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EXHIBIT 10.17
CREDIT AGREEMENT
DATED AS OF AUGUST 21, 1998
BETWEEN
LAMALIE ASSOCIATES, INC.
AS BORROWER,
AND
XXXXXXX BANK, N.A.
AS LENDER,
RELATING TO
$25,000,000 REVOLVING LINE OF CREDIT FACILITY
WITH $5,000,000 SUB-LIMIT FOR LETTERS OF CREDIT
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.......................................................... 1
SECTION 1.02. Computation of Time Periods..................................................... 11
SECTION 1.03. Accounting Terms................................................................ 11
SECTION 1.04. Financial Ratios................................................................ 11
ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT FACILITY
SECTION 2.01. The Commitment.................................................................. 11
SECTION 2.02. Making the Advances............................................................. 11
SECTION 2.03. Repayment; Resting of Credit Facilities........................................ 12
SECTION 2.04. Interest; Late Charges; Standby Fees........................................... 12
SECTION 2.05. Prepayments.................................................................... 14
SECTION 2.06. Conversion of Advances; Failure to
Select Interest Period......................................................... 14
SECTION 2.07. Increased Costs, Etc........................................................... 15
SECTION 2.08. Payments....................................................................... 17
ARTICLE III
OTHER TERMS APPLICABLE TO REVOLVING CREDIT
FACILITIES
SECTION 3.01. Senior Debt.................................................................... 18
SECTION 3.02. Use of Proceeds................................................................ 18
SECTION 3.03. Evidence of Debt............................................................... 18
SECTION 3.04. Borrower's Loan Accounting..................................................... 18
ARTICLE IV
LETTER OF CREDIT FACILITY
SECTION 4.01. Letters of Credit............................................................... 18
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SECTION 4.02. Request for Issuance............................................................ 19
SECTION 4.03. Drawings........................................................................ 20
SECTION 4.04. Increased Costs................................................................ 21
SECTION 4.05. Obligations Absolute............................................................ 21
SECTION 4.06. No Liability Regarding Letters of Credit........................................ 22
SECTION 4.07. Payment; Default Interest; Taxes................................................ 23
SECTION 4.08 Fees and Charges................................................................ 23
ARTICLE V
SECURITY INTERESTS AND GUARANTIES
SECTION 5.01. Security Interest.............................................................. 23
SECTION 5.02. Protection of Business Records.................................................. 24
SECTION 5.03. Guaranties...................................................................... 24
SECTION 5.04. Security and Guaranties Provided by
Additional Subsidiaries......................................................... 24
ARTICLE VI
CONDITIONS OF LENDING
SECTION 6.01. Conditions Precedent to Initial
Credit Event..................................................................... 24
SECTION 6.02. Conditions Precedent to Each
Credit Event..................................................................... 27
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the
Borrower......................................................................... 27
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants............................................................ 32
SECTION 8.02. Financial Covenants.............................................................. 36
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SECTION 8.03. Negative Covenants............................................................... 37
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default................................................................ 40
SECTION 9.02. Remedies......................................................................... 42
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc.................................................................. 44
SECTION 10.02. Notices, Etc..................................................................... 44
SECTION 10.03. No Waiver; Remedies.............................................................. 45
SECTION 10.04. Costs and Expenses............................................................... 45
SECTION 10.05. Right of Set-Off................................................................. 47
SECTION 10.06. Binding Effect................................................................... 47
SECTION 10.07. Assignments and Participations................................................... 47
SECTION 10.08. Governing Law.................................................................... 48
SECTION 10.09. Execution in Counterparts........................................................ 48
SECTION 10.10. Consent to Jurisdiction.......................................................... 48
SECTION 10.11. Confidentiality.................................................................. 49
SECTION 10.12. Further Assurances............................................................... 49
SECTION 10.13. Supercedes Prior Agreement........................................................ 49
EXHIBITS
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Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion
Exhibit D - Officer's Certificate
Exhibit E - Form of Letter of Credit Request
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SCHEDULES
Schedule 7.01(c) - Fictitious Names
Schedule 7.01(g) - Title to Assets
Schedule 7.01(h) - Pending Litigation
Schedule 7.01(i) - Tax Returns
Schedule 7.01(o) - ERISA Plans
Schedule 7.01(p) - Environmental Compliance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") dated as of August 21, 1998 by
and between LAMALIE ASSOCIATES, INC., a Florida corporation (the "Borrower") and
XXXXXXX BANK, N.A., a national banking association (the "Lender").
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender is willing to make available to the Borrower a line of credit
facility in an amount not exceeding $25,000,000 with a $5,000,000 sub-limit for
letters of credit, all as provided herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Account(s)" or "Accounts Receivable" means any right to payment for
goods or services sold which is not evidenced by an instrument or chattel paper.
"Account Debtor" means the primary obligor or obligors and any
co-signer in respect of any Accounts Receivable.
"Accounts Payable" means, at any date, the aggregate amount of all
liabilities of the Borrower that would be properly classified as trade or vendor
accounts payable at such date, all computed in accordance with GAAP,
consistently applied.
"Adjusted EBITDA" means the Borrower's EBITDA plus the EBITDA of any
acquired Person.
"Advance" means any Borrowing pursuant to Section 2.01(a).
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control"
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(including the terms "controlling," "controlled by" and "under common control
with") of a Person means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Credit Agreement, as the same may be modified,
supplemented or amended from time to time.
"Base Rate" means for any Interest Period for each Base Rate Advance
comprising part of the same Borrowing, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the rate of interest announced publicly by Xxxxxxx Bank, N.A. from time
to time as its "prime rate." Such prime rate is only a benchmark, is purely
discretionary, and is not the best or lowest rate charged to borrowing customers
of Xxxxxxx Bank, N.A. Any change in the prime rate shall be effective at the
beginning of the Business Day on which such change is announced.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 2.04(a)(i).
"Base Rate Margin" means the basis points per annum set forth below
which shall be effective for Borrowings beginning on the first Business Day next
following the date of receipt by the Lender of the Financial Statements and
Officers Certificates described in Section 8.01(a), demonstrating that the ratio
of Funded Debt as at the end of the Borrower's most recent four (4) Fiscal
Quarters to Adjusted EBITDA for the most recent four (4) Fiscal Quarters was
less than or equal to or greater than, as the case may be, the ratio set forth
below opposite the Base Rate Margin:
Funded Debt/EBITDA Ratio Applicable Base Rate Margin
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(a) Less than 2.00 to 1.00 Zero basis points
(b) Equal to or greater than
2.00 to 1.00 25 basis points
"Borrower" means Lamalie Associates, Inc., a Florida corporation, and
its permitted successors and assigns.
"Borrowing" means a borrowing comprising Advances of the same Type made
on the same day, or Advances Converted into the same Type on the same day.
"Business Day" means a day of the year on which the Lender is not
required or authorized to close in the City of Tampa, Florida.
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"Capital Lease" means a lease where the Borrower is the lessee under
which all obligations of lessee are treated as a capital lease in accordance
with GAAP.
"Closing Date" means the date of execution of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all of the properties, interests in property and
assets of the Borrower described in the Security Agreement as Collateral, which
Collateral shall, from time to time, secure the Obligations of the Borrower,
including all Loan Documents relating thereto.
"Commitment" has the meaning specified in Sections 2.01(a).
"Commitment Period" means the period from and including the date of
this Agreement to but not including the Termination Date, or such earlier date
as the Commitment shall terminate as provided herein.
"Conversion", "Convert" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.06 or
2.07.
"Credit Event" means the incurrence of any Borrowing.
"Current Assets" means, at any date, the aggregate amount of all assets
of the Borrower that would be properly classified as current assets at such
date, all computed in accordance with GAAP.
"Current Liabilities" means, at any date, the aggregate amount of all
liabilities (including tax and other proper accruals) of the Borrower that would
be properly classified as current liabilities at such date, all computed in
accordance with GAAP, consistently applied, except that no portion of the
Advances shall be included in Current Liabilities.
"Current Maturities of Long-Term Debt" means, at any date, the
aggregate principal amount of long-term Debt maturing during the following 12
months.
"Daily Unfunded Commitment," means the difference between (a) the
Commitment and (b) the sum of the daily outstanding balance of all Advances plus
the Letter of Credit Amount.
"Debt" shall mean, with respect to the Borrower, without duplication,
(i) all Obligations for borrowed money, (ii) all Obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) all Obligations under
conditional sale or other title retention
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agreements relating to property purchased by the Borrower, (iv) all Obligations
issued or assumed as the deferred purchase price of property or services
(excluding Obligations to trade creditors in payment for services or goods
acquired in the ordinary course of business), (v) all Obligations as lessee
under any lease which shall have been or should be, in accordance with GAAP,
treated as a Capital Lease, and (vi) all Obligations under direct or indirect
guarantees in respect of, and all Obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or Obligations of the Borrower of the kinds referred to
in clauses (i) through (v) above, less Subordinated Debt.
"Debt Service Coverage Ratio" has the meaning set forth in Section
8.02.
"Default" means any event that would constitute an Event of Default but
for the requirement that notice be given or time elapse or both.
"EBITDA" means earnings before interest, income taxes, depreciation and
amortization, determined in accordance with GAAP.
"Elected Rate" means the interest rate for an Advance elected by
Borrower hereunder, which shall be either a floating rate equal to the Base Rate
plus the Base Rate Margin or a fixed rate for the Interest Period equal to the
90-day LIBOR Rate plus the LIBOR Rate Margin.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $500,000,000; (b) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
a net worth determined in accordance with generally accepted accounting
principles in excess of $250,000,000; (c) a commercial bank organized under the
laws of any other country that is a member of the OBECD or a political
subdivision of any such country, and having total assets in excess of
$2,000,000,000, provided that such bank is acting through a branch or agency
located in the United States, in the Cayman Islands or in the country in which
it is organized or another country that is also a member of the OBECD; (d) the
central bank of any country that is a member of the OBECD; (e) a finance
company, insurance company or other financial institution or fund engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business, organized under the laws of the United States or any
State thereof and having assets in excess of $100,000,000; and (f) any other
financial institution reasonably acceptable to the Borrower.
"Environmental Laws" means any of the Water Pollution Control Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA" or "Superfund Act"),
the Superfund
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Amendments and Reauthorization Act, the Toxic Substances Control Act, the Clear
Air Act, or any similar laws imposing liability on any Person for the
generation, storage, impoundment and disposal, discharge, treatment, release,
seepage, emission, transportation or destruction of any Hazardous Waste or of
any garbage, sewage, effluent, smoke, dust or any other form of pollution
(whether or not denominated as a Hazardous Waste), as the same may be amended
from time to time, and any rules, regulations, or administrative orders
thereunder and any state statutes, laws, rules, regulations or administrative
orders addressing the same or similar subject as the foregoing federal laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" means any of the events specified in Section 9.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Financial Statements" is defined in Section 7.01(e).
"Fiscal Quarter" shall mean each fiscal quarter in a Fiscal Year.
"Fiscal Year" means each period of 52 weeks ending on February 28th of
each year.
"Fiscal Year End" means each February 28th.
"Funded Debt" means Debt owed to financial institutions, Subordinated
Debt, Capital Lease Obligations and purchase money Debt incurred by Borrower in
connection with the acquisition of any Person.
"GAAP" means generally accepted accounting principles in effect at the
time of any determination thereof, consistently applied.
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"Guarantors" means Xxxx Xxxxxx International, Inc., a Connecticut
corporation, LAI International Limited, a private limited company incorporated
under the English Companies Act of 1985, and all future Guarantors of the Credit
Facility pursuant to Section 5.04 hereof.
"Guaranty" means the Continuing Unconditional Guaranty of even date
herewith executed by the Guarantors in favor of Lender, together with all
additional Guarantys provided pursuant to Section 5.04 hereof.
"Hazardous Waste" means any hazardous, toxic or radioactive substance,
materials or products as defined under any Environmental Laws, including, but
not limited to, petroleum products, ammonia, chlorine, derivatives of petroleum
products, pesticides, asbestos and asbestos-containing materials, and
polychlorinated biphenyls (PCBs).
"Indemnity Release Date" means the date on which all Obligations of the
Borrower arising under the Loan Documents, other than those set forth in Section
10.04(c), have been satisfied in full.
"Interest Period" means, for (i) each Base Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of Conversion of a LIBOR Rate Advance into such Base Rate Advance, and
ending on the first day of the next succeeding Fiscal Quarter and, thereafter,
if applicable, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the first day of the next
succeeding Fiscal Quarter, and (ii) each LIBOR Rate Advance comprising part of
the same Borrowing, a period commencing on the date of such Advance or the date
of Conversion of any Base Rate Advance into such LIBOR Rate Advance, and ending
90 days later and, thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending 90 days later. The
duration of each such Interest Period applicable to LIBOR Rate Advances shall be
90 days; provided, however, that:
(a) The Borrower may not select any Interest Period for a
LIBOR Advance that ends after the Termination Date; and
(b) whenever the first day of any Interest Period for a LIBOR
Advance occurs on a day of the initial calendar month of such Interest
Period and there is no numerically corresponding day in the last
calendar month of such Interest Period, such Interest Period shall end
on the last Business Day of the last calendar month of such Interest
Period.
"Lease Expense" means all obligations of Borrower in its capacity as a
lessee under any Operating Lease.
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"Lender" means Xxxxxxx Bank, N.A., a national banking association, and
its successors and assigns.
"Letter of Credit" has the meaning specified in Section 4.01(a).
"L/C Advance" means an Advance which, in accordance with Section 4.03,
is made when the Borrower does not immediately reimburse the Lender for a
drawing made under a Letter of Credit and the Borrower is then permitted to
obtain a Borrowing in the amount of such drawing.
"Letter of Credit Amount" means, as of any date of determination, the
sum of (x) the aggregate amount available to be drawn under all Letters of
Credit then outstanding (assuming compliance with all conditions to drawing),
which amount shall be deemed to be made available upon issuance of a Letter of
Credit and to be outstanding so long as such Letter of Credit remains
outstanding, and (y) the amount of all outstanding L/C Advances.
"Letter of Credit Borrowing" means a Borrowing which comprises L/C
Advances.
"Letter of Credit Facility" means the letter of credit facility made
available to the Borrower pursuant to Article IV.
"Letter of Credit Request" has the meaning specified in Section 4.02.
"L/C Related Documents" has the meaning specified in Section 4.05.
"Liabilities" means, at any date, the aggregate amount of all
liabilities (including tax and other proper accruals) of the Borrower that would
be properly classified as liabilities at such date, all computed in accordance
with GAAP.
LIBOR Rate shall mean the interest rate per annum which is equal to the
offered rate in the London Interbank market for deposits in United States
Dollars having a maturity of three (3) months for ninety (90) day Interest
Periods, which appears on the Libor Rate Reference Page as of 11:00 a.m. (London
Time) on the day that is two London Banking Days preceding the first Business
Day of the Elected Interest Period. If at least two such offered rates appear on
the Libor Rate Reference Page, the rate will be the arithmetic mean of such
offered rates. Notwithstanding the foregoing, Lender may, in its sole
discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods. As used herein, "Libor
Rate Reference Page" shall mean either (a) the Reuters Screen LIBO Page, (b) the
Dow Xxxxx Telerate Page 3750 or such other nationally recognized source, as
either may from time to time be used by Lender in its sole discretion as a
reference for determining any applicable Libor Rate. "Business Banking Day"
shall mean each day other than a Saturday, a Sunday or any holiday on which
commercial banks
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in Jacksonville, Florida are closed for business. "London Banking Day" shall
mean each day other than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
"LIBOR Rate Advance" means an Advance that bears interest at the LIBOR
Rate plus the LIBOR Rate Margin.
