EXHIBIT 10
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
First Amendment, dated as of March 27, 2002 (this "Amendment"), to the
Loan and Security Agreement, dated as of July 23, 2001 (the "Loan Agreement") by
and among (i) the lenders identified on the signature pages hereof (such
lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a "Lender" and collectively as the "Lenders"),
(ii) FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("Agent"), and (iii) SCB COMPUTER
TECHNOLOGY, INC., a Tennessee corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
"Borrower", and individually and collectively, jointly and severally, as the
"Borrowers").
The Borrowers, the Lenders and the Agent desire to amend the Loan
Agreement to (i) permit Borrowers to request letters of credit and Lenders to
issue letters of credit, or to arrange for the issuance of letters of credit,
for the account of Borrowers and (ii) amend certain other provisions of the Loan
Agreement, in each case on the terms and conditions hereinafter set forth.
Accordingly, the Borrowers, the Agent and the Lenders hereby agree as
follows:
1. Definitions. All capitalized terms used herein and not otherwise
defined herein are used herein as defined in the Loan Agreement.
2. Existing Definitions. (a) The definition of the term "Lender Group"
in Section 1.1 of the Loan Agreement is hereby amended in its entirety to read
as follows:
"'Lender Group' means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent."
(b) The definition of the term "Loan Documents" in Section 1.1
of the Loan Agreement is hereby amended in its entirety to read as follows:
"'Loan Documents' means this Agreement, the Cash Management
Agreements, any Control Agreement, the Disbursement Letter, the Due
Diligence Letter, the Fee Letter, the Guaranty, the Letters of Credit,
the Letter of Credit Applications, L/C Undertakings, the Contribution
Agreement, the Officers' Certificate, the Stock Pledge Agreement, the
Trademark Security Agreement, the Guarantor Security Agreement, the
Intercompany Subordination Agreement, the Warrants, the Registration
Rights Agreement, the Intercreditor Agreement, any note or notes
executed by a Borrower in connection with this Agreement and payable to
a member of the Lender Group, and any other agreement entered into, now
or in the future, by any Borrower and the Lender Group in connection
with this Agreement."
(c) The definition of the term "Obligations" in Section 1.1 of
the Loan Agreement is hereby amended in its entirety to read as follows:
"'Obligations' means all loans (including the Term Loan),
Advances, debts, principal, interest (including any interest that, but
for the provisions of the Bankruptcy Code, would have accrued), Letter
of Credit Obligations, L/C Undertakings, premiums, liabilities
(including all amounts charged to Borrowers' Loan Account pursuant
hereto), obligations, fees (including the fees provided for in the Fee
Letter), charges, costs, Lender Group Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties of any kind
and description owing by Borrowers to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and including
all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by
law, or otherwise. Any reference in this Agreement or in the Loan
Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and
subsequent to any Insolvency Proceeding."
(d) The definition of the term "Pro Rata Share" in Section 1.1
of the Loan Agreement is hereby amended by (i) redesignating existing clause (b)
therein as new clause (c), (ii) redesignating existing clause (c) therein as
clause (d) and (iii) adding the following new clause (b):
"(b) with respect to a Lender's obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and to receive
payments of fees with respect thereto, the percentage obtained by
dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate
Revolver Commitments of all Lenders,"
(e) The definition of the term "Revolver Usage" in Section 1.1
of the Loan Agreement is hereby amended in its entirety to read as follows:
"'Revolver Usage' means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the
then extant amount of the Letter of Credit Usage."
3. New Definitions. The following definitions are hereby added to
Section 1.1 of the Loan Agreement:
"'Issuing Lender' means Foothill or any other Lender that, at
the request of Administrative Borrower and with the consent of Agent
agrees, in such Lender's sole discretion, to become an Issuing Lender
for the purpose of issuing L/Cs or L/C Undertakings pursuant to Section
2.14."
"'L/C' has the meaning set forth in Section 2.14(a)."
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"'L/C Disbursement' means a payment made by the Issuing Lender
pursuant to a Letter of Credit."
"'L/C Undertaking' has the meaning set forth in Section
2.14(a)."
"'Letter of Credit' means an L/C or an L/C Undertaking, as the
context requires."
"'Letter of Credit Application' has the meaning set forth in
Section 2.14(a)."
