EXHIBIT 10.27
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RESTATED REVOLVING CREDIT AGREEMENT
between
IMRGLOBAL CORP.
"Borrower"
and
FIRST UNION NATIONAL BANK
"Bank"
Dated: as of January 19, 2000
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TABLE OF CONTENTS
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1. Definitions...........................................................1
2. The Loan..............................................................1
2.1. Revolving Loan...............................................1
2.2. Revolving Note...............................................1
2.3. Cash Management Services.....................................1
2.4. Advances.....................................................1
2.5. Repayment of Loan............................................2
2.6. Overdue Amounts..............................................2
2.7. Calculation of Interest; Interest Rate.......................2
2.8. Letters of Credit............................................3
2.9. Fees.........................................................3
2.10. Statement of Account.........................................4
2.11. Termination..................................................4
2.12. Collateral...................................................4
3. Conditions Precedent to Borrowing.....................................5
3.1. Conditions Precedent to Initial Advance......................5
3.2. Conditions Precedent to Each Advance.........................6
4. Representations and Warranties........................................7
4.1. Valid Existence and Power....................................7
4.2. Authority....................................................7
4.3. Financial Condition..........................................7
4.4. Litigation...................................................7
4.5. Agreements, Etc..............................................7
4.6. Authorizations...............................................8
4.7. Title........................................................8
4.8. Collateral...................................................8
4.9. Location.....................................................8
4.10. Taxes........................................................8
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TABLE OF CONTENTS
(CONTINUED)
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4.11. Labor Law Matters............................................8
4.12. Judgment Liens...............................................8
4.13. Subsidiaries.................................................8
4.14. Environmental................................................9
4.15. ERISA........................................................9
4.16. Investment Company Act.......................................9
4.17. Names........................................................9
4.18. Insider......................................................9
4.19. Compliance with Covenants; No Default........................9
4.20. Full Disclosure.............................................10
4.21. Additional Representations..................................10
5. Affirmative Covenants of Borrower....................................10
5.1. Use of Loan Proceeds........................................10
5.2. Insurance...................................................10
5.3. Notice of Default...........................................10
5.4. Inspections.................................................10
5.5. Financial Information.......................................10
5.6. Maintenance of Existence and Rights.........................12
5.7. Payment of Taxes, Etc.......................................12
5.8. Subordination...............................................12
5.9. Compliance; Hazardous Materials.............................12
5.10. Compliance with Assignment Laws.............................12
5.11. Further Assurances..........................................12
5.12. Year 2000 Compatibility.....................................12
6. Negative Covenants of Borrower.......................................12
6.1. Debt........................................................12
6.2. Liens.......................................................12
6.3. Dividends...................................................13
6.4. Loans and Other Investments.................................13
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TABLE OF CONTENTS
(CONTINUED)
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6.5. Change in Business..........................................13
6.6. Transactions with Affiliates................................13
6.7. No Change in Offices........................................13
6.8. No Sale, Leaseback..........................................13
6.9. Margin Stock................................................13
6.10. Subsidiaries................................................13
6.11. Change of Ownership.........................................13
6.12. Change of Name..............................................14
6.13. Liquidation, Mergers, Consolidations and Dispositions of
Substantial Assets........................................14
6.14. Change of Fiscal Year or Accounting Methods.................14
6.15. Loan Advances, Transfers, Loans and Investments in Certain
Subsidiaries..............................................14
6.16. Prepayment of Other Debt....................................14
6.17. Default on Other Contracts or Obligations...................14
7. Other Covenants of Borrower..........................................14
8. Default..............................................................16
8.1. Events of Default...........................................16
8.2. Cure Period.................................................17
8.3. Remedies....................................................17
8.4. Receiver....................................................17
8.5. Deposits; Insurance.........................................17
9. Miscellaneous........................................................17
9.1. No Waiver, Remedies Cumulative..............................17
9.2. Survival of Representations.................................17
9.3. Indemnity By Borrower; Expenses.............................18
9.4. Notices.....................................................18
9.5. Governing Law...............................................19
9.6. Successors and Assigns......................................19
9.7. Counterparts................................................19
9.8. No Usury....................................................19
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9.9. Powers......................................................19
9.10. Approvals...................................................19
9.11. Binding Arbitration; Preservation of Remedies...............20
9.12. Participations..............................................20
9.13. Waiver of Certain Defenses..................................21
9.14. Other Provisions............................................21
LIST OF SCHEDULES AND EXHIBITS................................................22
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REVOLVING CREDIT AGREEMENT
THIS RESTATED REVOLVING CREDIT AGREEMENT (the "Agreement"), dated as of
January 19, 2000, between IMRGLOBAL CORP., a Florida corporation ("Borrower"),
and FIRST UNION NATIONAL BANK, a national banking association ("Bank") restates
in its entirety that certain Revolving Credit Agreement dated as of December 28,
1999, executed by and between Borrower and Bank.
W I T N E S S E T H :
In consideration of the premises and of the mutual covenants herein contained
and to induce Bank to extend credit to Borrower, the parties agree as follows:
1. DEFINITIONS. Capitalized terms that are not otherwise defined herein shall
have the meanings set forth in Exhibit 1 hereto.
2. THE LOAN.
2.1. REVOLVING LOAN. Bank agrees, on the terms and conditions set forth
in this Agreement, to make Advances and to issue letters of credit to Borrower
from time to time during the Revolving Credit Period in amounts such that the
aggregate principal amount of Advances and the face amount of any letters of
credit at any one time outstanding will not exceed the Maximum Loan Amount (the
"Loan"). Within the foregoing limit, Borrower may borrow, prepay and reborrow
Advances at any time during the Revolving Credit Period.
2.2. REVOLVING NOTE. The Loan shall be evidenced by a promissory note
in the face amount of the Maximum Loan Amount dated the date hereof (the "Note")
and shall be payable in accordance with the terms of the Note and this
Agreement.
2.3. CASH MANAGEMENT SERVICES. If Borrower subscribes to Bank's cash
management services and such services are applicable to the Loan, the terms of
such services, as set forth in the Services Agreement, shall control the manner
in which funds are transferred between the Demand Deposit Account and the Loan
for credit or debit to the Loan.
2.4. ADVANCES.
(a) Bank, in its discretion, may require from Borrower a
signed written request for an Advance in form satisfactory to Bank, which
request shall be delivered to Bank no later than 12:00 noon (local time in
Tampa, Florida) on the date of the requested Advance, and shall specify the date
(which shall be a Business Day) and the amount of the proposed Advance and
provide such other information as Bank may require. Bank's acceptance of such a
request shall be indicated by its making the Advance requested. Such an Advance
shall be made available to Borrower in immediately available funds at Bank's
address referred to in Section 10.4.
(b) Notwithstanding the foregoing, Bank may, in its sole and
absolute discretion, make or permit to remain outstanding Advances under the
Loan in excess of the original principal amount of the Note, and all such
amounts shall (i) be part of the Indebtedness evidenced by the Note, (ii) bear
interest as provided herein, (iii) be payable upon demand by Bank, and (iv) be
entitled to all rights and security as provided under the Loan Documents.
2.5. REPAYMENT OF LOAN.
(a) The Loan shall mature, and the principal amount thereof
and all interest, fees, expenses and other amounts payable under the Loan
Documents shall be due and payable, on the Termination Date.
(b) At any time after the occurrence of an Event of Default,
Bank shall have the right to set off against the Demand Deposit Account and/or
any other account maintained by Borrower with Bank amounts which are due under
the Loan.
(c) Borrower shall make each payment of principal of and
interest on the Loan and fees hereunder not later than 12:00 noon (local time
Tampa, Florida) on the date when due, without set off, counterclaim or other
deduction, in immediately available funds to Bank at its address referred to in
Section 9. Whenever any payment of principal of, or interest on, the Loan or of
fees shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(d) To the extent that the aggregate amount of all Advances
and the face amount of all outstanding letters of credit exceeds the Maximum
Loan Amount, the amount of such excess will be paid immediately to Bank upon
Bank's demand.
