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EXHIBIT 10.6
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "First
Amendment") is dated as of the 3rd day of October, 1997, by and between
NATIONSBANK, N.A., a national banking association, successor by merger to
NATIONSBANK, N.A. (SOUTH) ("Lender") and THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia corporation ("Borrower"); THE PROFIT RECOVERY
GROUP INTERNATIONAL I, INC., a Georgia corporation ("PRG International"); THE
PROFIT RECOVERY GROUP U.K., INC., a Georgia corporation ("PRG U.K."); THE PROFIT
RECOVERY GROUP ASIA, INC., a Georgia corporation ("PRG Asia"); THE PROFIT
RECOVERY GROUP CANADA, INC., a Georgia corporation ("PRG Canada"); THE PROFIT
RECOVERY GROUP NEW ZEALAND, INC., a Georgia corporation ("PRG New Zealand"); THE
PROFIT RECOVERY GROUP NETHERLANDS, INC., a Georgia corporation ("PRG
Netherlands"); THE PROFIT RECOVERY GROUP BELGIUM, INC., a Georgia corporation
("PRG Belgium"); THE PROFIT RECOVERY GROUP MEXICO, INC., a Georgia corporation
("PRG Mexico") THE PROFIT RECOVERY GROUP FRANCE, INC., a Georgia corporation
("PRG France"); THE PROFIT RECOVERY GROUP AUSTRALIA, INC., a Georgia corporation
("PRG Australia"); THE PROFIT RECOVERY GROUP GERMANY, INC., a Georgia
corporation ("PRG Germany"); PRG INTERNATIONAL HOLDING COMPANY, INC., a Georgia
corporation ("PRG International Holding"); ACCOUNTS PAYABLE RECOVERY SERVICES,
INC., a Georgia corporation ("Accounts Payable"); ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. acting
as attorney (mandataire) in the name of and on behalf of PRG FRANCE SA, a French
societe anonyme in the process of being incorporated ("French PRG"); and THE
PROFIT RECOVERY GROUP SOUTH AFRICA, INC., a Georgia corporation ("PRG South
Africa") (Borrower, PRG International, PRG U.K., PRG Asia, PRG Canada, PRG New
Zealand, PRG ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, PRG Australia and
PRG Germany, each an "Existing Loan Party" and, collectively, the "Existing Loan
Parties"; and PRG International Holding, Accounts Payable, French PRG and PRG
South Africa each a "New Loan Party" and, collectively, the "New Loan Parties";
and the New Loan Parties and the Existing Loan Parties other than Borrower each
a "Guarantor" and, collectively, the "Guarantors").
W I T N E S S E T H :
WHEREAS, Lender, Borrower and Existing Loan Parties are parties to that
certain Loan and Security Agreement dated September 27, 1996 (such Agreement
being hereinafter referred to as the "Loan Agreement");
WHEREAS, Lender, Borrower, Existing Loan Parties and New Loan Parties
desire to amend and modify the Loan Agreement as more particularly set forth
herein; and
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are
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hereby acknowledged, Lender, Borrower, Existing Loan Parties and New Loan
Parties hereby agree as follows:
1. Defined Terms. Capitalized terms used herein without definition are used as
defined in the Loan Agreement.
2. New Loan Parties. Each New Loan Party agrees that such New Loan Party shall
be hereafter considered a Loan Party, as such term is defined in the Loan
Agreement; and each New Loan Party hereby adopts, ratifies and agrees to be
bound by all provisions of the Loan Agreement, as amended from time to time, as
it applies (and, in the case of French PRG, to the extent applicable) to Loan
Parties. Each New Loan Party, excluding French PRG, specifically grants to
Lender a continuing security interest in all of the Property of such New Loan
Party to the full extent that Existing Loan Parties have granted such a security
interest in the Property of Existing Loan Parties under the provisions of the
Loan Agreement. As contemplated in Section 6 below, French PRG will pledge to
Lender as collateral for the guaranty obligations of French PRG all of the
shares owned by French PRG in Financiere ▇▇▇▇ SA and ▇▇▇▇ Intervention SA.
3. Specific Amendments to Loan Agreement. Lender, Borrower, Existing Loan
Parties and New Loan Parties hereby agree that the Loan Agreement is hereby
amended and modified as follows:
(a) The definitions for the following terms in Section 1, Paragraph 1.1 are
hereby deleted in their entirety, and inserted in lieu thereof shall be the
following:
(i) "Accounts - means all accounts, contract rights, chattel paper,
instruments and documents, whether now owned or hereafter created or acquired
by Loan Party or in which Loan Party now has or hereafter acquires any
interest; except that amounts due from or payable to any Affiliate,
Subsidiary or Loan Party shall be excluded therefrom."
(ii) "Permitted Distributions - means a Distribution made by a Loan
Party which does not result in the Combined Debt Service Coverage Ratio
of the Loan Parties to be less than 1.5 to 1.0 for any fiscal quarter or
the U.S. Debt Service Coverage Ratio to be less than 1.0 to 1.0 for any
fiscal quarter."
(iii) "Revolver Loan Period - means the period from the date of this
Agreement until September 30, 1999."
(b) Definitions for the following terms are hereby inserted into Section 1,
Paragraph 1.1, to read as follows:
(i) "U.S. Debt Service Coverage Ratio - means, for any period of time,
the ratio computed as of the last day of such period of time of (i) U.S.
EBITDA to (ii) U.S. Debt Service."
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(ii) "U.S. Debt Service - means Debt Service relating to and arising
from the operations of the Loan Parties in the United States of America
plus, if not already included, the debt service relating to the Loans."
(iii) "U.S. EBITDA - means EBITDA relating to and arising solely from the
operations of the Loan Parties within the United States of America."
(c) The first sentence of Section 2, Paragraph 2.1, is hereby deleted in its
entirety, and inserted in lieu thereof shall be the following:
"2.1 Term Loan. Subject to all of the terms and conditions of this
Agreement, Lender agrees, upon Borrower's request, to advance to Borrower,
from time to time until September 30, 1999, Term Loans in an aggregate
principal amount outstanding at any one time not to exceed $30,000,000.00,
the proceeds of which are to be used by Borrower in connection with future
acquisitions. It is anticipated that $26,500,000.00 will be advanced to
Borrower and, in turn, made available, directly or indirectly, to French PRG
for the purpose of acquiring shares in certain French companies being
Financiere ▇▇▇▇ SA and ▇▇▇▇ Intervention SA."
(d) Subparagraph (A) of Section 2, Paragraph 2.3 is hereby deleted in its
entirety, and inserted in lieu thereof shall be the following:
"(A) At no time shall Lender be obligated to advance amounts under
either the Term Loan or the Revolver Loan if, as a result of such advance,
the aggregate principal balance of the Loans would exceed $30,000,000.00
(subject to permanent reduction at Borrower's election pursuant to Section
3.2(D) herein)."
(e) New subparagraphs (D) and (E) are hereby inserted into Section 2,
Paragraph 2.3, to read as follows:
"(D) At no time shall Lender be obligated to advance amounts under
the Loans unless, at the time of such advance, Loan Parties have accounts
receivable or contracts receivable (billed and unbilled) net of reserves
equal to or greater than the amount which would be outstanding on the Loans
following such advance.
(E) At all times throughout the term of the Loans, the accounts
receivable or contracts receivable of Loan Parties (billed and unbilled) net
of reserves shall be equal to or greater than the amount outstanding under
the Loans. If at any time such ratio is not achieved, Borrower shall reduce
the amount outstanding under the Loans by an amount necessary to cause such
ratio to be achieved."
