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EXHIBIT 10.2
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MORTGAGE LOAN AGREEMENT
Dated as of May 29, 1998
PRECISION RESPONSE CORPORATION, a Florida corporation (the "Borrower")
and NATIONSBANK, N.A., a national banking association ("Bank") hereby agree as
follows:
W I T N E S S E T H:
WHEREAS, Borrower has requested a Five Million One Hundred Twenty
Thousand Dollar ($5,120,000.00) mortgage loan from Bank; and
WHEREAS, on this date Borrower has executed a Consolidated Renewal
Promissory Note (the "Note") in favor of Bank in the principal amount of Five
Million One Hundred Twenty Thousand Dollars ($5,120,000.00); and
WHEREAS, on this date Borrower has executed a Restated and Modified
Mortgage and Spreader Agreement (the "Mortgage"); and
WHEREAS, Borrower and Bank desire to set forth in this Agreement
certain terms and conditions pertaining to the Loan;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties do hereby agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
SECTION 1.01 DEFINITIONS.
(a) CAPITALIZED TERMS. For the purposes of this
Agreement:
"ACQUISITION" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for, or conversion
of securities into, such equity interest, or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by such Person.
"ADJUSTED LIBOR RATE" means for any Interest Period a rate per annum
(rounded upward to the next higher 1/100th of 1.00%) equal to the rate obtained
by dividing (a) the LIBOR Rate for such Interest Period by (b) a percentage
equal to one minus the Reserve Requirement in effect from time to time during
such Interest Period.
"AFFILIATE" means any Person (i) which directly or indirectly through
one or more intermediaries controls, is controlled by, or is under common
control with, the Borrower; or (ii) which beneficially owns or holds 10% or more
of the aggregate voting rights for all of the
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Borrower's classes of outstanding Voting Stock (or in the case of a Person which
is not a corporation, 10% or more of the aggregate voting rights of such Person)
of the Borrower; or 10% or more of any class of the outstanding Voting Stock (or
in the case of a Person which is not a corporation, 10% or more of the aggregate
voting rights of such Person) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of Voting Stock, by contract or otherwise.
"AGREEMENT" means this Agreement, as amended in writing from time to
time.
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"APPLICABLE LAW" means (i) all applicable common law and principles of
equity and (ii) all applicable provisions of all (A) constitutions, statutes,
rules, regulations and orders of Governmental Authorities, (B) Governmental
Approvals and (C) orders, decisions, judgments and decrees of all courts and
arbitrators.
"AUTHORIZED REPRESENTATIVE" means any of the President, the Chief
Executive Officer, Chief Financial Officer or the Treasurer of the Borrower or,
with respect to financial matters, the Chief Financial Officer or Treasurer of
the Borrower, or any other Person expressly designated by the Board of Directors
of the Borrower (or the appropriate committee thereof) as an Authorized
Representative.
"BOARD" means the Board of Governors of the Federal Reserve System (or
any successor body).
"BORROWER" means Precision Response Corporation, a Florida corporation.
However, for the purpose of all financial covenants, financial information and
financial disclosures as to Borrower contained in this Agreement, the term
"Borrower" shall mean collectively Borrower and all existing and hereafter
acquired Subsidiaries of Borrower as presented in Borrower's consolidated
financial statements.
"BORROWER'S ACCOUNT" means a demand deposit with the Bank as designated
by Borrower from time to time.
"BUSINESS DAY" means any day (other than a Saturday) on which the
Bank's Office is open for business and, if the day relates to a LIBOR Rate Loan,
on which most banks are open for international business (including dealings in
Dollar deposits) in London, England.
"CAPITAL EXPENDITURES" means, with respect to the Borrower, for any
period the sum of (without duplication) (i) all expenditures (whether paid in
cash or accrued as liabilities) by the Borrower or any Subsidiary during such
period for items that would be classified as "property, plant or equipment" or
comparable items on the balance sheet of the Borrower and its Subsidiaries,
including without limitation all transactional costs incurred in connection with
such expenditures provided the same have been capitalized and (ii) with respect
to any Capital Lease entered into by
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the Borrower or any Subsidiary during such period, the present value of the
lease payments due under such Capital Lease over the term of such Capital Lease
applying a discount rate equal to the interest rate provided in such lease (or
in the absence of a stated interest rate, that rate used in the preparation of
the financial statements), all determined in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis.
"CAPITAL LEASES" means all leases which have been or should be
capitalized in accordance with Generally Accepted Accounting Principles as in
effect from time to time (including Statement No. 13 of the Financial Accounting
Standards Board and any successor thereof).
"CAPITAL SECURITIES" means, with respect to any Person, any shares of
capital stock of such Person or any security convertible into, or any option,
warrant or other right to acquire, any shares of capital stock of such Person.
"CHANGE OF CONTROL" means any "person" or "group" (each as used in
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) other
than Xxxxx Xxxxxxx and Xxxx X. Xxxxxx (and/or any trusts or other entities owned
or controlled by them) either (i) becoming the "beneficial owner" (as defined in
Rule 13d-3 of the Securities Exchange Act of 1934), directly or indirectly, of
Voting Stock of the Borrower (or securities convertible into or exchangeable for
such Voting Stock) representing more than 50% of the combined voting power of
all Voting Stock of the Borrower or (ii) otherwise attains the ability, directly
or indirectly, to elect a majority of the board of directors of the Borrower.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"COLLATERAL" has the meaning ascribed to that term in the Mortgage.
"CONSISTENT BASIS" in reference to the application of Generally
Accepted Accounting Principles means the accounting principles observed in the
period referred to are comparable in all material respects to those applied in
the preparation of the audited financial statements of the Borrower referred to
in Section 6.01.
"CONTRACT" means an indenture, agreement (other than this Agreement and
any other Loan Document), other contractual restriction, lease, instrument
(other than the Notes), certificate of incorporation or charter, or bylaw.
"COST OF ACQUISITION" means, with respect to any Acquisition, as at the
date of entering into any agreement therefor, the sum of the following (without
duplication): (i) the value of the capital stock, warrants or options to acquire
Capital Securities of the Borrower or any Subsidiary to be transferred in
connection therewith, (ii) the amount of any cash and fair market value of other
property (excluding property described in clause (i) and the unpaid principal
amount of any debt instrument) given as consideration, (iii) the amount
(determined by using the face amount or the amount payable at maturity,
whichever is greater) of any Funded Debt incurred, assumed or acquired by the
Borrower or any Subsidiary in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that should be recorded on
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the financial statements of the Borrower and its Subsidiaries in accordance with
Generally Accepted Accounting Principles, (v) the aggregate fair market value of
all other consideration given by the Borrower or any Subsidiary in connection
with such Acquisition, and (vi) out-of-pocket transaction costs for the services
and expenses of attorneys, accountants and other consultants incurred in
effecting such transaction and other similar transaction costs so incurred.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DEFAULT RATE" means a rate per annum equal to the floating rate
applicable to the Loan for each such Interest Period plus 3.00%.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EBIT" means, for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) net income excluding
therefrom the restructuring and other non-recurring charges of the Borrower
incurred in the fiscal quarter ended September 30, 1997, (ii) interest expense,
and (iii) taxes on income of the Borrower, and (iv) any extraordinary loss in
such period minus (v) any extraordinary gain in such period, all determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis.
"EBITDA" means, for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) net income excluding
therefrom the restructuring and other non-recurring charges of the Borrower
incurred in the fiscal quarter ended September 30, 1997, (ii) interest expense,
(iii) income tax expense of the Borrower, (iv) amortization expense of the
Borrower, (v) depreciation of the Borrower and its Subsidiaries, and (vi) any
extraordinary loss in such period minus (vii) any extraordinary gain in such
period, all determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis.
"ENVIRONMENTAL LAWS" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license regulating,
relating to, or imposing liability or standards of conduct concerning, any
environmental matters or conditions, environmental protection or conservation,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery
Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all regulations
promulgated thereunder, and any other "Superfund" or "Superlien" law.
"EVENT OF DEFAULT" means any of the events or occurrences specified in
Section 7.01;
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100th of 1.00%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day,
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provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent on such day on such transaction as determined by the Agent.
"FISCAL YEAR" means the twelve-month fiscal period of the Borrower and
its Subsidiaries commencing on January 1 of each calendar year and ending on
December 31 of such calendar year.
"FIXED CHARGES" means, with respect to any period of computation
thereof, the sum of (i) interest expense plus (ii) Rents Expense.
"FOUR-QUARTER PERIOD" means a period of four full consecutive fiscal
quarters (whether or not in the same Fiscal Year) of the Borrower and its
Subsidiaries, taken together as one accounting period.
"FUNDED DEBT" of any Person means at any time, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable that arise in the ordinary course of
business but only if and so long as the same are payable on customary trade
terms, (iv) all obligations of such Person with respect to Capital Leases, (v)
all obligations of such Person to reimburse any other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all
obligations with respect to interest rate and currency swaps and similar
obligations obligating such Person to make payments, whether periodically or
upon the happening of a contingency, except that if any Contract relating to
such obligations provides for the netting of amounts payable by and to such
Person thereunder or if any such Contract provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of such
obligations shall be the net amount thereof, (vii) all of the foregoing owed by
others but secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) a lien on any asset of such
Person, whether or not such debt is assumed by such Person, (viii) all of the
foregoing owed by others but guaranteed by such Person, and (ix) any other
obligation for borrowed money which would be properly classifiable as debt under
Generally Accepted Accounting Principles applied on a Consistent Basis.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means accounting principles
that are consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors as in effect in the United
States of America from time to time.
"GOVERNMENTAL AUTHORITY" means any Federal, state, municipal, national
or other governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with the United States of America, a state thereof, or a foreign
entity or government.
"GUARANTIES" means all obligations of the Borrower directly or
indirectly guaranteeing, or in effect guaranteeing, any debt or other obligation
of any other Person.