"'Letter of Credit Guaranty' means one or more guaranties by the
Agent in favor of the Issuing Lender, guaranteeing the obligations of
one or more of the Borrowers to the Issuing Lender under a reimbursement
agreement, Letter of Credit Application or other like document in
respect of any Letters of Credit, or any indemnification agreement or
other similar document by the Agent in favor of the Issuing Lender in
respect of any Letter of Credit."
"'Letter of Credit Obligations' means, at any time and without
duplication, the sum of (i) the Reimbursement Obligations at such time,
plus (ii) the aggregate maximum amount available for drawing under the
Letters of Credit outstanding at such time, plus (iii) all amounts for
which the Agent may be liable to the Issuing Lender pursuant to any
Letter of Credit Guaranty."
"'Letter of Credit Usage' means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters
of Credit plus 100% of the amount of outstanding time drafts accepted by
an Underlying Issuer as a result of drawings under Underlying Letters of
Credit."
"'Reimbursement Obligations' means the obligation of the
Borrowers to reimburse the Agent and the Lenders for amounts payable by
the Agent or the Lenders under a Letter of Credit Guaranty in respect of
any drawing made under any Letter of Credit, together with interest
thereon as provided in Section 2.6."
"'Risk Participation Liability' means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender
with respect to an L/C Undertaking, consisting of (a) the amount
available to be drawn or which may become available to be drawn, (b) all
amounts that have been paid by the Issuing Lender to the Underlying
Issuer to the extent not reimbursed by Borrowers, whether by the making
of an Advance or otherwise, and (c) all accrued and unpaid interest,
fees, and expenses payable with respect thereto."
"'Underlying Issuer' means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of
credit at the request of the Issuing Lender for the benefit of a
Borrower."
"'Underlying Letter of Credit' means a letter of credit that has
been issued by an Underlying Issuer."
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4. Revolver Advances. The first sentence of Section 2.1(a) of the Loan
agreement is hereby amended in its entirety to read as follows:
"(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver
Commitment agrees (severally, not jointly or jointly and severally) to
make advances ("Advances") to Borrowers in an amount at any one time
outstanding not to exceed such Lender's Pro Rata Share of an amount
equal to the lesser of (i) the Maximum Revolver Amount less the Letter
of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit
Usage."
5. Revolver Advances. Section 2.1 of the Loan Agreement is hereby
amended by adding the following new clause (e) at the end thereof:
"(e) Within three Business Days after the Parent's receipt of
any tax refund (other than the tax refund referred to in Section 2.2(e) below),
the Borrowers shall prepay the outstanding principal amount of the Advances (or,
if there are no Advances outstanding at such time, the Term Loan) in an amount
equal to 100% of such tax refund; provided that, if the Honeywell Contract shall
not have been renewed upon terms acceptable to the Agent on or prior to July 31,
2002, then either (i) if such tax refund is received prior to July 31, 2002, (A)
the Borrowers shall prepay the outstanding principal amount of the Advances in
an amount equal to 100% of such tax refund and (B) the Agent shall institute a
reserve against the Borrowing Base in the amount of $1,000,000, which reserve
shall either be (1) if the Honeywell Contract is renewed upon terms acceptable
to the Agent on or prior to July 31, 2002, released by the Agent or (2) if the
Honeywell Contract is not renewed upon terms acceptable to the Agent on or prior
to July 31, 2002, released by the Agent at such time as the Agent (x) charges
the Loan Account for an Advance in the amount of such reserve and (y) applies
the proceeds of such Advance to the prepayment of the outstanding principal
amount of the Term Loan, or (ii) if such tax refund is received after July 31,
2002, $1,000,000 of such tax refund shall first be applied to the outstanding
principal amount of the Term Loan. Any prepayment of the Term Loan in accordance
with this Section 2.1(e) shall be accompanied by the payment of accrued interest
to the date of such prepayment on the amount prepaid and shall be applied
against the remaining installments of principal of the Term Loan in the inverse
order of maturity."
