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[CITY NATIONAL BANK OF FLORIDA LOGO]
September 10, 1999
Mr. Xxx Xxxxxx, Chairman and CEO
Preferred Employers Holdings, Inc.
00000 Xxxxxxxx Xxxxxxxxx, 00xx xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Re: $7,500,000.00 Revolving Line of Credit
Dear Xx. Xxxxxx:
This letter shall serve as City National Bank of Florida's commitment to make a
Revolving Line of Credit Loan to Preferred Employers Holdings, Inc. ("Borrower")
in the sum of $7,500,000 subject to the following terms and conditions. We shall
be referred to as "Bank" or "Lender" throughout this commitment.
The Consolidated Revolving Line of Credit will have the following terms:
1. AMOUNT: $7,500,000.00
2. PURPOSE: To provide funds for a self tender and to pay off existing loan in
the sum of $3,000,000 to Preferred Healthcare Staffing, Inc., a wholly owned
subsidiary of Borrower ("HC Staffing").
3. TERM: The Consolidated Revolving Line of Credit shall mature 364 days from
closing.
4. INTEREST: The interest rate shall be equal to Xxxxxx's Base Rate from time
to time in effect (the "Note Rate"). The Base Rate is neither tied to any
external rate of interest or index nor does it necessarily reflect the
lowest rate of interest actually charged by Lender to any particular class
or category of its customers. Interest as aforesaid shall be calculated on
the principal balance, which from time to time is outstanding, on the basis
of a three hundred sixty (360) day year, but interest shall accrue and be
payable for the actual number of days in each month. The rate of interest
from time to time applicable to the unpaid balance of the principal shall be
calculated on a daily basis so that, when such Base Rate shall change, the
Note Rate to be paid by Maker shall change effective as of the day of the
change in such Base Rate.
00 X. Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000 305-577-7333 000-000-0000 Fax
xxx.xxxxxxxxxxxx.xxx
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Mr. Xxx Xxxxxx
September 10, 1999
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5. REPAYMENT: Monthly payments of interest only shall be due and payable, with
the entire outstanding principal due at maturity.
6. BORROWER: Preferred Employers Holdings, Inc.
7. COLLATERAL: First lien security interest in all accounts receivable of HC
Staffing whether now owned or hereafter acquired. In connection with the
collateral, Borrower and HC Staffing will execute and deliver to Lender at
or before closing, all security and other documents the Lender may request
to perfect its security interest.
8. OPINION LETTER: Borrower shall provide Bank with an opinion of Xxxxxxxx's
counsel in form, scope and substance satisfactory to Bank and Bank's
counsel. Said opinion shall include among other provisions: that the
execution and delivery of the Loan Documents have been duly authorized,
and that the same are valid, binding and enforceable in accordance with
their terms and do not violate or contravene any statute or contractual
restriction binding on Borrower.
9. EXPENSES: Whether or not the transaction contemplated hereby closes, the
Borrower agrees to pay all of the normal disbursements, costs and fees
of the Bank and the Borrower involved in this transaction including but
not necessarily limited to, documentary stamps, if applicable, and any
and all other additional expenses or additional requirements reasonably
imposed by the Bank, or the Bank's counsel collectively, the ("Expenses").
The Expenses shall be paid at the Loan Closing, if the transaction
contemplated hereby closes, or within 10 days after request for the payment
thereof if the Loan has not closed. In the event the Borrower accepts this
Commitment Letter, but the loan is not closed or disbursed for any reason
(other than willful default by the Bank hereunder) the Borrower's obligation
for the Expenses shall survive the termination of this Commitment Letter
and all expenses incurred by the Bank, including, but not limited to, the
expense for filing documents plus related disbursements, shall be reimbursed
to the Bank by the Borrower within ten days after request therefor by the
Bank.
10. DUE DILIGENCE: Notwithstanding anything to the contrary contained herein,
this commitment is subject to our completion of an analysis of the Borrower
and Guarantor's financial statements and other due diligence in underwriting
this increase, the results of which shall be subject to our reasonable
approval. We may require, as a condition to closing on this increase,
modifications to or additional covenants in the Loan Agreement dated May 9,
1998.
This commitment letter carries an expiration date of October 22, 1999 in the
event this loan does not close on or before said date. In the event this
commitment is not accepted by Borrower on or before September 24, 1999, it shall
be automatically withdrawn and of no effect.
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Mr. Xxx Xxxxxx
September 10, 1999
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Bank reserves the right to cancel this commitment and terminate its obligations
hereunder at any time upon the happening of any of the following events:
a. Xxxxxxxx's failure to comply with any of the applicable conditions of this
commitment within the time specified.
b. Non-payment of any of the fees or expenses to be paid by Borrower in
connection with this commitment.
c. The filing by or against Borrower of any petition in bankruptcy or
insolvency or for the reorganization of Borrower or the appointment of a
receiver or trustee or the making of an assignment for the benefits of
creditors.
WAIVER OF JURY TRIAL. THE BORROWER AND XXXXXX XXXXXX KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY WITH REGARD TO ANY
LITIGATION BASED ON THIS COMMITMENT, OR TO ANY OBLIGATION RESULTING FROM
OR RELATED TO ANY LOAN OR GUARANTY RELATING TO THIS COMMITMENT, OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE
OF DEALING, COURSE OF CONDUCT, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF XXXXXXXX OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE LENDER ENTERING INTO THIS COMMITMENT.
Very truly yours,
CITY NATIONAL BANK OF FLORIDA
By: /s/ Xxxxx Xxxxxxx
_____________________________________
Xxxxx Xxxxxxx
Executive Vice President
KG/gpc
ACCEPTED THIS ___ DAY OF ___________, 1999.
"Borrower"
PREFERRED EMPLOYERS HOLDINGS, INC.
By:____________________________________