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"HAZARDOUS MATERIAL" means and includes any pollutant, contaminant or
hazardous, toxic or dangerous waste, substance or material (including without
limitation petroleum products, asbestos-containing materials and lead), the
generation, handling. storage, transportation, disposal, treatment, release,
discharge or emission of which is subject to any Environmental Law.
"INFORMATION" means written data, services, reports, statements
(including, but not limited to, financial statements delivered pursuant to or
referred to in this Agreement, opinions of counsel, documents and other
information, whether, in the case of any such in writing, it was prepared by the
Borrower, or any other Person on behalf of the Borrower.
"INTANGIBLE ASSETS" means those assets of the Borrower which are any of
the following: (1) deferred charges, other than prepaid advertising, prepaid
insurance and prepaid taxes, (2) patents, copyrights, trademarks, trade names,
franchises, goodwill, experimental expenses, customer lists or other similar
assets which would be classified as intangible assets on a balance sheet of the
Borrower prepared in accordance with Generally Accepted Accounting Principles,
(3) unamortized debt, discount or expense, or (4) notes or other debt owed to
the Borrower by its Affiliates.
"INTEREST PERIOD" means a period commencing, in the case of the first
Interest Period applicable to the Loan, on the date of the making of the Loan,
and, in the case of each subsequent, successive Interest Period applicable
thereto, on the last day of the immediately preceding Interest Period, and
ending one month thereafter on the same day, except that (a) any Interest Period
which would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (b) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month in which such Interest Period ends)
shall end on the last Business Day of a calendar month, and (c) no Interest
Period shall extend past the Maturity Date.
"LIBOR RATE" means, the rate per annum (rounded upwards to the nearest
1/100 of 1.00%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided that, if, for any
reason, such rate is not available, the term "LIBOR Rate" shall mean, with
respect to any Interest Period for a LIBOR Rate Loan, the rate per annum
(rounded upwards to the nearest 1/100 of 1.00%) appearing on a Reuters Screen
LIBOR Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBOR Page, the
applicable rate shall be the arithmetic mean of all such rates.
"LIEN", as applied to the property or assets (or the income or profits
therefrom) of any Person, means (in each case, whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise): any mortgage, lien, pledge, attachment, levy, charge, or other
security interest or encumbrance of any kind in respect of any property or
assets of such Person, or upon the income or profits therefrom.
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"LOAN" means the $5,120,000 Mortgage loan from Bank to Borrower.
"LOAN DOCUMENTS" means this Agreement, the Note, the Mortgage and
Security Agreement, and each document, instrument, certificate, and opinion
executed and delivered in connection with any of the foregoing, each as amended,
modified or replaced from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, properties, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, or (ii) the rights, powers and
remedies of Bank under any Loan Documents or the validity, legality or
enforceability thereof (including for purposes of clause (ii) the imposition of
materially burdensome conditions on the Bank in enforcing such rights, powers
and remedies).
"MAXIMUM PERMISSIBLE RATE" means, with respect to interest payable on
any amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (i) civil or criminal penalties being imposed on any
Bank or (ii) any Bank being unable to enforce payment of (or if collected, to
retain) all or part of such amount or the interest payable thereon.
"MORTGAGE" means that certain Restated and Modified Mortgage and
Security Agreement and Spreader Agreement of even date herewith from Borrower,
as Mortgagor, in favor of Bank, as Mortgagee.
"MORTGAGE PROPERTY" means the property located in Broward County,
Florida, owned by Borrower and encumbered by the Mortgage.
"NET PROCEEDS" from the issuance of equity or Debt means cash payments
received therefrom as and when received, net of all legal, accounting, banking,
underwriting, title and recording fees and expenses, commissions, discounts and
other issuance expenses incurred in connection therewith and all taxes required
to be paid or accrued as a consequence of such transaction.
"NET WORTH" means, as at any date of determination, (i) the aggregate
amount of all assets of the Borrower as may be properly classified as such, less
(ii) the aggregate amount of all liabilities of the Borrower as may be properly
classified as such, all as determined and classified in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis.
"NOTE" means the $5,120,000.00 Promissory Note of the Borrower payable
to the order of Bank.
"OBLIGATIONS" means all loans, fees, indebtedness, liabilities,
obligations, covenants and duties of the Borrower to the Bank arising under or
in connection with this Agreement or any other Loan Documents, direct or
indirect, absolute or contingent, due or not due, in contract or tort,
liquidated or unliquidated, arising by operation of law or otherwise, now
existing or hereafter arising, and whether or not for the payment of money or
the performance or non-performance of any act, including, but not limited to,
all damages which the Borrower may owe to the Bank by reason of any breach by
the Borrower of any representation, warranty, covenant, agreement or other
provision of this Agreement or any of the other Loan Documents.
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"PERSON" means an individual, corporation, partnership, limited
liability company, trust or unincorporated organization or a government or any
agency or political subdivision thereof.
"RATE HEDGING OBLIGATIONS" means any and all obligations and
liabilities of the Borrower to the Bank, whether absolute or contingent and
however and whenever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements, devices or arrangements designed to protect at
least one of the parties thereto from the fluctuations of interest rates,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including but not limited to Dollar- denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts, warrants and those commonly known as
interest rate "swap" agreements; and (ii) any and all cancellations, buybacks,
reversals, terminations or assignments of any of the foregoing.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"REGULATORY CHANGE" means (i) any new, or any change in any existing,
Applicable Law, interpretation, directive or request (whether or not having the
force of law) and (ii) any change in the administration or enforcement of any
such Applicable Law, interpretation, directive or request, in each case, that
becomes effective after the Agreement Date, whether as a result of an enactment
by a government or any agency or political subdivision thereof, a determination
of a court or a regulatory authority, or otherwise.
"RENTS EXPENSE" means, with respect to any period of computation
thereof, the aggregate amount of lease and rental expense due or scheduled to be
due for such period from the Borrower under operating leases, but excluding
Capital Leases.
"REPRESENTATION AND WARRANTY" means each representation and warranty
made by Borrower pursuant to or under this Agreement or any other Loan Document,
(ii) any amendment of or waiver or consent under this Agreement, (iii) any
Schedule to this Agreement or any such amendment, waiver or consent, or (iv) any
statement contained in any certificate, financial statement, or other instrument
or document delivered by or on behalf of the Borrower pursuant to any Loan
Document, whether or not (except as expressly provided to the contrary herein),
in the case of any representation or warranty referred to in this definition,
the information that is the subject matter thereof is within the knowledge of
the Borrower.
"RESERVE REQUIREMENT" means at any time the then current maximum rate
at which reserves (including any marginal, supplemental or emergency reserve)
are required to be maintained under Regulation D by member banks of the Federal
Reserve System in Miami with deposits comparable in amount to those of the Agent
against "Eurocurrency liabilities", as that term is used in Regulation D. The
Adjusted LIBOR Rates shall be adjusted automatically on and as of the effective
date of any change in the Reserve Requirement.
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"RESTRICTED PAYMENT" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of the
Borrower or any of its Subsidiaries (other than those payable or distributable
solely to the Borrower) now or hereafter outstanding, except a dividend payable
solely in shares of a class of stock to the holders of that class; (b) any
redemption, conversion, exchange, retirement or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of the Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower) now or hereafter outstanding; (c) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of the Borrower
or any of its Subsidiaries now or hereafter outstanding other than those payable
solely to the Borrower or in connection with a repricing, revesting or exchange
of options; and (d) any issuance and sale of Capital Securities of any
Subsidiary of the Borrower (or any option, warrant or right to acquire such
stock) other than to the Borrower.
"SECURITY INTERESTS" means the Mortgage lien, pledges and collateral
assignments created by the Mortgage and other Loan Documents.
"SOLVENT" means, when used with respect to any Person (and giving
effect to the Borrower's funding from time to time of a Subsidiary's liabilities
and obligations), that at the time of determination:
(a) the fair value of its assets (both at fair valuation
and at present fair saleable value on an orderly
basis) is in excess of the total amount of its
liabilities, including contingent Obligations; and
(b) it is then able and expects to be able to pay its
debts as they mature; and
(c) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"SUBSIDIARY" means any corporation or other entity in which 50% or more
of its outstanding Voting Stock or 50% or more of all equity interests is owned
directly or indirectly by the Borrower and/or by one or more of the Borrower's
Subsidiaries.
"SUBSIDIARIES" means, collectively, Tiger Construction, Inc., a
Florida corporation, Precision Relay Services, Inc., a Florida corporation,
Precision Response of Colorado, Inc., a Delaware corporation, Precision Response
of North America, Inc., a Delaware corporation, and any other Subsidiary
acquired or created after the Agreement Date.
"TAX" means any federal, state or foreign tax, assessment or other
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits other than income and franchise
taxes imposed upon a Bank by the federal government, the State of Florida (or
any political subdivision thereof), and any other jurisdiction (or any political
subdivision thereof) in which such Bank has its head office or lending office
for this Loan.
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"TOTAL CAPITALIZATION" means, as of any date on which the amount
thereof is to be determined, the sum of Funded Debt as of that date plus net
worth as of that date.
"VOTING STOCK" means, with respect to any Person, Capital Securities of
such Person entitling the holder thereof to vote in the election of directors of
such Person.
(b) "OTHER DEFINITIONAL AND INTERPRETIVE PROVISIONS"
(i) Except as otherwise specified herein, all
references herein (A) to any Person, other than the Borrower or any Subsidiary,
shall be deemed to include such Person's successors, transferees and assignees,
but only, in the case of transferees and assignees of the Banks, to the extent
the applicable transfer or assignment complies with the provisions of this
Agreement, (B) to the Borrower or any Subsidiary shall be deemed to include such
Person's successors, (C) to any Applicable Law specifically defined or referred
to herein shall be deemed references to such Applicable Law as the same may be
amended or supplemented from time to time, and (D) to any Contract defined or
referred to herein shall be deemed references to such Contract (and, in the case
of any instrument, any other instrument issued in substitution therefor) as the
terms thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time.