(f) Subparagraph (B) of Section 3, Paragraph 3.1 is hereby deleted in its
entirety, and inserted in lieu thereof shall be the following:
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"(B) Payment of Principal and Interest. Each advance under the Term
Loan shall be repayable in forty-eight (48) monthly installments. Payment of
such monthly installments shall commence one (1) month following the date of
the Term Note applicable to such advance and shall continue on the same day
of each and every month thereafter until the maturity date of such Term Note.
Monthly payments of accrued and unpaid interest only shall be due and payable
under such Term Note in arrears for the first twelve (12) months; thereafter,
for the next thirty-five (35) months, the monthly payments shall consist of
all accrued and unpaid interest together with one sixtieth (1/60) of the
original principal amount of such Term Note, and the remainder of all accrued
and unpaid interest together with the remaining unpaid principal balance
shall be immediately paid in full forty-eight (48) months following the date
of such Term Note."
(g) The date "September 30, 1998" in the fourth line of subparagraph (B) of
Section 3, Paragraph 3.2 is hereby deleted and the date "September 30, 1999"
is inserted in lieu thereof.
(h) Section 3, Paragraph 3.4 is hereby deleted in its entirety, and inserted
in lieu thereof shall be the following:
"3.4 Unused Facility Fee. In addition to other fees payable under the
terms and conditions of this Agreement and in addition to principal and
interest under the Revolver Note and each of the Term Notes, Borrower shall
pay to Lender on the first day of April, July, October and January,
commencing on January 1, 1998 and ending October 1, 1999, a fee equal to .25
percent (on a per annum basis) of the difference between (i) the maximum
aggregate amount which Lender has agreed to advance under the Loans (which,
as of the date hereof, is $30,000,000.00); and (ii) the average daily
aggregate outstanding principal balance under the Loans throughout the fiscal
quarter preceding such payment date. Borrower may, at its option, elect to
permanently reduce the maximum amount which Borrower is entitled to borrow
and which Lender is obligated to advance under the Loans by providing Lender
with three business days advance written notice of such election and
provided that the minimum amount of such permanent reduction of the Loans is
at least $1,000,000.00."
(i) New subparagraphs (F) and (G) are hereby inserted into Section 9,
Paragraph 9.3, to read as follows:
"(F) Maintain a U.S. Debt Service Coverage Ratio of at least 1.0 to
1.0 measured as of the end of each fiscal quarter for the period consisting
of such fiscal quarter together with the preceding three fiscal quarters.
(G) Maintain accounts receivable or contracts receivable (billed
and unbilled) net of reserves in an amount equal to or greater than the
amount of Loans outstanding under this Agreement."
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(j) Lender's address for notice in Section 12, Paragraph 12.10 is hereby
deleted, and inserted in lieu of shall be the following:
"NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇".
(k) Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit A-3 and Exhibit E are deleted in
their entirety, and substituted in lieu thereof are the attached Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit A-3 and Exhibit E.
4. Commitment Fee. Simultaneously with the execution of this Agreement, Borrower
shall pay to Lender an aggregate commitment fee of $25,000.00, with respect to
the Revolver Loan and with respect to the Term Loan, which has been fully
earned, and shall not be subject to rebate except as may be required by
applicable law. Such fees shall compensate Lender for the costs associated with
the origination, structuring, processing, approving and closing the Revolver
Loan and the Term Loan, including, but not limited to, administrative,
out-of-pocket, general overhead and lost opportunity costs, but not including
any expenses for which Borrower has agreed to reimburse Lender pursuant to any
other provisions of this Agreement or any of the other Loan Documents, such as,
by way of example, legal fees and expenses.
5. Representations and Warranties. In order to induce Lender to agree to the
modifications made to the Loan Agreement set forth herein, Borrower, Existing
Loan Parties and New Loan Parties hereby expressly reaffirm or affirm, as the
case may be, all covenants, agreements, representations and warranties set forth
in the Loan Agreement.
6. Agreements Regarding Pledge of Stock.
(a) In order to induce Lender to agree to the modifications made to the Loan
Agreement set forth herein, Borrower covenants and agrees that, within thirty
(30) days of the date of this Agreement, Borrower shall execute and deliver to
Lender all such documents or instruments as may be reasonably necessary to grant
to Lender as collateral for all of Borrower's obligations to Lender a first in
priority pledge and security interest in all of the stock which Borrower owns,
or will own, in French PRG. The terms and conditions of all such documents shall
be reasonably satisfactory to Lender and shall include an opinion of French
counsel that all such documents are valid and enforceable in accordance with
their terms. Failure by Borrower to comply with the terms and conditions of this
Section 6 shall constitute an Event of Default under the Loan Agreement.
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(b) In order to induce Lender to agree to the modifications made to the Loan
Agreement set forth herein, Borrower covenants and agrees that, within thirty
(30) days from the date of this Agreement, Borrower shall procure and cause to
be delivered to Lender (i) a Guaranty by French PRG of the obligations of
Borrower to Lender ; and (ii) all such documents or instruments as may be
reasonably necessary to grant to Lender as collateral for the obligations of
French PRG to Lender a first-in-priority pledge and security interest in all of
the stock which French PRG owns, or will own, in ▇▇▇▇ Intervention SA and
Financiere ▇▇▇▇ SA. The terms and conditions of all such documents shall be
reasonably satisfactory to Lender and shall include an opinion of French counsel
that all such documents have been properly authorized and executed and are valid
and enforceable in accordance with their terms. Failure by Borrower to comply
with the terms and conditions of this Section 6 shall constitute an Event of
Default under the Loan Agreement.
7. No Other Agreement. Except as expressly amended and modified herein, the Loan
Agreement shall remain unchanged and in full force and effect, and the parties
do hereby ratify and affirm the same. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
modification of the Loan Agreement and supersedes all prior agreements,
understandings or negotiations regarding said modification.
8. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
9. Georgia Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed under seal as of the date first above written.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
LENDER:
NATIONSBANK, N.A., a national banking
association
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
(BANK SEAL)
BORROWER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
GUARANTORS:
THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC., a Georgia
corporation
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
U.K., INC., a Georgia corporation
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE PROFIT RECOVERY GROUP
ASIA, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
CANADA, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE PROFIT RECOVERY GROUP NEW
ZEALAND, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
NETHERLANDS, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
BELGIUM, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURE PAGE CONTINUED FROM PREVIOUS PAGE]
THE PROFIT RECOVERY GROUP
MEXICO, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
FRANCE, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE PROFIT RECOVERY GROUP
AUSTRALIA, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
THE PROFIT RECOVERY GROUP
GERMANY, INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRG INTERNATIONAL HOLDING COMPANY,
INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
ACCOUNTS PAYABLE RECOVERY SERVICES,
INC., a Georgia corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRG FRANCE SA
By:
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. acting as attorney
(mandataire) in the name of and on behalf of
PRG France SA, a French societe anonyme in
the process of being incorporated
THE PROFIT RECOVERY GROUP SOUTH
AFRICA, INC., a Georgia corporation
By:
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
[CORPORATE SEAL]
[SIGNATURES FOR FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
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EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
The undersigned, the Chief Financial Officer of The Profit Recovery
Group International, Inc., a Georgia corporation ("Borrower"), gives this
Certificate to NationsBank, N.A. ("Lender") in accordance with the requirements
of Section 9.1(K) of that certain Loan and Security Agreement, dated September
27, 1997, as amended, by and between Lender and Borrower and certain affiliated
entities of Borrower (the "Loan Agreement") (capitalized terms used in this
Certificate, unless otherwise defined herein, shall have the means ascribed to
them in the Loan Agreement). Based upon my review of the financial statements of
the Loan Parties for the (month/fiscal year) ending _________________, 19__,
copies of which are attached hereto, I hereby certify to the best of my
knowledge that:
(1) The Combined Total Liabilities to Net Worth Ratio of the Loan
Parties does not exceed 1.5 to 1.0;
(2) The ratio of Funded Debt to EBITDA does not exceed 2.0 to 1.0;
(3) The Combined Debt Service Coverage Ratio of the Loan Parties is
not less than 1.5 to 1.0;
(4) The Combined Net Worth of the Loan Parties is not less than
$34,000,000.00;
(5) The ratio of Current Assets to Current Liabilities of the Loan
Parties is not less than 1.0 to 1.0;
(6) The U.S. Debt Service Coverage Ratio of the Loan Parties is not
less than 1.0 to 1.0; and
(7) The ratio of accounts receivable or contracts receivable
(billed and unbilled) net of reserves of the Loan Parties is not less
than the amount of Loans outstanding under the Loan Agreement.