6. Borrowing Procedures and Settlements. The last sentence of Section
2.3(c)(iii) of the Loan Agreement is hereby amended by adding the following
after the phrase "outstanding Obligations":
"(including an assumption of its Pro Rata Share of the Risk
Participation Liability)"
7. Payments. Section 2.4(b)(i) of the Loan Agreement is hereby amended
by (i) deleting existing clauses (L) and (M) therein and (ii) adding the
following new clauses (L), (M) and (N) in lieu thereof:
"L. twelfth, if an Event of Default has occurred and is
continuing, to Agent, to be held by Agent, for the ratable benefit of
Issuing Lender and those Lenders having a Revolver Commitment, as cash
collateral in an amount up to 105% of the then extant Letter of Credit
Usage until paid in full,
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M. thirteenth, to pay any other Obligations until paid in full,
and
N. fourteenth, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law."
8. Interest Rates and Letter of Credit Fee: Rates, Payments and
Calculations. Section 2.6 of the Loan Agreement is hereby amended by (i)
redesignating existing clause (d) as clause (e), (ii) redesignating existing
clause (e) as new clause (f), and (iii) amending clauses (a) - (d) in their
entirety to read as follows:
"(a) INTEREST RATES. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof as follows (i) if the relevant
Obligation is the Term Loan, at a per annum rate equal to the Base Rate
plus the Term Loan Margin, and (ii) otherwise, at a per annum rate equal
to the Base Rate plus the Revolver Margin.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to
any letter agreement between Agent and individual Lenders), a Letter of
Credit fee (in addition to the charges, commissions, fees, and costs set
forth in Section 2.12(e)) which shall accrue at a rate equal to 2% per
annum times the Daily Balance of the undrawn amount of all outstanding
Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters of Credit)
that have been charged to the Loan Account pursuant to the terms hereof
shall bear interest on the Daily Balance thereof at a per annum rate
equal to 4 percentage points above the sum of the Base Rate plus the
Term Loan Margin, and
(ii) the Letter of Credit fee provided for above shall be
increased to 4 percentage points above the per annum rate otherwise
applicable hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all other fees
payable hereunder shall be due and payable, in arrears, on the first day
of each month at any time that Obligations or Commitments are
outstanding. Borrowers hereby authorize Agent, from time to time,
without prior notice to Borrowers, to charge such interest and fees, all
Lender Group Expenses (as and when incurred), the charges, commissions,
fees, the fees and costs provided for in Section 2.11 (as and when
accrued or incurred), and all other payments as and when due and payable
under any Loan Document (including the installments due and payable with
respect to the Term Loan) to Borrowers' Loan Account, which amounts
thereafter constitute Advances hereunder and shall accrue interest at
the rate then applicable to Advances hereunder. Any interest not paid
when due shall be compounded by being charged to Borrowers' Loan Account
and shall
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thereafter constitute Advances hereunder and shall accrue interest at
the rate then applicable to Advances hereunder."
9. Designated Account. The first sentence of Section 2.9 of the Loan
Agreement is hereby amended in its entirety to read as follows:
"Agent is authorized to make the Advances and the Term Loan, and
Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person, or without instructions if
pursuant to Section 2.6(d)."
10. Maintenance of Loan Account; Statements of Obligations. The first
sentence of Section 2.10 of the Loan Agreement is hereby amended in its entirety
to read as follows:
"Agent shall maintain an account on its books in the name of
Borrowers (the "Loan Account") on which Borrowers will be charged with
the Term Loan, all Advances (including Agent Advances and Swing Loans)
made by Agent, Swing Lender, or the Lenders to Borrowers or for
Borrowers' account, the Letters of Credit issued by Issuing Lender for
Borrowers' account, and with all other payment Obligations hereunder or
under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses."