(ii) When used in this Agreement, "herein", "hereof"
and "hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any particular section or subsection of this Agreement, and
"Section" (and/or "Section") or "subsection" and "Schedule" and "Exhibit" shall
refer to sections and subsections of, and Schedules and Exhibits to, this
Agreement unless otherwise specified.
(iii) Whenever the context so requires, when used in
this Agreement the neuter gender includes the masculine or feminine, and the
singular number includes the plural, and vice versa.
(iv) 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 the words "to" and "until" each means "to but
excluding."
(v) The words "includes" and "including" when used
herein are not limiting.
(vi) Each term defined in Article 1 or Article 9 of
the Florida Uniform Commercial Code shall have the meaning ascribed to it
therein unless otherwise defined herein, except to the extent that the Uniform
Commercial Code of another jurisdiction is controlling, in which case such term
shall have the meaning ascribed to it in the Uniform Commercial Code of the
applicable jurisdiction.
SECTION 1.02 ACCOUNTING TERMS AND MATTERS. Unless the context otherwise
requires, all accounting terms herein (including capitalized terms) that are not
specifically defined herein shall be interpreted and determined under Generally
Accepted Accounting Principles applied on a Consistent Basis. Unless otherwise
specified herein, all accounting determinations hereunder and all computations
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utilized by the Borrower in complying with the covenants contained herein shall
be made, and all financial statements requested to be delivered hereunder shall
be prepared, in accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis, except, in the case of such financial statements, for
departures from Generally Accepted Accounting Principles that may from time to
time be approved in writing by the independent certified public accountants who
are at the time, in accordance with SECTION 6.01, reporting on the financial
statements of the Borrower.
SECTION 1.03 CAPTIONS. Section and subsection captions in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 1.04 NEUTRAL INTERPRETATION. This Agreement and each other Loan
Document has been thoroughly reviewed by counsel for the Borrower and the
Subsidiaries. No provision of this Agreement or other Loan Document shall be
construed less favorably to the Bank because it was drafted by the Bank's
counsel.
SECTION 2. DEFINITIONS AND INTERPRETATION
SECTION 2.01 LOAN REPAYMENT. The Borrower shall repay the Loan to Bank
in accordance with the payment provisions contained in the Note, which is
incorporated by reference herein.
SECTION 2.02 LOAN HOLDBACK. The amount of One Million One Hundred
Twenty Thousand Dollars ($1,120,000.00) shall not be disbursed to Borrower at
Closing, and shall constitute the "Interior Improvement Holdback". The Interior
Improvement Holdback shall be disbursed to Borrower upon the substantial
completion by Borrower of the interior improvements to the Mortgaged Property in
a lien free manner to the satisfaction of Bank. The Borrower agrees to
substantially complete the interior improvements within one hundred eighty (180)
days from the date hereof. The interior improvements shall be deemed to be
substantially completed at such time as (a) Borrower has obtained a Certificate
of Occupancy or Completion for the premises and improvements, and (b) Borrower
has obtained a contractor's final lien release from all contractors who have
worked on the interior improvements, and (c) Bank's inspector (I.E., an
inspector designated by Bank) has inspected the interior improvements and has
verified to Bank that the interior improvements have been substantially
completed and (d) Borrower has furnished to Bank an updated endorsement to the
title policy insuring the Mortgage confirming the absence of liens on the
Mortgaged Property. In the event that Borrower fails to substantially complete
the interior improvements in accordance with this Section 2.02 within 180 days
from the date hereof, then Bank shall not be obligated to advance the Interior
Improvement Holdback and at the option of Bank the amount of the Loan shall be
deemed reduced by the amount of the Interior Improvement Holdback. The failure
of Borrower to substantially complete the interior improvements within 180 days
in accordance with this Section 2.02 shall not be deemed to constitute a Default
under this Agreement and the only consequence of such failure shall be a
reduction in the amount of the Loan, but the foregoing shall not be deemed to
permit any construction liens to attach to the Mortgaged Property. The Interior
Construction Holdback shall not be deemed an advance of funds to the Borrower
and shall not bear interest unless and until such funds are advanced to
Borrower.
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SECTION 2.03 INTEREST ON LOAN.
(a) INTEREST RATE. The Loan shall bear interest on the
outstanding principal amount thereof until due at a rate per annum equal to the
floating Adjusted LIBOR Rate plus one hundred fifty basis points (Libor +
1.50%).
(b) DEFAULT INTEREST. If all or any part of the Loan is not
paid when due (whether at maturity, by reason of acceleration or otherwise),
and/or after the occurrence of an Event of Default at the option of Bank, such
unpaid amount shall bear interest for each day during the period from the date
such amount became so due until it is paid in full (whether before or after
judgment) at a rate per annum equal to the Default Rate.
(c) MAXIMUM INTEREST RATE. Nothing contained in this Agreement
or any Note shall require the Borrower to pay interest at a rate exceeding the
Maximum Permissible Rate. If, but for this provision, the Borrower would be
deemed obligated to pay interest at a rate which exceeds the Maximum Permissible
Rate, or, if any of the Obligations are paid or become payable before its
originally scheduled maturity and as a result the Borrower has paid or would be
obligated to pay interest at such an excessive rate, then (i) the Borrower shall
not be obligated to pay interest to the extent it exceeds the Maximum
Permissible Rate; (ii) if the outstanding Obligations have not been accelerated
as provided in this Agreement, any such excess interest that has been paid by
the Borrower shall be refunded; (iii) if the outstanding Obligations have been
accelerated as provided in this Agreement, any such excess that has been paid by
the Borrower shall be applied to the Obligations; and (iv) the effective rate of
interest shall be deemed automatically reduced to the Maximum Permissible Rate.
(d) COMPUTATION OF INTEREST. All interest and fees payable
pursuant to this Agreement or the Note shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the first
but excluding the last day, which, in the case of any Interest Period, means
from the first day of such Interest Period to the last day thereof). If the date
for any payment of principal is extended (whether by operation of this
Agreement, any provision of law or otherwise), interest shall be payable for
such extended time.
SECTION 2.04 OPTIONAL PREPAYMENTS OF LOAN. The Borrower may at any time
and from time to time, upon two Business Days' advance notice, prepay the Loan
in whole or in part without premium or penalty, except that any prepayment shall
be in a principal amount of a whole multiple of $100,000, and only on the last
day of an Interest Period.
The Borrower shall also have the right, upon two Business Days advance
notice, to prepay the Loan in full and terminate this Agreement, provided that
(i) any prepayment shall be subject to the provisions hereinabove set forth and
(ii)the written notice from Borrower must specify that Borrower desires to
terminate this Agreement and prepay in full the Loan.
SECTION 2.05 MANNER AND ALLOCATION OF PAYMENTS. Unless otherwise
provided herein, all payments and deposits due by the Borrower to the Bank with
respect to the Note shall be made not later than 12:00 noon (Miami time), on the
due date thereof, in Dollars and in funds immediately available to
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the Bank at the Bank's Office, without any deduction whatsoever, including, but
not limited to, any deduction for any set-off, recoupment, counterclaim or Tax.
Whenever any payment hereunder shall be due on a day which is not a Business
Day, the date of such payment shall be extended to the next succeeding Business
Day and any extension shall be included in computing interest and fees, if any,
in connection with such payment. Except as otherwise expressly stated in this
Agreement, all payments received from the Borrower shall be applied first to pay
fees, commissions and other charges (other than interest) then due, next to pay
interest then due and the remainder, if any, to pay the outstanding principal of
the Loan. The Borrower hereby authorizes Bank, if and to the extent payment owed
to Bank is not made when due hereunder or under the Note, to charge from time to
time against any or all of the Borrower's accounts with the Bank any amount so
due.
SECTION 3. CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Bank to enter into this Agreement and to make
the Loan, the Borrower represents and warrants to the Bank as follows:
SECTION 3.01 ORGANIZATION: POWER; QUALIFICATION; COMPLIANCE: The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation, has the corporate power and
authority to own its properties and to carry on its businesses as now being and
proposed to be hereafter conducted, is duly qualified, is in good standing, and
is authorized to do business, in all jurisdictions in which the character of its
properties or the nature of its businesses requires such qualification or
authorization. The Borrower is conducting its business in compliance with all
Applicable Laws.
SECTION 3.02 Intentionally Deleted.
SECTION 3.03 SOLVENCY. The Borrower will be Solvent after giving effect
to the transactions contemplated by the Loan Documents.
SECTION 3.04 AUTHORIZATION AND COMPLIANCE OF AGREEMENT AND NOTE. The
Borrower has the corporate power, and has taken all necessary corporate
(including stockholder, if necessary) action to authorize it to execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party in accordance with their respective terms, to incur its other obligations
under this Agreement and each of the other Loan Documents to which it is a party
and to borrow hereunder. Each of this Agreement and the other Loan Documents
delivered on the Agreement Date has been duly executed and delivered by the
Borrower and is a legal, valid and binding obligation of the Borrower and,
enforceable against the Borrower in accordance with its terms subject to the
applicable bankruptcy and insolvency laws and other laws affecting the
enforceability of creditors rights, generally.
SECTION 3.05 LITIGATION. Except as set forth on Exhibit A, as of the
Agreement Date there are not, in any court or before any arbitrator of any kind
or before or by any governmental or non-governmental body, any actions, suits or
proceedings, pending (or to the knowledge of the Borrower probable to be
asserted), against or in any other way relating to or affecting (a) the Borrower
or the business or any property of the Borrower, except actions, suits or
proceedings that, if adversely determined, would not, (i) singly result in
liability more than $250,000.00 above the amount of
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insurance coverage in effect with respect thereto or (ii) in the aggregate for
the Borrower result in liability more than $500,000.00 above the amount of
insurance coverage in effect with respect thereto or (iii) singly or in the
aggregate otherwise have a Materially Adverse Effect.