2.6. OVERDUE AMOUNTS. Any payments not made as and when due shall bear
interest from the date due until paid at the Default Rate, in Bank's discretion.
2.7. CALCULATION OF INTEREST; INTEREST RATE. All interest under the
Note or hereunder shall be calculated on the basis of the Actual/360
Computation, as defined in the Note. Interest shall accrue on the unpaid
principal balance of each Advance from the date such Advance is made available
to Borrower at a rate equal to the LIBOR Market Index Rate, as defined in the
Note, plus the Applicable Margin, as such rates may change from day to day,
provided, however, that after the occurrence of a Default, and otherwise as
provided in the Note, at Bank's option, the unpaid principal balance hereunder
shall bear interest at the Default Rate. As used herein, the term "Applicable
Margin" shall mean the following rate, as determined on the day three Business
Days after each Compliance Date:
(a) if the Funded Debt to EBITDA Ratio for the most recent
fiscal quarter of Borrower, as shown in the quarterly financial report delivered
by Borrower to Bank pursuant to Section 5.5 (a) and (c) herein, is less than
0.75:1, the Applicable Margin shall be 0.60%;
(b) if the Funded Debt to EBITDA Ratio for the most recent
fiscal quarter of Borrower, as shown in the quarterly financial report delivered
by Borrower to Bank pursuant to Section 5.5 (a) and (c) herein, is greater than
or equal to 0.75:1 and less than 1.00:1, the Applicable Margin shall be 0.85%;
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(c) if the Funded Debt to EBITDA Ratio for the most recent
fiscal quarter of Borrower, as shown in the quarterly financial report delivered
by Borrower to Bank pursuant to Section 5.5 (a) and (c) herein, is greater than
or equal to 1.00:1 and less than 1.25:1, the Applicable Margin shall be 1.25%;
and
(d) if the Funded Debt to EBITDA Ratio for the most recent
fiscal quarter of Borrower, as shown in the quarterly financial report delivered
by Borrower to Bank pursuant to Section 5.5 (a) and (c) herein, is greater than
or equal to 1.25:1, or if Borrower has not, on or before the Compliance Date,
delivered a quarterly financial report to Bank as required by such Section, the
Applicable Margin shall be 1.75%.
At all times prior to the first determination of the Applicable Margin, as
provided above, the Applicable Margin shall be 0.60%.
2.8. LETTERS OF CREDIT.
(a) At its discretion Bank may from time to time issue, extend
or renew letters of credit for the account of Borrower or its Subsidiaries. The
availability of Advances under the Loan shall be reduced by outstanding
obligations of Bank under any letters of credit. All payments made by Bank under
any such letters of credit (whether or not Borrower is the account party or
drawer) and all fees, commissions, discounts and other amounts owed or to be
owed to Bank in connection therewith, shall be deemed to be Advances under the
Note, and shall be repaid on demand. Borrower shall complete and sign such
applications and supplemental agreements and provide such other documentation as
Bank may require. The form and substance of all letters of credit, including
expiration dates, shall be subject to Bank's approval. Bank may charge a fee or
commission for issuance, renewal or extension of a letter of credit. Borrower
unconditionally guarantees all obligations of any Subsidiary with respect to
letters of credit issued by Bank for the account of such Subsidiary. Upon a
Default, Borrower shall, on demand, deliver to Bank good funds equal to 105% of
Bank's maximum liability under all outstanding letters of credit, to be held as
cash collateral for Borrower's reimbursement obligations and other Indebtedness.
(b) Any letter of credit issued hereunder shall be governed by
the Uniform Customs of Practice for Documentary Credit (1993 Rev.),
International Chamber of Commerce Publication No. 500, as revised from time to
time, except to the extent that the terms of such publication would limit or
diminish rights granted to Bank hereunder or in any other Loan Document.
2.9. FEES.
(a) Borrower shall pay to Bank a non-refundable facility fee
in the amount of $45,000.00, equal to .15% of the Maximum Loan Amount, payable
on the date of this Agreement.
(b) On the third Business Day after each Compliance Date,
beginning on the Compliance Date following the first quarter of 2000, and on the
date when the Loan is terminated, Borrower shall pay to Bank an availability fee
in an amount calculated as follows:
i. if the Funded Debt to EBITDA Ratio, for the most
recent fiscal quarter of Borrower, as shown in the
quarterly financial report delivered by Borrower to
Bank pursuant to Section 5.5 (a) and (c) herein, is
less than 0.75:1, a fee in the amount
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of one-quarter of 0.15% of the average daily unused
available amount of the Loan for the quarter
described in such report;
ii. if the Funded Debt to EBITDA Ratio, for the most
recent fiscal quarter of Borrower, as shown in the
quarterly financial report delivered by Borrower to
Bank pursuant to Section 5.5 (a) and (c) herein, is
greater than or equal to 0.75:1 and less than 1.00:1,
a fee in the amount of one-quarter of 0.20% of the
average daily unused available amount of the Loan for
the quarter described in such report;
iii. if the Funded Debt to EBITDA Ratio, for the most
recent fiscal quarter of Borrower, as shown in the
quarterly financial report delivered by Borrower to
Bank pursuant to Section 5.5 (a) and (c) herein, is
greater than or equal to 1.00:1 and less than 1.25:1,
a fee in the amount of one-quarter of 0.25% of the
average daily unused available amount of the Loan for
the quarter described in such report; and
iv. if the Funded Debt to EBITDA Ratio, for the most
recent fiscal quarter of Borrower, as shown in the
quarterly financial report delivered by Borrower to
Bank pursuant to Section 5.5 (a) and (c) herein, is
greater than or equal to 1.25:1, or if Borrower has
not, on or before the Compliance Date, delivered a
quarterly financial report to Bank as required by
such Section, a fee in the amount of one-quarter of
0.35% of the average daily unused available amount of
the Loan for the quarter described in such report.
2.10. STATEMENT OF ACCOUNT. If Bank provides Borrower with a statement
of account on a periodic basis, such statement will be presumed complete and
accurate, except as to any manifest error by Bank in the computation of amounts
paid by Borrower, and will be definitive and binding on Borrower, unless
objected to with specificity by Borrower in writing within forty-five (45) days
after receipt.
2.11. TERMINATION. Upon at least thirty (30) days prior written notice
to Bank, Borrower may, at its option, terminate this Agreement and the Loan
facility. Bank may terminate the Loan facility hereunder at any time, without
notice, upon or after the occurrence of an Event of Default.
2.12. COLLATERAL. To secure the full and timely performance of all the
obligations of Borrower and the Subsidiaries pursuant to the Loan Documents,
Borrower shall, upon execution of this Agreement and hereafter upon the
acquisition by Borrower of any direct or indirect subsidiary, execute and
deliver to Bank, and cause each Subsidiary to execute and deliver to Bank, one
or more Stock Pledge Agreements and other agreements required by Bank, in form
and substance satisfactory to Bank, granting to Bank a first priority, perfected
security interest in all the equity interests of each direct or indirect United
States subsidiary of Borrower and at least 65% of the voting equity interests of
each direct or indirect non-United States subsidiary of Borrower (or such lesser
percentage of voting equity interests specified in Exhibit 2.12), and shall
concurrently deliver to Bank the original certificates evidencing such equity
interests, duly pledged to Bank (or, if any such stock is uncertificated, such
control agreements and other agreements as are required by Bank to ensure that
it has a first priority, perfected security interest in such stock), together
with stock powers and other agreements required by Bank, provided, however, that
Bank acknowledges that the equity interest of those Subsidiaries organized under
the laws of France, Mauritius and Japan may not be evidenced by certificates and
may not be susceptible to pledge under the applicable governing laws.
