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EXHIBIT 10.1
NATIONSBANK OF TENNESSEE, N.A.
LOAN AGREEMENT
This Loan Agreement (the "Agreement") dated as of July 10, 1997,
by and between NATIONSBANK OF TENNESSEE, N.A. a national banking association
("Bank") and SCB COMPUTER TECHNOLOGY, INC., a Tennessee corporation, DELTA
SOFTWARE SYSTEMS, INC., a Tennessee corporation, and TMR ACQUISITION, INC., a
Tennessee corporation (collectively "Borrower").
RECITALS:
A. Borrower has applied to Bank for a revolving term
loan facility (the "Loan") in the principal amount of $16,000,000.
B. One of the conditions of the Loan from Bank to
Borrower is the execution of this Agreement setting forth the terms and
conditions of the Loan.
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. ACCOUNT DEBTOR: Account Debtor means any Person (as
herein defined) which is now or hereafter obligated or indebted to Borrower or
Partners (as herein defined) on any Account Receivable.
B. ACCOUNTS RECEIVABLE: Accounts Receivable means all
amounts owed to Borrower and Partners 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 (i) which arise from goods theretofore sold and delivered
or services or rentals theretofore rendered or made, as the case may be, to an
Account Debtor (as herein defined); (ii) with respect to which no setoffs,
counterclaims or defenses are claimed by the Account Debtor; (iii) which
constitute the binding obligation of an Account Debtor which Bank deems, in the
exercise of its reasonable business judgment, to be solvent, to be financially
able to pay its debts and obligations as they become due and to be paying its
debts and obligations as they become due; (iv) which, in the case of "dated
invoices" which specify a due date for the payment thereof, do not remain
unpaid more than ninety (90) days after the end of the month in which such due
date falls, and in the case of all other invoices, do not remain unpaid more
than ninety (90) days after the date of such invoice; (v) with respect to which
the Account Debtor is not an officer, director, agent or employee of Borrower
(vi) which do not arise from a "sale on approval," "sale or return,"
"guaranteed sale" or "consignment"; and (viii) which are unencumbered or
pledged as collateral for any other indebtedness of Borrower.
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C. BORROWER: SCB Computer Technology, Inc., a
Tennessee corporation, Delta Software Systems, Inc., a Tennessee Corporation,
and TMR Acquisition, Inc., collectively.
D. BORROWER'S ADDRESS:
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
E. 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.
F. EBITDA: EBITDA means, without duplication for any
period, the following, each calculated for the trailing twelve (12) months of
such period: (a) Net Income; plus (b) any provision for (or minus any benefit
from) income or franchise taxes included in the determination of Net Income;
plus (c) interest expense (excluding that which is associated with any lease
expense whereby the contract is assigned to a non-recourse lender) deducted in
the determination of Net Income (excluding that which is associated with any
lease expense whereby the contract is assigned to a non-recourse lender); plus
(d) amortization and depreciation (excluding that which is associated with any
lease expense whereby the contract is assigned to a non-recourse lender)
deducted in the determination of Net Income (excluding that which is associated
with any lease expense whereby the contract is assigned to a non-recourse
lender); plus (e) losses from (or minus gains from) non-cash items (excluding
sales, expenses or losses related to current assets) included in the
determination of Net Income; minus (f) after tax extraordinary gains (or plus
after tax extraordinary losses) (in each case as defined under GAAP) included
in the determination of Net Income.
G. FUNDED DEBT: Funded Debt means the total
indebtedness outstanding under all recourse notes payable of Borrower, plus
funded or unfunded letters of credit issued pursuant to Borrower's application
therefor, plus capital leases of Borrower.
H. 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.
I. LOAN: Any loan described in Section 2 hereof and any
subsequent loan which states that it is subject to this Loan Agreement.
J. LOAN DOCUMENTS: Loan Documents means this Loan
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 any Loan.
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K. NET INCOME: Net Income means for any period, the net
income (or loss) of Borrower and its Subsidiaries 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) 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.
L. PARTNERS: Partners means collectively Partners
Capital Group, Inc., a California corporation, and Partners Resources, Inc., an
Arizona corporation, both of which are being acquired by SCB Computer
Technology, Inc.