SECTION 3.06 BURDENSOME PROVISIONS. The Borrower is not a party to or
bound by any Contract or Applicable Law that could have a Materially Adverse
Effect.
SECTION 3.07 NO MATERIAL ADVERSE CHANGE OR EVENT. Between September 30,
1997 and the Agreement Date, no change in the business, assets, liabilities,
financial condition, results of operations or business prospects of the Borrower
and its Subsidiaries, taken as a whole, has occurred, and no event has occurred
or failed to occur, which has had or might reasonably be expected to have,
either alone or in conjunction with all other such changes, events and failures,
a Materially Adverse Effect. (In determining whether an adverse change has
occurred, it is understood that such an adverse change may have occurred, and
such an event may have occurred or failed to occur, at any particular time
notwithstanding the fact that at such time no Default shall have occurred and be
continuing.)
SECTION 3.08 NO ADVERSE FACT. No fact or circumstance is known to the
Borrower as of the Agreement Date which, either alone or in conjunction with all
other such facts and circumstances, has had or might reasonably be expected in
the future to have (so far as the Borrower can foresee) a Materially Adverse
Effect that has not been set forth or referred to in the financial statements
referred to herein or in a writing specifically captioned "Disclosure Statement"
and delivered to the Bank prior to the Agreement Date.
SECTION 3.09 TITLE TO PROPERTIES. The Borrower has title to its
properties reflected on the financial statements referred to in its most recent
Form 10-Q subject to no Liens or material adverse claims except as disclosed
thereon and except Permitted Liens.
SECTION 3.10 FUNDED DEBT. All agreements relating to Funded Debt of the
Borrower, or commitments or agreements to permit the Borrower to incur Funded
Debt (other than any Loan Document), are listed on Exhibit B.
SECTION 3.11 PATENTS, TRADEMARKS, ETC. The Borrower owns, or is
licensed or otherwise has the lawful right to use, all trademarks, copyrights,
technology, know-how and processes ("Intellectual Property") used in or
necessary for the conduct of its business as currently in any material respect
conducted. The use of such Intellectual Property by the Borrower does not
infringe on the rights of any Person.
SECTION 3.12 MARGIN STOCK. The proceeds of the Loan will be used by the
Borrower only for the purposes expressly authorized herein. None of such
proceeds will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock or for the purpose of reducing or retiring any Funded
Debt which was originally incurred to purchase or carry margin stock or for any
other purpose which might constitute any of the Loans a "purpose credit" within
the meaning of Regulation U. Neither the Borrower nor any agent acting in its
behalf has taken or will take any action which might cause this Agreement or any
of the documents or instruments delivered pursuant hereto to violate any
regulation of the Board or to violate the Securities Exchange Act of 1934, as
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amended, or the Securities Act of 1933, as amended, or any state securities
laws, in each case as in effect on the date hereof.
SECTION 3.13 INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
SECTION 80a-1, et seq.). The application of the proceeds of the Loan and
repayment thereof by the Borrower and the performance by the Borrower of the
transactions contemplated by the Loan Documents will not violate any provision
of that statute, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof.
SECTION 3.14 NO DEFAULT. As of the date hereof, there exists no Default
or Event of Default.
SECTION 3.15 HAZARDOUS MATERIALS. The Borrower is in compliance with
all applicable Environmental Laws in all material respects. The Borrower has not
been notified in writing of any action, suit, proceeding or investigation which,
and the Borrower is not aware of any facts which, (i) calls into question, or
could reasonably be expected to call into question, compliance by the Borrower
with any Environmental Laws, (ii) seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
license, permit or approval necessary for the generation, handling, storage,
treatment or disposal of any Hazardous Material, or (iii) seeks to cause, or
could reasonably be expected to form the basis of a meritorious proceeding to
cause, any property of the Borrower to be subject to any restrictions on
ownership, use, occupancy or transferability under any Environmental Law to
which the Borrower is not currently subject, which in the case of any matter
described in items (i), (ii) or (iii) above would result in a Material Adverse
Effect.
SECTION 4. CERTAIN AFFIRMATIVE COVENANTS
Until the Note is paid in full, unless the Bank shall otherwise consent
in writing, the Borrower shall, and where applicable shall cause each Subsidiary
to:
SECTION 4.01 PRESERVATION OF EXISTENCE AND PROPERTIES, SCOPE OF
BUSINESS, COMPLIANCE WITH LAW, PAYMENT OF TAXES AND CLAIMS. (a) Preserve and
maintain its corporate existence and all of its other franchises, licenses,
rights and privileges, (b) preserve, protect and obtain all Intellectual
Property, and preserve and maintain in good repair, working order and condition
all other properties, required for the conduct of its business as presently
conducted, all in accordance with customary and prudent business practices, (c)
engage only in the business in which it is engaged as of the Agreement Date and
related businesses that in the Bank's reasonable judgment are closely related
thereto, (d) comply with all Applicable Laws, (e) pay or discharge when due (or
as permitted by the Mortgage) all Taxes owing by it or imposed upon its property
(for the purposes of this clause, such Taxes shall be deemed to be due on the
date after which they become delinquent), and all liabilities which might become
a Lien on any of its properties, (f) take all action and obtain all consents and
Governmental Approvals required so that its obligations under the Loan Documents
will at all times be valid and binding and enforceable in accordance with their
respective terms, and (g) obtain and maintain all licenses, permits and
approvals of Governmental Authorities and as are required for the conduct of its
business as presently conducted.
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SECTION 4.02 INSURANCE. Maintain insurance with responsible insurance
companies against such risks and in such amounts as is customarily maintained by
similar businesses, as may be required by the Mortgage or by Applicable Law, or
as may be reasonably requested by the Bank.
SECTION 4.03 USE OF PROCEEDS. Use the Loan only for general corporate
purposes (including refinancing of an existing mortgage loan) and refrain from
using proceeds of any Loan to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulation U) or to extend credit to others for the purpose of
purchasing or carrying any margin stock (if requested by the Bank, the Borrower
shall furnish to the Bank statements in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U).
SECTION 5. CERTAIN NEGATIVE COVENANTS
The Borrower shall not:
SECTION 5.01 NET WORTH. Permit Net Worth to be less than (i) as at the
last day of each succeeding fiscal quarter of the Borrower and until (but
excluding) the last day of the next following fiscal quarter of the Borrower,
the sum of (A) the amount of $88,317,000.00 plus (B) 85% of the net income (with
no reduction for net losses during any period) for the fiscal quarter of the
Borrower ending on such day plus (C) 100% of the aggregate Net Proceeds of the
issuance of equity securities or other capital investments.
SECTION 5.02 FUNDED DEBT TO EBITDA RATIO. Permit the ratio of Funded
Debt as at the end of any Four-Quarter Period to EBITDA for such Four-Quarter
Period to exceed 2.50 to 1.0.
SECTION 5.03 FIXED CHARGE COVERAGE RATIO. Permit the ratio of (a) the
sum of EBITDA for any Four-Quarter Period plus Rents Expense for such
Four-Quarter Period to (b) the sum of interest expense for such Four-Quarter
Period plus Rents Expense for such Four-Quarter Period plus income tax expense
for such Four-Quarter Period plus 20% of Funded Debt outstanding as of the last
day of the applicable Four-Quarter Period to be less than 2.00 to 1.00 as of the
last day of each Four- Quarter Period.
SECTION 5.04 CAPITAL EXPENDITURES. Make or become committed to make
Capital Expenditures which exceed in the aggregate (on a noncumulative basis,
with the effect that amounts not expended in any Fiscal Year may not be carried
forward to a subsequent period) $30,000,000 in Fiscal Year 1998 and $35,000,000
in any later Fiscal Year.
SECTION 5.05 FUNDED DEBT TO CAPITALIZATION. Permit the ratio of total
Funded Debt to Total Capitalization to exceed .50 to 1.0.
SECTION 5.06 FUNDED DEBT. Incur, create, assume or permit to exist any
Funded Debt, however evidenced, except:
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(a) Funded Debt existing as of the Closing Date; provided,
none of the instruments and agreements evidencing or governing any such Funded
Debt shall be amended, modified or supplemented in any material respects after
the Closing Date to change any terms of subordination, repayment or rights of
conversion, put, exchange or other rights from such terms and rights as in
effect on the Closing Date;
(b) the Obligations and Rate Hedging Obligations;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) Funded Debt incurred in connection with Acquisitions
permitted hereunder; and
(e) Funded Debt incurred to purchase property, plant and
equipment of the Borrower and its Subsidiaries in a cumulative amount not to
exceed $10,000,000.
SECTION 5.07 TRANSFER OF ASSETS. Sell, lease, transfer or otherwise
dispose of any assets of the Borrower or any Subsidiary (including any ownership
interest in any Material Subsidiary) other than (a) dispositions of inventory in
the ordinary course of business, (b) dispositions of equipment or real property
which, in the aggregate during any Fiscal Year, have a fair market value or book
value, whichever is less, of $5,000,000 or less and is not replaced by equipment
having at least equivalent value, (c) dispositions of property that is
substantially worn, damaged, obsolete or, in the judgment of the Borrower, no
longer best used or useful in its business or that of any Subsidiary, (d)
transfers of assets necessary to give effect to merger or consolidation
transactions permitted by this Agreement, and (e) subleases of offices or other
facilities of Borrower or its Subsidiaries no longer used in their business.
SECTION 5.08 INVESTMENTS. Purchase, own, invest in or otherwise
acquire, directly or indirectly, any stock or other securities, or make or
permit to exist any investment whatsoever in any other Person or permit to exist
any loans or advances to any Person, except that the Borrower may maintain
investments or invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
(c) investments in Persons existing as of the date hereof
as set forth in Schedule 6.09;
(d) loans and advances to employees and independent
contractors of Borrower or its Subsidiaries not in excess of $250,000.00 in the
aggregate;
(e) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities or other assets received in
satisfaction or partial satisfaction thereof in
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connection with accounts of financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss; and
(f) investments in Subsidiaries.