11. Fees. Section 2.11(a) of the Loan Agreement is hereby amended in its
entirety to read as follows:
"(a) UNUSED LINE FEE. On the first day of each month during the
term of this Agreement, an unused line fee in the amount equal to 0.50%
per annum times the result of (a) the Maximum Revolver Amount, less (b)
the sum of (i) the average Daily Balance of Advances that were
outstanding during the immediately preceding month, plus (ii) the
average Daily Balance of the Letter of Credit Usage during the
immediately preceding month,"
12. Joint and Several Liability of Borrowers. The first sentence of
Section 2.13(e) of the Loan Agreement is hereby amended by adding the following
after the phrase "notice of any Advances":
"or Letters of Credit issued under or"
13. Letters of Credit. The following is hereby added as new Section 2.14
of the Loan Agreement:
"2.14 Letters of Credit
(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of
Borrowers (each, an "L/C") or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an
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Underlying Issuer (as of the Closing Date, the prospective Underlying
Issuer is to be Xxxxx Fargo) for the account of Borrowers. To request
the issuance of an L/C or an L/C Undertaking (or the amendment, renewal,
or extension of an outstanding L/C or L/C Undertaking), Administrative
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance
of the requested date of issuance, amendment, renewal, or extension) a
notice requesting the issuance of an L/C or L/C Undertaking, or
identifying the L/C or L/C Undertaking to be amended, renewed, or
extended, the date of issuance, amendment, renewal, or extension, the
date on which such L/C or L/C Undertaking is to expire, the amount of
such L/C or L/C Undertaking, the name and address of the beneficiary
thereof (or of the Underlying Letter of Credit, as applicable), and such
other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking (each, a "Letter of Credit
Application"). If requested by the Issuing Lender, Borrowers also shall
be an applicant under the Letter of Credit Application with respect to
any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a
Letter of Credit if any of the following would result after giving
effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing
Base less the amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed $2,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the then extant amount of outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of
credit that already are outstanding as of the Closing Date. Each Letter
of Credit (and corresponding Underlying Letter of Credit) shall have an
expiry date no later than 30 days prior to the Maturity Date and all
such Letters of Credit (and corresponding Underlying Letter of Credit)
shall be in form and substance acceptable to the Issuing Lender (in the
exercise of its Permitted Discretion), including the requirement that
the amounts payable thereunder must be payable in Dollars. If Issuing
Lender is obligated to advance funds under a Letter of Credit, Borrowers
immediately shall reimburse such L/C Disbursement to Issuing Lender by
paying to Agent an amount equal to such L/C Disbursement not later than
11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have received written or
telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received
by Administrative Borrower prior to such time on such date, then not
later than 11:00 a.m., California time, on (i) the Business Day that
Administrative Borrower receives such notice, if such notice is received
prior to 10:00 a.m., California time, on the date of receipt or (ii) the
Business Day following the Business Day that Administrative Borrower
receives such notice, if such notice is received after 10:00 a.m.,
California time, on the date of receipt, and, in the absence of such
reimbursement, the L/C Disbursement immediately and automatically shall
be deemed to be an Advance hereunder and,
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thereafter, shall bear interest at the rate then applicable to Advances
under Section 2.6. To the extent an L/C Disbursement is deemed to be an
Advance hereunder, Borrowers' obligation to reimburse such L/C
Disbursement shall be discharged and replaced by the resulting Advance.
Promptly following receipt by Agent of any payment from Borrowers
pursuant to this paragraph, Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.14(c) to reimburse the Issuing Lender, then to
such Lenders and the Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.14(a), each Lender with a Revolver Commitment
agrees to fund its Pro Rata Share of any Advance deemed made pursuant to
the foregoing subsection on the same terms and conditions as if
Borrowers had requested such Advance and Agent shall promptly pay to
Issuing Lender the amounts so received by it from the Lenders. By the
issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitment, the
Issuing Lender shall be deemed to have granted to each Lender with a
Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation
Liability of such Letter of Credit, and each such Lender agrees to pay
to Agent, for the account of the Issuing Lender, such Lender's Pro Rata
Share of any payments made by the Issuing Lender under such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such
Lender's Pro Rata Share of each L/C Disbursement made by the Issuing
Lender and not reimbursed by Borrowers on the date due as provided in
clause (a) of this Section, or of any reimbursement payment required to
be refunded to Borrowers for any reason. Each Lender with a Revolver
Commitment acknowledges and agrees that its obligation to deliver to
Agent, for the account of the Issuing Lender, an amount equal to its
respective Pro Rata Share pursuant to this Section 2.14(b) shall be
absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or
Default or the failure to satisfy any condition set forth in Section 3
hereof. If any such Lender fails to make available to Agent the amount
of such Lender's Pro Rata Share of any payments made by the Issuing
Lender in respect of such Letter of Credit as provided in this Section,
Agent (for the account of the Issuing Lender) shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and
hold the Lender Group harmless from any loss, cost, expense, or
liability, and reasonable attorneys fees incurred by the Lender Group
arising out of or in connection with any Letter of Credit; provided,
however, that no Borrower shall be obligated hereunder to indemnify for
any loss, cost, expense, or liability that is caused by the gross
negligence or willful misconduct of the Issuing Lender or any other
member of the Lender Group. Each Borrower agrees to be bound by the
Underlying Issuer's regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender's interpretations
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of any L/C issued by Issuing Lender to or for such Borrower's account,
even though this interpretation may be different from such Borrower's
own, and each Borrower understands and agrees that the Lender Group
shall not be liable for any error, negligence, or mistake, whether of
omission or commission, in following Borrowers' instructions or those
contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Each Borrower understands that the L/C Undertakings
may require Issuing Lender to indemnify the Underlying Issuer for
certain costs or liabilities arising out of claims by Borrowers against
such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss,
cost, expense (including reasonable attorneys fees), or liability
incurred by the Lender Group under any L/C Undertaking as a result of
the Lender Group's indemnification of any Underlying Issuer; provided,
however, that no Borrower shall be obligated hereunder to indemnify for
any loss, cost, expense, or liability that is caused by the gross
negligence or willful misconduct of the Issuing Lender or any other
member of the Lender Group.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and
other writings and property received by such Underlying Issuer pursuant
to such Underlying Letter of Credit and to accept and rely upon the
Issuing Lender's instructions with respect to all matters arising in
connection with such Underlying Letter of Credit and the related
application.