"LIBOR Rate Margin" means the basis points per annum set forth below
which shall be effective for Borrowings beginning on the first Business Day next
following the date of receipt by the Lender of the Financial Statements and
Officers Certificates described in Section 8.01(a), demonstrating that the ratio
of Funded Debt as at the end of the Borrower's most recent four (4) Fiscal
Quarters to Adjusted EBITDA for the most recent four (4) Fiscal Quarters was
less than or equal to or greater than, as the case may be, the ratio set forth
below opposite the LIBOR Rate Margin:
Funded Debt/EBITDA Ratio Applicable Libor Rate Margin
------------------------ ----------------------------
(a) Less than 1.00 to 1.00 125 basis points
(b) Greater than or equal to
1.00 to 1.00 but less than
1.50 to 1.00 150 basis points
(c) Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 175 basis points
(d) Equal to or greater than
2.00 to 1.00 200 basis points
A LIBOR Rate Advance may not be elected during any period in which the Financial
Statements and Officers Certificate described above are delinquent.
"Loan Documents" means this Agreement, the Note, the Guaranty, the
Waiver of Jury Trial Agreement between Lender and Borrower bearing even date
herewith, the Tax Indemnity Agreement between Lender and Borrower bearing even
date herewith, each Notice of Borrowing, any Swap Agreement and any other
agreement, document or instrument relating to the Revolving Credit Facility or
the Advances described herein, including each amendment to any of the foregoing.
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"Net Income" means, for any fiscal period, net income after taxes of
the Borrower as it would appear on a statement of income of the Borrower for
such period computed in accordance with GAAP, consistently applied.
"Note" means the promissory note of the Borrower payable to the order
of the Lender, substantially in the form of Exhibit A, evidencing the aggregate
indebtedness of the Borrower to the Lender resulting from Advances made by the
Lender pursuant to Section 2.01(a).
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Conversion" has the meaning specified in Section 2.06(a).
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any obligation to make any
payment for any reason, whether or not such obligation is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, legal, equitable, secured
or unsecured, and whether or not such obligation is discharged, stayed or
otherwise affected by any proceeding referred to in Section 8.01(f)-(h). Without
limiting the generality of the foregoing, the Obligations of the Borrower under
the Loan Documents include (a) all principal interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, indemnities and any other amounts
payable by the Borrower under any Loan Document, and (b) any amount in respect
of any of the foregoing that the Lender may elect to pay or advance on behalf of
the Borrower, but only to the extent authorized by the provisions of the
relevant Loan Document.
"Officers' Certificate" means a certificate in the form appended to
this Agreement as Exhibit D, signed by an executive officer of the Borrower.
"Operating Lease" means a lease where the Borrower is the lessee under
which all obligations of lessee treated as an operating lease in accordance with
GAAP.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency of the federal government.
"Permitted Acquisitions" is defined in Section 8.03(d).
"Permitted Liens" is defined in Section 8.03(d).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, trade or business (whether or not incorporated) or other entity, or a
government or any political subdivision or agency thereof.
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"Revolving Credit Facility" means the revolving line of credit facility
made available to the Borrower as described in Article II.
"Security Agreement" means the Security Agreement by and between
Lender, Borrower and Guarantors, bearing even date herewith, including all
amendments or supplements thereto.
"Subordinated Debt" means any Debt of the Borrower permitted under the
terms hereof that is subordinated to the Obligations of the Borrower under the
Loan Documents on, and that otherwise contain, terms and conditions satisfactory
to the Lender.
"Subsidiary", with respect to any Person, means any corporation
organized under the laws of the United States of America or a jurisdiction
thereof at least a majority of the outstanding shares of voting stock or similar
interest of which are owned, directly or indirectly, by such Person. The term
"Subsidiary", when used herein without reference to any particular Person, shall
mean a Subsidiary of the Borrower now owned or hereafter created or acquired.
"Swap Agreement" means any International Swaps and Derivatives
Association (ISDA) Master Agreement executed by the Borrower providing for an
interest rate swap with respect to all or any part of the Revolving Credit
Facilities including all schedules and confirmations relating thereto.
"Tangible Net Worth" means, at any date, the following, all computed in
accordance with GAAP, consistently applied: consolidated shareholders' equity,
plus Subordinated Debt, minus receivables due from officers, directors,
stockholders or Affiliates and any goodwill, trade names, trademarks, patents,
unamortized debt discounts, non-compete agreements and other intangibles (other
than any portion thereof previously amortized).
"Tax Rate" means the federal income tax rate applicable to Borrower
from time to time.
"Termination Date" means the earlier of (i) the second anniversary of
the Closing Date and (ii) the date of termination in whole of the Commitment
pursuant to Section 9.02; provided that with respect to the Letter of Credit
Facility only, if Letters of Credit are outstanding all outstanding on the
second anniversary of the Closing Date, the Termination Date with respect to
such facility shall mean the earlier of (x) the date the last Letter of Credit
expires or (y) five (5) days after such Letter of Credit is fully drawn upon.
"Type" refers to the distinction among Advances pursuant to Section
2.01 bearing interest based on the Base Rate and the LIBOR Rate.
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SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and each of the words "to" and
"until" means "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
SECTION 1.04. Financial Ratios. All financial ratios and other
financial requirements set forth herein shall be calculated on a consolidated
basis with all Subsidiaries of Borrower.
ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT FACILITY
SECTION 2.01. The Commitment.
(a) Revolving Credit Facility. Subject to Section 2.01(b), Lender
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an aggregate amount not to exceed
Twenty-Five Million Dollars ($25,000,000) (such amount being the Lender's
"Commitment") less the Letter of Credit Amount at any time outstanding. Each
Borrowing comprising LIBOR Rate Advances shall be in an aggregate amount of not
less than $1,000,000 and any Borrowing in excess of $1,000,000 shall be in
integral multiples of $500,000. Borrowings comprising Base Rate Advances shall
not be subject to any restrictions regarding minimum amounts. Within the limits
of the Lender's Commitment, and subject to the limits referred to above, the
Borrower may repay and prepay and subsequently reborrow the amounts so repaid or
prepaid under this Section 2.01(a).
(b) Note and Notice of Borrowing. All Advances shall be evidenced
by the Note payable to the order of the Lender, in substantially the form of
Exhibit A hereto and a Notice of Borrowing, in substantially the form of Exhibit
B hereto.
SECTION 2.02. Making the Advances.
(a) Each Borrowing shall be made on notice, given by the Borrower
to the Lender not later than 11:00 a.m., Tampa, Florida time on the third
Business Day prior to the date of a proposed Borrowing comprising LIBOR Rate
Advances and on the Business Day of a proposed Borrowing comprising Base Rate
Advances. Each such notice of a Borrowing shall be by telephone, telex,
telecopier or cable, specifying therein the requested (i) date of such
Borrowing, (ii) Type of Advances comprising such Borrowing, and (iii) the
aggregate
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amount of such Borrowing, and shall be confirmed in writing by the delivery of a
Notice of Borrowing in substantially the form of Exhibit B hereto. Upon
fulfillment of the applicable conditions set forth in Article V, the Lender will
make such funds available to the Borrower by crediting the Borrower's account
maintained with Lender as specified by the Borrower.
(b) Anything in subsection (a) above to the contrary
notwithstanding, the Borrower may not select LIBOR Rate Advances for any
Borrowing if (i) the obligation of the Lender to make LIBOR Rate Advances shall
then be suspended pursuant to Section 2.07 or (ii) the Financial Statements or
reports or Officers Certificates required to be delivered to the Lender pursuant
to Section 8.01(a) are delinquent or (iii) an Event of Default hereunder has
occurred and is continuing.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to comprise LIBOR Rate Advances, the Borrower shall indemnify the
Lender against any loss, cost or expense incurred by the Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Advance the applicable conditions set forth in Article V,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund the Advance to be made by the Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
SECTION 2.03. Repayment. On the Termination Date, the Borrower shall
repay to the Lender the outstanding principal amount of all Advances, together
with interest accrued thereon and all other Obligations due under this Agreement
and the other Loan Documents.
SECTION 2.04. Interest; Late Charges; Standby Fees.
(a) Interest on Advances. The Borrower shall pay interest on
the unpaid principal amount of each Advance owing to the Lender from
the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a variable rate per annum
(adjusted on the day of each Base Rate change) equal at all
times to the sum of (A) the Base Rate in effect from time to
time, plus (B) the Base Rate Margin, payable in arrears on
each October 1, January 1, April 1, and July 1 during the
Commitment Period and on the Termination Date. Interest on
Base Rate Advances shall be computed on the basis of a year of
360 days and calculated for the actual number of days elapsed
as a Base Rate Advance.
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(ii) LIBOR Rate Advances. During such periods as such
Advance is a LIBOR Rate Advance, a fixed rate per annum for
each Interest Period equal at all times to the sum of (A) the
LIBOR Rate elected by Borrower for such Advance plus (B) the
LIBOR Rate Margin, payable in arrears on the last day of such
Interest Period. Interest on LIBOR Rate Advances shall be
computed on the basis of a year of 360 days and calculated for
the actual number of days elapsed as a LIBOR Rate Advance.
(b) Default Interest. The Borrower shall pay interest, payable
on demand, on the principal amount of each Advance or other Obligation
that is not paid when due and on all interest on any Advance or other
Obligation not paid when due (whether or not so specified in any Notes)
at a rate per annum equal to the maximum rate allowed by applicable
law.
(c) Late Charges. In addition to default interest, a late
charge shall be assessed as a service charge with respect to each
payment of principal or interest that is delinquent by ten (10) or more
days in an amount equal to the greater of 5% of the amount of such
delinquent payment or $100.
(d) Standby Fees. Borrower shall pay standby fees to Lender
equal to the Daily Unfunded Commitment multiplied by the basis points
per annum set forth below, which basis points shall be effective
beginning on the first Business Day next following the date of receipt
by the Lender of the Financial Statements and Officers Certificates
described in Section 8.01(a), demonstrating that the ratio of Funded
Debt as at the end of the Borrower's most recent four (4) Fiscal
Quarters to Adjusted EBITDA for the most recent four (4) Fiscal
Quarters was less than or equal to or greater than, as the case may be,
the ratio set forth below opposite the standby fee:
Funded Debt/EBITDA Ratio Applicable Standby Fee
------------------------ ----------------------
(a) Less than 1.00 to 1.00 20 basis points
(b) Greater than or equal to
1.00 to 1.00 but less than
1.50 to 1.00 25 basis points
(c) Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 30 basis points
(d) Equal to or greater than
2.00 to 1.00 40 basis points
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Such fees shall be paid to Lender in four quarterly installments in arrears on
each October 1, January 1, April 1 and July 1 during the Commitment Period and
on the Termination Date, with the first such fee payable on October 1, 1998.
SECTION 2.05. Prepayments.
(a) Optional. The Borrower may prepay the outstanding
principal amount of Advances, together with any accrued but unpaid
interest thereon, upon notice to the Lender delivered not later than
11:00 a.m., Tampa, Florida time on the Business Day that the prepayment
is to be made, each such notice stating the proposed date and aggregate
principal amount of the prepayment and the Borrowing to be so prepaid,
and if such notice is given the Borrower shall prepay the outstanding
principal amount of the Advances comprising part of the same Borrowing
in whole or with respect to Borrowings as designated by Borrower
ratably in part,; provided, however, that (x) each partial prepayment
of LIBOR Rate Advances shall be in an aggregate principal amount of not
less than $500,000 or an integral multiple of $500,000 in excess
thereof, and (y) any prepayment of LIBOR Rate Advances made other than
on the last day of an Interest Period shall be subject to a prepayment
fee equal to the difference between (i) the amount of interest which
would have been payable with respect to the LIBOR Rate Advance for the
remainder of the Interest Period and (ii) the amount of interest which
the Lender would earn on the sums prepaid if invested for the remainder
of the Interest Period at an interest rate equal to the Federal Funds
Rate published in the "Money Rates" column of the local edition of the
Wall Street Journal on the Business Day following the prepayment, but
in no event less than zero. Prepayments may be made only after notice
as provided herein. Except as set forth in this Section 2.05,
prepayment of principal and interest hereunder may be made at any time
without penalty.
(b) Mandatory. The Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Advances comprising part of
the same Borrowings equal to the amount by which the aggregate
principal amount of the Advances then outstanding exceeds the aggregate
amount of the applicable Commitment. All such mandatory prepayments
shall be applied first to Base Rate Advances and then to LIBOR Rate
Advances.
SECTION 2.06. Conversion of Advances; Failure to Select Interest
Period.
(a) Optional. On and after the Closing Date, the Borrower may
on any Business Day, upon notice (each, a "Notice of Conversion") given
to the Lender not later than 11:00 A.M. Tampa, Florida time, on the
third Business Day prior to the date of a proposed Conversion into
LIBOR Rate Advances and one Business Day prior to a proposed Conversion
into Base Rate Advances, subject to the provisions of
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Section 2.07(c), Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type;
provided, however, that any Conversion of any LIBOR Rate Advances into
Base Rate Advances shall be made on, and only on, the last day of an
Interest Period for such LIBOR Rate Advances being Converted and any
Conversion of Base Rate Advances into LIBOR Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.01(a)
and (b). Each such Notice of Conversion shall be by telephone, telex,
telecopier or cable, confirmed immediately in writing, in substantially
the form of Exhibit C hereto, specifying, within the restrictions
specified above, (i) the date of such Conversion, (ii) the Advances to
be Converted, the portion thereof to be Converted and the Type of
Advances into which they will be Converted and (iii) if such Conversion
is into LIBOR Rate Advances, the duration of the initial Interest
Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) If the Borrower shall fail to give a Notice
of Conversion in respect of LIBOR Rate Advances prior to the end of the
Interest Period applicable thereto as provided in subsection (a) of
this Section 2.06, the Lender will forthwith so notify the Borrower.
Each such LIBOR Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, renew for a like Interest
Period. (ii) Upon the occurrence and during the continuance of any
Event of Default, unless the Lender otherwise consents in writing, (A)
each LIBOR Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and
(B) the obligation of the Lender to make, continue or Convert Advances
into LIBOR Rate Advances shall be suspended. (iii) LIBOR Rate Advances
shall automatically Convert into Base Rate Advances as provided in
Section 2.07(c).
SECTION 2.07. Increased Costs, Etc.