Very truly yours,
By:
----------------------------
Chief Financial Officer
Date: ___________________________
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NATIONSBANK
PROMISSORY NOTE
$26,500,000.00 Date: October 3, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
1. PROMISE TO PAY. FOR VALUE RECEIVED, the undersigned, THE PROFIT
RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (hereinafter referred
to as "Maker"), promises to pay to the order of NATIONSBANK, N.A., a national
bank (hereinafter referred to as "Payee"; Payee and any subsequent holder of all
or any part interest in this Note being hereinafter referred to collectively as
"Holder"), at the following address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
or at any such other place as Holder may designate to Maker in writing from time
to time, the principal sum of TWENTY-SIX MILLION FIVE HUNDRED THOUSAND AND
NO/100THS DOLLARS ($26,500,000.00), or so much thereof as shall be disbursed
hereunder and shall from time to time be outstanding and unpaid, together with
interest thereon at the rates hereinafter set forth (subject to adjustment and
designation of the applicable interest rate or rates as provided below), in
lawful money of the United States of America, which at the time of payment shall
be legal tender in payment of all debts and dues, public and private, such
principal and interest to be paid in the manner hereinafter provided. This
Promissory Note (the "Note") is executed and delivered pursuant to that certain
Loan and Security Agreement, dated September 27, 1996, among Payee, Maker and
certain affiliates of Maker (hereinafter, together with all supplements and
amendments thereto, the "Loan Agreement"). This Note is a Term Note referred to
in, and is issued pursuant to, the Loan Agreement, and is entitled to all of the
benefits and security of the Loan Agreement. All of the terms, covenants and
conditions of the Loan Agreement and all other instruments evidencing or
securing the indebtedness hereunder are hereby made a part of this Note and are
deemed incorporated herein in full. All capitalized terms used herein, unless
otherwise specifically defined in this Note, shall have the meanings ascribed to
them in the Loan Agreement.
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2. DEFINITIONS. As used herein, the following terms shall have the
indicated definitions:
(a) "Business Day" means any day whereon banks are open for business in
Atlanta, Georgia and, with respect to borrowing, payment or rate selection of
the Fixed Rate or a Eurodollar Interest Period, any day whereon banks are open
for business in both Atlanta, Georgia and New York, New York and whereon
dealings in U.S. dollars are carried on in the London interbank market.
(b) "Default Rate" means (i) with respect to the Floating Rate, a rate
per annum equal to the Prime Rate plus two percent (2%); and (ii) with respect
to the Fixed Rate for the remainder of the applicable Eurodollar Interest
Period, a rate per annum equal to the applicable Eurodollar Rate plus two
percent (2%), and after such applicable Eurodollar Interest Period at the rate
per annum equal to the Prime Rate plus two percent (2%).
(c) "Effective Date" means any Business Day designated by Maker in a
Rate Selection Notice as the date such rate selection shall become effective.
(d) "Eurodollar Interest Period" means, with respect to the Fixed Rate,
a period of thirty (30) days, sixty (60) days, ninety (90) days or one hundred
eighty (180) days to the extent eurodollar borrowings of such or similar periods
are available, commencing on a Business Day and selected by the Maker in its
Rate Selection Notice; provided, however, such Eurodollar Interest Period shall
commence on the last day of the immediately preceding Eurodollar Interest Period
in the case of a rollover to a successive Eurodollar Interest Period. If any
Eurodollar Interest Period would otherwise end on a day which is not a Business
Day, such Eurodollar Interest Period shall end on the next succeeding Business
Day. Any Eurodollar Interest Period must end on or before the maturity date of
this Note.
(e) "Eurodollar Rate" means, with respect to the relevant Eurodollar
Interest Period, the sum of the LIBOR Rate applicable to that Eurodollar
Interest Period plus one and three-quarters percent (1.75%) per annum, subject
to adjustment from time to time as hereinafter provided. The Eurodollar Rate
shall be rounded, if necessary, to the next higher one-sixteenth of one percent.
(f) "Event of Default" means an Event of Default as that term is
defined in the Loan Agreement.
(g) "Fixed Rate" means the rate per annum for the applicable Eurodollar
Rate selected from time to time pursuant to this Note.
(h) "Floating Rate" means a rate per annum equal to the Prime Rate,
changing when and as the Prime Rate changes.
(i) "LIBOR Rate" means the simple interest rate per annum determined by
Holder,
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18
taking into account the rates at which deposits in United States dollars for
periods of thirty (30) days, sixty (60) days, ninety (90) days and one hundred
eighty (180) days (each of the foregoing is individually referred to as "LIBOR
Rate Option") are offered in the interbank eurodollar market, and such other
factors as Holder may reasonably deem appropriate from time to time. The LIBOR
Rate is established in the discretion of Holder for the particular indebtedness
evidenced by this Note, and may not be the lowest rate based in part upon which
market for deposits in the interbank eurodollar market at which Holder prices
loans on the date on which the LIBOR Rate is established. The rate of interest
charged under this Note with respect to any selection of any of the LIBOR Rate
Options shall be the selected LIBOR Rate Option on the Effective Date of the
Rate Selection Notice, and shall continue to be the same rate of interest,
without daily adjustment, until the maturity of the selected LIBOR Rate Option
has fully elapsed or the Rate Selection Notice has been terminated as otherwise
provided herein. The LIBOR Rate Option applicable to new selections shall be the
rate of interest of the selected LIBOR Rate Option on the Effective Date of the
Rate Selection Notice. In the event that Holder shall have determined that the
dollar deposits in an amount approximately equal to the Principal Amount are not
available to Holder at such time in the interbank eurodollar market, or that
reasonable means within the customary operating practices of Holder do not exist
for ascertaining a LIBOR Rate, or if any change in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make in unlawful for Holder to
make or maintain LIBOR Rates with respect to the principal balance hereof or to
fund the principal advanced hereunder in the interbank eurodollar market then,
Holder shall promptly notify Maker and thereafter such portion of the principal
balance hereof shall bear interest at the Floating Rate until such time, if any,
as a LIBOR Rate loan can be made by Holder to Maker, following which Holder
shall be entitled to the selection of the LIBOR Rate Options as provided in this
Note.
(j) "Minimum Notice Period" means a period commencing no later than
10:00 a.m. Atlanta, Georgia time three (3) Business Days prior to the Effective
Date of a Fixed Rate Advance.