(e) Any and all charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately
shall be reimbursable by Borrowers to Agent for the account of the
Issuing Lender; it being acknowledged and agreed by each Borrower that,
as of the Closing Date, the issuance charge imposed by the prospective
Underlying Issuer is .825% per annum times the face amount of each
Underlying Letter of Credit, that such issuance charge may be changed
from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or
application thereof by any Governmental Authority, or (ii) compliance by
the Underlying Issuer or the Lender Group with any direction, request,
or requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of
the Federal Reserve Board as from time to time in effect (and any
successor thereto):
(i) any reserve, deposit, or similar requirement is or shall
be imposed or modified in respect of any Letter of Credit issued
hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of
Credit or any Letter of Credit issued pursuant hereto;
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and the result of the foregoing is to increase, directly or indirectly,
the cost to the Lender Group of issuing, making, guaranteeing, or
maintaining any Letter of Credit or to reduce the amount receivable in
respect thereof by the Lender Group, then, and in any such case, Agent
may, at any time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify Administrative
Borrower, and Borrowers shall pay on demand such amounts as Agent may
specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the
rate then applicable to Advances hereunder. The determination by Agent
of any amount due pursuant to this Section, as set forth in a
certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto."
14. Effect of Termination. The first sentence of Section 3.5 of the Loan
Agreement is hereby amended in its entirety to read as follows:
"On the date of termination of this Agreement, all Obligations
(including, without limitation, Letter of Credit Obligations)
immediately shall become due and payable without notice or demand."
15. Early Termination by Borrowers. The first and second sentences of
Section 3.6 of the Loan Agreement are hereby amended in their entirety to read
as follows:
"Borrowers have the option, at any time upon 90 days prior
written notice by Administrative Borrower to Agent, to terminate this
Agreement by paying to Agent, for the benefit of the Lender Group, in
cash, the Obligations (including either (i) providing cash collateral to
be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender), in full, together with the Applicable
Prepayment Premium (to be allocated based upon letter agreements between
Agent and individual Lenders). If Administrative Borrower has sent a
notice of termination pursuant to the provisions of this Section, then
the Commitments shall terminate and Borrowers shall be obligated to
repay the Obligations (including either (i) providing cash collateral to
be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender), in full, together with the Applicable
Prepayment Premium, on the date set forth as the date of termination of
this Agreement in such notice."
16. Negative Covenants. Section 7.1(a) of the Loan Agreement is hereby
amended in its entirety to read as follows:
"(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit;"
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17. Replacement of Holdout Lender. The second paragraph of Section 15.2
of the Loan Agreement is hereby amended in its entirety to read as follows:
"Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to the Holdout Lender
being repaid its share of the outstanding Obligations (including an
assumption of its Pro Rata Share of the Risk Participation Liability)
without any premium or penalty of any kind whatsoever. If the Holdout
Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and
delivered such Assignment and Acceptance Agreement. The replacement of
any Holdout Lender shall be made in accordance with the terms of Section
14.1. Until such time as the Replacement Lenders shall have acquired all
of the Obligations, the Commitments, and the other rights and
obligations of the Holdout Lender hereunder and under the other Loan
Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender's Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the
Risk Participation Liability of such Letter of Credit.
18. Parent as Agent for Borrowers. The second sentence of Section 17.9
of the Loan Agreement is hereby amended in its entirety to read as follows:
"Each Borrower hereby irrevocably appoints and authorizes the
Administrative Borrower (i) to provide Agent with all notices with
respect to Advances and Letters of Credit obtained for the benefit of
any Borrower and all other notices and instructions under this Agreement
and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and
to exercise such other powers as are reasonably incidental thereto to
carry out the purposes of this Agreement."