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3. CONDITIONS PRECEDENT TO BORROWING. Prior to any Advance, the following
conditions shall have been satisfied, in the sole opinion of Bank and its
counsel:
3.1. CONDITIONS PRECEDENT TO INITIAL ADVANCE. In addition to any other
requirement set forth in this Agreement, Bank will not make the initial Advance
under the Loan unless and until the following conditions shall have been
satisfied:
(a) LOAN DOCUMENTS. Borrower and each other party to any Loan
Document, as applicable, shall have executed and delivered this Agreement, the
Note, and other required Loan Documents, all in form and substance satisfactory
to Bank.
(b) SUPPORTING DOCUMENTS. Borrower shall cause to be delivered
to Bank the following documents:
(i) A copy of the governing instruments of Borrower,
each Foreign Subsidiary and each Guarantor, and a good standing certificate of
Borrower, each Foreign Subsidiary and each such Guarantor, certified by the
appropriate official of its state of incorporation and the State of Florida, if
different;
(ii) A copy of the bylaws, partnership agreement or
operating agreement of Borrower, each Foreign Subsidiary and each Guarantor, as
applicable, certified as to completeness and accuracy by an appropriate office,
manager or partner of such Borrower, Foreign Subsidiary or Guarantor, as
applicable;
(iii) Incumbency certificate and certified
resolutions of the board of directors (or other appropriate Persons) of Borrower
and each other Person executing any Loan Documents, signed by the Secretary or
another authorized officer of Borrower or such other Person, authorizing the
execution, delivery and performance of the Loan Documents;
(iv) The legal opinion of Borrower's and any
Guarantor's or Foreign Subsidiary's legal counsel addressed to Bank regarding
such matters as Bank and its counsel may request; and
(v) Satisfactory evidence of payment of all fees due
and reimbursement of all costs incurred by Bank, and evidence of payment to
other parties of all fees or costs which Borrower is required under this
Agreement to pay by the date hereof.
(c) INSURANCE. Borrower shall have delivered to Bank
satisfactory evidence of insurance meeting the requirements of Section 5.2.
(d) SUBORDINATIONS. Bank shall have received subordinations
satisfactory to it from all Guarantors, Foreign Subsidiaries and Affiliates as
required by Section 5.8.
(e) ADDITIONAL DOCUMENTS. Borrower shall have delivered to
Bank all additional opinions, documents, certificates and other assurances that
Bank or its counsel may require.
(f) PAYMENT OF FEES. Borrower shall have paid all fees, costs
and expenses as required by the Loan Documents in connection with the Closing.
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3.2. CONDITIONS PRECEDENT TO EACH ADVANCE. The following conditions, in
addition to any other requirements set forth in this Agreement, shall have been
met or performed by the Advance Date with respect to any Advance Request and
each Advance Request (whether or not a written Advance Request is required)
shall be deemed to be a representation that all such conditions have been
satisfied:
(a) ADVANCE REQUEST. Borrower shall have delivered to Bank an
Advance Request and other information, as required under Section 2.4(a), unless
the procedures described in Section 2.3 are in effect.
(b) NO DEFAULT. No Default shall have occurred and be
continuing or would occur upon the making of the Advance in question and, if
Borrower is required to deliver a written Advance Request, Borrower shall have
delivered to Bank an officer's certificate to such effect, which may be
incorporated in the Advance Request.
(c) CORRECTNESS OF REPRESENTATIONS. All representations and
warranties made by Borrower and any Guarantor herein or otherwise in writing in
connection herewith shall be true and correct in all material respects with the
same effect as though the representations and warranties had been made on and as
of the proposed Advance Date, and, if Borrower is required to deliver a written
Advance Request, Borrower shall have delivered to Bank an officer's certificate
to such effect, which may be incorporated in the Advance Request.
(d) NO ADVERSE CHANGE. There shall have been no change which
could have a Material Adverse Effect on the condition, financial or otherwise,
of Borrower, any Subsidiary or any Guarantor from such condition as it existed
on the date of the most recent financial statements of such Person delivered
prior to date hereof.
(e) LIMITATIONS NOT EXCEEDED. The proposed Advance shall not
cause the outstanding principal balance of the Loan to exceed the Maximum Loan
Amount.
(f) NO TERMINATION. Bank shall (i) have timely received all
financial information from all Guarantors and Foreign Subsidiaries as required
under the Loan Documents, and (ii) not have received notice from any Guarantor
or any surety terminating or repudiating such Person's guaranty of the
Indebtedness incurred by Borrower.
(g) FURTHER ASSURANCES. Borrower shall have delivered such
further documentation or assurances as Bank may reasonably require.
(h) ADDITIONAL GUARANTIES. Borrower shall have obtained and
delivered to Bank an executed Guaranty Agreement, in form and substance
satisfactory to Bank, from any other direct or indirect Subsidiary or other
Affiliate of Borrower to whom Borrower has made or will make advances,
transfers, loans or investments in an aggregate amount in excess of
$1,000,000.00 (and, if any such Subsidiary or other Affiliate is owned, in part
or whole, by another direct or indirect Subsidiary or other Affiliate of
Borrower, from such other Subsidiary or Affiliate), provided that (i) Borrower
will have no obligation to obtain and deliver to Bank a Guaranty in connection
with an advance, transfer, loan or investment which is expressly permitted under
Section 6.4(a) or (b) hereof, and (ii) on Bank's approval, which shall not be
unreasonably withheld, Borrower shall have the right to make advances in excess
of $1,000,000.00 to a Foreign Subsidiary without the necessity of delivering to
Bank a Guaranty from such Foreign Subsidiary.
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4. REPRESENTATIONS AND WARRANTIES. In order to induce Bank to enter into this
Agreement and to make the Loan provided for herein, Borrower makes the following
representations and warranties, all of which shall survive the execution and
delivery of the Loan Documents. Unless otherwise specified, such representations
and warranties shall be deemed made as of the date hereof and as of the Advance
Date of any Advance by Bank to Borrower:
4.1. VALID EXISTENCE AND POWER. Each of Borrower and each Subsidiary is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and is duly qualified or licensed to
transact business in all places where the failure to be so qualified would have
a Material Adverse Effect on it. Each of Borrower and each other Person which is
a party to any Loan Document (other than Bank) has the power to make and perform
the Loan Documents executed by it and all such instruments will constitute the
legal, valid and binding obligations of such Person, enforceable in accordance
with their respective terms, subject only to bankruptcy and similar laws
affecting creditors' rights generally.
4.2. AUTHORITY. The execution, delivery and performance thereof by
Borrower and each other Person (other than Bank) executing any Loan Document
have been duly authorized by all necessary action of such Person, and do not and
will not violate any provision of law or regulation, or any writ, order or
decree of any court or governmental or regulatory authority or agency or any
provision of the governing instruments of such Person, and do not and will not,
with the passage of time or the giving of notice, result in a breach of, or
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of such Person pursuant to, any law,
regulation, instrument or agreement to which any such Person is a party or by
which any such Person or its respective properties may be subject, bound or
affected.
4.3. FINANCIAL CONDITION. Other than as disclosed in financial
statements dated as of September 30, 1999, and delivered to Bank, neither
Borrower nor any Subsidiary has any direct or contingent obligations or
liabilities (including any guarantees or leases) or any material unrealized or
anticipated losses from any commitments of such Person except as described on
Exhibit 4.3 (if any). All such financial statements have been prepared in
accordance with GAAP and fairly present the financial condition of Borrower or
the Subsidiary, as the case may be, as of the date thereof. Borrower is not
aware of any material adverse fact (other than facts which are generally
available to the public and not particular to Borrower, such as general economic
or industry trends) concerning the conditions or future prospects of Borrower or
any Subsidiary which has not been fully disclosed to Bank, including any adverse
change in the operations or financial condition of such Person since the date of
the most recent financial statements delivered to Bank. Borrower and each
Subsidiary is Solvent, and after consummation of the transactions set forth in
this Agreement and the other Loan documents, Borrower and each Subsidiary will
be Solvent.