(k) "Prime Rate" shall be the per annum rate announced by Payee from
time to time as its Prime Rate and as one of the several interest rate bases
used by Payee. Payee lends at rates both above and below the Prime Rate and is
not represented or intended to be the lowest or most favorable rate of interest
offered by Payee. If, and to the extent and from time to time, the Prime Rate of
Payee increases or decreases, then the Prime Rate under this Note shall be
corresponding increased or decreased, such increase or decrease hereunder to be
effective as of the date on which such increase or decrease of the Prime Rate of
Payee occurs. The Prime Rate in effect at the end of each day shall be the Prime
Rate utilized for purposes of calculating interest under this Note for such day.
In the event that Payee shall abolish or abandon the practice of establishing
its Prime Rate, Holder shall designate a comparable reference rate which shall
be deemed to be the Prime Rate hereunder.
(l) "Principal Amount" means the principal amount outstanding from time
to time under this Note.
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19
(m) "Rate Option" means the rate per annum equal to either (i) the
Floating Rate or (ii) the Eurodollar Rate.
(n) "Rate Selection Notice" means a written or telephonic notice (such
telephonic notice to be immediately confirmed by written or telefaxed notice)
providing irrevocable notice by the Maker to the Payee specifying (i) the
Eurodollar Interest Period which Maker desires to select, and (ii) the Effective
Date of each such Eurodollar Rate selection.
(o) "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to Reserve Requirements applicable to member banks of the
Federal Reserve System.
(p) "Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or scheduled changes in reserve requirements during
such Eurodollar Interest Period) which is imposed under Regulation D on
non-personal time deposits of $100,000.00 or more with a maturity date equal to
that on Eurocurrency liabilities.
3. FLOATING RATE BORROWING. Except as provided in Section 4 below,
this Note shall bear interest at the rate per annum equal to the Floating Rate
and, therefore, the initial rate of interest as of the date hereof, expressed
in simple interest terms, is 8.618% per annum. If at any time or from time to
time the Floating Rate increases or decreases, then the rate of interest
hereunder shall be correspondingly increased or decreased effective on the date
of which such increase or decrease of such Floating Rate takes effect.
4. SELECTION OF FIXED RATE. Subject to the terms and conditions of
this Note, Maker may elect from time to time that interest accrue at a rate per
annum equal to the Eurodollar Rate rather than the rate per annum equal to the
Floating Rate, and for a Eurodollar Interest Period selected hereunder for all
(but not less than all) of the outstanding principal balance of this Note by
giving the Holder the appropriate Rate Selection Notice in not less than the
Minimum Notice Period applicable thereto. The Principal Amount shall bear
interest from and including the first day of the Eurodollar Interest Period
applicable thereto and during such Eurodollar Interest Period. Except in
accordance with Section 7 hereof, the Rate Option shall not be changed by the
Maker. Maker may select a new Eurodollar Interest Period and Eurodollar Rate to
apply to the Principal Amount, effective as of the last day of the existing
Eurodollar Interest Period, by giving a Rate Selection Notice in not less than
the Minimum Notice Period. If at the end of a Eurodollar Interest Period the
Maker fails to select a new Eurodollar Rate and new Eurodollar Interest Period,
then the Principal Amount shall accrue interest at the Floating Rate on and
after the last day of such existing Eurodollar Interest Period until paid or
until the Effective Date of a new Rate Option selected by the Maker. The Maker
may not select the Fixed Rate if, on the date of the Rate Selection Notice or
the Effective Date of such selection, there exists an Event of Default.
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20
5. RESTRICTIONS ON FIXED RATE. Notwithstanding anything in this Note to
the contrary, Maker may not select that this Note accrue at the Fixed Rate
unless the outstanding principal balance of this Note as of the date of such
election is equal to or greater than $500,000.00.
6. TELEPHONIC NOTICES. Maker hereby authorizes the Payee to effect Rate
Option selections based on telephonic notices made by any one of the following
(or such other persons as Borrower may designate in writing from time to time to
Lender):
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
The Maker agrees to deliver promptly to Payee a written confirmation of each
telephone notice signed by an authorized officer of Maker. If the written
confirmation differs in any material respect from the action taken by the Payee,
the records of the Payee shall govern absent manifest error.
7. YIELD PROTECTION. With respect only to interest calculated at the
Fixed Rate, if any existing or future law, governmental rule, policy, guideline,
regulation or directive, whether or not having the force of law, or compliance
of the Payee with such, (i) subjects the Payee to any tax, duty, charge or
withholding on or from payments due from the Maker (excluding U.S. taxation of
the overall net income of the Payee), or changes the basis of taxation of
payment to the Payee in respect of the Indebtedness, or (ii) imposes or
increases or deems applicable any reserve, assessment (other than reserves and
assessments included in the Reserve Requirement with respect to principal
accruing at the Fixed Rate), special deposit, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, the Payee (other than reserves and assessments taken into account
in determining the Fixed Rate), or (iii) imposes any other condition the result
of which is to increase the cost to the Payee of making, funding or maintaining
U.S. dollar loans or reduces any amount receivable by the Payee in connection
with U.S. dollar loans, or requires the Payee to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by the Payee, or (iv) affects the amount of capital required or
expected to be maintained by the Payee or any corporation controlling the Payee
and the Payee determines that the amount of capital required is increased by or
based upon the existence of the Loan or any of the Loan Documents or its
obligation to make the Loan hereunder or of commitments of this type, then
within 15 days of demand by the Payee, Maker shall pay the Payee that portion of
such increased expense incurred (including, in the case of Paragraph 7(iv), any
reduction in the rate of return on capital to an amount below that which it
could have achieved but for such change in regulation after taking into account
Payee's policies as to capital adequacy) or the amount of reduction in an amount
received which the Payee determines is attributable to making, funding and
maintaining the Loan. A certificate of Payee is to the amounts payable pursuant
to this Paragraph 7 (which certificate shall reflect in reasonable detail the
method and basis for the calculation thereof) submitted to Maker shall, absent
manifest error, be final and binding upon all of the parties hereto. Payee will
give
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21
Maker notice that Payee has determined that amounts are due and payable pursuant
to this Paragraph 7 within a reasonable time after such determination by Payee.
Payee agrees that the determination of any such increased expense incurred or in
the amount of reduction in the amount received shall be consistent with such
determination made with respect to other loans of Payee which are similarly
structured, of a similar amount and for a similar purpose.
8. (a) AVAILABILITY OF INTEREST RATE. If the Payee determines that (i)
maintenance of the Fixed Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, (ii) deposits
of a type and maturity appropriate to match fund a Fixed Rate loan are not
available, or (iii) a Eurodollar Rate does not accurately reflect the cost of
making or maintaining the Fixed Rate, then the Payee shall suspend the
availability of the affected LIBOR Rate Option and require that the Fixed Rate
under an affected LIBOR Rate Option to be converted to an unaffected Rate
Option. Subject to the terms and conditions of this Note, the Maker may select,
by giving a Rate Selection Notice in not less than the Minimum Notice Period,
any unaffected Rate Option to apply to this Note. If the Maker fails to select a
new Rate Option, this Note shall accrue interest at the Floating Rate.
(b) BANK CERTIFICATES; SURVIVAL OF INDEMNITY. A certificate of the
Payee as to the amount due under Section 7 shall be final, conclusive and
binding on the Maker in the absence of manifest error. Determination of amounts
payable under such Section 7 shall be calculated as though the Holder funded its
Fixed Rate loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Fixed Rate loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the certificate
shall be payable on demand after receipt by the Maker of the certificate. The
obligations under Section 7 shall survive for a period of six (6) months
following repayment of the Loan.