(a) If the introduction of or any change in any law, guideline
or regulation or in the interpretation or administration of any law,
guideline or regulation by any court or administrative or governmental
authority (including any central bank) charged with the interpretation
or administration thereof from and after the date hereof, (x) subjects
the Lender or corporation controlling the Lender to any tax of any kind
whatsoever with respect to any LIBOR Rate Advance, or changes the basis
of taxation of payments to the Lender or corporation of principal,
commissions, fees, interest or any other amount payable hereunder
relating to LIBOR Rate Advances (except for (A) taxes on or measured by
the overall net income of the Lender or branch, office or agency
through which the Lender is acting for purposes of this Agreement or
(B) changes in the rate of such taxes); (y) imposes, modifies or holds
applicable any reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or
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other credit or commitment therefor extended by, or any other
acquisition of funds by the Lender which are not otherwise included in
any determination of the LIBOR Rate payable hereunder; or (z) imposes
on the Lender or corporation controlling the Lender any other
condition, and as a result there shall be any increase in the cost to
any Lender or corporation controlling the Lender of agreeing to make or
making, funding or maintaining LIBOR Rate Advances by an amount deemed
by the Lender to be material, then the Borrower shall from time to
time, upon demand by the Lender, pay to the Lender additional amounts
sufficient to compensate the Lender for such increased cost. The Lender
shall submit to the Borrower a certificate as to the rationale for and
the amount of and method of calculating such increased cost, which
certificate shall be conclusive and binding for all purposes, absent
manifest error or a mistake in interpreting the law, guideline or
regulation.
(b) If the introduction of or any change in any law, guideline
or regulation or in the interpretation of any law, guideline or
regulation by any court or administrative or governmental authority
(including any central bank) charged with the interpretation or
administration thereof from and after the date hereof has or would have
the effect of reducing the rate of return on the capital of the Lender
or any corporation controlling the Lender as a consequence of its
making or funding or maintaining LIBOR Rate Advances below the rate
which the Lender or such controlling corporation could have achieved
but for such compliance (taking into account the policies of the Lender
or controlling corporation with regard to capital) by an amount deemed
by the Lender to be material, then the Borrower shall from time to
time, upon demand by the Lender, pay to the Lender additional amounts
sufficient to compensate the Lender or other corporation for such
reduction. The Lender shall submit to the Borrower a certificate as to
the rationale for and the amount of and method of calculating such
additional amounts, which certificate shall be conclusive and binding
for all purposes, absent manifest error or a mistake in interpreting
the law, guideline or regulation. The Lender agrees to notify the
Borrower of any circumstances that would cause the Borrower to pay
additional amounts pursuant to this Section 2.07, provided that the
failure to give such notice shall not affect the Borrower's obligation
to pay such additional amounts hereunder.
(c) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any
law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for the Lender
to perform its obligations hereunder to make LIBOR Rate Advances or to
continue to fund or maintain LIBOR Rate Advances hereunder, then, on
notice thereof and demand therefor by the Lender to the Borrower, (i)
each LIBOR Rate Advance will automatically, at the end of the Interest
Period for each such Advance, Convert into a Base Rate Advance and (ii)
the obligation of the Lender to make or Convert Advances into LIBOR
Rate Advances shall be suspended until the
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Lender shall notify the Borrower that the Lender has determined that
the circumstances causing such suspension no longer exist.
SECTION 2.08. Payments.
(a) The Borrower shall make each payment hereunder not later
than 12:00 Noon Tampa, Florida time, on the day when due in U.S.
dollars to the Lender, in same day funds, or Borrower shall initiate a
wire transfer to the Lender and notify the Lender of the amount of the
wire transfer and the federal wire system reference number by 11:00
a.m. on the date of payment and such wire transfer must be actually
received by the Lender by 3:00 p.m. on such day.
(b) All payments received pursuant to subsection (a) of this
Section 2.08 shall be applied in the following order: first, to the
payment of any costs and expenses and other amounts due pursuant to
Section 10.04; second, to the payment of any amount due under this
Agreement or any other Loan Document other than any amount referred to
in any other clauses of this subsection (b); third, to the payment of
interest due on the Advances; and fourth, to the payment of principal
due on the Advances; provided, however, that as long as no Event of
Default exists hereunder, the Lender shall apply all such payments in
accordance with the Borrower's instructions.
(c) The Borrower hereby authorizes the Lender, if and to the
extent the Borrower has not complied with Section 2.08(a) and as a
result payment owed to the Lender is not made within the applicable
grace period hereunder, to charge from time to time against any or all
of the Borrower's accounts with the Lender any amount so due, in which
event the Lender shall give prompt notice to the Borrower of such
charge; provided, however, that the failure to give such notice shall
not affect the validity of such charge.
(d) All computations of interest and fees hereunder shall be
made by the Lender on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable.
Each determination by the Lender of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in each
case be included in the computation of payment of interest or fees, as
the case may be.
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ARTICLE III
OTHER TERMS APPLICABLE TO REVOLVING CREDIT
FACILITY
SECTION 3.01. Senior Debt. The parties hereto agree that the principal
of, premium, if any, and interest on the indebtedness for money borrowed
evidenced hereunder, whether outstanding on the date hereof or hereafter
incurred, is expressly made senior in right of payment to all indebtedness
included in the definition of "Subordinated Debt" in Section 1.01.
SECTION 3.02. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agree that such proceeds shall be used) to fund (a)
working capital requirements, (b) the issuance of letters of credit, (c) for
general corporate and acquisition needs, and (d) to retire in full the
Borrower's existing $6,500,000 line of credit with Lender.
SECTION 3.03. Evidence of Debt. (a) The Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to the Lender resulting from each Advance owing to
the Lender from time to time, including the amounts of principal and interest
payable and paid to the Lender from time to time hereunder.
SECTION 3.04. Borrower's Loan Accounting. The Lender shall provide the
Borrower with a monthly accounting of principal outstanding, interest payable
and fees due, if any, pursuant to this Agreement. Each such accounting shall be
mailed to the Borrower and shall be deemed final, binding and conclusive upon
the Borrower in all respects as to all matters as reflected therein unless the
Borrower, within sixty (60) days after the date the accounting is delivered to
it, notifies the Lender in writing of any objections, describing the basis for
such objections with specificity. In such event, only those items expressly
objected to in the notice shall be deemed disputed by the Borrower.
ARTICLE IV
LETTER OF CREDIT FACILITY
SECTION 4.01. Letters of Credit. The Lender agrees, on the terms and
conditions hereinafter set forth, to issue standby letters of credit (each a
"Letter of Credit") for corporate purposes at the request and for the account of
the Borrower from time to time on any Business Day from the Closing Date until
the Termination Date; provided, however, that the Letter of Credit Amount shall
not exceed at any time the lesser of (a) $5,000,000 or (b) the Daily Unfunded
Commitment. No Letter of Credit shall have an expiration date (including all
rights of renewal) later than the day numerically corresponding to the date of
issuance in
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the twelfth calendar month thereafter. Subject to the limits referred to above,
the Borrowers may request the issuance of Letters of Credit hereunder, repay any
L/C Advances resulting from drawings thereunder, and request the issuance of
additional Letters of Credit under this Section 4.01.
The following letters of credit issued by the Lender on behalf of
Borrowers are currently outstanding:
Date of Expiration Dollar
L/C # Issuance Date Amount Beneficiary
----- -------- ---- ------ -----------
T512122 10/24/95 10/11/98 $404,500.00 Metropolitan Life
Ins. Co.
T524373 12/11/97 12/1/98 40,072.50 Keystone Centrose
Associates
973358 8/7/98 8/7/99 1,367,398.70* Despa Deutche
Sparkassan Immobilien
Anlage
%518487 01/30/97 11/30/98 40,176.00 One Station Place
--------------------
* British Pounds
All such Letters of Credit shall remain outstanding until they are
drawn-on or expire by their terms. From and after the Closing Date, the stated
amount of such letters of credit shall be deemed Letter of Credit Amounts
hereunder and the rights and obligations of the Borrower and the Lender with
respect thereto shall be governed by the provisions of this Agreement.
SECTION 4.02. Request for Issuance.
(i) Each request by the Borrower for the issuance of a Letter
of Credit (a "Letter of Credit Request") shall be made not later than
12:00 Noon Tampa, Florida time, on the second Business Day prior to the
date of the proposed issuance of such Letter of Credit, by the Borrower
to the Lender. Each Letter of Credit Request shall be by telephone,
telex, telecopier or cable, confirmed immediately in writing,
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substantially in the form of Exhibit E hereto and shall be accompanied
by a signed letter of credit application and agreement for standby
letters of credit on the Lender's then standard form (which application
shall be delivered, in original signed form, within one Business Day of
any such Letter of Credit Request sent by telex, telecopier or cable),
to the Lender at the address and telecopy number, and to the attention
of the persons, set forth in Section 10.02 hereof and at its address at
000 X. Xxxxxxx Xxxx., Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxxx X.
Xxxxx, and may be canceled by notice thereof prior to issuance of such
Letter of Credit by telephone, telex, telecopier or cable, confirmed
immediately in writing, to the Lender. In the event any inconsistency
exists between the provisions of such application and the provisions of
this Agreement, the provisions of this Agreement shall govern the
rights and obligations of the parties.
(ii) Upon receipt by the Lender of a Letter of Credit Request,
and upon fulfillment of the applicable conditions set forth herein, the
Lender shall promptly issue such Letter of Credit and shall promptly so
notify the Borrower.
SECTION 4.03. Drawings. In the event that any drawing shall be made
under a Letter of Credit, by demand or claim (including, without limitation, by
draft), the Lender shall promptly notify the Borrower of such drawing and the
Borrower shall within five (5) Business Days after receiving notice of such
drawing reimburse the Lender for any amount paid by the Lender under such Letter
of Credit, together with interest thereon at the Base Rate plus one-half of one
percent (0.50%). Each Letter of Credit shall require at least one Business Day's
notice of drawing before payment shall be due. In the event that any drawing
under a Letter of Credit is not reimbursed by the Borrower on the date of
payment by the Lender, the Borrower shall be deemed to have received a Borrowing
consisting of an L/C Advance in an aggregate amount equal to such unreimbursed
payment. Notwithstanding anything to the contrary contained above, to the extent
that, at the time of the unreimbursed drawing under a Letter of Credit, cash or
cash equivalents are then held by the Lender in a cash collateral account to
secure Borrower's reimbursement obligation, such cash and cash equivalents shall
(to the extent available to be so applied) be applied to reimburse the Lender
for the respective drawing, with only the unreimbursed amount thereof after
giving effect to said application to be advanced as otherwise provided above.
Upon the occurrence of an Event of Default under this Agreement and the
acceleration of the Obligations under this Agreement, the Borrowers shall,
within one Business Day, (i) obtain the release of the Lender from all of its
obligations under each outstanding Letter of Credit or (ii) deposit with the
Lender in the Cash Collateral Account, as further security for the Borrowers'
Obligations to reimburse the Lender for any payments to be made under any Letter
of Credit, a cash amount equal to the Letter of Credit Amount. The Lender shall
apply such deposit toward any payment required under any Letter of Credit, and
shall, within three
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Business Days after the later of (i) the earlier of (x) the date any Letter of
Credit expires by its terms and (y) receipt of proof satisfactory to the Lender
that its obligations under any Letter of Credit have otherwise been terminated,
and (ii) the date the Event of Default and acceleration shall have been waived
by the Lender, refund to the Borrower that portion of such deposit represented
by such Letter of Credit in the case of clause (i) of this sentence and all such
deposits in the case of clause (ii).
SECTION 4.04. Increased Costs. If subsequent to the date hereof the
introduction of or any change in any law, guideline or regulation or in the
interpretation or administration of any law, guideline or regulation by any
court or administrative or governmental authority (including any central bank)
charged with the interpretation or administration thereof from and after the
date hereof, (1) imposes, modifies or holds applicable any reserve, special
deposit or similar requirement against letters of credit or guaranties issued
by, or assets held by, or deposits in or for the account of, the Lender or any
corporation controlling the Lender or (2) imposes on the Lender or any
corporation controlling the Lender any other condition regarding this Agreement
or any Letter of Credit, and the result of any event referred to in the
preceding clause (1) or (2) shall be to increase the cost to the Lender, or any
corporation controlling the Lender, of issuing or maintaining any Letter of
Credit, then, upon demand by the Lender or controlling corporation, the Borrower
shall immediately pay to the Lender or controlling corporation additional
amounts that shall be sufficient to compensate the Lender or controlling
corporation for such increased cost. The Lender or controlling corporation shall
submit to the Borrower a certificate as to the rationale for and the amount of
and method of calculating such increased cost, which certificate shall be
conclusive and binding for all purposes, absent manifest error or a mistake in
interpreting the law, guideline or regulation.
SECTION 4.05. Obligations Absolute. The obligations of the Borrower
relating to any Letter of Credit under this Agreement and any other related
agreement or instrument shall, to the extent permitted by law, be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and such other related agreement or instrument, including an
"Agreement for Computer Transmission of Letter of Credit Applications and
Amendments" and the Terms and Conditions for Commercial Letter of Credit
incorporated therein, under all circumstances, including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any Letter of Credit or any other agreement or instrument relating
thereto (collectively, the "L/C Related Documents").
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrowers in
respect of the Letters of
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Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Lender or any
other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Related Documents or any
unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Lender under a Letter of Credit against
presentation of a draft or certificate that does not comply with the
terms of the Letter of Credit;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, any other Loan Document or any other
guaranty or other agreement, for all or any of the obligations of the
Borrower in respect of the Letters of Credit; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.
SECTION 4.06. No Liability Regarding Letters of Credit. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit. Neither the Lender nor any of its officers or directors
shall be liable or responsible for: (a) the use that may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) any matter described in Section 4.05; or (c) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except to the extent of any direct, but not consequential, damages
suffered by the Borrower that are found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
wilful misconduct of the Lender in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or in failing
to make lawful payment under a Letter of Credit after the presentation to it of
a draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Lender may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
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SECTION 4.07. Payment; Default Interest; Taxes. The provisions of
Section 2.08(a) with respect to payments and Section 2.04(b) with respect to
default interest shall also apply to all L/C Advances.
SECTION 4.08. Fees and Charges. The Borrower shall pay to the Lender
(i) a fee equal to the Applicable Percentage of the stated amount of each Letter
of Credit (with a minimum fee for each issuance of $250), plus (ii) any other
standard charges the Lender customarily assess its customers relating to letters
of credit (such as charges for telex, courier service, etc.). Each Letter of
Credit fee and charge paid hereunder shall be non-refundable. As used herein,
the "Applicable Percentage" means the percentage set forth below which shall be
effective for Letters of Credit beginning on the first Business Day next
following the date of receipt by the Lender of the Financial Statements and
Officers Certificates described in Section 8.01(a), demonstrating that the ratio
of Funded Debt as at the end of the Borrower's most recent four (4) Fiscal
Quarters to Adjusted EBITDA for the most recent four (4) Fiscal Quarters was
less than or equal to or greater than, as the case may be, the ratio set forth
below opposite the Applicable Percentage:
Funded Debt/EBITDA Ratio Applicable Percentage
------------------------ ---------------------
(a) Less than 1.00 to 1.00 1.25%
(b) Greater than or equal to
1.00 to 1.00 but less than
1.50 to 1.00 1.50%
(c) Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 1.75%
(d) Equal to or greater than
2.00 to 1.00 2.00%
ARTICLE V
SECURITY
SECTION 5.01. Security Interest. To secure all Obligations of Borrower
with respect to the Revolving Credit Facility and all Loan Documents relating
thereto, the
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Borrower and Guarantors hereby irrevocably grant to Lender a continuing security
interest in the Collateral more particularly described in the Security
Agreement.