M. PERSON: Person means any individual, partnership,
corporation, trust, unincorporated organization, lender liability company,
association, joint venture or other legally recognized entity having the
capacity to contract in its own name.
N. SUBSIDIARIES: Subsidiaries means those corporations
now or hereafter owned by SCB Computer Technology, Inc., including at the
present time, those identified on Exhibit "A" attached hereto, as such list may
be amended or restated from time to time.
O. TANGIBLE NET WORTH. Tangible Net Worth means the
amount by which total assets exceed total liabilities in accordance with GAAP.
P. 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.
2. LOANS. Bank hereby agrees to make one or more loans to
Borrower in the aggregate principal face amount of Sixteen Million and No/100
Dollars ($16,000,000.00). The obligation to repay the loans is evidenced by a
promissory note or notes dated July 10, 1997, (the promissory note or notes
together with any and all renewals, extensions or rearrangements thereof being
hereafter collectively referred to as the "Note") having a maturity date,
repayment terms and interest rate as set forth in the Note.
A. REVOLVING TERM LOAN FEATURE. The Loan shall consist
of a revolving term loan facility (the "Loan") under which Borrower may from
time to time, borrow, repay and re-borrow funds. The Loan shall be repaid as
set forth in the Note with a maturity date of August 1, 2000, at which time the
entire outstanding principal balance, plus all accrued and unpaid interest,
shall be due and payable in full. Interest shall be paid monthly as more fully
provided in the Note.
B. ACQUISITION/STRUCTURING FEE. Borrower will pay an
acquisition/structuring fee of Forty-Eight Thousand and No/100 Dollars
($48,000.00) at the closing of the Loan.
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C. UNUSED CREDIT FEE. Borrower will pay hereafter on
August 1, 1997, and on the same day of each month thereafter for the period
from and including the date the Loan was established to and including the
maturity date of the Loan, an unused credit fee at a rate per annum equal to
(i) .20%, (if the Funded Debt/EBITDA ratio is less than 1.0 to 1.0), (ii) .25%
(if such ratio is equal to or less than 1.50 to 1.0), or (iii) .30% (if such
ratio is greater than 1.5 to 1.0), times the average daily unused portion of
the Loan during the preceding month. The Borrower may at any time upon written
notice to the Bank permanently reduce the amount of the Loan at which time the
obligation of the Borrower to pay such unused credit fee shall thereupon
correspondingly be reduced.
D. PURPOSE. Ten Million and No/100 Dollars
($10,000,000.00) of the Loan shall initially be used to acquire Partners. The
remainder of the Loan shall be available to Borrower for other general
corporate purposes (including, without limitation, additional acquisitions made
in accordance with the terms hereof) or for reimbursement to Borrower for
additional funds out of Borrower's available cash used to purchase Partners,
provided all due diligence has been completed to Bank's reasonable
satisfaction, such due diligence including, without limitation, (i) UCC-11
searches for Borrower and Partners revealing no liens, liabilities or
obligations reasonably unacceptable to Bank, (ii) satisfactory review of all
material lease contracts securing non-recourse debt of Borrower or Partners,
(iii) proof reasonably satisfactory to Bank that Borrower has incurred no
contractual liability as a result of the acquisition of Partners which is
unacceptable to Bank in its reasonable discretion including, without
limitation, acceptable opinion letters from Borrower's counsel opining to such
matters as Bank may reasonably require including, without limitation, counsel
opinion that Borrower has incurred no contractual liability as a result of the
acquisition of Partners, other than as set forth in the relevant stock purchase
agreements, copies of which will be provided to Bank, and (iv) proof that no
other funds in excess of One Million and No/100 Dollars have been used by
Borrower for the use or benefit of Partners, or either of them. Borrower
agrees to provide Bank with guaranty agreements in form and substance prepared
by and acceptable to Bank executed by the Partners within ten (10) days of the
date hereof. Notwithstanding the initial draw limitation of Ten Million and
No/100 Dollars ($10,000,000.00) as set forth above and the other conditions to
further advances hereunder, Borrower may also draw an additional Six Million
and No/100 Dollars ($6,000,000.00) on the date hereof provided (i) marketable
securities reasonably acceptable to Bank are pledged (in form and substance
prepared by Bank) by Borrower to Bank on the date hereof to fully secure such
sum, and (ii) Borrower agrees to repay such sum within ten (10) days of the
date hereof, at which time Bank agrees to fully release such marketable
securities. Failure to so repay shall constitute a default hereunder.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to Bank as follows:
A. GOOD STANDING. Each of the Persons composing
Borrower and Partners 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.