9. PAYMENTS OF PRINCIPAL AND INTEREST. Commencing on November 1, 1997
and continuing on the first (1st) day of each calendar month thereafter through
and including October 1, 1998, there shall be due and payable monthly
installments consisting only of accrued and unpaid interest under this Note;
thereafter, commencing on November 1, 1998 and continuing on the first (1st) day
of each calendar month thereafter through and including September 1, 2001, there
shall be due and payable monthly installments consisting of (i) all accrued and
unpaid interest under this Note, and (ii) principal in the amount of FOUR
HUNDRED FORTY-ONE THOUSAND SIX HUNDRED SIXTY-SIX AND 67/100THS DOLLARS
($441,666.67).
Interest shall be calculated on a 360 day year basis for the actual
number of days elapsed. If any payment of principal or interest hereunder would
become due and payable on a day which is not a Business Day, then such payment
shall be due and payable on the next succeeding Business Day.
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10. MATURITY DATE. If not sooner paid (subject to the restrictions on
prepayment contained in the Loan Documents) the entire outstanding principal
balance of this Note shall be due and payable in full on October 1, 2001.
11. APPLICATION OF PAYMENTS. If any permitted payments or prepayments
are received when no Event of Default exists hereunder or under any of the Loan
Documents, and if any such payments do not fully pay all sums evidenced by this
Note, then such payment first shall be applied to the payment of late charges
and other fees payable under this Note or the Loan Documents, then to accrued
and unpaid interest under this Note and, then, to the outstanding principal
balance of this Note. Following any partial prepayment of this Note, following
the date of such prepayment, monthly installments shall be due and payable
consisting of (i) all accrued and unpaid interest, and (ii) equal installments
of principal based upon an amortization of the outstanding principal balance of
the Note following such prepayment over the number of monthly installments
payable between such date and the maturity date of this Note.
12. FACILITY. The loan made pursuant to this Note is governed by the
terms of the Loan Agreement whereby the loan evidenced by this Note shall be
made pursuant to and subject to the Loan Agreement.
13. PREPAYMENT. Maker may, from time to time, pay all or any portion
this Note without prepayment premium or penalty provided that, at the time of
such prepayment, this Note is accruing interest at the Floating Rate. If a
prepayment of all or any portion of the outstanding amount of this Note is made
at the time that this Note is accruing interest at the Fixed Rate, then there
shall be due and payable as a condition to such prepayment a prepayment premium
equal to any loss or cost incurred by Holder resulting from such prepayment
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the fixed rate under this Note.
14. LATE CHARGE. A late charge shall be due and payable in the amount
of five percent (5%) of the amount of any installment or payment of interest
and/or principal not paid within ten (10) days of the date on which such
installment or payment was due. Holder shall have no obligation to accept any
such delinquent payment of principal and/or interest without the accompanying
late charge, and the acceptance by Holder of such delinquent payment without the
accompanying late charge shall not constitute a waiver by Holder of the right to
enforce and collect such late charge. Maker acknowledges and agrees that the
late charge herein provided is not a charge in the nature of interest imposed
for the use of money advanced under this Note; rather, the late charge is
imposed to compensate Holder for the expense, inconvenience and economic
frustration experienced by Holder as a result of Maker's failure to make timely
payments due hereunder, and is a reasonable forecast and estimate of Holder's
actual damages and loss on account of such delinquent payment.
15. DEFAULT AND ACCELERATION. It is hereby expressly agreed that should
default occur in any payment of principal or interest stipulated, or should any
other Event of
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Default occur, then, and in any such event, the outstanding principal balance of
the indebtedness evidenced hereby, and any other sums advanced hereunder or
under the Loan Documents (hereinafter defined), together with all accrued and
unpaid interest, at the option of Holder and without notice to Maker except as
otherwise provided herein or in the Loan Documents, shall at once become due and
payable and may be collected forthwith, regardless of the stipulated date of
maturity. Interest shall accrue at the applicable Default Rate from maturity, or
sooner following the occurrence of a default hereunder and after the expiration
date of any period provided for the curing of such default and for so long as
such default continues, regardless of whether or not there has been an
acceleration of the indebtedness evidenced hereby as set forth herein. All such
interest at the Default Rate shall be paid at the time of and as a condition
precedent to the curing of any such default should Maker have the right to cure
such default. Time is of the essence of this Note. In the event this Note, or
any part thereof, is collected by or through an attorney-at-law, Maker agrees to
pay all costs of collection including, but not limited to, reasonable attorneys'
fees actually incurred.
16. WAIVERS.
(a) Except as expressly required herein or in the Loan Documents,
presentment for payment, demand, protest and notice of demand, protest and
non-payment and all other notices, except for such notices (if any) of default
provided to be given hereunder or under any of the Loan Documents, are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of
default hereunder, acceptance of a past due installment, or indulgences granted
from time to time shall be construed (i) as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note, or (ii) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by the laws of the
State of Georgia; and Maker hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Maker under this Note, either in whole or in
part, unless Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
(b) Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefit of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced by this Note. Maker hereby transfers, conveys and assigns
to Holder a sufficient amount of such homestead or exemption as may be set apart
in bankruptcy, to pay this Note in full, with
8
24
all costs of collection, and does hereby direct any trustee in bankruptcy having
possession of such homestead or exemption to deliver to Holder a sufficient
amount of property or money set apart as exempt to pay the indebtedness
evidenced hereby, or any renewal thereof, and does hereby appoint Holder the
attorney-in-fact for Maker to claim any and all homestead exemptions allowed by
law.
17. GOVERNING LAW. This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State of
Georgia.
18. DEFINITIONS. As used herein, the terms "Maker" and "Holder" shall
be deemed to include their respective heirs, successors, legal representatives
and assigns, whether by voluntary action of the parties or by operation of law.
In the event that more than one person, firm or entity is a Maker hereunder,
then all references to "Maker" shall be deemed to refer equally to each of said
persons, firms, or entities, all of whom shall be jointly and severally liable
for all of the obligations of Maker hereunder.
19. LEGAL LIMITATIONS. It is the express intent hereof that the
undersigned not pay and the Holder not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be legally paid by the
undersigned under applicable law. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Note or otherwise, shall the
interest contracted for, charged or received by Holder hereunder or otherwise
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Holder in excess
of the maximum lawful amount permitted under applicable law, the interest
payable to Holder shall be reduced automatically to the maximum amount permitted
under applicable law. If Holder shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid principal balance of the Note, such excess shall be refunded
to Maker. All interest paid or agreed to be paid to Holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Holder.
20. ARBITRATION. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Note or any related agreements or instruments, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the Rules of Practice and Procedure for the Arbitration
of Commercial Disputes or Judicial Arbitration and Mediation Services, Inc.
("J.A.M.S."), and the "Special Rules" set forth below. In the event of any
inconsistency, the Special Rules shall
9
25
control. Judgment upon any arbitration award may be entered in any court having
jurisdiction. Any party to this Note may bring an action, including a summary or
expedited proceeding, to compel arbitration of any controversy or claim in which
this Note applies in any court having jurisdiction over such action.
21. SPECIAL RULES. The arbitration shall be conducted in the city of
Maker's domicile at the time of this Note's execution and administered by
J.A.M.S., who will appoint an arbitrator; if J.A.M.S. is unable or legally
precluded from administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration; further the arbitrator shall only, upon
a showing of cause, be permitted to extend the commencement of such hearing for
an additional sixty (60) days.