SECTION 5.09 MERGER AND CONSOLIDATION. (a) Consolidate with or merge
into any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets; provided, however, (i) any
Subsidiary of the Borrower may merge, sell, transfer, lease or otherwise dispose
of, all or substantially all of its assets into or consolidate with the Borrower
or any wholly-owned Subsidiary of the Borrower, (ii) any Subsidiary may
liquidate, windup or dissolve so long as all of its assets (subject to its
liabilities) are transferred to Borrower or to another Subsidiary, and (iii) any
other Person may merge into or consolidate with the Borrower or any wholly-owned
Subsidiary and any Subsidiary may merge into or consolidate with any other
Person in order to consummate an Acquisition permitted by this Agreement,
provided further, that any resulting or surviving entity shall execute and
deliver such agreements and other documents, including a Guaranty Agreement, and
take such other action as the Agent may require to evidence or confirm its
express assumption of the obligations and liabilities (if any) of its
predecessor entities under the Loan Documents.
SECTION 5.10 RESTRICTED PAYMENTS. Make or agree to make any Restricted
Payment or apply or set apart any of their assets therefor.
SECTION 5.11 ACQUISITIONS. Enter into any Contract, binding commitment
or other binding arrangement providing for any Acquisition, or solicit the
tender of securities or proxies in respect thereof in order to effect any
Acquisition, unless (i) the Person to be (or whose assets are to be) acquired
does not oppose such Acquisition and the line or lines of business of the Person
to be acquired are substantially the same as the Borrower or any of its
Subsidiaries, (ii) the Cost of Acquisition (excluding out-of-pocket transaction
costs for services and expenses of attorneys, accountants, and other consultants
incurred in effecting such transaction and other similar transactions and
closing costs so incurred, all of which may be paid in cash) does not exceed
$3,000,000 and is paid entirely in stock, and (iii) an Authorized Representative
shall have furnished the Bank with a certificate to the effect that no Default
or Event of Default shall have occurred and be continuing either immediately
prior to or immediately after giving effect to such Acquisition and the Borrower
shall have furnished to the Bank (A) pro forma historical financial statements
as of the end of the most recently completed fiscal period of the Borrower
(whether quarterly or year end) giving effect to such Acquisition and assuming
that any debt incurred to effect such Acquisition shall be deemed to have been
outstanding during the Four-Quarter Period preceding such Acquisition and to
have borne a rate of interest during such period equal to that rate in existence
at the date of determination and (B) a certificate in form and substance
satisfactory to the Bank prepared on a historical pro forma basis giving effect
to such Acquisition as of the most recent fiscal quarter of the Borrower then
ended, which certificate shall demonstrate that no Default or Event of Default
would exist immediately after giving effect thereof, and (iii) the Person
acquired shall be a Subsidiary, or be merged into or with the Borrower or one of
its Subsidiaries, immediately upon consummation of the Acquisition (or if assets
are being acquired, the acquiror shall be the Borrower or a Subsidiary).
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SECTION 5.12 TRANSACTIONS WITH AFFILIATES. After the date hereof, enter
into any transaction, including without limitation the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
to the Borrower or its Subsidiaries for compensation at the same rates generally
paid by Persons engaged in the same or similar businesses for the same or
similar services or as may otherwise be approved by a majority vote of the
Compensation Committee of the Borrower's Board of Directors, (b) that the
Borrower or any Subsidiary may render services to such Persons for compensation
at the same rates generally charged by the Borrower or such Subsidiary and (c)
in either case in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's (or any Subsidiary's) business consistent with
past practice of the Borrower and its Subsidiaries and upon fair and reasonable
terms no less favorable to the Borrower (or any Subsidiary) than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate. Notwithstanding anything to the contrary contained herein, any
transaction or agreement with an Affiliate in connection with such Affiliate's
employment or compensation (including salary, bonus, stock options and other
benefits) payable or provided by the Borrower which is approved by the
Borrower's Compensation Committee comprised of at least a majority of
independent Directors shall be deemed to have satisfied the requirements of
items (a), (b) and (c), above.
SECTION 5.13 FISCAL YEAR. Change its Fiscal Year or that of any
Subsidiary.
SECTION 5.14 DISSOLUTION, ETC. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings seeking any
such winding up, liquidation or dissolution, except as to any Subsidiary to the
extent permitted under SECTION 5.09.
SECTION 5.15 LIMITATIONS OF SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property, whether now owned or hereafter acquired
in a related transaction or series of related transactions, which has been or is
to be sold or transferred by the Borrower or any Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or any
Subsidiary.
SECTION 5.16 CHANGE IN CONTROL. Cause or permit to exist or occur any
Change of Control.
SECTION 5.17 CUSTOMER LISTS AND TRADENAMES. Sell, assign, encumber or
otherwise dispose of any of its customer lists or any tradename at any time used
by it, except for the licensing thereof in the ordinary course of business.
SECTION 5.18 CIRCUMVENTION. Do anything indirectly that this Agreement
would prohibit its doing directly.
SECTION 6. INFORMATION
SECTION 6.01 FINANCIAL STATEMENTS AND INFORMATION TO BE FURNISHED.
Until the Note is paid in full, the Borrower shall deliver to the Bank:
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(a) QUARTERLY FINANCIAL STATEMENTS; OFFICER'S CERTIFICATE. As
soon as available and in any event within 45 days after the end of each of the
first three quarters of each Fiscal Year, (i) consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such quarter, and the related
consolidated statements of income, and cash flows for such quarter and for the
period from the beginning of the then current Fiscal Year through the end of
such reporting period, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of the Borrower and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes in their
financial position for such fiscal period.
(b) YEAR-END STATEMENT; ACCOUNTANTS' AND OFFICER'S
CERTIFICATES. As soon as available and in any event within 90 days after the end
of each Fiscal Year, (i) consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of each Fiscal Year, and the notes thereto, and the
related consolidated statements of income, shareholders' equity and cash flows,
and the respective notes thereto, for such Fiscal Year, setting forth
comparative financial statements for the preceding Fiscal Year, all prepared in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis and containing, with respect to the consolidated financial statements,
opinions of Coopers & Xxxxxxx LLP, or other such independent certified public
accountants of national standing selected by the Borrower and reasonably
acceptable to the Bank, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of the Borrower and without any
exception not acceptable to the Bank.
(c) SEC MATERIALS; MANAGEMENT LETTERS. Promptly upon their
becoming available to the Borrower, a copy of (i) all Form 10-Qs, 10-Ks and
other regular or special reports or effective registration statements which the
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) any proxy
statement distributed by the Borrower or any Subsidiary to its shareholders,
bondholders or the financial community in general, and (iii) any management
letters submitted to the Borrower or any Subsidiary by independent accountants
in connection with the annual audit of the Borrower or any Subsidiary.
(d) ADDITIONAL MATERIALS.
(i) Promptly upon the sending thereof, copies of all
notices, reports and other communications from the Borrower to any of its
shareholders or securities holders generally;
(ii) Promptly upon the Borrower's becoming aware
thereof, notice of each federal statutory Lien, tax or other state or local
government Lien or other Lien (other than the Permitted Liens) filed against the
property of the Borrower or any Subsidiary;
(iii) From time to time and within a reasonable time
after request of the Bank, such data, certificates, reports, statements,
documents or further information regarding this Agreement, any other Loan
Document, any Loan, any Collateral or any other transaction contemplated hereby,
or the business, assets, liabilities, financial condition, results of operations
or business prospects of the Borrower or the Subsidiaries, as the Bank may
reasonably request, in each
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case in form and substance, with a degree of detail, and certified in a manner
reasonably satisfactory to the Bank.
(iv) NOTICE OF DEFAULTS, LITIGATION AND OTHER
MATTERS. Promptly after its occurrence, notice of: (i) any Default; (ii) the
commencement of any action, suit or proceeding or investigation in any court or
before any arbitrator of any kind or by or before any Governmental Authority or
non-governmental body against or in any other way relating adversely to or
affecting (A) the Borrower, any Subsidiary or any of their respective businesses
or properties, that, if adversely determined, (1) singly would result in
liability more than $250,000.00 (whether or not covered by insurance) or (2) in
the aggregate for the Borrower and the Subsidiaries would result in liability
more than $500,000.00 (whether or not covered by insurance) or (3) otherwise
might, singly or in the aggregate, have a Materially Adverse Effect, or (B) in
any material way this Agreement or the other Loan Documents or any transaction
contemplated hereby or thereby; (iii) any amendment of the certificate of
incorporation or bylaws of the Borrower; and (iv) any significant development in
any lawsuits described in Exhibit A.
SECTION 6.02 ADDITIONAL AGREEMENTS RELATING TO DISCLOSURE. From the
Agreement Date until the Note is paid in full, the Borrower shall:
(a) ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required or necessary to permit (i) the
preparation of financial statements required to be delivered and (ii) the
determination of the Borrower's compliance with the terms of this Agreement and
the other Loan Documents.
(b) VISITS AND INSPECTIONS. Permit representatives (whether or
not officers or employees) of the Bank, from time to time during normal business
hours, and as often as may be reasonably requested, to (i) visit and inspect any
properties of the Borrower and any Subsidiary, (ii) inspect and make extracts
from its books and records (including but not limited to management letters
prepared by the Borrower's independent accountants) and its customer lists,
(iii) discuss with principal officers of the Borrower and the Borrower's
independent accountants the businesses, assets, liabilities, financial
conditions, results of operations and business prospects of the Borrower and any
Subsidiary and (iv) inspect the Collateral and the premises upon which any of
the Collateral is located, and verify the amount, quality, quantity, value and
condition of, or any other matter relating to, the Collateral. In the event that
any of the Collateral is under the exclusive control of any third party, the
Borrower shall cause such parties to make such inspection rights available to
the Agent.