SECTION 5.02. Protection of Business Records. The Borrower hereby
agrees to take the following protective actions in order to prevent destruction
of the Borrower's business records: (i) if the Borrower maintains its business
records on a manual system then such records shall be kept in a fire-proof
cabinet; and (ii) if the collateral records are computerized, the Borrower
agrees to create a tape "back-up" at a secure off-site location and, if
requested by Lender, provide Lender with a tape copy of such "back-up"
information on a monthly basis.
SECTION 5.03. Guaranties. On the Closing Date, Guarantors shall each
execute and deliver a Guaranty of the Borrower's Obligations under this
Agreement and the other Loan Documents.
SECTION 5.04. Security and Guaranties Provided by Additional
Subsidiaries. In the event the Borrower shall hereafter organize or acquire any
additional Subsidiaries, it shall promptly cause each such Subsidiary to execute
and deliver to the Lender: (a) an unconditional guaranty of the Borrower's
Obligations under this Agreement and the other Loan Documents; (b) an amendment
to the Security Agreement granting the Lender a first priority security interest
in such Subsidiary's accounts, and (c) UCC-1 financing statements evidencing
such security interests; in each case in form and substance acceptable to
Lender.
ARTICLE VI
CONDITIONS OF LENDING
SECTION 6.01. Conditions Precedent to Initial Credit Event. The
obligation of the Lender to make an Advance on the Closing Date is subject to
the following conditions precedent:
(a) Since March 31, 1998 nothing shall have occurred (and the
Lender shall not have become aware of any facts or conditions not
previously known) which the Lender shall determine has, or would be
reasonably likely to have, a material adverse effect on the rights or
remedies of the Lender under any of the Loan Documents, or on the
ability of the Borrower to perform its obligations to the Lender or to
any other creditor.
(b) All regulatory authorizations, approvals, consents or
other actions by and notices to or filings with, any governmental
authority or regulatory body or any third party required or necessary
for the due execution, delivery and performance by the
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Borrower of each Loan Document to which it is or is to be a party and
for the other transactions contemplated by the Loan Documents, shall
have been obtained, taken, given or made without the imposition of any
condition which is not acceptable to the Lender and shall be in full
force and effect, and there shall be no applicable laws, regulations,
orders, injunctions, restraining orders or other impediments that would
restrain, prevent or impose any material adverse conditions upon any
transaction contemplated by any of the Loan Documents.
(c) All loans made by the Lender and all other loans or
extensions of credit made by other parties to the Borrower in
connection with the transactions contemplated by the Loan Documents
shall be in full compliance with all applicable law, including, without
limitation, Regulations G, T, U and X of the Federal Reserve Board.
(d) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower pending or threatened
before any court, governmental agency or arbitrator that, in the sole
judgment of the Lender, is reasonably likely to have a material adverse
effect on the business, results of operations, condition (financial or
otherwise) or prospects of the Borrower, or on the ability of the
Borrower to perform their respective obligations under the Loan
Documents or on the rights and remedies of the Lender thereunder, or
that purports to affect the legality, validity or enforceability of any
Loan Document or the consummation of any transaction contemplated
therein.
(e) The Borrower shall have paid a commitment fee to Lender in
the amount of $62,500.
(f) After giving effect to the transactions contemplated by
the Loan Documents including, without limitation, the execution and
delivery thereof and the making of Advances hereunder, no event shall
have occurred and be continuing which violates or constitutes a
material default or material unmatured default under the terms of any
agreement for money borrowed to which the Borrower is a party.
(g) The Lender shall have received on or before the Closing
Date, the Note, duly executed by the Borrower to the order of the
Lender, executed copies of this Agreement, the Guaranty and all other
Loan Documents, and the following, each dated the Closing Date (unless
otherwise specified):
(i) Certificate(s) of insurance evidencing (x)
comprehensive, all-risk hazard insurance coverage for the full
insurable value of the Borrower's fixed assets; (y) public
liability coverage in amounts as may be reasonably required
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by the Lender; and (z) Workers' Compensation coverage, if
required by law. All insurance coverage shall be written
through a company or companies reasonably satisfactory to the
Lender, shall insure against such risks as may be specified by
the Lender, and the Lender shall be named as an additional
insured and loss payee with respect to the coverage described
in clause (x) above.
(ii) A copy of a resolution of the Board of Directors
of Borrower, certified by a duly elected executive officer of
the Borrower, authorizing the execution of this Agreement and
the other Loan Documents and authorizing specified officers of
the Borrower to execute and deliver this Agreement and the
other Loan Documents and a copy of resolutions of the Board of
Directors of Guarantors, certified by a duly elected executive
officer of Guarantors, authorizing specified officers of the
Guarantors to execute and deliver the Guaranties, the Security
Agreement and other Loan Documents, as applicable.
(iii) Certified copies of the Certificates of
Incorporation, as amended to date, of the Borrower and the
Guarantors and a copy of the by-laws as amended to date, of
the Borrower and the Guarantors certified to be true, correct
and complete by a corporate officer, together with evidence
satisfactory to the Lender that the corporate existence of the
Borrower and the Guarantors is in good standing.
(iv) Current certifications from an executive officer
of the Borrower and Guarantors certifying that to their
knowledge, other than financing statements related to
Permitted Liens, no mortgages, deeds of trust or UCC financing
statements have been filed with the appropriate filing office
in any jurisdiction in which Borrower or Guarantors do
business which purports to perfect a lien on the real or
personal property of Borrower or Guarantors, including, but
not limited to, inventory, accounts, contract rights and
equipment, and all such real and personal property is free and
clear of all security interests, charges, mortgages, deeds of
trust, other encumbrances, chattel mortgages and liens, other
than Permitted Liens.
(v) Opinion of counsel for Borrower in form and
substance satisfactory to the Lender.
(vi) UCC-1 Financing Statements covering the
Collateral, duly executed and in form and content acceptable
to the Lender.
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(vii) Such other instruments, documents and agreements
as the Lender may reasonably require.
SECTION 6.02. Conditions Precedent to Each Credit Event.
(a) Except as otherwise expressly provided herein, the obligation of
the Lender to make an Advance (but not to Convert any outstanding Advance) on
the occasion of each Credit Event (including on the Closing Date), shall be
subject to the further conditions precedent that on the date of such Borrowing
(x) the following statements shall be true: (i) the representations and
warranties contained in each Loan Document are correct in all material respects,
before and after giving effect to the Borrowing and to the application of
proceeds therefrom, as though made on and as of such date, except for changes
contemplated or permitted by this Agreement; and (ii) no event has occurred and
is continuing, or would result from such Borrowing or from the application of
proceeds therefrom, that constitutes an Event of Default or a Default; and (iii)
after giving effect to the requested Borrowing, the outstanding Advances will
not exceed the Lender's Commitment; and (y) with respect to LIBOR Rate
Borrowings only, the Lender shall have received a Notice of Borrowing in the
form of Exhibit B from the Borrower containing a certification to such effect.
The acceptance of the benefits of each Advance shall constitute a representation
and warranty by the Borrower that all conditions set forth above in this Section
are then satisfied.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants, at the time of the making of each Advance (but
not the Conversion of any outstanding Advance), on the occasion of each
Borrowing (including without limitation the initial Borrowing) which
representations and warranties shall survive the execution and delivery of this
Agreement and the making of Advances hereunder, as follows:
(a) Corporate Status. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, has the corporate power and legal authority to own its property and
carry on its business as now being conducted and is duly qualified to do
business in every jurisdiction where qualification is necessary.
(b) Subsidiaries. The Borrower owns all of the outstanding
capital stock of Xxxx Xxxxxx International, Inc., a Connecticut corporation and
LAI International Limited, a private limited company. The Borrower has no other
Subsidiaries. Xxxx Xxxxxx International, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Connecticut, has the corporate power and legal authority to
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own its property and carry on its business as now being conducted and is duly
qualified to do business in every jurisdiction where qualification is necessary.
LAI International Limited is a private limited company duly organized, validly
existing and in good standing under the English Companies Act of 1985, has the
corporate power and legal authority to own its property and carry on its
business as now being conducted and is duly qualified to do business in every
jurisdiction where qualification is necessary.
(c) Fictitious Names. Except for the names set forth on
Schedule 7.01(c), the Borrower uses no fictitious name in the conduct of its
business.
(d) Power and Authority. The Borrower is authorized under all
applicable provisions of law to execute, deliver and perform pursuant to this
Agreement and the other Loan Documents, and all actions on the part of the
Borrower required for the lawful execution, delivery and performance of this
Agreement and the other Loan Documents have been duly taken. This Agreement and
each of the other Loan Documents, upon the due execution and delivery thereof,
will be the valid and enforceable instrument, obligation or agreement of the
Borrower in accordance with their terms, except as limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally. Neither the execution and delivery of this Agreement or the other
Loan Documents, nor the fulfillment of or compliance with their provisions and
terms, will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a violation of or default under any applicable law,
regulation, order, writ, or decree, or any agreement or instrument to which the
Borrower is now a party, or create any security interest, chattel mortgage, lien
or other encumbrance upon any of the property or assets of the Borrower pursuant
to the terms of any agreement or instrument to which the Borrower is a party or
by which the Borrower is bound, except those in favor of the Lender expressly
created by the Loan Documents.
(e) Financial Statements. The audited and unaudited financial
statements of the Borrower (collectively, the "Financial Statements") heretofore
presented to the Lender fairly present in all material respects the financial
condition of the Borrower and the results of its operations in the business
described therein as of the date and for the period covered thereby in
accordance with GAAP (except to the extent noted therein). The Financial
Statements have been prepared in accordance with GAAP, consistently applied, and
show all material liabilities required to be shown under GAAP, including
contingent liabilities, long-term leases and unusual commitments. Since the date
of the Financial Statements, there has been no material adverse change in the
financial condition of the Borrower. All other information submitted by the
Borrower in support of the transactions contemplated by this Agreement was
fairly stated in all material respects as of the respective dates of such
information.
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(f) Loss. Except as otherwise reflected in the Financial
Statements, no material loss, damage, destruction or taking of any of the real
or personal property of the Borrower or of the real or personal property leased
by the Borrower has occurred that has not been fully restored or replaced or
that is not fully covered by insurance less applicable deductibles, and neither
such property nor the business of the Borrower has been adversely affected in
any material way as the result of any accident, strike, lockout, embargo, riot,
war or act of God or the public enemy.
(g) Title to Assets. Except as set forth in Schedule 7.01(g),
the Borrower has good and marketable title to all of its material properties and
assets, including, without limitation, the Collateral and the properties and
assets described on the Financial Statements (except for those properties and
assets disclosed on the Financial Statements which have been disposed of in the
ordinary course of the Borrower's business since the date of the Financial
Statements) and all such properties and assets are free and clear of all
security interests, mortgages, deeds of trust, chattel mortgages, liens or other
encumbrances of any kind, except those in favor of the Lender and Permitted
Liens.
(h) Litigation. There are no investigations, actions, suits or
proceedings by any federal, state or local government body, agency or authority,
or any political subdivisions thereof, or by any Person, pending, or to the
knowledge of the Borrower threatened against Borrower, or other proceedings to
which the Borrower is a party (including administrative or arbitration
proceedings), (a) that are likely to result in any material adverse change in,
or to have any other material adverse effect on, the business or condition,
financial or otherwise, of Borrower, or (b) that, whether or not the Borrower is
a party thereto, seek to restrain, enjoin, prohibit or obtain damages or other
relief with respect to the transactions contemplated by this Agreement,
including, but not limited to, the denial of any necessary permit, license or
certificate. To the knowledge of the Borrower, Schedule 7.01(h) contains a true
and correct listing of all litigation currently pending in which the Borrower is
a defendant.
(i) Tax Returns. Except as disclosed on Schedule 7.01(i), the
Borrower has filed all tax returns required to be filed by it and has paid all
taxes and assessments payable by it that have become due, other than those not
yet delinquent. The Borrower has established reserves that are believed by the
Borrower to be adequate for the payment of all federal and state income taxes
which are due and have not heretofore been paid or closed by applicable statute.
(j) Contract or Restriction Affecting Borrower. The Borrower
is not a party to or bound by any contract or agreement or subject to any
charter or other corporate restriction that materially and adversely affects or
will materially and adversely affect the business, properties or condition,
financial or otherwise, of the Borrower.
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(k) Patents and Trademarks. The Borrower owns, possesses or
has the right to use all patents, licenses, trademarks, trademark rights, trade
names, trade name rights, copyrights, trade secrets and proprietary and other
confidential commercial information necessary to conduct its business as now
conducted in all material respects, without known conflict with any patent,
license, trademark, trade name, copyright or proprietary right of any other
person.
(l) Governmental Approval. The Borrower is in compliance with
all applicable laws and regulations of all governmental authorities, except
where the failure to so be in compliance will not materially and adversely
affect the business, properties or condition, financial or otherwise, of the
Borrower. Except as otherwise specified herein, no written approval of any
federal, state or local governmental authority, or any political subdivision
thereof, is necessary to carry out the terms of this Agreement or any of the
other Loan Documents, and no consents or approvals are required in the making or
performance of this Agreement or any of the other Loan Documents.
(m) Regulation U. No part of the proceeds of any Advance under
this Agreement will be used to purchase or carry or to reduce or retire any loan
incurred to purchase or carry, any margin stocks (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any such
margin stocks. The Borrower is not engaged and will not engage as one of its
important activities in extending credit for the purpose of purchasing or
carrying such margin stocks. If requested by the Lender, the Borrower will
furnish to the Lender, a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U. In addition, no part of
the proceeds of any Advance will be used for the purchase of commodity future
contracts (or margins therefor for short sales), or for any commodity not
required for the normal raw material inventory of the Borrower.
(n) Securities Law. No proceeds of the Loan will be used to
acquire any security in any transaction that is subject to Sections 13 and 14 of
the Securities Exchange Act of 1934, as amended. The Borrower is not an
"investment company" or a company "controlled" by an "investment company"
(within the meaning of the Investment Company Act of 1940, as amended).