22. RESERVATION OF RIGHTS. Nothing in this Note shall be deemed to (i)
limit the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (ii) be a waiver by the Holder
of the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder hereto (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Holder may exercise such self help rights, foreclosure upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Note. Neither
the exercise or self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies. Nothing in this Note shall be deemed to limit the right of Maker to
seek injunctive relief.
23. TITLES. The titles of sections or paragraphs herein are used for
the convenience of the parties only and neither amplify, modify or alter in any
way the provisions of this instrument.
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IN WITNESS WHEREOF, Maker has executed this Note under seal on the date
first above written.
MAKER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
(CORPORATE SEAL)
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EXHIBIT A-3
NATIONSBANK
PROMISSORY NOTE
(TERM NOTE-FIXED RATE)
$________________ Date: ___________, 1997
Atlanta, Georgia
1. PROMISE TO PAY. FOR VALUE RECEIVED, the undersigned, THE PROFIT
RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (hereinafter referred
to as "Maker"), promises to pay to the order of NATIONSBANK, N.A., a national
bank (hereinafter referred to as "Payee"; Payee and any subsequent holder of all
or any part interest in this Note being hereinafter referred to collectively as
"Holder"), at the following address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
or at any such other place as Holder may designate to Maker in writing from
time to time, the principal sum of ________ AND NO/100THS DOLLARS
($_____________.00), or so much thereof as shall be disbursed hereunder and
shall from time to time be outstanding and unpaid, together with interest
thereon at the rates hereinafter set forth (subject to adjustment as provided
below), in lawful money of the United States of America, which at the time of
payment shall be legal tender in payment of all debts and dues, public and
private, such principal and interest to be paid in the manner hereinafter
provided. This Promissory Note (the "Note") is executed and delivered pursuant
to that certain Loan and Security Agreement, dated September 27, 1996, among
Payee, Maker and certain affiliates of Maker (hereinafter, together with all
supplements and amendments thereto, the "Loan Agreement"). This Note is a Term
Note referred to in, and is issued pursuant to, the Loan Agreement, and is
entitled to all of the benefits and security of the Loan Agreement. All of the
terms, covenants and conditions of the Loan Agreement and all other instruments
evidencing or securing the indebtedness hereunder are hereby made a part of
this Note and are deemed incorporated herein in full. All capitalized terms
used herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.
28
2. DEFINITIONS. As used herein, the following terms shall have the
indicated definitions:
(a) "Business Day" means any day whereon banks are open for business in
Atlanta, Georgia and, with respect to borrowing, payment or rate selection of
the Fixed Rate or a Eurodollar Interest Period, any day whereon banks are open
for business in both Atlanta, Georgia and New York, New York and whereon
dealings in U.S. dollars are carried on in the London interbank market.
(b) "Default Rate" means [the rate of interest specified in Section 3]
plus 2% per annum.
(c) "Event of Default" means an Event of Default as that term is
defined in the Loan Agreement.
3. INTEREST RATE. This Note shall bear interest at the rate of ________
percent (___%) per annum.
4. PAYMENTS OF PRINCIPAL AND INTEREST. Commencing one (1) month from
the date of this Note and continuing on the same day of each calendar month
thereafter through and including [the day which is 12 months from the date of
the Note], there shall be due and payable monthly installments of only accrued
and unpaid interest under this Note; thereafter, commencing one (1) month after
[the day which is 12 months from the date of the Note] and continuing on the
same day of each calendar month thereafter through and including [the day which
is 47 months from the date of the Note], there shall be due and payable equal
monthly installments in the amount of $ __________.
Interest shall be calculated on a 360 day year basis for the actual
number of days elapsed. If any payment of principal or interest hereunder would
become due and payable on a day which is not a Business Day, then such payment
shall be due and payable on the next succeeding Business Day.
5. MATURITY DATE. If not sooner paid (subject to the restrictions on
prepayment contained in the Loan Documents) the entire outstanding principal
balance of this Note shall be due and payable in full 48 months from the date of
this Note.
6. APPLICATION OF PAYMENTS. If any permitted payments or prepayments
are received when no Event of Default exists hereunder or under any of the Loan
Documents, and if any such payments do not fully pay all sums evidenced by this
Note, then such payment first shall be applied to the payment of late charges
and other fees payable under this Note or the Loan Documents, then to accrued
and unpaid interest under this Note and, then, to the outstanding principal
balance of this Note.
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7. FACILITY. The loan made pursuant to this Note is governed by the
terms of the Loan Agreement whereby the loan evidenced by this Note shall be
made pursuant to and subject to the Loan Agreement.
8. PREPAYMENT. Maker may, from time to time, pay all or any portion
this Note without prepayment premium or penalty. Following any partial
prepayment of this Note, following the date of such prepayment, equal monthly
installments of principal and interest shall be due and payable based upon a
reamortization of the outstanding principal balance of this Note following such
prepayment over the number of monthly installments payable between such date and
the maturity date of this Note and utilizing the rate of interest set forth in
this Note.
9. LATE CHARGE. A late charge shall be due and payable in the amount
of five percent (5%) of the amount of any installment or payment of interest
and/or principal not paid within ten (10) days of the date on which such
installment or payment was due. Holder shall have no obligation to accept any
such delinquent payment of principal and/or interest without the accompanying
late charge, and the acceptance by Holder of such delinquent payment without the
accompanying late charge shall not constitute a waiver by Holder of the right to
enforce and collect such late charge. Maker acknowledges and agrees that the
late charge herein provided is not a charge in the nature of interest imposed
for the use of money advanced under this Note; rather, the late charge is
imposed to compensate Holder for the expense, inconvenience and economic
frustration experienced by Holder as a result of Maker's failure to make timely
payments due hereunder, and is a reasonable forecast and estimate of Holder's
actual damages and loss on account of such delinquent payment.
10. DEFAULT AND ACCELERATION. It is hereby expressly agreed that should
default occur in any payment of principal or interest stipulated, or should any
other Event of Default occur, then, and in any such event, the outstanding
principal balance of the indebtedness evidenced hereby, and any other sums
advanced hereunder or under the Loan Documents (hereinafter defined), together
with all accrued and unpaid interest, at the option of Holder and without notice
to Maker except as otherwise provided herein or in the Loan Documents, shall at
once become due and payable and may be collected forthwith, regardless of the
stipulated date of maturity. Interest shall accrue at the applicable Default
Rate from maturity, or sooner following the occurrence of a default hereunder
and after the expiration date of any period provided for the curing of such
default and for so long as such default continues, regardless of whether or not
there has been an acceleration of the indebtedness evidenced hereby as set forth
herein. All such interest at the Default Rate shall be paid at the time of and
as a condition precedent to the curing of any such default should Maker have the
right to cure such default. Time is of the essence of this Note. In the event
this Note, or any part thereof, is collected by or through an attorney-at-law,
Maker agrees to pay all costs of collection including, but not limited to,
reasonable attorneys' fees actually incurred.
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11. WAIVERS.