4.4. LITIGATION. Except as disclosed on Exhibit 4.4 (if any), there are
no suits or proceedings pending, or to the knowledge of Borrower threatened,
before any court or by or before any governmental or regulatory authority,
commission, bureau or agency or public regulatory body against or affecting
Borrower or any Subsidiary, or their assets, which if adversely determined would
have a Material Adverse Effect on the financial condition or business of
Borrower or such Subsidiary.
4.5. AGREEMENTS, ETC. Neither Borrower nor any Subsidiary is a party to
any agreement or instrument or subject to any court order, governmental decree
or any charter or other corporate restriction,
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adversely affecting its business, assets, operations or condition (financial or
otherwise), nor is any such Person in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party, or any law, regulation, decree,
order or the like.
4.6. AUTHORIZATIONS. All authorizations, consents, approvals and
licenses required under applicable law or regulation for the ownership or
operation of the property owned or operated by Borrower or any Subsidiary or for
the conduct of any business in which it is engaged have been duly issued and are
in full force and effect, and it is not in default, nor has any event occurred
which with the passage of time or the giving of notice, or both, would
constitute a default, under any of the terms or provisions of any part thereof,
or under any order, decree, ruling, regulation, closing agreement or other
decision or instrument of any governmental commission, bureau or other
administrative agency or public regulatory body having jurisdiction over such
Person, which default would have a material adverse effect on such Person.
Except as noted herein, no approval, consent or authorization of, or filing or
registration with, any governmental commission, bureau or other regulatory
authority or agency is required with respect to the execution, delivery or
performance of any Loan Document.
4.7. TITLE. Each of Borrower and each Subsidiary has good title to all
of the assets shown in its financial statements free and clear of all Liens,
except Permitted Liens.
4.8. COLLATERAL. The security interests granted to Bank pursuant to any
Security Agreement (a) constitute and, as to subsequently acquired property
included in the collateral covered by the Security Agreement, will be fully
perfected, superior and prior to the rights of all third persons, now existing
or hereafter arising; and (b) are, and as to such subsequently acquired
collateral will be, fully perfected, superior and prior to the rights of all
third persons, now existing or hereafter arising.
4.9. LOCATION. The chief executive office of each of Borrower, the
Guarantors and the Foreign Subsidiaries, where its business records are located,
and all of the other places of business of Borrower, the Guarantors and the
Foreign Subsidiaries, are all located at the addresses indicated on Exhibit 4.9.
4.10. TAXES. Borrower and each Subsidiary have filed all federal and
state income and other tax returns which are required to be filed, and have paid
all taxes as shown on said returns and all taxes, including withholding, FICA
and AD VALOREM taxes, shown on all assessments received by it to the extent that
such taxes have become delinquent. Neither Borrower nor any Subsidiary is
subject to any federal, state or local tax Liens nor has such Person received
any notice of deficiency or other official notice to pay any taxes. Borrower and
each Subsidiary have paid all sales and excise taxes payable by it.
4.11. LABOR LAW MATTERS. No goods or services have been or will be
produced by Borrower or any Subsidiary in violation of any applicable labor laws
or regulations or any collective bargaining agreement or other labor agreements
or in violation of any minimum wage, wage-and-hour or other similar laws or
regulations.
4.12. JUDGMENT LIENS. Neither Borrower nor any Subsidiary, nor any of
their assets, are subject to any unpaid judgments (whether or not stayed) or any
judgment liens in any jurisdiction.
4.13. SUBSIDIARIES. Borrower's Subsidiaries are listed on Exhibit 4.13.
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4.14. ENVIRONMENTAL. Except as disclosed on Exhibit 4.14, and except
for ordinary and customary amounts of solvents, cleaners and similar materials
used in the ordinary course of Borrower's and the Guarantors' and Foreign
Subsidiaries' businesses and in strict compliance with all Environmental Laws,
no such Person, nor to Borrower's best knowledge any other previous owner or
operator of any real property currently owned or operated by Borrower or any
Guarantor or any Foreign Subsidiary, has generated, stored or disposed of any
Regulated Material on any portion of such property, or transferred any Regulated
Material from such property to any other location in violation of any applicable
Environmental Laws. Except as disclosed on Exhibit 4.14, no Regulated Material
has been generated, stored or disposed of on any portion of the real property
currently owned or operated by Borrower by any other Person, or is now located
on such property. Except as disclosed on Exhibit 4.14, each of Borrower, the
Guarantors, and the Foreign Subsidiaries is in full compliance with all
applicable Environmental Laws and none of them has been notified of any action,
suit, proceeding or investigation which calls into question compliance by
Borrower or any Guarantor or Foreign Subsidiary with any Environmental Laws or
which seeks to suspend, revoke or terminate any license, permit or approval
necessary for the generation, handling, storage, treatment or disposal of any
Regulated Material.
4.15. ERISA. Borrower has furnished to Bank true and complete copies of
the latest annual report required to be filed pursuant to Section 104 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), with
respect to each employee benefit plan or other plan maintained for employees of
Borrower or any Subsidiary or any Guarantor and covered by Title IV of ERISA (a
"Plan"), and no Termination Event (as hereinafter defined) with respect to any
Plan has occurred and is continuing. For the purposes of this Agreement, a
"Termination Event" shall mean a "reportable event" as defined in Section
4043(b) of ERISA, or the filing of a notice of intent to terminate under Section
4041 of ERISA. Neither Borrower nor any Subsidiary nor any Guarantor has any
unfunded liability with respect to any such Plan.
4.16. INVESTMENT COMPANY ACT. Neither Borrower nor any Subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
4.17. NAMES. Each of Borrower and the Subsidiaries currently conducts
all business only under its legal name as set forth above in the introductory
section of this Agreement or in SCHEDULE B. Except as disclosed on Exhibit 4.17,
during the preceding five (5) years, neither Borrower nor any Subsidiary has (i)
been known as or used any other corporate, fictitious or trade name, (ii) been
the surviving entity of a merger or consolidation or (iii) acquired all or
substantially all of the assets of any Person.
4.18. INSIDER. Borrower is not, and no Person having "control" (as that
term is defined in 12 X.X.X.xx. 375(b)(5) or in regulations promulgated pursuant
thereto) of Borrower is, an "executive officer," "director," or "principal
shareholder" (as those terms are defined in 12 U.S.C. ss. 375(b) or in
regulations promulgated pursuant thereto) of Bank, of a bank holding company of
which Bank is a subsidiary, or of any subsidiary of a bank holding company of
which Bank is a subsidiary.
4.19. COMPLIANCE WITH COVENANTS; NO DEFAULT. Borrower is, and upon
funding of the Loan will be, in compliance with all of the covenants hereof. No
Default has occurred, and the execution, delivery and performance of the Loan
Documents and the funding of the Loan will not cause a Default.
9
4.20. FULL DISCLOSURE. There is no material fact which is known or
which should be known by Borrower that Borrower has not disclosed to Bank which
could have a Material Adverse Effect. No Loan Document, nor any agreement,
document, certificate or statement delivered by Borrower to Bank, contains any
untrue statement of a material fact or omits to state any material fact which is
known or which should be known by Borrower necessary to keep the other
statements from being misleading.
4.21. ADDITIONAL REPRESENTATIONS. Any additional representations or
warranties set forth on Exhibit 4.21 (if any) hereto are true and correct in all
material respects.