(o) ERISA. (i) All pension or welfare benefit plans within the
respective meanings of Sections 3(2) and 3(1) of ERISA to which the Borrower is
a party or to which the Borrower makes any employer contributions with respect
to employees are listed on Schedule 7.01(o) attached hereto. With regard to the
current and previous plan years of each plan referred to in Schedule 7.01(o),
all contributions required to meet the employer contribution obligations of the
Borrower under Section 412 of the Code, Part 3 of Title 1(B) of ERISA, the terms
of the plan itself, or any applicable collective bargaining agreement,
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with respect to the elapsed portion of the current and previous plan years, have
been duly made, and such plan and its related trust have not incurred any
accumulated funding deficiency (within the meaning of Section 412(a) of the Code
and Section 302 of ERISA) since the effective date of ERISA. In addition,
Borrower has not incurred any withdrawal liability under Title IV of ERISA with
respect to any multi-employer plan (within the meaning of Section 3(37) of
ERISA). (ii) Neither the Borrower nor any Affiliate has engaged in any
"prohibited transactions" within the meaning of Section 4975 of the Code or
Section 406 of ERISA that could subject the Borrower to any material tax or
penalty on prohibited transactions imposed by Section 4975 of the Code. The
execution, delivery and performance of this Agreement and the other instruments,
documents and agreements contemplated hereby, and the making of the Advances by
the Lender to the Borrower will not constitute such a "prohibited transaction"
(assuming that the funds used by the Lender to make the Loan are disbursed from
the Lender's general funds and not from any separate fiduciary or other account
maintained by the Lender). (iii) No Reportable Event (as such term is defined in
Title IV of ERISA) has occurred with respect to, nor has there been terminated,
any plan subject to Title IV of ERISA and maintained for any employees of the
Borrower or any member of any "controlled group of corporations" (as such term
is defined in Section 1563 of the Code) of which the Borrower is a member. (iv)
The Borrower has paid all premiums due to the PBGC with respect to each plan
identified in Schedule 7.01(o), and no premium, late payment charge, premium
penalty or interest thereon is due. The PBGC has made no demand on the Borrower
for payment of any liability, including interest, arising under Title IV(D) of
ERISA, and no lien exists in favor of the PBGC upon any real or personal
property or rights to such property belonging to the Borrower.
(p) Environmental Matters. (i) Except as set forth in Schedule
7.01(p), the Borrower is in compliance, and will remain in compliance, with all
material provisions of the Environmental Laws, other than where the failure to
so be in compliance will not materially and adversely affect its business,
properties or condition, financial or otherwise. (ii) The Borrower has not
received any assessment, notice of liability or notice of financial
responsibility, and no notice of any action, claim or proceeding to determine
such liability or responsibility, or the amount thereof, or to impose civil
penalties with respect to a site listed on any federal or state listing of sites
containing or believed to contain Hazardous Wastes, and the Borrower has not
received notification that any hazardous substances (as defined under CERCLA)
that it has disposed of have been found in any site at which any governmental
agency is conducting an investigation or other proceeding under any
Environmental Law. (iii) To the best of the Borrower's knowledge without
independent investigation, no part of any of the property used by Borrower in
its business or any building, structure or facility located thereon or
improvement thereto contains asbestos or polychlorinated biphenyls (PCBs); have
electrical transformers, fluorescent light fixture ballasts or other equipment
containing PCBs installed thereon or therein; is used for the handling,
processing, storage or disposal of Hazardous Wastes; or contain above-ground or
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underground storage tanks or other storage facilities for Hazardous Wastes. (iv)
No excise taxes have been imposed on the Borrower pursuant to Sections 4611,
4661 or 4681 of the Code.
(q) No Material Default. No material default exists with
respect to the Borrower's obligations under any material contract or leases.
(r) No Untrue Statements. Neither this Agreement, nor any of
the other Loan Documents, nor any other agreement, report, schedule,
certification or instrument simultaneously with the execution of this Agreement
delivered to the Lender by the Borrower or by any officer thereof, contains any
misrepresentation or untrue statement of any material fact or omits to state any
material fact necessary to make any of such agreements, reports, schedules,
certificates or instruments not misleading in any material respect.
All references to Borrower throughout this Article VII includes its
Subsidiaries unless the context clearly indicates an intent to refer solely to
the Borrower.
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants. From and after the Closing Date
and for so long as the Note or any Advance or any Obligations under the Loan
Documents shall remain unpaid, or the Lender shall have any Commitment
hereunder, the Borrower will, unless the Lender shall otherwise consent in
writing:
(a) Financial Reports and Other Data. Furnish to the Lender
the following:
(i) as soon as available, but in any event not later
than forty-five (45) days after the end of each Fiscal
Quarter, unaudited consolidated financial statements of the
Borrower for such reporting period and for the Borrower's
fiscal year to date prepared in accordance with GAAP and on a
basis consistent with past monthly financial statements,
including a profit and loss statement and a balance sheet;
(ii) as soon as available, but in any event not later
than forty-five (45) days after the end of each Fiscal
Quarter, an accounts receivable aging report as of the end of
such quarter;
(iii) as soon as available, but in any event not later
than one hundred twenty (120) days after the end of each
Fiscal Year, annual, audited
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consolidated financial statements of the Borrower, including
balance sheets, profit and loss statements, changes in
financial position, stockholder equity and such other
accounting data in a format and in such detail as the Lender
may reasonably request, for such Fiscal Year, with the
corresponding figures for the previous Fiscal Year. Each
report shall be unqualified in all respects, shall be prepared
by an independent certified public accountant reasonably
satisfactory to the Lender, in accordance with GAAP,
consistently applied, and shall state that such financial
statements fairly present the financial position of the
Borrower and the results of its operations and the changes in
their financial position for the year then ended in accordance
with GAAP, consistently applied;
(iv) such other audited and unaudited financial
statements, profit and loss statements, and other accounting
data, including but not limited to supporting documentation
for financial statements provided the Lender under other
clauses of this Section 8.01(a), as may be reasonably
requested by the Lender from time to time concerning the
Borrower;
(v) concurrently with the delivery of the financial
statements described in this Section 8.01(a)(i) and (iii), the
Borrower shall deliver an Officers' Certificate addressed to
the Lender in the form attached hereto as Exhibit D
acknowledging that such financial statements fairly present
the financial condition of the Borrower in accordance with
GAAP and (A) certifying that, as to matters which would be
required to be recognized and disclosed under applicable
standards of the AICPA, no Event of Default and no Default
that, with the giving of notice, the passage of time, or both,
would constitute an Event of Default has occurred and is
continuing, or describing the nature and duration of any such
Event of Default or Default and the steps that the Borrower is
taking to remedy such Event of Default or Default; and (B)
certifying that the Borrower is not in violation of or in
default under any other material loan or any other material
loan agreement; and
(vi) not later than ten (10) days after each filing
with the Securities and Exchange Commission, a copy of each of
Borrower's SEC Form 8K, 10Q and 10K reports.
(b) Taxes and Liens. Except as may relate to Permitted Liens
described in Section 8.03(a), promptly pay, or cause to be paid, all taxes,
assessments and other governmental charges that may lawfully be levied or
assessed upon the income or profits of the Borrower, or upon any property, real,
personal or mixed, belonging to it, or upon any part thereof, and also any
lawful claims for labor, material and supplies that, if unpaid, might become a
lien or charge against any such property; provided, however, the Borrower shall
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not be required to pay any such tax, assessment, charge, levy or claim so long
as the validity thereof shall be actively contested in good faith by proper
proceedings; but provided further that any such tax, assessment, charge, levy or
claim shall be paid forthwith (or into the Registry of the Court) upon the
commencement of proceedings to foreclose any lien securing the same.
(c) Business and Existence. Do or cause to be done all things
necessary to preserve and to keep in full force and effect the corporate
existence and rights and franchises, trade names, patents, trademarks, trade
secrets and permits that are reasonably necessary for the continuance of the
business of the Borrower; and to continue to engage principally in the business
currently operated by the Borrower.
(d) Corporate Status. Maintain the existence of the Borrower
as a corporation in good standing under the laws of the State of Florida and
qualified to transact business as a foreign corporation, in good standing, in
every jurisdiction in which it owns or leases properties from which it transacts
business.
(e) Insurance. Keep its business and properties insured at all
times by responsible insurance companies against the risks and to the extent set
forth in Section 6.01(g)(i), and carry such other types and amounts of
insurance, including business interruption insurance, as are usually carried by
Persons engaged in the same or a similar business similarly situated. The
Borrower shall provide the Lender with evidence of such insurance (including
proof that the Lender has been named as an additional insured and loss payee on
all property insurance) and, in connection with the delivery to the Lender of
the Borrower's annual financial statements, shall deliver an Officers'
Certificate specifying the details of such insurance then in effect. The
Borrower shall give notice to the Lender immediately if the Borrower receive any
notice from any insurer that it intends to cancel or terminate any policy or
coverage.
(f) Maintain Property. Maintain its properties and facilities
in good order and repair (normal wear and tear excepted) and, from time to time,
make all needed and proper repairs, renewals, replacements, additions and
improvements thereto, so that the business carried on by them may be conducted
at all times in accordance with prudent business management.
(g) True Books. Keep true books of record and account in which
full, true and correct entries are made of all of their dealings and
transactions; set up on its books such reserves as may be required by GAAP with
respect to all taxes, assessments, charges, levies and claims referred to in
Section 8.01(b) hereof, and with respect to its business in general, and include
such reserves in interim as well as year-end financial statements; and to
otherwise maintain its books of account in accordance with GAAP, consistently
applied.
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(h) Right of Inspection. Permit or cause to be permitted any
Person designated by the Lender, at the Lender's expense, to inspect any of
their properties, books and financial reports, and to discuss its affairs,
finances and accounts with its officers and independent certified public
accountants, all at such reasonable times and as often as the Lender may
reasonably request, provided that, subject to the provisions of Section 10.11 of
this Agreement, the Lender shall, and shall cause all Persons conducting such
inspection on its behalf to, keep confidential all information concerning the
Borrower or its business obtained during such inspection.
(i) Knowledge of Default. Upon any officer of the Borrower
obtaining knowledge of (a) an Event of Default (or a Default) hereunder or (b)
any default under any lease of real property which would have a material adverse
effect on the operations of Borrower, cause to be delivered to the Lender an
Officers' Certificate specifying the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect thereto.
(j) Suits or Other Proceedings. Upon any officer of the
Borrower obtaining knowledge of any material litigation, dispute or proceedings
being instituted or threatened against the Borrower, or any attachment, levy,
execution or other process being instituted against any assets of the Borrower,
in any case embodying or relating to a claim in excess of $100,000 net of
insurance coverages, cause to be delivered promptly to the Lender an Officers'
Certificate describing such litigation, dispute, proceeding, levy, execution or
other process.
(k) Further Assurances. At its cost and expense, upon request
of the Lender, duly execute and deliver or cause to be duly executed and
delivered to the Lender such further instruments and do and cause to be done
such further acts that may be necessary or proper in the opinion of the Lender,
reasonably exercised, to carry out more effectively the provisions and purposes
of this Agreement and the other Loan Documents.
(l) Observe All Laws. Conform to and duly observe in all
material respects all laws, regulations and other valid requirements of any
regulatory authority with respect to their properties and the conduct of its
business.
(m) ERISA Requirement. Comply with all material requirements
of ERISA applicable to them and furnish to the Lender as soon as possible and in
any event within thirty (30) days after any officer of the Borrower or any duly
appointed administrator of any employee pension benefit plan (as defined in
ERISA) knows or has reason to know that any Reportable Event (as defined in
ERISA) with respect to any such plan has occurred, an Officers' Certificate
describing in reasonable detail such Reportable Event and any action that the
Borrower proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC or a statement that said
notice will be filed with
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the annual report of the United States Department of Labor with respect to such
plan if such filing has been authorized.
(n) Bank Accounts. Maintain its primary operating accounts
with the Lender.
(o) Ordinary Course of Business. Collect its accounts only in
the ordinary course of business.
(p) Notice of Changes. Promptly notify the Lender in writing
of any change of its officers, directors and key employees; change of location
of its principal offices; change of location of any of its principal assets; any
acquisition, disposition or reorganization of any Subsidiary, Affiliate or
parent of Borrower; change of Borrower's name, any sale or purchase out of the
regular course of Borrower's business; and any other material change in the
business or financial affairs of Borrower. Nothing in this subsection shall
authorize Borrower to take any of the foregoing actions or otherwise modify the
covenants of Borrower contained herein.
(q) Search Consultants. Notify the Lender in writing within
fifteen (15) days after the end of each Fiscal Quarter if there is a net
reduction of ten percent (10%) or more in the number of search consultant
partners and principals in Borrower's employ during such quarter and notify the
Lender in writing within twenty (20) days after the end of each Fiscal Year if
there is a net reduction of 25 percent (25%) or more in the number of search
consultant partners and principals in Borrower's employ during such Fiscal Year.
All references to Borrower throughout this Section 8.01 shall include
each of its Subsidiaries.
SECTION 8.02. Financial Covenants. From and after the Closing Date and
for so long as the Notes or any Advance or any Obligations under the Loan
Documents shall remain unpaid, or Lender shall have any Commitment hereunder,
the Borrower will, unless the Lender shall otherwise consent in writing:
(a) Debt Service Coverage Ratio. Cause Borrower's Debt Service
Coverage Ratio to be no less than 1.25 to 1.0, to be tested on a rolling
four-Fiscal Quarter basis as of the end of each Fiscal Quarter. Debt Service
Coverage shall mean for any Fiscal Quarter the ratio of (i) the sum of earnings
for such period before income taxes, plus interest expense, lease expense,
depreciation and amortization (to the extent, if any, that such amounts were
deducted as expenses in calculating earnings for such period), to (ii) the sum
of all interest expense (net of interest income) and lease expense deducted in
calculating earnings for such period, plus 20 percent of all outstanding
Advances hereunder and Current Maturities of Long Term Debt divided by one (1)
minus the Tax Rate.
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(b) Funded Debt to Adjusted EBITDA. Cause the ratio of
Borrower's Funded Debt to Adjusted EBITDA not to exceed 2.5 to 1.0, to be tested
on a rolling four Fiscal Quarter basis as of the end of each Fiscal Quarter
during the Commitment Period. As used herein, Adjusted "EBITDA" means the
Borrower's EBITDA plus the EBITDA of any acquired Person.
(c) Current Ratio. Cause the ratio of its Current Assets to
Current Liabilities to be no less than 1.0 to 1.0.
Each of the foregoing financial ratios shall be calculated on a
consolidated basis with all of Borrower's Subsidiaries in accordance with GAAP.
SECTION 8.03. Negative Covenants. From and after the Closing Date and
for so long as the Notes or any Advance or any Obligations under the Loan
Documents shall remain unpaid or the Lender shall have any Commitment hereunder,
the Borrower will not, without the written consent of the Lender:
(a) Liens. Incur, create, assume or permit to exist at any
time any mortgage, pledge, security interest, lien, charge or other encumbrance
of any kind on any assets of any kind, real or personal, tangible or intangible,
whether now owned or hereafter acquired, except the following, (collectively
referred to as the "Permitted Liens"): (i) liens securing purchase money
indebtedness provided that Borrower shall not incur any such indebtedness in
excess of $500,000 outstanding at any one time; (ii) pledges or deposits in
connection with or to secure workers' compensation, unemployment insurance,
pensions or other employee benefits occurring under provisions of law or under
agreements disclosed to the Lender; (iii) liens for taxes not due or that are
being contested in good faith by proper proceedings and against which the
Borrower have established reserves as required by GAAP; (iv) statutory liens of
landlords, carriers, warehouse-men, mechanics, materialmen, and other liens
imposed by law and incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made therefor;
(v) liens incurred or deposits made to secure the performance of statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); (vi) any
attachment or judgment lien in existence less than thirty (30) days after the
entry thereof or with respect to which execution has been stayed or the payment
of which is covered in full by insurance or with respect to which the Borrower
shall in good faith be prosecuting an appeal or proceedings for review and in
respect of which the Borrower shall have set aside on their books such reserves
as shall be required by GAAP with respect to each such judgment or award; (vii)
liens constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions of record on the use of real property and lessor's
liens under leases on rented premises, which liens do not materially detract
from the value of such property or impair the use thereof in the business of the
Borrower; (viii)
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banker's liens in the nature of rights of setoff arising in the ordinary course
of business of the Borrower; (ix) liens securing loans against the cash value of
life insurance policies; and (x) such other liens as the Lender may approve.