(a) Except as expressly required herein or in the Loan Documents,
presentment for payment, demand, protest and notice of demand, protest and
non-payment and all other notices, except for such notices (if any) of default
provided to be given hereunder or under any of the Loan Documents, are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of
default hereunder, acceptance of a past due installment, or indulgences granted
from time to time shall be construed (i) as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note, or (ii) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by the laws of the
State of Georgia; and Maker hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Maker under this Note, either in whole or in
part, unless Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
(b) Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefit of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced by this Note. Maker hereby transfers, conveys and assigns
to Holder a sufficient amount of such homestead or exemption as may be set apart
in bankruptcy, to pay this Note in full, with all costs of collection, and does
hereby direct any trustee in bankruptcy having possession of such homestead or
exemption to deliver to Holder a sufficient amount of property or money set
apart as exempt to pay the indebtedness evidenced hereby, or any renewal
thereof, and does hereby appoint Holder the attorney-in-fact for Maker to claim
any and all homestead exemptions allowed by law.
12. GOVERNING LAW. This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State of
Georgia.
13. DEFINITIONS. As used herein, the terms "Maker" and "Holder" shall
be deemed to include their respective heirs, successors, legal representatives
and assigns, whether by voluntary action of the parties or by operation of law.
In the event that more than one person, firm or entity is a Maker hereunder,
then all references to "Maker" shall be deemed to refer equally to each of said
persons, firms, or entities, all of whom shall be jointly and
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severally liable for all of the obligations of Maker hereunder.
14. LEGAL LIMITATIONS. It is the express intent hereof that the
undersigned not pay and the Holder not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be legally paid by the
undersigned under applicable law. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Note or otherwise, shall the
interest contracted for, charged or received by Holder hereunder or otherwise
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Holder in excess
of the maximum lawful amount permitted under applicable law, the interest
payable to Holder shall be reduced automatically to the maximum amount permitted
under applicable law. If Holder shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid principal balance of the Note, such excess shall be refunded
to Maker. All interest paid or agreed to be paid to Holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Holder.
15. ARBITRATION. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Note or any related agreements or instruments, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the Rules of Practice and Procedure for the Arbitration
of Commercial Disputes or Judicial Arbitration and Mediation Services, Inc.
("J.A.M.S."), and the "Special Rules" set forth below. In the event of any
inconsistency, the Special Rules shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this Note
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim in which this Note applies in any court
having jurisdiction over such action.
16. SPECIAL RULES. The arbitration shall be conducted in the city of
Maker's domicile at the time of this Note's execution and administered by
J.A.M.S., who will appoint an arbitrator; if J.A.M.S. is unable or legally
precluded from administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration; further the arbitrator shall only, upon
a showing of cause, be permitted to extend the commencement of such hearing for
an additional sixty (60) days.
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17. RESERVATION OF RIGHTS. Nothing in this Note shall be deemed to (i)
limit the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (ii) be a waiver by the Holder
of the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder hereto (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Holder may exercise such self help rights, foreclosure upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Note. Neither
the exercise or self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies. Nothing in this Note shall be deemed to limit the right of Maker to
seek injunctive relief.
18. TITLES. The titles of sections or paragraphs herein are used for
the convenience of the parties only and neither amplify, modify or alter in any
way the provisions of this instrument.
IN WITNESS WHEREOF, Maker has executed this Note under seal on the date
first above written.
MAKER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
(CORPORATE SEAL)
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EXHIBIT A-2
NATIONSBANK
PROMISSORY NOTE
$10,000,000.00 Date: _____________, 1997
Atlanta, Georgia
1. PROMISE TO PAY. FOR VALUE RECEIVED, the undersigned, THE PROFIT
RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (hereinafter referred
to as "Maker"), promises to pay to the order of NATIONSBANK, N.A., a national
bank (hereinafter referred to as "Payee"; Payee and any subsequent holder of all
or any part interest in this Note being hereinafter referred to collectively as
"Holder"), at the following address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
or at any such other place as Holder may designate to Maker in writing from time
to time, the principal sum of TEN MILLION AND NO/100THS DOLLARS
($10,000,000.00), or so much thereof as shall be disbursed hereunder and shall
from time to time be outstanding and unpaid, together with interest thereon at
one or more of the rates hereinafter set forth (subject to adjustment and
designation of the applicable interest rate or rates as provided below), in
lawful money of the United States of America, which at the time of payment shall
be legal tender in payment of all debts and dues, public and private, such
principal and interest to be paid in the manner hereinafter provided. This
Promissory Note (the "Note") is executed and delivered pursuant to that certain
Loan and Security Agreement, dated as of even date herewith, among Payee, Maker
and certain affiliates of Maker (hereinafter, together with all supplements and
amendments thereto, the "Loan Agreement"). This Note is the Revolver Note
referred to in, and is issued pursuant to, the Loan Agreement, and is entitled
to all of the benefits and security of the Loan Agreement. All of the terms,
covenants and conditions of the Loan Agreement and all other instruments
evidencing or securing the indebtedness hereunder are hereby made a part of this
Note and are deemed incorporated herein in full. All capitalized terms used
herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.
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2. DEFINITIONS. As used herein, the following terms shall have the
indicated definitions:
(a) "Advance" means a Fixed Rate Advance or a Floating Rate Advance.
(b) "Business Day" means any day whereon banks are open for business in
Atlanta, Georgia and, with respect to borrowing, payment or rate selection of a
Fixed Rate Advance or a Eurodollar Interest Period, any day whereon banks are
open for business in both Atlanta, Georgia and New York, New York and whereon
dealings in U.S. dollars are carried on in the London interbank market.
(c) "Default Rate" means (i) with respect to each Floating Rate
Advance, a rate per annum equal to the Prime Rate plus two percent (2%); and
(ii) with respect to each Fixed Rate Advance for the remainder of the applicable
Eurodollar Interest Period, a rate per annum equal to the applicable Eurodollar
Rate plus two percent (2%), and after such applicable Eurodollar Interest Period
at the rate per annum equal to the Prime Rate plus two percent (2%).
(d) "Effective Date" means any Business Day designated by Maker in a
Rate Selection Notice as the date such rate selection shall become effective, or
the first day of Floating Rate Advance.
(e) "Eurodollar Interest Period" means, with respect to a Fixed Rate
Advance, a period of thirty (30) days, sixty (60) days, ninety (90) days or one
hundred eighty (180) days to the extent eurodollar borrowings of such or similar
periods are available, commencing on a Business Day and selected by the Maker in
its Rate Selection Notice; provided, however, such Eurodollar Interest Period
shall commence on the last day of the immediately preceding Eurodollar Interest
Period in the case of a rollover to a successive Eurodollar Interest Period. If
any Eurodollar Interest Period would otherwise end on a day which is not a
Business Day, such Eurodollar Interest Period shall end on the next succeeding
Business Day. Any Eurodollar Interest Period must end on or before the maturity
date of this Note.
(f) "Eurodollar Rate" means, with respect to a Fixed Rate Advance for
the relevant Eurodollar Interest Period, the sum of the LIBOR Rate applicable to
that Eurodollar Interest Period plus one and three-quarters percent (1.75%) per
annum, subject to adjustment from time to time as hereinafter provided. The
Eurodollar Rate shall be rounded, if necessary, to the next higher one-sixteenth
of one percent.
(g) "Event of Default" means an Event of Default as that term is
defined in the Loan Agreement.
(h) "Fixed Rate Advance" means that portion of the Principal Amount to
which the Eurodollar Rate is applicable for a particular Eurodollar Interest
Period.
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(i) "Floating Rate" means a rate per annum equal to the Prime Rate,
changing when and as the Prime Rate changes.
(j) "Floating Rate Advance" means that portion of the Principal Amount
of the Note bearing interest at the Floating Rate.