SECTION 7. DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrower, or
be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any Governmental Authority or
quasi-governmental body:
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(a) The Borrower shall fail to pay any amount in respect of
principal of the Loan when and as due (whether at maturity, acceleration or
otherwise) in accordance with the terms of this Agreement and the Note; or the
Borrower shall fail to pay any amount owing in respect of interest, fees,
commissions or other charges due under this Agreement or any other Loan
Document, when and as due (whether as stated, by reason of notice of prepayment
or acceleration or otherwise) in accordance with the terms of this Agreement or
such other Loan Documents; or
(b) Any Representation and Warranty shall at any time prove to
have been incorrect or misleading in any material respect when made; or
(c) An Event of Default shall occur under that certain Credit
Agreement dated as of March 2, 1998 between Borrower and Bank.
(d) The Borrower shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than one described in clauses (a), (b), (c), (h), (i), (k),
(l), (m), (n) or (o) of this SECTION 7.01) and such default shall remain uncured
for a period of 30 days; or
(e) The Borrower shall fail to pay, in accordance with its
terms and when due and payable, after giving effect to any notice, cure or grace
periods, the principal of or interest on any Funded Debt having an aggregate
outstanding balance in excess of $100,000 (other than the Obligations), or the
maturity of any such Funded Debt, in whole or in part, shall have been
accelerated, or any such Funded Debt, in whole or in part, shall have been
required to be prepaid prior to the stated maturity thereof, in accordance with
the provisions of any Contract evidencing, providing for the creation of or
concerning such Funded Debt or, if any event shall have occurred and be
continuing that would permit any holder or holders of such Funded Debt, any
trustee or agent acting on behalf of such holder or holders or any other Person
so to accelerate such maturity or require any such prepayment; or
(f) A default shall occur and be continuing under any Contract
(other than a Contract relating to Funded Debt to which clause (d) of this
SECTION 7.01 is applicable) binding upon the Borrower, except such a default
that, together with all other such defaults, has not had and will not have a
Materially Adverse Effect on (i) the Borrower or (ii) the Loan Documents or the
Obligations; or
(g) (i) Borrower shall (A) commence a voluntary case under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other
bankruptcy or insolvency law of any jurisdiction , (B) file a petition seeking
to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts, (C) consent to, or fail to contest in a timely and appropriate manner,
any petition filed against it in an involuntary case under such bankruptcy laws
or other laws, (D) apply for, or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of a substantial part of
its assets, domestic or foreign, (E) admit in writing its inability to pay, or
generally not be paying, its debts (other than those that are the subject of
bona fide disputes) as they become due, (F) make a general assignment
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for the benefit of creditors, or (G) take any corporate action for the purpose
of effecting any of the foregoing; or
(ii) A case or other proceeding shall be commenced
against Borrower in any court of competent jurisdiction seeking (A) relief under
the Federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (B) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Borrower of all or any
substantial part of the assets, domestic or foreign, of Borrower or, and, in
each case, such case or proceeding shall continue undismissed or unstayed for a
period of 60 days, or an order granting the relief requested in such case or
proceeding against such Borrower (including, but not limited to, an order for
relief under such Federal bankruptcy laws) shall be entered; or
(h) (i) A judgment or order for the payment of money in an
amount that (A) individually, exceeds by $250,000.00 or (B) when aggregated with
all other unpaid judgments outstanding against the Borrower, exceeds by
$500,000.00, the amount of insurance coverage applicable thereto shall be
entered against the Borrower by any court and (ii) either (A) such judgment or
order shall continue undischarged and/or unbonded or unstayed for a period of 30
days or (B) enforcement proceedings shall have been commenced upon such judgment
or order; or
(i) The Mortgage shall fail or cease to be fully perfected,
enforceable in accordance with its terms, and prior to the rights of all third
parties or any loss, theft, damage or destruction of any item or items of
Collateral occurs which either (i) has or is reasonably likely to have a
Material Adverse Effect or (ii) materially and adversely affects the operation
of the Borrower's business and is not covered by insurance as required therein;
or
(j) Any material provision of any Loan Document, or any
portion of any obligation for the payment of money under any Loan Document,
shall fail or cease to be in full force and effect, or Borrower shall make any
written statement or bring any action challenging the enforceability or binding
effect of any of the Loan Documents or the Mortgage; or
(k) The dissolution of the Borrower shall occur; or
(l) Any Change of Control shall occur; or
(m) The Borrower shall engage in any conduct or activity that
is illegal or there shall be filed against Borrower any criminal action, suit or
proceeding under any federal or state racketeering statute (including without
limitation the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding is not dismissed within 120 days and could result in
a Material Adverse Effect; or
(n) All or any part of the property of Borrower is
nationalized, expropriated, seized or otherwise appropriated, or custody or
control of such property or of any Borrower shall be assumed by any Governmental
Authority or any court of competent jurisdiction at the instance of any
Governmental Authority and the same has or is reasonably likely to have a
Material Adverse
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Effect, unless the same is being contested in good faith by proper proceedings
diligently pursued and a stay of enforcement is in effect; or
(o) The Borrower breaches any of the material terms or
conditions of any agreement under which any Rate Hedging Obligation is created
and such material breach continues beyond any applicable grace period, or any
action is taken by the Borrower to discontinue (except with the consent of Bank
if it is a counterparty to such agreement) or assert the invalidity or
unenforceability of any such agreement or Rate Hedging Obligation; or
SECTION 7.02 REMEDIES UPON EVENT OF DEFAULT. Upon and at any time after
occurrence of any Event of Default (other than one specified in Section 7.01(g))
involving the Borrower), the Bank may, do any or all of the following: (a)
declare, in whole or, from time to time, in part, by notice to the Borrower, the
principal of, interest on and any other components of the Obligations to be, and
the same shall thereupon become, due and payable to the Bank. Upon the
occurrence of an Event of Default specified in Section 7.01(g) involving the
Borrower, automatically and without any notice, the Obligations shall be due and
payable in full. Presentment, demand, protest, and all notices of any kind
(other than notices expressly provided for in this Section 7) are hereby
expressly waived. The remedies specified in this Section 7.02 shall be in
addition to and not in limitation of the remedies set forth elsewhere herein and
in the other Loan Documents or provided by Applicable Law
SECTION 8. CHANGES IN CIRCUMSTANCES; YIELD MAINTENANCE; AND ILLEGALITY
SECTION 8.01 INCREASED COSTS OR REDUCED RETURNS. If, after the
Agreement Date, any Regulatory Change, or compliance by the Bank (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Governmental Authority, central bank or comparable agency:
(a) subjects the Bank to any Tax with respect to any LIBOR
Rate Loans or its obligation to make LIBOR Rate Loans, or change the basis of
taxation of any amounts payable to such Bank (or its Lending Office) under this
Agreement in respect of any LIBOR Rate Loans (other than Taxes imposed on the
overall net income of such Bank by the jurisdiction in which the Bank has its
principal office of the Lending Office);
(b) imposes, modifies, or deems applicable any reserve,
special deposit, assessment, or similar requirement (other than the reserve
requirement utilized in the determination of the LIBOR Rate) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Bank (or its Lending Office); or
(c) imposes on the Bank (or its Lending Office) or the London
interbank market any other material adverse condition affecting any of its
material obligations or rights under this Agreement, or any of such extensions
of credit or liabilities or commitments; and the result of any of the foregoing
is to increase the cost to the Bank (or its Lending Office) of making,
converting into, continuing, or maintaining any Loan or to reduce any sum
received or receivable by the Bank (or its Lending Office) under this Agreement
or the Note with respect to any Loan, then the Borrower shall pay to the Bank on
demand such amount or amounts as will compensate the Bank for such increased
cost of reduction.
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SECTION 8.02 CAPITAL ADEQUACY. If, after the Agreement Date, Bank shall
have determined that any Regulatory Change regarding, or any request or
directive regarding, capital adequacy (whether or not having the force of law)
of any Governmental Authority, central bank or comparable agency has or would
have the effect of reducing the rate of return on the capital of such Bank or
any corporation controlling such Bank as a consequence of the Bank's obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such Regulatory Change, request or directive (taking into
consideration its policies with respect to capital adequacy), then from time to
time upon demand the Borrower shall pay to the Bank additional amount or amounts
as will compensate such Bank for such reduction or, in the alternative, Borrower
may elect to satisfy in full all of the Obligations and to terminate this
Agreement, provided that Borrower pays to Bank all amounts owed up to the date
of termination.
SECTION 8.03 NOTICE TO BORROWER. Bank shall promptly notify the
Borrower of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to SECTION 8.01 or
SECTION 8.02 and shall designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Bank, be otherwise disadvantageous to it. Any Bank
claiming compensation under SECTION 8.01 or SECTION 8.02 shall furnish to the
Borrower a reasonably detailed statement setting forth the additional amount or
amounts to be paid to it hereunder and the calculation thereof which shall be
conclusive in the absence of manifest error. In determining such amount, the
Bank may use any reasonable averaging and attribution methods.
SECTION 8.04 LIMITATION ON TYPES OF LOANS. If on or prior to the first
day of any Interest Period for any LIBOR Rate Loan:
(a) The Bank determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBOR Rate for
such Interest Period; or
(b) the Bank determines that the LIBOR Rate will not
adequately and fairly reflect the cost to the Bank of funding LIBOR Rate Loan
for such Interest Period;
then the Bank shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, the Bank shall be under no obligation to continue
LIBOR Rate Loan and the Borrower shall, on the last day of the then current
Interior Period for each outstanding LIBOR Rate Loan prepay such Loan or convert
such Loan to a prime based loan yielding a return which in the sole opinion of
Bank is equivalent to the yield under the LIBOR based rate.