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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 each
Person composing Borrower and, to Borrower's knowledge, Partners, is in
material compliance with all laws and regulatory requirements to which each 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 or to Borrower's knowledge, Partners, 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 or, to Borrower's knowledge,
Partners, and no provision of any existing material agreement, mortgage,
indenture or contract binding on Borrower or, to Borrower's knowledge,
Partners, or affecting its or their 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. Acquisition of Partners will not
constitute a default under any document to which Borrower, or, to Borrower's
knowledge, Partners, is a party, or result in the acceleration of any
indebtedness or obligations of Borrower or Partners.
F. OWNERSHIP OF ASSETS. Borrower and, to Borrower's
knowledge, Partners have good title to their respective assets, and their
assets are free and clear of liens, except 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, with respect to
Partners, disclosed to Bank prior to the execution of the guaranty agreements
executed by Partners which are required to be furnished to Bank within ten (10)
days of the date hereof.
G. TAXES. All taxes and assessments due and payable by
Borrower, and to Borrower's knowledge, Partners, have been paid or are being
contested in good faith by appropriate proceedings and Borrower and to
Borrower's knowledge, Partners have filed all tax returns which they are
required to file.
H. FINANCIAL STATEMENTS. The financial statements of
Borrower 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 financial condition as of the date or dates thereof, and
there has been no material adverse change in Borrower's financial condition or
operations since January 31, 1997. All factual information furnished by
Borrower to Bank in connection with this Agreement and the other Loan
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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 Xxxxxxxxxx Xxxx Xxxxxxxxxx,
Xxxxxxxxx 00000
J. ENVIRONMENTAL. The conduct of Borrower's and to
Borrower's knowledge, Partners, business operations and the condition of
Borrower's and to Borrower's knowledge, Partners', respective 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 and at and as of the date of any advance
under the Loan.
L. SUBSIDIARIES. Other than as shown on Exhibit "A",
except for Partners and those Persons other than SCB Computer Technology, Inc.
composing Borrower, there are no other Subsidiaries.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of
all obligations of Borrower under the Loan Documents, Borrower will, on a
consolidated basis together with Partners and any other Subsidiaries, now or
hereafter existing, unless Bank consents otherwise in writing (and without
limiting any requirement of any other Loan Document):
A. FINANCIAL CONDITION. Maintain at all times
Borrower's financial condition as follows and determined in accordance with
GAAP applied on a consistent basis throughout the period involved except to the
extent modified by the following:
i. Maintain thereafter a ratio of Funded Debt
to EBITDA of 2.25 to 1.0 or less; and on April 30, 1998, and thereafter,
maintain a ratio of Funded Debt to EBITDA of 2.0 to 1.0 or less.
ii. Maintain a ratio of Funded Debt to Tangible
Net Worth of 2.0 to 1.0 or less; and on April 30, 1998, and thereafter,
maintain a ratio of Funded Debt to Tangible Net worth of 1.5 to 1.0 or less.
iii. Beginning April 1, 1998, maintain a ratio of
cash plus Accounts Receivable to Current Liabilities plus unsecured Funded Debt
of 1.0 to 1.0 or greater.
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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:
i. Furnish to Bank audited 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 financial statements prepared
by Borrower (including a balance sheet and profit and loss statement) of
Borrower, for each quarter of each fiscal year of Borrower, within forty five
(45) 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 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 the 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 such additional
information, reports and statements respecting the business operations and
financial condition of Borrower, Partners and their Subsidiaries,
respectively, from time to time, as Bank may reasonably request.
C. INSURANCE. Maintain insurance with responsible
insurance companies on such of its properties, in such amounts and against such
risks as is customarily maintained by similar businesses operating in the same
vicinity, specifically to include fire and extended coverage insurance covering
all assets, business interruption insurance, workers compensation insurance and
liability insurance, all to be with such companies and in such amounts as are
satisfactory to Bank and providing for at least 30 days prior notice to Bank
of any cancellation thereof. Satisfactory evidence of such insurance will be
supplied to Bank prior to funding under the Loan(s) and 30 days prior to each
policy renewal.