5. AFFIRMATIVE COVENANTS OF BORROWER. Unless otherwise approved in writing by
Bank, Borrower covenants and agrees that from the date hereof and until payment
in full of the Indebtedness and the formal termination of this Agreement,
Borrower and each Subsidiary:
5.1. USE OF LOAN PROCEEDS. Shall use the proceeds of the Loan only for
general corporate purposes, including acquisition of subsidiaries, and furnish
Bank all evidence that it may reasonably require with respect to such use.
5.2. INSURANCE. Shall maintain such liability insurance, workers'
compensation insurance, business interruption insurance and casualty insurance
as may be required by law, customary and usual for prudent businesses in its
industry or as may be reasonably required by Bank.
5.3. NOTICE OF DEFAULT. Shall provide to Bank immediate notice of (a)
the occurrence of a Default and what action (if any) Borrower is taking to
correct the same, (b) any material litigation or material changes in existing
litigation or any judgment against it or its assets, (c) any material damage or
loss to property, (d) any notice from taxing authorities as to claimed
deficiencies in an amount greater than $100,000.00 or any tax lien or any notice
relating to alleged ERISA violations, (e) any Reportable Event, as defined in
ERISA, (f) the cancellation or termination of, or any default under, any
material agreement to which Borrower is a party or by which any of its
properties are bound, or any acceleration of the maturity of any Debt of
Borrower; and (g) any loss or threatened loss of material licenses or permits.
5.4. INSPECTIONS. Shall permit inspections of the records of such
Person pertaining thereto at such times and in such manner as may be reasonably
required by Bank and shall further permit such inspections, reviews and field
examinations of its other records and its properties (with such reasonable
frequency and at such reasonable times as Bank may desire) by Bank as Bank may
deem necessary or desirable from time to time. The cost of such field
examinations, reviews, verifications and inspections shall be borne by Borrower
if an Event of Default has occurred.
5.5. FINANCIAL INFORMATION. Shall maintain books and records in
accordance with GAAP and shall furnish to Bank the following periodic financial
information:
(a) INTERIM STATEMENTS. Within forty-five (45) days after the
end of each quarter, an unaudited management prepared balance sheet of Borrower
and its Subsidiaries at the end of that period and an unaudited management
prepared income statement and statement of cash flows for that period (and for
the portion of the fiscal year ending with such period), together with all
supporting schedules, setting forth in comparative form the figures for the same
period of the preceding fiscal year, and certified by the chief financial
officer of Borrower as true and correct and fairly representing the financial
condition of
10
Borrower and its Subsidiaries and that such statements are prepared in
accordance with GAAP, except without footnotes and subject to normal year-end
audit adjustments;
(b) ANNUAL STATEMENTS. Within ninety (90) days after the end
of each fiscal year, a detailed audited financial report of Borrower and its
Subsidiaries containing a consolidated and consolidating balance sheet at the
end of that period and a consolidated and consolidating income statement and
statement of cash flows for that period, setting forth in comparative form the
figures for the preceding fiscal year, together with all supporting schedules
and footnotes, and containing an audit/review opinion of independent certified
public accountants acceptable to Bank that the financial statements were
prepared in accordance with GAAP. Borrower shall obtain such written
acknowledgments from Borrower's independent certified public accountants as Bank
may require permitting Bank to rely on such annual financial statements. Any
management letter, supplemental letter, or other document accompanying the
report will also be provided to Bank. In addition, promptly upon receipt, one
copy of each written report submitted to Borrower by independent accountants for
any other annual, quarterly or special audit will be provided to Bank;
(c) NO DEFAULT CERTIFICATES. Together with each report
required by Subsection (a) and (b), a certificate of its president or chief
financial officer that no Default then exists or if a Default exists, the nature
and duration thereof and Borrower's intention with respect thereto, and in
addition, shall cause Borrower's independent auditors (if applicable) to submit
to Bank, together with its audit report, a statement that, in the course of such
audit, it discovered no circumstances which it believes would result in a
Default or if it discovered any such circumstances, the nature and duration
thereof;
(d) COVENANT COMPLIANCE CERTIFICATES. Together with each
report required by Subsection (a), (b) an (c), a certificate of its president or
chief financial officer detailing calculation of and compliance with the Other
Covenants of Borrower described in Section 7;
(e) AUDITOR'S MANAGEMENT LETTERS. Promptly upon receipt
thereof, copies of each report submitted to Borrower by independent public
accountants in connection with any annual, interim or special audit made by them
of the books of Borrower including, without limitation, each report submitted to
Borrower concerning its accounting practices and systems and any final comment
letter submitted by such accountants to management in connection with the annual
audit of Borrower;
(f) STATEMENTS OF GUARANTORS. Within ninety (90) days after
the end of each fiscal year, a detailed audited financial report of any
Guarantor or Foreign Subsidiary which is not included in the consolidated
financial reports of Borrower, containing a consolidated and consolidating
balance sheet at the end of that period and a consolidated and consolidating
income statement and statement of cash flows for that period for the Guarantor
or Foreign Subsidiary and its subsidiaries, setting forth in comparative form
the figures for the preceding fiscal year, together with all supporting
schedules and footnotes, and containing an audit opinion of independent
certified public accountants acceptable to Bank that the financial statements
were prepared in accordance with GAAP. Borrower shall obtain such written
acknowledgments from the Guarantors' or Foreign Subsidiaries' independent
certified public accountants as Bank may require permitting Bank to rely on such
annual financial statements; and
11
(g) OTHER INFORMATION. Such other information reasonably
requested by Bank from time to time concerning the business, properties or
financial condition of Borrower, Guarantor, the Foreign Subsidiaries and their
respective Subsidiaries; and
5.6. MAINTENANCE OF EXISTENCE AND RIGHTS. Borrower will preserve and
maintain its corporate existence, authorities to transact business, rights and
franchises, trade names, patents, trademarks and permits necessary to the
conduct of its business.
5.7. PAYMENT OF TAXES, ETC. Shall pay before delinquent all of its
debts and taxes, except that Bank shall not unreasonably withhold its consent to
nonpayment of taxes being actively contested in accordance with law (provided
that Bank may require bonding or other assurances).
5.8. SUBORDINATION. Shall cause all debt and other obligations now or
hereafter owed to any Guarantor or Affiliate to be subordinated in right of
payment (provided that such debt and other obligations may be paid according to
their terms so long as no Default or Event of Default has occurred) and security
to the Indebtedness in accordance with subordination agreements satisfactory to
Bank.
5.9. COMPLIANCE; HAZARDOUS MATERIALS. Shall strictly comply with all
laws, regulations, ordinances and other legal requirements, specifically
including, without limitation, ERISA, all securities laws and all laws relating
to hazardous materials and the environment. Unless approved in writing by Bank,
neither Borrower nor any Subsidiary shall engage in the storage, manufacture,
disposition, processing, handling, use or transportation of any hazardous or
toxic materials, whether or not in compliance with applicable laws and
regulations.
5.10. COMPLIANCE WITH ASSIGNMENT LAWS. Shall if required by Bank comply
with the Federal Assignment of Claims Act and any other applicable law relating
to assignment of government contracts.
5.11. FURTHER ASSURANCES. Shall take such further action and provide to
Bank such further assurances as may be reasonably requested to ensure compliance
with the intent of this Agreement and the other Loan Documents.
5.12. YEAR 2000 COMPATIBILITY. Shall take all action necessary to
assure that Borrower's computer based systems are able to operate and
effectively process data including dates on or after January 1, 2000, and shall
furnish to Bank a Year 2000 questionnaire and assessment provided by, and in
form and substance acceptable to, Bank.
6. NEGATIVE COVENANTS OF BORROWER. Unless otherwise approved in writing by Bank,
Borrower covenants and agrees that from the date hereof and until payment in
full of the Indebtedness and the formal termination of this Agreement, Borrower
and each Subsidiary:
6.1. DEBT. Shall not, directly or indirectly, create incur, assume or
become liable for any additional indebtedness, whether contingent or direct, if
giving effect to such additional indebtedness on a pro forma basis causes the
aggregate amount of Borrower's debt, excluding the Loan, to exceed
$5,000,000.00, except for the indebtedness, if any, described on SCHEDULE C
attached hereto.