(b) Incur Other Debt. Incur or allow to exist any Debt other
than (i) Debt related to Permitted Liens, (ii) Debt representing loans secured
by the cash value of life insurance policies; (iii) Subordinated Debt, (iv) Debt
representing salary or bonuses paid to executive officers of the Borrower and
loaned back to the Borrower, and (v) Debt arising under this Agreement or
representing any other loans made to the Borrower by the Lender and (vi)
unsecured Subordinated Debt to fund Permitted Acquisitions, as described in
Section 8.03(d).
(c) Merger; Sale of Assets; Etc. Enter into any transaction of
merger or consolidation except as otherwise expressly permitted herein;
transfer, sell, assign, lease or otherwise dispose of any of its property or
assets, except for (i) the sale of inventory in the ordinary course of business
and (ii) the disposal of obsolete, worn-out, uneconomic or surplus property or
assets; change its name; otherwise change its structure or identity in any
material respect except as expressly permitted herein; or materially change the
nature of its business as now conducted or enter into any new business,
provided, however, that the foregoing shall not be deemed to restrict the
Borrower from opening new or closing existing offices as it sees fit or from
effecting a consolidation or reorganization undertaken for tax purposes, the net
effect of which does not diminish the consolidated assets of the Borrower and
its Subsidiaries and provided Borrower complies with Section 5.04 of this
Agreement.
(d) Acquisitions. Acquire the assets of another Person or
acquire another Person by merger, share exchange or otherwise, unless Borrower
complies with the following conditions: (i) Borrower demonstrates pro forma
compliance with each financial covenant set forth in Section 8.02 after
consummation of the acquisition, based on the combined historical audited
financial statements of Borrower and the Person to be acquired; (ii) the cash
consideration paid for any one acquisition shall not exceed $5,000,000; (iii)
the aggregate cash consideration paid for all acquisitions within any rolling
12-month period commencing on the date of this Agreement shall not exceed
$15,000,000; (iv) the cost of any one acquisition shall not exceed 20 percent of
the Borrower's net worth determined in accordance with GAAP; and (v) Borrower
shall not incur any Debt to any Person in connection with an acquisition other
than unsecured Subordinated Debt. Borrower may pay principal and interest with
respect to any such Subordinated Debt provided that Borrower complies with each
financial covenant set forth in Section 8.02 both before and after such payment.
Acquisitions which satisfy the foregoing conditions are referred to herein as
"Permitted Acquisitions."
(e) Guaranties. Guarantee, assume, endorse or otherwise in any
manner become or remain liable in connection with, or otherwise become or remain
responsible for, the obligations (including accounts payable) of any Person,
other than the endorsement of
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negotiable instruments in the ordinary course of business for deposit or
collection or in connection with Permitted Acquisitions.
(f) Fiscal Year End. Change its Fiscal Year end without
providing notice of such change to the Lender within fifteen (15) days after the
effectiveness of such change.
(g) Accounting Practices. Change its accounting methods or
practices, depreciation or amortization policy or rates from that in existence
as of the date hereof, except as required to comply with law or with GAAP, or
change in the method of accounting for inventory which complies with GAAP, or as
otherwise permitted by the Lender. The Lender agrees that it will not
unreasonably withhold its consent to any such change.
(h) Amend Certificate of Incorporation. Amend its certificate
of incorporation without providing notice of such change to the Lender within
fifteen (15) days after the effectiveness of such amendment.
(i) Loans or Advances. Make loans or advances to any Person,
except loans or advances to employees not to exceed $5,000,000 in the aggregate,
draws against commissions in the usual course of Borrower's business, deposits
required by government agencies or public utilities, and reasonable and
customary deposits to non-Affiliate landlords. For purposes of calculating the
financial covenants set forth in Section 8.02, loans to employees shall be
deemed intangible assets.
(j) Affiliate Transactions. Enter into any transaction with
any Affiliate, except for transactions where the consideration paid or to be
paid to or by the Borrower, as the case may be, is at least as favorable to the
Borrower as it would be if the Borrower was dealing with a completely
independent party.
(k) Management Fees. Pay any management fees to any Affiliate
except that management fees may be paid by any Subsidiary to the Borrower.
(l) Redemption of Subordinated Debt. Exercise its right to
voluntarily redeem any Subordinated Debt if, after giving effect to such
redemption, the Borrower would be in default of any financial covenant set forth
in Section 8.02 of this Agreement.
(m) Dividends and Repurchases. Declare or pay any cash
dividends, make any other distribution on account of any class of its stock
(other than a stock split or a stock dividend) or redeem, purchase, retire or
otherwise acquire, directly or indirectly, any shares of its stock; provided,
that the Borrower may purchase or redeem (i) fractional shares in connection
with stock splits or stock dividends and (ii) shares issued to employees to
exercise outstanding options and/or to provide funds to the employees to pay
federal income taxes as a consequence of the options being exercised.
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The covenants set forth in this Section 8.03 shall apply to the
Borrower and its Subsidiaries measured on a consolidated basis, provided that
notwithstanding Section 8.03(m), a Subsidiary may pay dividends to the Borrower
or redeem shares of its capital stock owned by the Borrower.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default. The occurrence of one or more of the
following events shall constitute an event of default hereunder (an "Event of
Default"):
(a) Payment of Notes or Advances. The failure of
Borrower (i) to pay any principal payment on any Note or
Advance when the same becomes due and payable or (ii) to pay
interest due on any Note or Advance or any other Obligations
payable hereunder or under any of the other Loan Documents
within five (5) days after the Lender makes written demand
therefor.
(b) Cross-Default; Payment of Other Obligations. The
occurrence of any default with respect to any other loan
agreement or promissory note evidencing Debt owed to the
Lender by the Borrower, if such default gives rise to the
right to accelerate the due date of such Debt, or (ii) the
failure of Borrower (x) to pay principal of or interest on any
other Debt of the Borrower in excess of Fifty Thousand Dollars
($50,000) beyond any period of grace provided with respect
thereto, or (y) to perform or abide by any other agreement,
term, condition or covenant contained in any agreement or
instrument under which any such other Debt is created, if in
either such case, the effect of such failure is to cause or
permit the holder or holders of such Debt (or a trustee on
behalf of such holder or holders) to cause such Debt to become
due prior to its stated maturity, or (z) to pay principal of
or interest on any Debt of Borrower secured by real property
owned by the Borrower, or to perform or abide by any other
agreement, term, condition or covenant contained in any
agreement or instrument under which such Debt is created or
secured (but nothing contained herein shall permit the
existence of any such Debt unless otherwise expressly
permitted herein), regardless of the amount of the Debt, if
the effect of such failure is to cause or permit the holder or
holders of such Debt (or a trustee on behalf of such holder or
holders) to cause such Debt to become due prior to its stated
maturity. Notwithstanding the foregoing, no Event of Default
shall occur hereunder by reason of an alleged default by
Borrower under any lease agreement provided the Borrower is
diligently contesting such default in good faith.
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(c) Representation or Warranty. Any representation or
warranty made by the Borrower herein or in any writing
furnished in connection with or pursuant to this Agreement or
any of the other Loan Documents shall be false or misleading
in any material respect on the date upon which made or deemed
reaffirmed.
(d) Financial Covenants. The breach of any financial
covenant set forth in Section 8.02 which is not cured within
thirty (30) days of the Borrower's knowledge or notice
thereof.
(e) Other Covenants. The failure of the Borrower to
perform or observe in any material respect any other material
covenant, term, condition or requirement binding on it
contained in this Agreement or in any of the other Loan
Documents, and such Default shall not have been remedied
within thirty (30) days of the Borrower's knowledge or notice
thereof, or such longer time, not to exceed sixty (60) days,
as is necessary if the Borrower is diligently pursuing a cure
and the Default is reasonably capable of being cured within
such extended period.
(f) Liquidation; Dissolution; Voluntary Bankruptcy. The
liquidation or dissolution of the Borrower, or the suspension
of the business of the Borrower, or the filing by the Borrower
of a voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts or for any other relief
under the United States Bankruptcy Code, as amended, or under
any other insolvency act or law, state or federal, now or
hereafter existing, or any other action of the Borrower
indicating its consent to, approval of or acquiescence in, any
such petition or proceeding; the application by the Borrower
for, or the appointment by consent or acquiescence of the
Borrower of a receiver, a trustee or a custodian of the
Borrower for all or a substantial part of its property; the
making by the Borrower of any assignment for the benefit of
creditors; the inability of the Borrower or the admission by
the Borrower in writing of its inability to pay its debts as
they mature; or the taking of any action to authorize any of
the foregoing by the Borrower.
(g) Involuntary Bankruptcy. The filing of an
involuntary petition against Borrower in bankruptcy or seeking
reorganization, arrangement, readjustment of its debts or for
any other relief under the United States Bankruptcy Code, as
amended, or under any other insolvency act or law, state or
federal, now or hereafter existing; or the involuntary
appointment of a receiver, a trustee or a custodian of
Borrower for all or a substantial part of its property; or the
issuance of a warrant of attachment, execution or similar
process against any substantial part of the property of
Borrower, and the continuance of any of such events for sixty
(60) days undismissed or undischarged.
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(h) Adjudication of Bankruptcy. The adjudication of
Borrower as bankrupt or insolvent.
(i) Order of Dissolution. The entering of any order in
any proceedings against Borrower decreeing the dissolution,
divestiture or split-up of the Borrower, and such order
remains in effect for more than thirty (30) days.
(j) Reports and Certificates. Any report, certificate,
financial statement or other instrument delivered to the
Lender by or on behalf of Borrower pursuant to the terms of
this Agreement or the Loan Documents is false or misleading in
any material respect when made or delivered.
(k) Judgment. A final judgment (after all avenues of
appeal and all applicable appeal periods have expired), which
with other outstanding final judgments against Borrower
exceeds an aggregate of Ten Thousand Dollars ($10,000.00) (net
of amounts covered by insurance), shall be rendered against
the Borrower, and if within thirty (30) days after entry
thereof such judgment shall not have been discharged, paid or
bonded or execution thereon stayed pending appeal, or if
within thirty (30) days after the expiration of any such stay
such judgment shall not have been discharged.
SECTION 9.02. Remedies.
(a) Termination of Advances; Acceleration. Upon the occurrence
of any Event of Default, and at any time thereafter as long as the
Event of Default is continuing, the Lender (i) by notice to the
Borrower, declare the obligation of the Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) may
by notice to the Borrower, declare the Note and the Advances, all
interest thereon and all other Obligations payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon
the Notes and the Advances, all such interest and all such Obligations
shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that (i) if an
Event of Default arises under Section 9.01(a) by reason of the failure
of the Borrower to pay any principal or interest payment when due, or
(ii) in the event of an actual or deemed entry of an order for relief
with respect to the Borrower or any of its Subsidiaries under the
Federal Bankruptcy Code, then, unless any such Event of Default is
waived in writing by the Lender, (x) the obligation of the Lender to
make Advances shall automatically be terminated and (y) the Note and
the Advances, all
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such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower. In
addition, without limiting any other rights of the Lender, whenever the
Lender has the right to declare any indebtedness to be immediately due
and payable (whether or not it has so declared), the Lender may set off
against the indebtedness without notice any amounts then owed to the
Borrower by the Lender, in any capacity.
(b) Remedies. Upon the occurrence of any Event of Default, and
at any time thereafter as long as the Event of Default is continuing,
the Lender may exercise any of the rights and remedies set forth in
Article V of this Agreement or in the Security Agreement, which rights
and remedies shall not be exclusive.
(c) Cumulative Remedies. All rights, remedies or recourse of
the Lender under this Agreement, the Notes, the Security Agreement or
any other Loan Documents, under the Uniform Commercial Code or other
law, in equity or otherwise, are cumulative, and exercisable
concurrently, and may be pursued singularly, successively or together
and may be exercised as often as occasion therefore shall arise. No act
of commission or omission by the Lender, including, but not limited to,
any failure to exercise, or any delay, forbearance or indulgence in the
exercise of, any right, remedy or recourse hereunder or under any other
Loan Document shall be deemed a waiver, release or modification of that
or any other right, remedy or recourse, and no single or partial
exercise of any right, remedy or recourse shall preclude the Lender
from any other or future exercise of the right, remedy or recourse or
the exercise of any other right, remedy or recourse. No waiver or
release of any such rights, remedies and recourse shall be effective
against the Lender unless in writing and manually signed by an
authorized officer of the Lender on the Lender's behalf, and then only
to the extent recited therein. A waiver, release or modification with
reference to any one event shall not be construed as continuing or
constituting a course of dealing, nor shall it be construed as a bar
to, or as a waiver, release or modification of, any subsequent right,
remedy or recourse as to a subsequent event.
(d) No Liability. Whether or not the Lender elects to employ
any or all remedies available to it in the event of an occurrence of a
Default or an Event of Default, the Lender shall not be liable for the
payment of any expenses incurred in connection with the exercise of any
remedy available to it or for the performance or non-performance of any
obligation of the Borrower.
(e) Waiver of Default. The Lender may, by written notice to
the Borrower at any time and from time to time, waive any Default or
any Event of Default that shall have occurred hereunder and its
consequences. Any such waiver shall be for
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such period and subject to such conditions as shall be specified in any
such notice. In the case of any such waiver, the Borrower shall be
restored to their former position hereunder and under the Loan
Documents, and any Event of Default or Default so waived shall be
deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Event of Default.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 10.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, as follows:
If to Borrower: Lamalie Associates, Inc.
Northdale Plaza
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx
Executive Vice President
Telecopier: (000) 000-0000
If to Lender: Xxxxxxx Bank, N.A.
000 X. Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Vice President
Telecopier: (000) 000-0000
or, as to the Borrower or the Lender, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed, telecopied, telexed
or cabled, be effective when received, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answer back or delivered to the
cable company, respectively, except that notices and
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communications to the Lender pursuant to Article II or IX shall not be effective
until received by the Lender.
SECTION 10.03. No Waiver; Remedies. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 10.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Lender in connection with
the modification and amendment of the Loan Documents and the other documents to
be delivered thereunder (including, without limitation, (A) all stamp,
documentary, excise and intangible taxes and any interest and penalties incident
thereto and (B) the reasonable fees and expenses of counsel for the Lender with
respect to negotiations with the Borrower regarding any Default and advising the
Lender as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents and the other
documents to be delivered thereunder and (ii) if an Event of Default occurs, all
reasonable costs and expenses of the Lender in connection with the enforcement
of the Loan Documents and the other documents to be delivered thereunder,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors, rights generally or otherwise
(including, without limitation, the reasonable fees and expenses of counsel for
the Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Lender and
each of its Affiliates and their respective officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with the Loan Documents and the other documents to
be delivered thereunder, the Lender's agreements to make the Advances, the use
or intended use of the proceeds of any of the Advances hereunder, whether or not
an Indemnified Party is a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
negligence, willful misconduct or breach of the Loan Documents.