19. Conditions to Effectiveness. This Amendment shall become effective
only upon satisfaction in full of the following conditions precedent (the first
date upon which all such conditions have been satisfied being herein called the
"Amendment Effective Date"):
(a) The representations and warranties contained in this Amendment
and in Section 5 of the Loan Agreement and each other Loan Document shall be
correct on and as of the Amendment Effective Date as though made on and as of
such date (except where such representations and warranties relate to an earlier
date in which case such representations and warranties shall be true and correct
as of such earlier date); no Event of Default shall have occurred and be
continuing on the Amendment Effective Date or result from this Amendment
becoming effective in accordance with its terms.
(b) The Agent shall have received counterparts of this Amendment
which bear the signatures of the Borrowers, the Guarantors and the Lenders.
(c) The Agent shall have received an Omnibus Amendment of Security
Documents, in the form of Exhibit A hereto, duly executed by the Borrowers, the
Guarantors and the Agent.
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(d) The Borrowers shall have paid to the Agent, for the benefit of
the Lender Group, in immediately available funds, a fully earned and
nonrefundable amendment fee equal to $100,000.
(e) All legal matters incident to this Amendment shall be
satisfactory to the Agent and its counsel.
20. Representations and Warranties. Each of the Borrowers represents and
warrants to the Lenders as follows:
(a) Each Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and (ii) has all requisite corporate power, authority and legal right to
execute, deliver and perform this Amendment and to perform the Loan Agreement,
as amended hereby.
(b) The execution, delivery and performance by the Borrowers of this
Amendment and the performance by the Borrowers of the Loan Agreement as amended
hereby (i) have been duly authorized by all necessary corporate action, (ii) do
not and will not violate or create a default under any Borrower's charter or
by-laws, any applicable law or any contractual restriction binding on or
otherwise affecting any Borrower or any Borrower's properties, and (iii) except
as provided in the Loan Documents, do not and will not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any Borrower's property.
(c) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority or other regulatory body is
required in connection with the due execution, delivery and performance by any
Borrower of this Amendment and the performance by the Borrowers of the Loan
Agreement as amended hereby.
(d) Each of this Amendment and the Loan Agreement, as amended
hereby, constitute the legal, valid and binding obligations of the Borrowers,
enforceable against each Borrower in accordance with their terms.
(e) The representations and warranties contained in Section 5 of the
Loan Agreement are correct on and as of the Amendment Effective Date as though
made on and as of the Amendment Effective Date (except to the extent such
representations and warranties expressly relate to an earlier date), and no
Event of Default has occurred and is continuing on and as of the Amendment
Effective Date.
21. Continued Effectiveness of Loan Agreement. Each Borrower hereby (i)
confirms and agrees that each Loan Document to which it is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that on and after the Amendment Effective Date all
references in any such Loan Document to "the Loan Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by this Amendment, and (ii) confirms
and agrees that to the extent that any such Loan Document purports to assign or
pledge to the Agent, or to grant to the Agent a security interest in or lien on,
any collateral as security for the Obligations of the Borrowers from time to
time existing in respect of the Loan Agreement and
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the Loan Documents, such pledge, assignment and/or grant of the security
interest or lien is hereby ratified and confirmed in all respects.
22. Miscellaneous.
(a) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Amendment.
(b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(c) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.
(d) The Borrowers will pay on demand all fees, costs and expenses of
the Agent in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, the fees, disbursements and other
charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS:
SCB COMPUTER TECHNOLOGY, INC.
a Tennessee corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Title: Executive Vice President
SCB COMPUTER TECHNOLOGY OF ALABAMA, INC.,
an Alabama corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Title: Executive Vice President
PARTNERS RESOURCES INC.
an Arizona corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Title: Executive Vice President
AGENT AND LENDER:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------
Title: Vice President
ACKNOWLEDGED AND AGREED:
PARTNERS CAPITAL GROUP,
a California corporation,
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Executive Vice President
DELTA SOFTWARE SYSTEMS, INC.,
a Tennessee corporation,
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Executive Vice President
TECHNOLOGY MANAGEMENT RESOURCES, INC.,
a Tennessee corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Executive Vice President
EXHIBIT A
[OMNIBUS AMENDMENT TO SECURITY DOCUMENTS]