6.2. LIENS. Shall not create or permit any Liens on any of its property
except Permitted Liens, and, in any event, Borrower shall not create or permit
Liens (including without limitation Permitted Liens) which secure in the
aggregate more than the amount of indebtedness permitted under Section 6.1
hereof.
12
6.3. DIVIDENDS. Shall not pay or declare any dividends (other than
stock dividends) or other distribution or purchase, redeem or otherwise acquire
any stock or other equity interests, except for the acquisition of treasury
stock on the open market, or pay or acquire any debt subordinate to the
Indebtedness unless, after giving effect thereto, there shall be no Default
hereunder and such payment or acquisition is specifically permitted by Exhibit
6.3 hereto (if any); provided, however, that any Subsidiary may pay dividends to
Borrower or another Subsidiary wholly-owned by Borrower.
6.4. LOANS AND OTHER INVESTMENTS. Shall not make or permit to exist any
advances or loans to, or guarantee or become contingently liable, directly or
indirectly, in connection with the obligations, leases, stock or dividends of,
or own, purchase or make any commitment to purchase any stock, bonds, notes,
debentures or other securities of, or any interest in, or make any capital
contributions to (all of which are sometimes collectively referred to herein as
"Investments") any Person except for (a) investments of up to two years in
duration described in SCHEDULE D attached hereto; (b) an unsecured line of
credit from Borrower to Xxxxxx Xxxxx in an amount up to $5,000,000.00, bearing
interest at a rate no less than one percent (1%) above the Prime Rate, (c)
guaranties issued by IMRGlobal Corp. with respect to the performance by a
Subsidiary of agreements (excluding agreements relating to the repayment of
loans) entered into by the Subsidiary, to the extent such guaranties are
necessary in the ordinary course of such Subsidiary's business, and (d)
advances, transfers, loans or investments in Guarantors and advances, transfers,
loans and investments up to $1,000,000.00 in the aggregate to or in any
Subsidiary which is not a Guarantor, provided that, so long as no Event of
Default has occurred, Bank shall not unreasonably withhold its approval of
advances, transfers, loans or investments to or in any Foreign Subsidiary.
6.5. CHANGE IN BUSINESS. Shall not enter into any business which is
substantially different from the business in which it is presently engaged.
6.6. TRANSACTIONS WITH AFFILIATES. Shall not directly or indirectly
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, pay any management fees to or otherwise deal with, in the ordinary
course of business or otherwise, any Affiliate (other than a Subsidiary);
provided, however, that any acts or transactions prohibited by this Section (and
not otherwise prohibited under this Agreement) may be performed or engaged in
after written notice to Bank if upon terms not less favorable to Borrower or
such Subsidiary than if no such relationship existed.
6.7. NO CHANGE IN OFFICES. Shall not, unless it shall have given 60
days' advance written notice thereof to Bank, change the location of its chief
executive office or other office where books or records are kept.
6.8. NO SALE, LEASEBACK. Shall not enter into any sale-and-leaseback or
similar transaction.
6.9. MARGIN STOCK. Shall not use any proceeds of the Loan to purchase
or carry any margin stock (within the meaning of Regulation U of the Board of
Governors of Federal Reserve System) or extend credit to others for the purpose
of purchasing or carrying any margin stock.
6.10. SUBSIDIARIES. Shall not permit any Subsidiary to issue capital
stock except to its parent.
6.11. CHANGE OF OWNERSHIP. Shall not issue, sell or otherwise dispose
of any of its equity interests or other securities, or rights, warrants or
options to purchase or acquire any such equity interests
13
or securities or otherwise participate in any change in the ownership of
Borrower without the prior written consent of Bank, which consent shall not be
unreasonably withheld.
6.12. CHANGE OF NAME. Shall give Bank thirty (30) days prior written
notice of any change of name or any new trade or fictitious name. Borrower's and
any Subsidiary's use of any trade or fictitious name shall be in compliance with
all laws regarding the use of such names.
6.13. LIQUIDATION, MERGERS, CONSOLIDATIONS AND DISPOSITIONS OF
SUBSTANTIAL ASSETS. Shall not dissolve or liquidate, or become a party to any
merger or consolidation, or sell, transfer, lease or otherwise dispose of all or
a substantial part (more than 10% in the aggregate during the term hereof) of
its property or assets, except for the sale of Inventory in the ordinary course
of business, or, without the prior written consent of Bank (which shall not be
unreasonably withheld), sell or dispose of any equity ownership interests in any
Subsidiary.
6.14. CHANGE OF FISCAL YEAR OR ACCOUNTING METHODS. Shall not change its
fiscal year or its accounting methods without the prior written consent of Bank,
provided that Borrower or any Subsidiary may, after notice to Bank, change its
fiscal year end to December 31, and provided that Borrower or any Subsidiary may
change its accounting methods to the extent necessary to comply with GAAP, or
otherwise as necessary to fairly describe Borrower's financial condition, so
long as Borrower discloses all such changes to Bank in advance, no such change
will make any reports furnished to Bank misleading, and Borrower provides to
Bank immediately upon request supplemental financial information which would
allow Bank to fairly and completely compare current reports with prior reports
received by Bank.
6.15. LOAN ADVANCES, TRANSFERS, LOANS AND INVESTMENTS IN CERTAIN
SUBSIDIARIES. Shall not make any advances, transfers, loans or investments in an
aggregate amount in excess of $1,000,000.00 to or in any Subsidiary, or other
Affiliate, which is not a Guarantor, except as expressly permitted under Section
6.4(a) and (b) hereof, except that, so long as no Event of Default has occurred,
Bank shall not unreasonably withhold its approval of advances, transfers, loans
or investments to or in a Foreign Subsidiary.
6.16. PREPAYMENT OF OTHER DEBT.Shall not retire any long term debt at a
date in advance of its legal obligation to do so, provided that, so long as no
Event of Default has occurred, Borrower may retire up to $1,000,000.00 in long
term debt of any Subsidiary and may retire any part or all of the long-term debt
of any newly acquired Subsidiary which becomes a Guarantor.
6.17. DEFAULT ON OTHER CONTRACTS OR OBLIGATIONS. Shall not default on
any material contract with or obligation when due to a third party or default in
the performance of any obligation to a third party incurred for money borrowed.
7. OTHER COVENANTS OF BORROWER. Borrower covenants and agrees that from the date
hereof and until payment in full of the Indebtedness and the formal termination
of this Agreement, Borrower shall comply with the following additional
covenants:
FUNDED DEBT TO ADJUSTED EBITDA RATIO. Borrower shall, at all
times, maintain on a consolidated basis a Funded Debt to EBITDA Ratio of less
than 1.50 to 1.00. This covenant shall be calculated quarterly on a rolling four
quarters basis. "Funded Debt to EBITDA Ratio" shall mean the sum of all Funded
Debt divided by Adjusted EBITDA. "Funded Debt" shall mean, as applied to any
person or
14
entity, the sum of all indebtedness for borrowed money (including, without
limitation, capital lease obligations, obligations under synthetic leases,
subordinated debt (including debt subordinated to Bank), and unreimbursed
drawings under letters of credit), or any other monetary obligation evidenced by
a note, bond, debenture or other agreement or similar instrument of that person
or entity. "Adjusted EBITDA" shall be defined as consolidated net income from
continuing operations plus consolidated depreciation and amortization plus
interest expense plus income taxes, provided that Adjusted EBITDA for any
four-quarter period which includes the last quarter of 1999 or the first quarter
of 2000 shall also be increased by the charges itemized on SCHEDULE E attached
hereto.