(c) With respect to all property owned or leased by the Borrower or its
Subsidiaries, the Borrower agrees to indemnify and hold harmless each
Indemnified Party for, from and
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against and to reimburse each Indemnified Party with respect to, any
Environmental Claim, loss, damage, liability, cost and expense (including
reasonable attorney's fees and court costs) of an and every kind or character,
known or unknown, fixed or contingent, asserted against or incurred by any
Indemnified Party at any time and from time to time by reason of or arising out
of any violation on or before the Indemnity Release Date of any Environmental
Laws in effect on or before the Indemnity Release Date, and any and all matters
arising out of any act, omission, event or circumstance existing or occurring on
or prior to the Indemnity Release Date (including, without limitation, the
actual, proposed or threatened storage, holding, existence, generation,
processing, abatement, handling or presence on or under any property owned or
leased by the Borrower or its Subsidiaries or release, emission, removal,
disposition, discharge or transportation into or from such property, of
hazardous substances or solid waste disposed of or released prior to the
Indemnity Release Date), regardless of whether the act, omission, event or
circumstance constituted a violation of any Environmental Law at the time of its
existence or occurrence; provided that this indemnity shall not apply to any
Environmental Claim, loss, damage, liability, cost or expense (or the applicable
part thereof) resulting from, or attributable to, (i) any act or omission of any
Indemnified Party or its authorized agents, attorneys or contractors, or (ii)
any act or omission which occurs after the Borrower cease to own or lease such
property. For purposes of this paragraph (c), the terms "hazardous substance"
and "release" shall have the meanings specified in the Federal Comprehensive
Environmental Response,' Compensation and Liability Act of 1980, as subsequently
modified, supplemented or amended ("CERCLA"), and the terms "solid waste" and
"disposed" shall have the meanings specified in the Federal Resource
Conservation and Recovery Act of 1976, as subsequently modified, supplemented or
amended ("RCRA"); provided that in the event either CERCLA or RCRA is amended so
as to broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment and provided ,
further, that to the extent that any property owned or leased by the Borrower or
its Subsidiaries is situated in a state in which the applicable laws may
establish a meaning for "hazardous substance," "release," "solid waste," or
"disposal" which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply. The provision of this paragraph shall survive the
Indemnity Release Date, and shall continue thereafter in full force and effect.
(d) If any payment of principal of, or Conversion of, any LIBOR Rate
Advance is made by or on behalf of the Borrower to or for the account of the
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment, prepayment or Conversion pursuant to Article II,
acceleration of the maturity of the Advances pursuant to Section 9.02 or for any
other reason, the Borrower shall, upon demand by the Lender, pay to the Lender
any amounts required to compensate the Lender for any additional losses, costs
or expenses that it may reasonably incur as a result of such payment, prepayment
or Conversion, including, without limitation, any loss, cost or expense incurred
by reason of
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the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund or maintain such Advance.
SECTION 10.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 9.02 to authorize the Lender to
declare the Advances due and payable pursuant to the provisions of Section 9.02,
the Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Lender to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement, irrespective of whether the
Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured. The Lender agrees promptly to notify the Borrower
after any such set-off and application made by the Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender under this Section shall also
extend to each of the Lender's participants and are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that the
Lender or participants may have.
SECTION 10.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Lender and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender.
SECTION 10.07. Assignments and Participations. (a) The Lender may
assign to one or more Eligible Assignees all or any part of, or may grant
participations to one or more banks or other entities in or to all or any part
of, its Commitment, any Advance or Advances owing to the Lender and the Note
held by it, and to the extent of any such assignment or participation (unless
otherwise stated therein) the assignee or purchaser of such participation shall,
to the fullest extent permitted by law, have the same rights and benefits
hereunder as it would have if it were the Lender hereunder.
(b) The Lender may, in connection with any assignment, or proposed
assignment pursuant to this Section 10.07, disclose to the assignee or proposed
assignee any information relating to the Borrower furnished to the Lender by or
on behalf of the Borrower; provided, however, that, prior to any such
disclosure, the assignee or proposed assignee shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from the Lender. The Lender may also provide any information to a
participant or prospective participant relating to the Borrower furnished to the
Lender by or on behalf of
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53
the Borrower, provided the participant or proposed participant agrees to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from the Lender.
SECTION 10.08. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF FLORIDA WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW OF FLORIDA.
SECTION 10.09. Execution In 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 shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 10.10. Consent to Jurisdiction.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT BY THE LENDER IN
THE HILLSBOROUGH COUNTY, FLORIDA CIRCUIT COURT OR THE UNITED STATES
DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA, TAMPA DIVISION, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTION.
(b) The Borrower agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, or in any other manner provided
by law, provided that nothing in this Section 10.10 is intended to
impair the Borrower's right under applicable law to appeal or seek a
stay of any judgment.
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(c) Nothing contained herein shall affect the right of the
Lender to serve legal process in any other manner permitted by law or
commence legal proceedings' or otherwise proceed against the Borrower
or its property in the courts of any other jurisdiction.
SECTION 10.11. Confidentiality. The Lender agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than persons employed or retained by the Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loan Documents; provided that nothing herein shall prevent the
Lender from disclosing such information (i) to its officers, directors,
employees, agents, attorneys and accountants who have a need to know such
information in accordance with customary banking practices and who receive such
information having been made aware of the restrictions set forth in this
Section, (ii) upon the order of any court or administrative agency, (iii) upon
the request or demand of any regulatory agency or authority having jurisdiction
over the Lender, (iv) which has been publicly disclosed, (v) to the extent
reasonably required in connection with any litigation to which the Lender, the
Borrower or their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy hereunder, and
(vii) to any actual or proposed assignee or participant who agree in writing to
comply with the restrictions set forth in this Section.
SECTION 10.12. Further Assurances. The Borrower agrees that, at any
time and from time to time after the execution and delivery of this Agreement,
they shall, upon request of the Lender, execute and deliver such further
instruments and documents, and do such further acts and things as the Lender may
reasonably request in order to fully effect the purposes of this Agreement and
to protect the Lender's interests and Collateral.
SECTION 10.13. Supercedes Prior Agreement. This Agreement replaces and
supercedes in its entirety that certain loan agreement by and between Borrower
and Lender dated March 13, 1996, which has been satisfied in full and
terminated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
WITNESSES: LAMALIE ASSOCIATES, INC.
A Florida corporation
-----------------------------
By:
--------------------------------------
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----------------------------- Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
-50-
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WITNESSES: XXXXXXX BANK, N.A.,
a national banking association
-----------------------------
By:
--------------------------------------
----------------------------- Name: Xxxxxxxx X. Xxxxx
Title: Vice President
STATE OF ALABAMA
COUNTY OF
-----------------------------
The foregoing instrument was acknowledged before me this _____ day of
August, 1998 by Xxxxxx X. Xxxxxxxx, Vice President of Lamalie Associates, Inc.,
a Florida corporation, [ ] who is personally known to me, [ ] or who has
produced the following identification: (check one). -----------------------
-----------------------------------------
Name: (print)
-----------------------------
NOTARY PUBLIC
Commission No.:
--------------------------
Commission Expiration Date:
--------------
STATE OF ALABAMA
COUNTY OF
-----------------------------
The foregoing instrument was acknowledged before me this _____ day of
August, 1998 by Xxxxxxxx X. Xxxxx, Vice President of Xxxxxxx Bank, N.A., a
national banking association, [ ] who is personally known to me, [ ] or who has
produced the following identification: (check one). -----------------------
-----------------------------------------
Name: (print)
-----------------------------
NOTARY PUBLIC
Commission No.:
--------------------------
Commission Expiration Date:
--------------
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EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
BIRMINGHAM, ALABAMA
U.S. $25,000,000.00 (MAXIMUM) AUGUST ___, 1998
FOR VALUE RECEIVED, the undersigned, LAMALIE ASSOCIATES, INC., a
Florida corporation (the "Maker"), promises to pay to the order of XXXXXXX BANK,
N.A. (the "Lender") at 000 X. Xxxxxxx Xxxx., Xxxxx, Xxxxxxx 00000 in lawful
money of the United States of America and in immediately available funds, the
aggregate unpaid principal amount of all Advances made by Lender to Maker
pursuant to the terms and conditions of the Credit Agreement bearing even date
herewith between Maker and Lender, as amended, modified or supplemented from
time to time (the "Credit Agreement"), plus accrued interest, on the dates and
in the amounts as provided herein, which amount in no event shall exceed the
principal amount of Twenty-Five Million and No/100 Dollars ($25,000,000). The
unpaid principal amount of this Note, plus all accrued and unpaid interest,
shall be due and payable in full on the Termination Date, subject to required
annual principal payments and earlier optional or mandatory prepayment in whole
or in part as provided in the Credit Agreement. Maker further agrees to pay
interest each month on the unpaid principal amount owing hereunder from time to
time from the date hereof on the dates and at the applicable rate specified in
Article II of the Credit Agreement.
If any payment on this promissory note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
This promissory note is the Note referred to in the Credit Agreement
and is subject to, and entitled to, all provisions and benefits thereof.
Capitalized terms used herein without definition shall have the meanings given
to such terms in Section 1.01 of the Credit Agreement. The Credit Agreement,
among other things, provides for the making of Advances by Lender to Maker from
time to time in an aggregate amount not to exceed at any time outstanding the
U.S. dollar amount first above mentioned.
Interest on Advances hereunder shall accrue at the rate elected by
Maker for each such Advance (the "Elected Rate") at the time Maker request such
Advance in accordance with
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the procedures set forth in the Credit Agreement. Each such Advance shall accrue
interest from the date of the Advance until repaid. The Elected Rate for any
Advance shall be either: (i) a fixed rate per annum for the Interest Period
equal to the 90-day LIBOR Rate plus the LIBOR Rate Margin, or (ii) a variable
rate per annum equal to the Base Rate plus the Base Rate Margin.
After the due date of any Advance payable hereunder, whether by
acceleration or otherwise, interest shall accrue on the principal balance
remaining unpaid at a rate equal to the maximum rate allowed by applicable law
(the "Default Rate").
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, which have not been cured by Maker or waived
by the Lender, the Lender may, by delivery of written notice to Maker from
Lender, take any or all of the following actions, without prejudice to the
rights of Lender or any holder of this Note to enforce its claims against Maker:
(a) declare all Obligations due hereunder to be immediately due and payable, in
which case all Obligations due hereunder shall automatically become immediately
due and payable without the necessity of any notice or other demand) without
presentment, demand, protest or any other action or obligation of the Lender;
and (b) immediately terminate the Commitment thereunder; and at all times
thereafter, all Advances made by Lender pursuant to the Credit Agreement shall
be at the Lender's sole discretion, unless such Event of Default is cured or
waived.
Notwithstanding anything herein to the contrary, the interest rate
applicable to this Note shall at no time exceed the maximum rate permitted by
applicable law whether now or hereafter in effect. Accordingly, the total
liability of Maker hereof for payment of interest hereunder shall not exceed any
limitations imposed upon the payment of interest by applicable usury laws.
Without limitation on the foregoing, in no event shall Lender be entitled to
unearned or unaccrued interest or other charges, except as may be authorized by
law; nor shall Lender be entitled to receive at any time any such charges not
allowed or permitted by law, or any interest in excess of the highest lawful
rate. Any payments of interest in excess of the highest lawful rate shall be
credited by Lender on interest accrued or principal or both; except that Maker
shall have an option to demand a refund as to any such interest or charges in
excess of the highest lawful rate.
The parties agree that time is of the essence in this Note. Maker shall
be in default hereunder upon the occurrence of one or more of the Events of
Default specified in the Credit Agreement.
Maker hereby (a) waives valuation and appraisement, demand,
presentment, notice of nonpayment, protest, notice of protest and all other
notice, filing of suit and diligence in collecting this Note, (b) agrees to any
substitution, addition or release of any collateral or any party or person
primarily or secondarily liable hereon, (c) agrees that Lender shall not be
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required first to institute any suit, or to exhaust its remedies against Maker
or any other person or party to become liable hereunder, or against any
collateral in order to enforce payment of this Note, (d) consents to any
extension, rearrangement, renewal or postponement of time of payment of this
Note and to any other indulgency with respect hereto without notice, consent or
consideration to either of them, and (e) agrees that, notwithstanding the
occurrence of any of the foregoing, Maker shall be and remain directly and
primarily liable for all sums due under this Note.
No failure to exercise, and no delay in exercising any rights hereunder
on the part of Lender shall operate as a waiver of such rights.
Maker agrees to pay Lender all reasonable costs of collection,
including reasonable attorneys' fees and expenses (includes fees for paralegal
services), whether or not suit be brought, and whether incurred in connection
with collection, trial, appeal, bankruptcy proceedings, administrative
proceedings or otherwise.
Whenever used in this Note, the word "Lender" shall include any
subsequent holder of this Note. It is expressly understood and agreed that
Lender shall never be construed for any purpose as a partner, joint venturer,
co-principal or associate of Maker, or of any person or party claiming by,
through or under Maker in the conduct of their respective businesses.
This Note and the rights and obligations of the parties hereunder shall
be construed in accordance with and governed by the laws of the State of Florida
without regard to the principles of conflict of laws of Florida.
This Note replaces and supercedes in its entirety that certain
promissory note executed by Maker in favor of Lender dated March 13, 1996.
LAMALIE ASSOCIATES, INC.
a Florida corporation
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
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STATE OF ALABAMA
COUNTY OF
-----------------------------
The foregoing instrument was acknowledged before me this _____ day of
August, 1998 by Xxxxxx X. Xxxxxxxx, Vice President of Lamalie Associates, Inc.,
a Florida corporation, [ ] who is personally known to me, [ ] or who has
produced the following identification:
(check one).
----------------------
-----------------------------------------
Name: (print)
-----------------------------
NOTARY PUBLIC
Commission No.:
--------------------------
Commission Expiration Date:
--------------
THIS INSTRUMENT WAS MADE, EXECUTED AND DELIVERED OUTSIDE THE STATE OF FLORIDA,
AND NO FLORIDA DOCUMENTARY STAMP TAX IS DUE HEREON IN ACCORDANCE WITH F.A.C.
12B-4.053(34)
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EXHIBIT B
FORM OF NOTICE OF BORROWING
[Date]
Xxxxxxx Bank, N.A.
000 X. Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Vice President
Ladies and Gentlemen:
The undersigned, Lamalie Associates, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August ___, 1998 (the "Credit Agreement"), the
terms defined therein being used herein as therein defined), among the Borrower,
and Xxxxxxx Bank, N.A., as Lender, and hereby gives you irrevocable notice
pursuant to section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection set
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.02(a) of the Credit Agreement:
The Business Day of the Proposed Borrowing is , 19 .
------------- --
The Proposed Borrowing comprises a [ ] Base Rate Advance or [ ] a LIBOR Rate
Advance (check as applicable).
The aggregate amount of the Proposed Borrowing is $ .
--------------------------
The Interest Period for each LIBOR Rate Advance shall be 90 days.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(a) the representations and warranties contained in each Loan
Document are correct in all material respects, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such dates, except for changes
contemplated or permitted by the Credit Agreement;
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(b) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes an Event of Default or a Default under the
Credit Agreement; and
(c) after giving effect to the Borrowing requested herein, the
outstanding Advances will not exceed the total Commitment of the Lender
under the Credit Agreement.