D. EXISTENCE AND COMPLIANCE. Maintain its, as well as
that of its Subsidiaries,
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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, Partners' or any
Subsidiary's financial condition or operations or Bank's rights under the Loan
Documents, (ii) any material litigation filed by or against Borrower or any
Subsidiary, (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).
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 its tangible property
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 its
business.
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.
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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):
A. CAPITAL EXPENDITURES. Make capital expenditures
during each fiscal year (including capitalized leases) exceeding in the
aggregate a number which is equal to twenty five percent (25%) of the previous
year's annual depreciation plus net profit.
B. LEASE EXPENDITURES. Incur new obligations for the
lease or hire of real or personal property requiring payments in any fiscal
year in excess of an aggregate of Five Hundred Thousand and No/100 Dollars
($500,000.00).
C. TRANSFER OF ASSETS OR CONTROL. Sell, lease, assign
or otherwise dispose of or transfer any assets, except in the normal course of
its business, or transfer control or ownership of any Subsidiary.
D. LIENS. Grant, suffer or permit any contractual or
noncontractual lien on or security interest in its assets (including, without
limitation, any of Borrower's intellectual property), 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.
E. EXTENSIONS OF CREDIT. Other than loans to
Subsidiaries, make or permit any Subsidiary to make, loans or advances in
excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) in the
aggregate outstanding at any time, or make any capital contribution to, or
participate as a partner or joint venturer with any Person, except for
extensions of credit to employees in the normal course of Borrower's business,
and except for the purchase of direct obligations of the United States or any
agency thereof with maturities of less than one year, or obligations of Bank or
any subsidiary thereof.
F. BORROWINGS. Create, incur, assume or become liable
in any manner for any indebtedness (for borrowed money, deferred payment for
the purchase of assets, lease payments, as surety or guarantor for the debt for
another, or otherwise) other than to Bank, except for normal trade debts
incurred in the ordinary course of Borrower's business, non-recourse
indebtedness, and except for existing indebtedness disclosed to Bank in writing
and acknowledged by Bank prior to the date of this Agreement.
G. DIVIDENDS AND DISTRIBUTIONS. Make any distribution
(other than dividends payable in capital stock of Borrower) on any shares of
any class of its capital stock or apply any of its property or assets to the
purchase, redemption or other retirement of any shares of any class of capital
stock of Borrower exceeding in the aggregate a sum which is equal to twenty
five percent (25%) of net profit per fiscal year.
H. 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
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conducted.
I. MANAGEMENT CHANGE. Make any substantial change in
its present executive or management personnel.
J. NEGATIVE PLEDGE LIMITATION. Enter into any agreement
with any person other than Bank pursuant hereto which prohibits or limits the
ability of Borrower or any Subsidiary to create, incur, assume or suffer to
exist any lien upon any of the assets, rights, revenues or property, whether
real, personal or mixed, whether tangible or intangible, and whether now owned
or hereafter acquired.
K. ACQUISITIONS OR MERGERS. Acquire or enter into any
merger or consolidation, or purchase or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations, or other securities of, or otherwise invest in or acquire any
interest in any entity, except in regards to any acquisition that (i) has
positive EBITDA during the last two (2) fiscal years, (ii) the total
consideration therefor is less than Three Million and No/100 Dollars
($3,000,000.00) (unless the acquisition is 100% stock), and (iii) the total
consideration is less than six (6) times the acquisition EBITDA, provided,
however, in no event may Borrower enter into any acquisition if the results of
such acquisition on a proforma basis would cause a default hereunder.
L. FUNDING TO PARTNERS. During the interim period
between the date hereof and the date all due diligence has been completed to
Bank's satisfaction as set forth in Section 2 D. hereof, Borrower shall not
fund, loan, advance or make available to, in any manner, sums to Partners in
excess of One Million and No/100 Dollars ($1,000,000.00)
6. DEFAULT. 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 any affiliate or subsidiary of NationsBank Corporation; 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 sole discretion could have a
material adverse effect on Borrower's financial condition or business affairs,
provided, however, that Bank agrees not to exercise its right to declare a
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default as a result of any such material adverse change until forty five (45)
days after written notice from Bank to Borrower that Bank deems a material
adverse change to have occurred.