DEPOSIT RELATIONSHIP. Borrower shall maintain its primary
depository account and cash management account with Bank.
TANGIBLE NET WORTH. Borrower shall, at all times, maintain on
a consolidated basis a Tangible Net Worth of at least the following:
PERIOD TANGIBLE NET WORTH
------ ------------------
As of December 31, 1999 $118,000,000.00
As of the end of the first, second and third fiscal quarters of $ 86,000,000.00
2000
As of the end of Fiscal Year 2000 and the end of the first, $110,000,000.00
second and third fiscal quarters of 2001
As of the end of Fiscal Year 2001 and thereafter $150,000,000.00
"Tangible Net Worth" shall mean the total assets minus total liabilities. For
purposes of this computation, the aggregate amount of any intangible assets of
Borrower including, without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks, and brand names, shall be
subtracted from total assets, and total liabilities shall include debt fully
subordinated to Bank on terms and conditions acceptable to Bank.
TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. Borrower shall,
at all times, maintain on a consolidated basis a ratio of Total Liabilities,
divided by Tangible Net Worth of not more than the following:
PERIOD TANGIBLE NET WORTH
------ ------------------
Calendar Year 2000 1.5 to 1.0
Calendar Year 2001 1.25 to 1.0
Thereafter 1.0 to 1.0
For purposes of this computation, "Total Liabilities" shall mean all liabilities
of Borrower, excluding debt fully subordinated to Bank on terms and conditions
acceptable to Bank, and including capitalized leases, synthetic leases and all
reserves for deferred taxes and other deferred sums appearing on the liabilities
side of a balance sheet of Borrower, in accordance with generally accepted
accounting principles applied on a consistent basis.
15
8. DEFAULT.
8.1. EVENTS OF DEFAULT. Each of the following shall constitute a
Default:
(a) There shall occur any default by Borrower in the payment,
when due, of any principal of or interest on the Note, any amounts due hereunder
or any other Loan Document, or any other Indebtedness; or
(b) There shall occur any default by Borrower or any other
party to any Loan Document (other than Bank) in the performance of any
agreement, covenant or obligation contained in this Agreement or such Loan
Document not provided for elsewhere in this Section 8; or
(c) Any representation or warranty made by Borrower or any
other party to any Loan Document (other than Bank) herein or therein or in any
certificate or report furnished in connection herewith or therewith shall prove
to have been untrue or incorrect in any material respect when made; or
(d) Any other obligation now or hereafter owed by Borrower, or
a majority shareholder of any Subsidiary, to Bank shall be in default and not
cured within the grace period, if any, provided therein, or any such Person
shall be in default under any obligation in excess of $1,000,000.00 owed to any
other obligee, which default entitles the obligee to accelerate any such
obligations or exercise other remedies with respect thereto; or
(e) Borrower or any Subsidiary or Guarantor shall (A)
voluntarily dissolve, liquidate or terminate operations or apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of such Person or of all or of a substantial part of its
assets, (B) admit in writing its inability, or be generally unable, to pay its
debts as the debts become due, (C) make a general assignment for the benefit of
its creditors, (D) commence a voluntary case under the federal Bankruptcy Code
(as now or hereafter in effect), (E) file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, (F) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under Bankruptcy Code, or (G) take any corporate action for
the purpose of effecting any of the foregoing; or
(f) An involuntary petition or complaint shall be filed
against Borrower or any Subsidiary or any Guarantor seeking bankruptcy relief or
reorganization or the appointment of a receiver, custodian, trustee, intervenor
or liquidator of Borrower or any Subsidiary or any Guarantor, of all or
substantially all of its assets, and such petition or complaint shall not have
been dismissed within sixty (60) days of the filing thereof; or an order, order
for relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving or ordering any of the
foregoing actions;
(g) A judgment in excess of $1,000,000.00 shall be rendered
against the Borrower or any Subsidiary or Guarantor and shall remain
undischarged, undismissed and unstayed for more than ten days (except judgments
validly covered by insurance with a deductible of not more than $1,000,000.00)
or there shall occur any levy upon, or attachment, garnishment or other seizure
of, assets of Borrower or a Subsidiary, where the amount of the underlying claim
exceeds $1,000,000.00; or
16
(h) Borrower, any Subsidiary or any Guarantor shall fail to
pay, on demand, any returned or dishonored draft, check, or other item which has
been deposited to the Demand Deposit Account or otherwise presented to Bank and
for which Borrower has received provisional credit; or
(i) Any Guarantor shall repudiate or revoke any Guaranty
Agreement; or
(j) There shall occur any change in the financial condition of
Borrower, on a consolidated basis, which, in the reasonable opinion of Bank,
could have a Material Adverse Effect.
8.2. CURE PERIOD. Borrower shall have five days after first receiving
notice of any Default under clauses 8.1 (a), (b), (d), (h), (i), or (j) above
("Cure Period") in order to cure such Default, provided that: (a) such Default
is subject to being cured with the Cure Period, (b) Borrower exercises due
diligence during the Cure Period to cure the Default, (c) a delay in exercising
its remedies would not, in Bank's discretion, impair the Bank's ability to
protect its interest in collateral securing the Indebtedness, and (d) there was
not, within one year prior to such Default, a Default under the same covenant or
provision in the Loan Documents. Borrower shall have no rights to cure any
Default under clauses 8.1(c), (e), (f) and (g) above.
8.3. REMEDIES. If any Default shall occur, Bank may, without notice to
Borrower, at its option, withhold further Advances to Borrower. If an Event of
Default shall have occurred and be continuing, Bank may at its option, declare
any or all Indebtedness to be immediately due and payable (if not earlier
demanded), terminate its obligation to make Advances to Borrower, bring suit
against Borrower to collect the Indebtedness, exercise any remedy available to
Bank hereunder or at law and take any action or exercise any remedy provided
herein or in any other Loan Document or under applicable law. No remedy shall be
exclusive of other remedies or impair the right of Bank to exercise any other
remedies.
8.4. RECEIVER. In addition to any other remedy available to it, Bank
shall have the absolute right, upon the occurrence of an Event of Default, to
seek and obtain the appointment of a receiver to take possession of and operate
and/or dispose of the business and assets of Borrower and any costs and expenses
incurred by Bank in connection with such receivership shall bear interest at the
Default Rate, at Bank's option.
8.5. DEPOSITS; INSURANCE. After the occurrence of an Event of Default,
Borrower authorizes Bank to collect and apply against the Indebtedness when due
any cash or deposit accounts in its possession, and irrevocably appoints Bank as
its attorney-in-fact to endorse any check or draft or take other action
necessary to obtain such funds.
9. MISCELLANEOUS.
9.1. NO WAIVER, REMEDIES CUMULATIVE. No failure on the part of Bank to
exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and are in addition to any other remedies provided by law, any Loan Document or
otherwise.
9.2. SURVIVAL OF REPRESENTATIONS. All representations and warranties
made herein shall survive the making of the Loan hereunder and the delivery of
the Note, and shall continue in full force and effect so
17
long as any Indebtedness is outstanding, there exists any commitment by Bank to
Borrower, and until this Agreement is formally terminated in writing.