SECTION 8.05 COMPENSATION. Upon the request of Bank, the Borrower shall
pay to Bank such amount or amounts as shall be sufficient (in the reasonable
determination of such Bank) to compensate it for any loss, cost or expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment or prepayment of a LIBOR Rate Loan for any
reason (including without limitation, the acceleration of the Loan pursuant to
the terms hereof) on a date other than the last day of the Interest Period for
such LIBOR Rate Loan; or
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If Bank claims compensation under this Section 8.05, the Bank shall furnish a
certificate to the Borrower that states the amount to be paid to it hereunder
and includes a description of the method used by the Bank in calculating such
amount. The Borrower shall have the burden of proving that the amount of any
such compensation calculated by Bank is not correct. Any compensation payable by
the Borrower to Bank under this Section 8.05 shall be payable without regard to
whether Bank has funded this Loan through the purchase of deposits in any amount
or of a maturity corresponding to the deposits used as a reference in
determining the LIBOR Rate.
SECTION 8.06 TAXES. (a) Any and all payments made by the Borrower
hereunder or under the Note shall be made free and clear of and without
deduction for any present or future Taxes. If the Borrower shall be required by
law to deduct any Taxes from or in respect of any amount payable hereunder or
under the Note, (i) the amount payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional amounts payable under this SECTION 8.08) the Bank receives an amount
equal to the amount the Bank would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
intangible or documentary stamp taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder or under
the Note or from the execution, delivery, or registration of, or otherwise with
respect to, this Agreement, the Note or the Loan (hereinafter referred to as
"Other Taxes").
(c) The Borrower shall indemnify Bank for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this SECTION 8.08) paid by
the Bank and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted and provided, however, that Bank has given the
Borrower written notice of and an opportunity to contest same to the extent
Borrower, within 10 business days of receipt of such written notice, advises
Bank in writing that Borrower reasonably believes that such Taxes and Other
Taxes were not correctly or legally asserted and Bank is provided currently
therewith with adequate security to cover its liability if such Taxes or Other
Taxes are ultimately determined to be due . Such indemnification shall be made
within 10 Business Days from the date Bank makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by
the Borrower, the Borrower shall furnish to Bank the original or a certified
copy of a receipt evidencing such payment. If no Taxes are payable in respect of
any such payment, the Borrower shall furnish to Bank a certificate from each
appropriate taxing authority or an opinion of counsel acceptable to Bank, in
either case stating that such payment is exempt from or not subject to Taxes.
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SECTION 9. MISCELLANEOUS
SECTION 9.01 NOTICES.
(a) MANNER OF DELIVERY. All notices and other communications
under this Agreement shall, except in those cases where a telephone notice is
expressly permitted, be in writing (which shall include communications by
telefax). All written notices and communications shall be sent by registered or
certified mail, postage prepaid, return receipt requested, by prepaid telefax,
reputable overnight courier, freight prepaid, or delivered by hand.
(b) ADDRESSES. All notices and other communications under this
Agreement shall be given at the following respective addresses and telefax and
telephone numbers and to the attention of the following Persons:
(i) If to the Borrower:
0000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President and Treasurer
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Bilzin Xxxxxxx Xxxx Price & Xxxxxxx LLP
2500 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
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(ii) If to the Bank:
NationsBank, N.A.
000 X.X. 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx,
Senior Vice President
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxx LLP
0000 Xxxxx Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(iii) or at such other address or telefax or
telephone number or to the attention of such other person as the party to whom
such information pertains may hereafter specify for the purpose in a notice to
the other specifically captioned "Notice of Change of Address".
(c) EFFECTIVENESS. Each notice and other communication under
this Agreement shall be effective or deemed delivered or furnished (i) if given
by mail, on the third Business Day after such communication is deposited in the
mail, addressed as above provided, (ii) if given by telefax, when such
communication is transmitted to the appropriate number determined as above
provided in this SECTION 9.01 and receipt is confirmed and (iii) if given by
hand delivery or overnight courier, when left at the address of the addressee
addressed as above provided except that notices of a change of address, telefax
or telephone number, and notices to the Bank shall not be effective, and
materials furnished to the Bank shall not be deemed furnished until received,
and in the case of the Bank, such notices and materials shall not be deemed
received until physically received by a responsible officer at the Bank's Office
not later than noon (Miami time) on any day if such day is to count as a
Business Day for the purpose of determining the adequacy of any notice to the
Agent hereunder. Where expressly permitted by other provisions of this
Agreement, notices may be by telephone, promptly confirmed in writing (which
shall include communications by telefax). The failure to give written
confirmation of any such notice shall not effect the validity thereof.
(d) NO ENTITLEMENT. No notice given to or demand made on the
Borrower by the Bank in any instance shall entitle the Borrower to notice or
demand in any other instance.
SECTION 9.02 EXPENSES. The Borrower shall, on demand, pay or reimburse
the Bank for (a) all documentary stamp, intangible and similar taxes, and all
recording and filing fees, if any, payable in connection with, arising out of or
in any way related to the negotiation, preparation, execution,
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delivery or performance of this Agreement, the other Loan Documents or the Loan,
and (b) all reasonable out-of-pocket costs and expenses (including fees and
disbursements of legal counsel and other experts) incurred, and all payments
made in connection with, arising out of, or in any way related to (i) the
negotiation, syndication, preparation, execution and delivery of (A) this
Agreement and the other Loan Documents, and (B) (whether or not executed) any
waiver, amendment or consent hereunder or thereunder, or hereto or thereto, (ii)
the enforcement by the Bank of any of their rights hereunder or any of the other
Loan Documents, (iv) protecting, preserving, exercising or enforcing any of the
rights of Bank hereunder or any of the other Loan Documents, (v) any claim
asserted by any Person other than the Bank (whether asserted before or after the
payment, performance and observance in full of the Borrower's Obligations
hereunder and under the other Loan Documents) and the prosecution or defense
thereof, in any way arising under, related to, or connected with, this
Agreement, or any of the other Loan Documents or the relationship established
hereunder, and (vi) any governmental investigation arising out of, relating to,
or in any way connected with this Agreement or any of the other Loan Documents,
provided that the foregoing obligations to pay expenses shall not be applicable
to any cost incurred by the Bank to the extent such cost is determined by a
judgment of a court that is binding on Bank (as the case may be), final and not
subject to review on appeal, to be the result of acts or omissions of Bank (as
the case may be), constituting gross negligence or willful misconduct or willful
breach of this Agreement.
SECTION 9.03 BANKS' RIGHT TO CURE. The Bank may from time to time, in
its absolute discretion, for the Borrower's account and at the Borrower's
expense, pay any amount or do any act required of the Borrower hereunder to
preserve, protect, maintain or enforce the Obligations, the Collateral or the
Security Interests for the benefit of the Bank, and which the Borrower fails to
pay or do, after five (5) days written notice from Bank, including payment of
any judgment against the Borrower, insurance premium, taxes or assessments,
warehouse charge, financing or processing charge, landlord's claim, and any
other Security Interest upon or with respect to the Collateral. All payments
that the Bank make pursuant to this Section and all out-of-pocket costs and
expenses that the Bank pay or incur in connection with any action taken by them
hereunder shall be a part of the Obligations, the repayment of which shall be
secured by the Collateral. Any payment made or other action taken by the Bank
pursuant to this Section shall be without prejudice to any right to assert an
Event of Default hereunder and to pursue the Bank's other rights and remedies
with respect thereto.
SECTION 9.04 RIGHTS CUMULATIVE. The rights and remedies of the Bank
under this Agreement and the other Loan Documents shall be cumulative and not
exclusive of nor limiting upon any rights or remedies that it would otherwise
have, and no failure or delay by Bank or in exercising any right shall operate
as a waiver of it, nor shall any single or partial exercise of any power or
right preclude its other or further exercise or any other power or right. Every
indemnification agreement made by the Borrower or the Bank herein shall survive
repayment of the Obligations.
SECTION 9.05 SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, the Bank, and each of its branches and offices, is hereby
authorized by the Borrower, at any time and from time to time, (i) to set off
against, and to appropriate and apply to the payment of the Obligations (whether
matured or unmatured, fixed or contingent or liquidated or unliquidated) any and
all amounts owing by the Bank, or any such office or branch, to the Borrower
(whether payable in Dollars or any other currency, whether matured or unmatured,
and, in the case of deposits, whether general or special time or demand and
however evidenced) and (ii) pending any such action,
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to the extent necessary, to hold such amounts as collateral to secure such
Obligations and to return as unpaid for insufficient funds any and all checks
and other items drawn against any deposits so held as Bank in its sole
discretion may elect.
SECTION 9.06 ASSIGNMENTS BY BORROWER. The Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Bank, and any such attempted assignment or transfer shall
be null and void.
SECTION 9.07 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, the Borrower hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 9.08 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and shall be
binding upon all parties, their successors and permitted assigns.
SECTION 9.09 SURVIVAL OF OBLIGATIONS. The termination of this Agreement
shall not affect any rights of the Borrower or the Bank or any obligation of the
Borrower or the Bank arising prior to the effective date of such termination,
and the provisions hereof shall continue to be fully operative until all
transactions entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or liquidated and the
Obligations arising prior to or after such termination have been irrevocably
paid in full. All representations, warranties, covenants, waivers and agreements
contained herein shall survive termination hereof until payment in full of the
Obligations unless otherwise provided herein. Notwithstanding the foregoing, if
after receipt of any payment of all or any part of the Obligations, Bank is for
any reason compelled to surrender such payment to any Person because such
payment is determined to be void or voidable as a preference, impermissible set
off, a diversion of trust funds or for any other reason, this Agreement shall
continue in full force and the Borrower shall be liable to, and shall indemnify
and hold the Bank harmless for, the amount of such payment surrendered until the
Bank shall have been finally and irrevocably paid in full. The provisions of the
foregoing sentence shall be and remain effective notwithstanding any contrary
action which may have been taken by Bank in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Bank's rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
SECTION 9.10 OTHER SECURITY AND GUARANTIES. The Bank may, without
notice or demand and without affecting the Borrower's obligations hereunder,
from time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce and release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser, or any Person who has given any
Security Interest in any other collateral as security for the payment of all or
any part of the Obligations, or any other Person in any way obligated to pay all
or any part of the Obligations.