Capitalized terms used herein without definition have the meanings set
forth in the Credit Agreement.
Very truly yours,
LAMALIE ASSOCIATES, INC.
By:
--------------------------------------
Title:
-----------------------------------
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EXHIBIT C
FORM OF NOTICE OF CONVERSION
[Date]
Xxxxxxx Bank, N.A.
000 X. Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Vice President
Ladies and Gentlemen:
The undersigned, Lamalie Associates, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August ___, 1998 (the "Credit Agreement")
among the Borrower and Xxxxxxx Bank, N.A., and hereby gives you irrevocable
notice, pursuant to Section 2.06(a) of the Credit Agreement, that the
undersigned hereby requests to convert $ _________ in principal amount of a
currently outstanding Borrowing, bearing interest at a rate based on the [___]
Base Rate [___] LIBOR Rate (check one) and having an Interest Period ending on
___________________, 19__, to a Borrowing bearing interest at a rate based on
the [___] Base Rate [___] LIBOR Rate (check one) on ___________________, 19__.
If the conversion is to a LIBOR Rate Borrowing, the Interest Period for such
Borrowing shall be 90 days.
Capitalized terms used herein without definition have the meanings set
forth in the Credit Agreement.
Very truly yours,
LAMALIE ASSOCIATES, INC.
By:
--------------------------------------
Title:
-----------------------------------
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EXHIBIT D
OFFICERS' CERTIFICATE
RE: CREDIT AGREEMENT DATED AS OF AUGUST ___, 1998 BY AND
BETWEEN LAMALIE ASSOCIATES, INC., AS BORROWER, AND XXXXXXX
BANK, N.A., AS LENDER (THE "CREDIT AGREEMENT")
The undersigned executive officers of Lamalie Associates, Inc. (the
"Borrower") hereby certify to the Lender pursuant to the Credit Agreement that:
(1) [Check as applicable] [ ] with respect to the audited
consolidated financial statements of the Borrower for the
fiscal year ended February 28, 199 delivered to Lender
pursuant to the Credit Agreement, such financial statements
fairly present the financial condition of the Borrower in
accordance with GAAP; [ ] with respect to the unaudited
consolidated financial statements of the Borrower for the
fiscal quarter ended ____________, 199__ delivered to Lender
pursuant to the Credit Agreement, such financial statements
fairly present the financial condition of the Borrower.
(2) As to matters which would be recognized and disclosed under
applicable standards of the AICPA, no Event of Default and no
Default that, with the giving of notice, the passage of time,
or both, would constitute an Event of Default under the Credit
Agreement has occurred and is continuing;
(3) Borrower is not in violation of or in default under any other
material loan or any other material loan agreement;
(4) Borrower is not in default under any lease of real property
which would have a material adverse effect on its operations;
(5) The undersigned officers have no knowledge of the occurrence
of any Reportable Event (as defined in ERISA) with respect to
any employee benefit of Borrower;
(6) Borrower has not received any notice of cancellation or
termination from any of its insurers;
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(7) (i) certificates of insurance specifying the policy periods
and the insurance coverages that are in place are attached
hereto, or (ii) true and correct summaries of all such
insurance coverages are attached hereto;
(8) Since the date of the last Officers' Certificate delivered to
the Lender, the undersigned executive officers have not
acquired knowledge of any material litigation, dispute or
proceeding instituted or threatened against Borrower or any
attachment, levy, execution or other process instituted
against Borrower, in any case embodying or relating to a claim
in excess of $10,000 (net of insurance coverages), except as
follows [as applicable, describe any such matters]:
----------------------------------
----------------------------------
----------------------------------
All capitalized terms used herein and not otherwise defined shall have
the meaning ascribed to them in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned officers of Lamalie Associates,
Inc. have executed this Officers' Certificate effective as of the ____day of
____________, 199__.
-----------------------------------------
Chief Financial Officer
-----------------------------------------
President or Executive Vice President
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EXHIBIT D
FORM OF LETTER OF CREDIT REQUEST
[Date]
Xxxxxxx Bank, N.A.
000 X. Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: International Department
Ladies and Gentlemen:
The undersigned, Lamalie Associates, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August __, 1998 (the "Credit Agreement"),
among the Borrower and Xxxxxxx Bank, N.A., and hereby requests that you issue
for the account of and deliver on behalf of the undersigned a standby Letter of
Credit incorporating the following term, in addition to such other terms and
provisions acceptable to you.
1. Beneficiary (including address):
---------------------------------------------
---------------------------------------------
---------------------------------------------
2. Issuance Date:
------------------------------------------------
3. Expiration Date:
----------------------------------------------
4. Multiple Drawings: [ ] Permitted
[ ] Not Permitted
5. Special Instructions:
-----------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
6. Amount of Letter of Credit:
-----------------------------------
7. Purpose of Letter of Credit:
----------------------------------
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---------------------------------------------
---------------------------------------------
The Borrower will execute and deliver to you an Application for Letter
of Credit and such other documents relating thereto as you may reasonably
require, consistent with the terms of the Credit Agreement.
Very truly yours,
LAMALIE ASSOCIATES, INC.
By:
--------------------------------------
Title:
-----------------------------------
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SCHEDULE 7.01(c)
FICTITIOUS NAMES
None, other than Lamalie Amrop International, LAI, Lamalie Associates, LAI
International and XXX Xxxx Xxxxxx.
-63-
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SCHEDULE 7.01(g)
TITLE TO ASSETS
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SCHEDULE 7.01(h)
PENDING LITIGATION
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SCHEDULE 7.01(o)
ERISA PLANS
1. Lamalie Associates, Inc. Profit Sharing Plan.
2. Lamalie Associates, Inc. Health Plan.
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SCHEDULE 7.01(p)
ENVIRONMENTAL COMPLIANCE
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FIRST AMENDMENT TO CREDIT AGREEMENT
SECURITY AGREEMENT AND RELATED LOAN DOCUMENTS
This First Amendment to Credit Agreement, Security Agreement, and
Related Loan Documents is dated as of December 31, 1998 (the "Amendment") by and
among NationsBank, N.A., a national banking association, successor by merger to
Xxxxxxx Bank, N.A. (the "Lender"), Lamalie Associates, Inc., a Florida
corporation (the "Borrower") and XXX Xxxx Xxxxxx, Inc., f/k/a Xxxx Xxxxxx
International, Inc., a Connecticut corporation and LAI International Limited, a
private limited company incorporated under the English Companies Act of 1985
(collectively the "Guarantors") and LAI Worldwide, Inc., a Florida corporation
("LAI Worldwide"). All capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to such terms set forth in Section 1.01 of the
Credit Agreement dated as of August 21, 1998 by and among Lender and Borrower
(the "Credit Agreement").
W I T N E S S E T H :
WHEREAS, as of August 21, 1998, Lender and Borrower entered into the
Credit Agreement under which Lender provided a $25,000,000 Revolving Credit
Facility to Borrower; and
WHEREAS, in reliance on a certificate of good standing issued by the
Connecticut Secretary of State on August 21, 1998, the Credit Agreement makes
several references to Guarantor, Xxxx Xxxxxx International, Inc., a Connecticut
corporation ("Xxxx Xxxxxx"); and
WHEREAS, through inadvertence the Connecticut Secretary of State failed
to record Xxxx Xxxxxx'x corporate name change to XXX Xxxx Xxxxxx, Inc. in its
records in connection with the February 27, 1998 filing of a Certificate of
Merger which merged a wholly owned subsidiary of Borrower into Xxxx Xxxxxx;; and
WHEREAS, in order to correct its error, on October 14, 1998 the
Connecticut Secretary of State changed Xxxx Xxxxxx'x corporate name to XXX Xxxx
Xxxxxx, Inc., retroactive to February 27, 1998; and
WHEREAS, the principal executive office of Xxxx Xxxxxx has been
relocated from New York, New York to Tampa, Florida; and
WHEREAS, effective October 1, 1998 Lender was merged into NationsBank,
N.A., a national banking association; and
74
WHEREAS, pursuant to a corporate reorganization (the "Reorganization")
effective December 31, 1998, the Borrower has become a wholly owned subsidiary
of LAI Worldwide; and
WHEREAS, as a condition to Lender's granting its consent to the
Reorganization, LAI Worldwide has agreed to grant Lender a security interest in
its accounts, join in and become a party to the Security Agreement, and to
guaranty Borrower's obligations under the Credit Agreement; and
WHEREAS, the parties desire to amend the Credit Agreement, the Security
Agreement and certain related Loan Documents to recognize the foregoing
corporate name changes, acknowledge the Reorganization, and cause LAI Worldwide
to join in the Security Agreement and provide a guaranty as herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
Section 1. Xxxx Xxxxxx Name Change. All references to Xxxx Xxxxxx
International, Inc. in the Credit Agreement and the related Loan Documents,
including without limitation, the Note, the Guaranty and the Security Agreement,
are hereby changed retroactive to August 21, 1998 to XXX Xxxx Xxxxxx, Inc.
Section 2. Xxxxxxx Bank, N.A. Name Change. All references to Xxxxxxx
Bank, N.A. in the Credit Agreement and the related Loan Documents, including
without limitation, the Note and the Guaranty, are hereby changed retroactive to
October 1, 1998 to NationsBank, N.A., successor by merger to Xxxxxxx Bank, N.A.
Section 3. Principal Executive Office. All references in the Security
Agreement and the other Loan Documents to the location of the principal
executive office of Xxxx Xxxxxx as 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000-0000 are hereby changed to Northdale Plaza, 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx, Xxxxxxx 00000-0000.
Section 4. LAI Worldwide.
(a) Borrower agrees to cause LAI Worldwide to provide an
unconditional guaranty of Borrowers' Obligations under the Credit
Agreement, the Note and the other Loan Documents, together with a first
priority security interest in its accounts. To document such security
interest, LAI Worldwide hereby joins in and becomes a party to the
Security Agreement effective as of the date hereof, and agrees to
execute and deliver a UCC-1 financing statement, in form and content
reasonably acceptable to Lender. Hereafter, all reference to "Debtors"
throughout the Security Agreement
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75
shall mean the Borrower, XXX Xxxx Xxxxxx, Inc., LAI International
Limited and LAI Worldwide, Inc. and all references to "Guarantors"
throughout the Credit Agreement shall mean XXX Xxxx Xxxxxx, Inc., LAI
International Limited and LAI Worldwide, Inc.
(b) In consideration of the agreements set forth in clause
(a), Lender consents to the Reorganization. Lender acknowledges that it
has been advised by Borrower that LAI Worldwide presently intends to
serve as a passive holding company which will not own any accounts.
Section 5. Representations and Warranties. Borrower hereby represents
and warrants to Lender that (a) no Default or Event of Default exists under the
Credit Agreement, the Security Agreement, or the related Loan Documents as of
the date hereof, (b) all of the provisions of the Credit Agreement, the Security
Agreement, and the related Loan Documents except as amended hereby, are in full
force and effect and (c) since the date of the last financial statements of
Borrower delivered to Lender in accordance with the requirements of the Credit
Agreement, there has been no material adverse change in its financial condition.
Section 6. Effect of Amendment. Except as expressly modified and
amended in this Amendment, all of the terms, provisions and conditions of the
Credit Agreement, the Security Agreement, and the related Loan Documents are and
shall remain in full force and effect.
Section 7. Counterparts. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument.
Section 8. ENTIRETY. THE CREDIT AGREEMENT, THE SECURITY AGREEMENT, AND
THE RELATED LOAN DOCUMENTS AS AMENDED HEREBY EMBODY THE ENTIRE AGREEMENT AMONG
THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY,
RELATING TO THE SUBJECT MATTER HEREOF.
Section 9. Governing Law. The Credit Agreement, the Security Agreement,
and the related Loan Documents as amended hereby, shall be deemed to be
contracts made under, and for all purposes shall be construed in accordance
withy, the laws of the State of Florida.
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76
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
WITNESSES: LAMALIE ASSOCIATES, INC.,
a Florida corporation
--------------------------
By:
--------------------------------------
-------------------------- Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
WITNESSES: XXX XXXX XXXXXX, INC., f/k/a
Xxxx Xxxxxx International, Inc.,
a Connecticut corporation
--------------------------
By:
--------------------------------------
-------------------------- Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
WITNESSES: LAI WORLDWIDE, INC.,
a Florida corporation
--------------------------
By:
--------------------------------------
-------------------------- Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
WITNESSES: LAI INTERNATIONAL LIMITED, a
private limited company incorporated
under the English Companies Act of 1985
--------------------------
By:
--------------------------------------
-------------------------- Name: Xxxxxx X. Xxxxxxxx
Title: Director
WITNESSES: NATIONSBANK, N.A., Successor by Merger
to Xxxxxxx Bank, N.A., a national banking
Association
--------------------------
By:
--------------------------------------
-------------------------- Name: Sadahri Xxxxx
Title: Vice President
-4-
77
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this____day of
____________, 199__ by Xxxxxx X. Xxxxxxxx, Vice President of Lamalie Associates,
Inc., XXX Xxxx Xxxxxx, Inc., and LAI Worldwide, Inc., and Director of LAI
International Limited, [ ] who is personally known to me, [ ] or who has
produced the following identification:__________(check one).
-----------------------------------------
Name: (print)
-----------------------------
NOTARY PUBLIC
Commission No.:
--------------------------
Commission Expiration Date:
--------------
-5-
78
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this____day of
______________, 1998 by Sadahri Xxxxx, Vice President of NationsBank, N.A., [ ]
who is personally known to me, [ ] or who has produced the following
identification:_____(check one).
-----------------------------------------
Name: (print)
-----------------------------
NOTARY PUBLIC
Commission No.:
--------------------------
Commission Expiration Date:
--------------
-6-
79
EXHIBIT A TO UCC-1 FINANCING STATEMENT
This UCC-1 Financing Statement evidences the Secured Party's security
interest in all of the Debtors' present and future right, title and interest in
and to any and all of the following property, wherever located, whether such
property be now owned or hereafter acquired or arising (hereafter the
"Collateral"):
(a) All Accounts and any lock box or collection
accounts which may be established for the deposit of proceeds from
Accounts, regardless of whether or not they constitute proceeds of
other Collateral;
(b) All products of and accessions to any of the
Collateral;
(c) All proceeds from Collateral of every kind and
nature and in whatever form, including, without limitation, both cash
and noncash proceeds resulting or arising from the rendering of
services by Debtors or the sale or other disposition by Debtors of the
Collateral;
(d) All books and records relating to the conduct of
Debtors' business relating to the Collateral and other evidence of any
Collateral, including, without limitation, the books and records
relating to Debtor's Accounts, whether written, stored in computer
memory, or stored on computer tape, disc or punch cards, and any
equipment containing such evidences and/or necessary for the access to
such evidences, including computer programs and computer service bureau
contracts;
(e) The right, in the name and on behalf of Debtor to
appear in and defend any action or proceeding brought with respect to
the Collateral and to commence any action or proceedings to protect the
interest of Secured Party in the Collateral.
All capitalized terms used herein and not otherwise defined shall have
the meaning set forth in the Florida Uniform Commercial Code.