9.3. INDEMNITY BY BORROWER; EXPENSES. In addition to all other
Indebtedness, Borrower agrees to defend, protect, indemnify and hold harmless
Bank and its Affiliates and all of their respective officers, directors,
employees, attorneys, consultants and agents from and against any and all
losses, damages, liabilities, obligations, penalties, fees, costs and expenses
(including, without limitation, attorneys' and paralegals' fees, costs and
expenses) incurred by such indemnitees, whether prior to or from and after the
date hereof, as a result of or arising from or relating to (i) the due diligence
effort (including, without limitation, public record search, recording fees,
examinations and investigations of the properties of Borrower and Borrower's
operations), negotiation, preparation, execution and/or performance of any of
the Loan Documents or of any document executed in connection with the
transactions contemplated thereby, maintenance of the Loan by Bank, and any and
all amendments, modifications, and supplements of any of the Loan Documents or
restructuring of the Indebtedness, (ii) any suit, investigation, action or
proceeding by any Person (other than Borrower), whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any Person under any
statute, regulation or common law principle, arising from or in connection with
Bank's furnishing of funds to Borrower under this Agreement, (iii) Bank's
preservation, administration and enforcement of its rights under the Loan
Documents and applicable law, including the reasonable fees and disbursements of
counsel for Bank in connection therewith, whether suit be brought or not and
whether incurred at trial or on appeal, (iv) periodic field exams, audits and
appraisals performed by Bank after the occurrence of an Event of Default; and/or
(v) any matter relating to the financing transactions contemplated by the Loan
Documents or by any document executed in connection with the transactions
contemplated thereby, other than for such loss, damage, liability, obligation,
penalty, fee, cost or expense arising from such indemnitee's gross negligence or
willful misconduct. If Borrower should fail to pay any tax or other amount
required by this Agreement to be paid, Bank may make such payment and the amount
thereof shall be payable on demand, shall bear interest at the Default Rate from
the date of demand until paid and shall be deemed to be Indebtedness entitled to
the benefit and security of the Loan Documents. In addition, Borrower agrees to
pay and save Bank harmless against any liability for payment of any state
documentary stamp taxes, intangible taxes or similar taxes (including interest
or penalties, if any) which may now or hereafter be determined to be payable in
respect to the execution, delivery or recording of any Loan Document or the
making of any Advance, whether originally thought to be due or not, and
regardless of any mistake of fact or law on the part of Bank or Borrower with
respect to the applicability of such tax. Borrower's obligation for
indemnification for all of the foregoing losses, damages, liabilities,
obligations, penalties, fees, costs and expenses of Bank shall be part of the
Indebtedness, chargeable against Borrower's loan account, and shall survive
termination of this Agreement.
9.4. NOTICES. Any notice or other communication hereunder under the
Note to any party hereto or thereto shall be by hand delivery, overnight
delivery, facsimile, telegram, telex or registered or certified mail and unless
otherwise provided herein shall be deemed to have been given or made when
delivered, telegraphed, telexed, faxed or three (3) Business Days after having
been deposited in the mails, postage prepaid, addressed to the party at its
address specified below (or at any other address that the party may hereafter
specify to the other parties in writing):
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Bank: First Union National Bank
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Senior Portfolio Manager
With a copy to:
First Union National Bank
000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Mr. Xxx Xxxxxxxx
Borrower: IMRglobal Corp.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
9.5. GOVERNING LAW. This Agreement and the Loan Documents shall be
deemed contracts made under the laws of the State of Florida and shall be
governed by and construed in accordance with the laws of said state (excluding
its conflict of laws provisions if such provisions would require application of
the laws of another jurisdiction).
9.6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of Borrower and Bank, and their respective successors
and assigns; provided, that Borrower may not assign any of its rights hereunder
without the prior written consent of Bank, and any such assignment made without
such consent will be void.
9.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.
9.8. NO USURY. Regardless of any other provision of this Agreement, the
Note or in any other Loan Document, if for any reason the effective interest
should exceed the maximum lawful interest, the effective interest shall be
deemed reduced to, and shall be, such maximum lawful interest, and (i) the
amount which would be excessive interest shall be deemed applied to the
reduction of the principal balance of the Note and not to the payment of
interest, and (ii) if the loan evidenced by the Note has been or is thereby paid
in full, the excess shall be returned to the party paying same, such application
to the principal balance of the Note or the refunding of excess to be a complete
settlement and acquittance thereof.
9.9. POWERS. All powers of attorney granted to Bank are coupled with an
interest and are irrevocable.
9.10. APPROVALS. If this Agreement calls for the approval or consent of
Bank, such approval or consent may be given or withheld in the discretion of
Bank unless otherwise specified herein.
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9.11. BINDING ARBITRATION; PRESERVATION OF REMEDIES.
(a) BINDING ARBITRATION. Upon demand of any party hereto,
whether made before or after institution of any judicial proceeding, any claim
or controversy arising out of, or relating to the Loan Documents ("Disputes")
between the parties hereto (a "Dispute") shall be resolved by binding
arbitration conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act. Disputes may include,
without limitation, tort claims, counterclaims, disputes as to whether a matter
is subject to arbitration, claims brought as class actions, or claims arising
from documents executed in the future. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements.
(b) SPECIAL RULES. All arbitration hearings shall be conducted
in the city in which the office of Bank first stated above is located. A hearing
shall begin within 90 days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then for no more
than a total of 60 days. The expedited procedures set forth in Rule 51 et seq.
of the Arbitration Rules shall be applicable to claims of less than $1,000,000.
Arbitrators shall be licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The parties do not waive applicable
Federal or state substantive law except as provided herein.
(c) PRESERVATION AND LIMITATION OF REMEDIES. Notwithstanding
the preceding binding arbitration provisions, the parties agree to preserve,
without diminution, certain remedies that any party may exercise before or after
an arbitration proceeding is brought. The parties shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to the parties' entitlement to such remedies is a Dispute.
(d) NO PUNITIVE DAMAGES. Each party agrees that it shall not
have a remedy of punitive or exemplary damages against the other in any Dispute
and hereby waives any right or claim to punitive or exemplary damages it may
have now or which may arise in the future in connection with any Dispute,
whether the Dispute is resolved by arbitration or judicially.
(e) WAIVER OF JURY TRIAL. The parties acknowledge that by
agreeing to binding arbitration they have irrevocably waived any right they may
have to a jury trial with regard to a Dispute.
9.12. PARTICIPATIONS. Bank shall have the right to enter into one or
more participation with other lenders with respect to the Indebtedness. Upon
prior notice to Borrower of such participation, Borrower shall thereafter
furnish to such participant any information furnished by Borrower to Bank
pursuant to the terms of the Loan Documents. Nothing in this Agreement or any
other Loan Document shall prohibit Bank from pledging or
20
assigning this Agreement and Bank's rights under any of the other Loan
Documents, to any Federal Reserve Bank in accordance with applicable law.
9.13. WAIVER OF CERTAIN DEFENSES. To the fullest extent permitted by
applicable law, upon the occurrence of any Event of Default, neither Borrower
nor anyone claiming by or under Borrower will claim or seek to take advantage of
N.C.G.S. ss. 26-7, ET SEQ. or any other law requiring Bank to attempt to realize
upon any collateral or collateral of any surety or guarantor, or any
appraisement, evaluation, stay, extension, homestead, redemption or exemption
laws now or hereafter in force in order to prevent or hinder the enforcement of
this Agreement. Borrower, for itself and all who may at any time claim through
or under Borrower, hereby expressly waives to the fullest extent permitted by
law the benefit of all such laws. All rights of Bank and all obligations of
Borrower hereunder shall be absolute and unconditional irrespective of (i) any
change in the time, manner or place of payment of, or any other term of, all or
any of the Indebtedness, or any other amendment or waiver of or any consent to
any departure from any provision of the Loan Documents, (ii) any exchange,
release or non-perfection of any other collateral given as security for the
Indebtedness, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Indebtedness, or (iii) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, Borrower or any third party, other than payment and performance in
full of the Indebtedness.
9.14. OTHER PROVISIONS. Any other or additional terms and conditions
set forth in Exhibit 10.15 (if any) are hereby incorporated herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
FIRST UNION NATIONAL BANK
By: /s/ XXXXXX X. XXXXXXXX, XX.
------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
Senior Vice President
IMRGLOBAL CORP., A FLORIDA CORPORATION
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Xxxxxx Xxxxxxx
Chief Financial Officer
Bank:____________
Borrower:____________
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