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SECTION 9.11 NEGOTIATED TRANSACTION. The Borrower, and Bank represent
each to the others that in the negotiation and drafting of this Agreement and
the other Loan Documents they have been represented by and have relied upon the
advice of counsel of their choice.
SECTION 9.12 NO JOINT VENTURE. Nothing contained in any Loan Document
shall be deemed or construed by the parties hereto or by any third person to
create the relationship of principal and agent or of partnership or joint
venture or of any association between the Bank and the Borrower other than the
relationship of creditors and debtor.
SECTION 9.13 COUNTERPART FACSIMILE EXECUTION. For purposes of this
Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document.
SECTION 9.14 FURTHER ASSURANCES; POWER OF ATTORNEY. The Borrower
agrees, upon the request of the Bank, to execute and deliver such further acts
as Bank may reasonably request in order to fully effectuate the purposes of any
Loan Document. The Borrower hereby irrevocably appoints the Bank as its true and
lawful attorney-in-fact (such appointment being coupled with an interest) with
full power (in the name of the Borrower or otherwise), after the occurrence of
an Event of Default, to execute and deliver such documents and do such acts as
the Bank may reasonably deem necessary in order to fully effectuate the purposes
of this Agreement.
SECTION 9.15 SUCCESSORS AND ASSIGNS. All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. With respect to the
Borrower's successors and assigns, such successors and assigns shall include any
receiver, trustee or debtor-in-possession of or for the Borrower.
SECTION 9.16 INDEMNIFICATION; LIMITATION OF LIABILITY. The Borrower
agrees to indemnify and hold harmless the Bank 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, costs and expenses (including without limitation reasonable
attorneys' fees) 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 (including without limitation in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loan or the manufacture, storage,
transportation, release or disposal of any Hazardous Material on, from, over or
affecting any of the Collateral or any of the assets, properties or operations
of Borrower or any Subsidiary or any predecessor in interest, directly or
indirectly, except to the extent such claim, damage, loss, liability, cost or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct or willful breach of this Agreement. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
SECTION 9.16 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower agrees not to
assert any claim against the Bank, any of its Affiliates,
31
32
or any of their respective directors, officers, employees, attorneys, agents and
advisers, on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Loan Documents, any
of the transactions contemplated herein or therein or the actual or proposed use
of the proceeds of the Loans. To the extent that any of the indemnities required
from the Borrower under this provision are unenforceable because they violate
any Applicable Law or public policy, the Borrower shall pay the maximum amount
which it is permitted to pay under Applicable Law.
SECTION 9.17 GOVERNING LAW. This Agreement and the other Loan Documents
shall be construed in accordance with, and governed by, the laws of the State of
Florida without regard to any conflicts- of-law principle or rule that would
give effect to the law or any other jurisdiction.
SECTION 9.18 JUDICIAL PROCEEDINGS. ANY JUDICIAL PROCEEDING BROUGHT
AGAINST THE BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTIES OF
MIAMI-DADE OR BROWARD, FLORIDA, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER (A) ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURTS AND
IRREVOCABLY AGREES (WITHOUT WAIVING ANY RIGHT TO APPEAL) TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND (B) IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE BANK TO BRING PROCEEDINGS AGAINST THE BORROWER OR OR WITH RESPECT
TO THE COLLATERAL IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT ONLY IN A COURT LOCATED IN
MIAMI-DADE COUNTY IN THE STATE OF FLORIDA.
SECTION 9.19 WAIVER OF JURY TRIAL. THE BORROWER, AND BANK HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING, ACTION OR COUNTERCLAIM TO WHICH ANY OF
THEM ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER AND WHETHER ARISING OR ASSERTED BEFORE OR
AFTER THE AGREEMENT DATE OR BEFORE OR AFTER PAYMENT, OBSERVANCE AND PERFORMANCE
IN FULL OF THE BORROWER'S OBLIGATIONS HEREUNDER OR THEREUNDER. THE BORROWER
ACKNOWLEDGES THAT NO REPRESENTATIVE OF BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH PROCEEDING, ACTION OR
COUNTERCLAIM, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THIS
SECTION 9.19 IS A
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MATERIAL INDUCEMENT TO THE BANK TO ENTER INTO THIS AGREEMENT AND MAKE THE LOAN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the day and year first
written above.
PRECISION RESPONSE CORPORATION,
By: /s/ XXXXXX X. XXXXXX
-------------------------------------
Name: XXXXXX X. XXXXXX
Title: V.P. AND TREASURER
NATIONSBANK, N.A.,
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: XXXXXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT
Lending Office:
000 X.X. 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Address for Notices:
000 X.X. 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx,
Senior Vice President
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
33
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EXHIBIT A
---------
LITIGATION
----------
XXXXXX X. XXXXX, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V.
PRECISION RESPONSE CORPORATION: XXXX X. XXXXXX; XXXX X. X'XXXX; XXXXX X.
XXXXXXX; XXXXX X. XXXXXX; XXXXXXX X. XXXXXX; XXXXXXX X. XXXXX, XX.; XXXXXXXXX
MUSTAD; XXXX X. XXXXXX; XXXXXXX XXXXX & CO.; XXXX XXXXXXXX, INC.; XXXXXXX
XXXXX & CO.; AND XXXXXX XXXX LLC, a class action filed on February 25, 1998 in
the United States District Court for the Southern District of Florida (Case No.
98-0334).
35
EXHIBIT B
---------
PRECISION RESPONSE CORPORATION
FUNDED DEBT
AS OF APRIL 30, 1998
LOAN
ENDING % ORIGINAL LOAN MONTHLY BALANCE
DATE TERMS RATE BANK OR INSTITUTION AMOUNT P & I AS OF 4/30/98
----------------------------------------------------------------------------------------------------------------
CAPITAL LEASES
--------------------
Jun-99 Fixed 12.97 Bankers Leasing $ 15,500.00 $ 522.02 $ 6,729.64
Jul-99 Fixed 12.22 Bankers Leasing 15,000.00 499.79 $ 6,902.77
Mar-00 Fixed 10.51 OCE' Printing Systems 167,611.00 3,572.00 $ 76,816.90
Apr-00 Fixed 11.19 OCE'Printing Systems 29,026.60 677.06 $ 14,478.58
Mar-98 Fixed 11.82 BellSouth Financial #107 66,846.03 2,214.40 $ 2,150.26
Jun-98 Fixed 10.16 BellSouth Financial #200 88,358.00 2,867.83 $ 5,569.96
Jun-98 Fixed 10.16 BellSouth Financial #300 14,522.85 469.73 $ 912.14
Jun-99 Fixed 10.31 BellSouth Financial #400 144,035.92 3,674.36 $ 48,164.06
Jun-99 Fixed 10.31 BellSouth Financial #500 32,129.00 819.61 $ 10,743.38
Jun-99 Fixed 10.33 BellSouth Financial #600 69,215.00 1,754.29 $ 22,992.16
Jun-99 Fixed 10.31 BellSouth Financial #700 8,653.00 189.51 $ 2,483.90
Jun-99 Fixed 10.31 BellSouth Financial #800 20,603.00 467.46 $ 6,127.35
Jul-99 Fixed 10.33 BellSouth Financial #900 4,918.68 125.52 $ 1,755.36
Jun-99 Fixed 10.31 BellSouth Financial #1000 49,959.15 1,274.46 $ 16,705.64
Jul-99 Fixed 10.31 BellSouth Financial #1100 44,228.20 1,128.27 $ 15,781.99
Apr-99 Fixed 10.29 BellSouth Financial #1101 37,125.90 980.04 $ 11,130.38
Jun-99 Fixed 10.31 BellSouth Financial #1300 69,977.02 1.785.12 $ 23,399.56
Jun-99 Fixed 10.29 BellSouth Financial 41301 35,681.00 941.90 $ 12,347.92
Jul-99 Fixed 10.31 BellSouth Financial #1400 5,762.72 147.01 $ 2,056.17
Oct-99 Fixed 10.31 BellSouth Financial #1500 72,276.41 1,894.79 $ 31,421.04
Mar-01 Fixed 10.00 CS1 1,689,859.73 42,505.00 $1,284,716.85
Mar-00 Fixed 10.00 CIT Group 2,603,051.73 83,299.00 $1,668,079.72
Nov-00 Fixed 10.23 Kronos, Inc. 48,968.00 1,572.00 $ 41.405.95
Nov-00 Fixed 11.01 Kronos, Inc. 192,539.60 6,246.91 $ 163,182.52
Apr-99 Fixed 16.84 Advanta Leasing 100,000.00 3,557.10 $ 42,002.48
Oct-00 Fixed 10.00 AT&T Credit Corp. 590,998.00 15,956.61 $ 422,005.17
Dec-00 Fixed 10.00 AT&T Credit Corp. 1,023,246.72 26,649.11 $ 745,828.19
May-99 Fixed 9.96 Sun Davox 408,647.00 13,178.22 $ 160,147.33
Jun-99 Fixed 10.00 Sanwa 659,032.00 30,411.40 $ 59,094.28
Jan-00 Fixed 6.64 AT&T-davox Add. 69,379.00 1,982.86 $ 39,207.82
Nov-00 Fixed 10.70 Charter Financial 702,647.50 22,508.04 $ 590,163.35
--------------------------------------------
TOTAL CAPITAL LEASES $ 9,079,798.76 $273,871.42 $ 5,534,502.82
--------------------------------------------
---------------
NATIONS BANK REVOLVING CREDIT FACILITY BALANCE $11,216,337.93
---------------
DEBT GUARANTEED
--------------------
Jun-98 SunTrust Bank, Miami, N.A.
(P.R.C.'s guarantee of mortgage on facility known as --------------------------------------------
"The Xxxxxxx Building") $ 3,468,000.00 N/A $ 3,468,000.00
--------------------------------------------
TOTAL FUNDED DEBT $20,218,840.75
===============