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.
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 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax. No. 901/000-0000
with a copy to:
Bass, Berry, & Xxxx PLC
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxx
Fax No. 615/000-0000
Bank:
NationsBank of Tennessee, N.A.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
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
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(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 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 Loan 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 Loan 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 Loan 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 Loan
Agreement.
D. DOCUMENTS. All documents, certificates and other
items required under this Loan 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 Loan 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
- 12 -
13
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 the
Borrower, regardless of whether the 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 the Borrower, the Bank, and of any third parties. The
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 the Bank to make any
advances under the Loan shall not have expired.
11. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS, INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS
OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT,
SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL
ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF
PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF
J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES
SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE CITY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS
INSTRUMENT,
- 13 -
14
AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
ARBITRATION PROVISION; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW;
OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR
ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
12. 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.
- 14 -
15
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. NATIONSBANK OF TENNESSEE, N.A.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
---------------------------- ---------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxx
-------------------------- -------------------------
Title: Chief Financial officer Title: Vice President
------------------------- ------------------------
[Corporate Seal]
Attest: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: Controller
------------------------
DELTA SOFTWARE SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Secretary
-------------------------
[Corporate Seal]
Attest: Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------
Title: Controller
-------------------------
- 15 -
16
TMR ACQUISITION, INC.
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
--------------------------
Title: Secretary
-------------------------
[Corporate Seal]
Attest: Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: Controller
-------------------------
- 16 -
17
EXHIBIT "A"
SUBSIDIARIES
1. Delta Software Systems, Inc.
2. TMR Acquisition, Inc.
3. Partners Capital Group, Inc.
4. Partners Resources, Inc.
5. SCB Software Services, Inc.
- 17 -
18
Exhibit B
[GRAPHIC OMITTED] COMPLIANCE CERTIFICATE
--------------------------------------------------------------------------------
STATUS AS OF ___________, 19____
Quarter ended Quarter ended Quarter ended Quarter ended 12 Mos. ended
31-Oct-96 31-Jan-97 30-Apr-97 31-Jul-97 31-Jul-97
EBITDA 0
------
Net Income 0
Taxes 0
Interest Expense 0
less: Int. Exp paid on non-recourse 0
notes
Amortization and Depreciation Expense 0
less: A&D expense on non-recourse 0
notes
After tax extraordinary losses (gains) 0
----------------------------------------------------------------------
Total EBITDA 0 0 0 0 0
----------------------------------------------------------------------
FUNDED DEBT/ EBITDA
-------------------
Recourse Notes Payable (Funded Debt)
EBITDA 0
--------------
Funded Debt/ EBITDA #DIV/01
--------------
Maximum 2.25x; 2.0 on/after 4/30/98
FUNDED DEBT/ TANGIBLE NET WORTH
-------------------------------
Funded Debt 0
Tangible Net Worth
--------------
Funded Debt/ Tangible Net Worth #DIV/01
--------------
Maximum 2.0x; 1.5x on/after 4/30/98
ACCTS REC./ CURRENT LIAB. & F. DEBT
-----------------------------------
Accounts Rec. (net of past dues, etc.)
Funded Debt 0
--------------
Accts Rec./ Current Liab. & F. Debt
--------------
Minimum 1.0x, beginning 4/30/98 #DIV/01
CERTIFICATION
This Certificate is given by SCB Computer Technology, Inc. pursuant to
subsection 4.B.iii of the Loan Agreement ("Agreement") between Borrower and
NationsBank of Tennessee, N.A. ("Bank") dated July 10, 1997. The undersigned
does hereby certify, represent, and warrant to Bank that the information set
forth herein, financial statements and other attachments ("Attachments") hereto
are true, correct, accurate, and complete in all respects, without any material
deviations or omissions. Borrower certifies there is no default under the terms
of the Agreement.
SCB COMPUTER TECHNOLOGY, INC.
By:_____________________________________
Title:__________________________________
(must be CFO, VP or President)
Date:___________________________________