(k) "LIBOR Rate" means the simple interest rate per annum determined by
Holder, taking into account the rates at which deposits in United States dollars
for periods of thirty (30) days, sixty (60) days, ninety (90) days and one
hundred eighty (180) days (each of the foregoing is individually referred to as
"LIBOR Rate Option") are offered in the interbank eurodollar market, and such
other factors as Holder may reasonably deem appropriate from time to time. The
LIBOR Rate is established in the discretion of Holder for the particular
indebtedness evidenced by this Note, and may not be the lowest rate based in
part upon which market for deposits in the interbank eurodollar market at which
Holder prices loans on the date on which the LIBOR Rate is established. The rate
of interest charged under this Note with respect to any selection of any of the
LIBOR Rate Options shall be the selected LIBOR Rate Option on the Effective Date
of the Rate Selection Notice, and shall continue to be the same rate of
interest, without daily adjustment, until the maturity of the selected LIBOR
Rate Option has fully elapsed or the Rate Selection Notice has been terminated
as otherwise provided herein. The LIBOR Rate Option applicable to new selections
shall be the rate of interest of the selected LIBOR Rate Option on the Effective
Date of the Rate Selection Notice. In the event that Holder shall have
determined that the dollar deposits in an amount approximately equal to the
portion of the Principal Amount to which any of the LIBOR Rate Options apply are
not available to Holder at such time in the interbank eurodollar market, or that
reasonable means within the customary operating practices of Holder do not exist
for ascertaining a LIBOR Rate, or if any change in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make in unlawful for Holder to
make or maintain LIBOR Rates with respect to the principal balance hereof or any
portion thereof or to fund any portion of the principal advanced hereunder in
the interbank eurodollar market then, Holder shall promptly notify Maker and
thereafter such portion of the principal balance hereof shall bear interest at
the Floating Rate until such time, if any, as a LIBOR Rate loan can be made by
Holder to Maker, following which Holder shall be entitled to the selection of
the LIBOR Rate Options as provided in this Note.
(l) "Minimum Notice Period" means a period commencing no later than
10:00 a.m. Atlanta, Georgia time three (3) Business Days prior to the Effective
Date of a Fixed Rate Advance.
(m) "Prime Rate" shall be the per annum rate announced by Payee from
time to time as its Prime Rate and as one of the several interest rate bases
used by Payee. Payee lends at rates both above and below the Prime Rate and is
not represented or intended to be the lowest or most favorable rate of interest
offered by Payee. If, and to the extent and from time to time, the Prime Rate of
Payee increases or decreases, then the Prime Rate under this Note shall
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be corresponding increased or decreased, such increase or decrease hereunder to
be effective as of the date on which such increase or decrease of the Prime Rate
of Payee occurs. The Prime Rate in effect at the end of each day shall be the
Prime Rate utilized for purposes of calculating interest under this Note for
such day. In the event that Payee shall abolish or abandon the practice of
establishing its Prime Rate, Holder shall designate a comparable reference rate
which shall be deemed to be the Prime Rate hereunder.
(n) "Principal Amount" means the principal amount outstanding from time
to time under this Note.
(o) "Rate Option" means the rate per annum equal to either (i) the
Floating Rate or (ii) the Eurodollar Rate.
(p) "Rate Selection Notice" means a written or telephonic notice (such
telephonic notice to be immediately confirmed by written or telefaxed notice)
providing irrevocable notice by the Maker to the Payee specifying (i) the
Principal Amount which shall be governed by the Eurodollar Rate, (ii) the
Eurodollar Interest Period applicable to each such amount to be governed by the
Eurodollar Rate, and (iii) the Effective Date of each such Eurodollar Rate
selection.
(a) "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to Reserve Requirements applicable to member banks of the
Federal Reserve System.
(b) "Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or scheduled changes in reserve requirements during
such Eurodollar Interest Period) which is imposed under Regulation D on
non-personal time deposits of $100,000.00 or more with a maturity date equal to
that on Eurocurrency liabilities.
3. FLOATING RATE BORROWING. Except as provided in Section 4 below,
this Note shall bear interest at the rate per annum equal to the Floating Rate
and, therefore, the initial rate of interest as of the date hereof, expressed
in simple interest terms, is 8.25% per annum. If at any time or from time to
time the Floating Rate increases or decreases, then the rate of interest
hereunder shall be correspondingly increased or decreased effective on the date
of which such increase or decrease of such Floating Rate takes effect.
4. SELECTION OF FIXED RATE ADVANCE. Subject to the terms and
conditions of this Note, Maker may elect from time to time to pay interest at a
rate per annum equal to the Eurodollar Rate rather than the rate per annum
equal to the Floating Rate, and for a Eurodollar Interest Period selected
hereunder for all or any outstanding portion of the Note
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(subject to the provision of Paragraph 5 below) by giving the Holder the
appropriate Rate Selection Notice in not less than the Minimum Notice Period
applicable thereto. The Principal Amount of each Fixed Rate Advance shall bear
interest from and including the first day of the Eurodollar Interest Period
applicable thereto and during such Eurodollar Interest Period. Except in
accordance with Section 7 hereof, the Rate Option applicable to such Fixed Rate
Advance shall not be changed by the Maker. Maker may select a new Eurodollar
Interest Period and Eurodollar Rate to apply to an outstanding Fixed Rate
Advance, effective as of the last day of the existing Eurodollar Interest Period
applicable to such Fixed Rate Advance, by giving a Rate Selection Notice in not
less than the Minimum Notice Period and subject to the minimum advance amount
provisions applicable to the Fixed Rate Advance selected. If at the end of a
Eurodollar Interest Period for an outstanding Fixed Rate Advance, the Maker
fails to select a new Eurodollar Rate and new Eurodollar Interest Period, then
such Advance shall be a Floating Rate Advance on and after the last day of such
existing Eurodollar Interest Period until paid or until the Effective Date of a
new Rate Option with respect thereto selected by the Maker. An outstanding
Floating Rate Advance can be converted to a Fixed Rate Advance at any time by
providing a Rate Selection Notice (and subject to the provisions of Paragraph 5
below). The Maker may not select a Fixed Rate Advance for any Advance if, on the
date of the Rate Selection Notice or the Effective Date of such selection, there
exists an Event of Default.
5. RESTRICTIONS ON LOANS. The amount of any Fixed Rate Advance pursuant
to this Note shall be in a minimum amount of $500,000.00.
6. TELEPHONIC NOTICES. Maker hereby authorizes the Payee to extend
Advances and effect Rate Option selections based on telephonic notices made by
any one of the following (or such other persons as Borrower may designate in
writing from time to time to Lender):
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
The Maker agrees to deliver promptly to Payee a written confirmation of each
telephone notice signed by an authorized officer of Maker. If the written
confirmation differs in any material respect from the action taken by the Payee,
the records of the Payee shall govern absent manifest error.
7. YIELD PROTECTION. With respect only to interest calculated at the
Fixed Rate, if any existing or future law, governmental rule, policy, guideline,
regulation or directive, whether or not having the force of law, or compliance
of the Payee with such, (i) subjects the Payee to any tax, duty, charge or
withholding on or from payments due from the Maker (excluding U.S. taxation of
the overall net income of the Payee), or changes the basis of taxation of
payment to the Payee in respect of the Indebtedness, or (ii) imposes or
increases or deems applicable any reserve, assessment (other than reserves and
assessments included in the
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Reserve Requirement with respect to Fixed Rate Advances), special deposit,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Payee (other than reserves and
assessments taken into account in determining the interest rate applicable to
Fixed Rate Advances), or (iii) imposes any other condition the result of which
is to increase the cost to the Payee of making, funding or maintaining U.S.
dollar loans or reduces any amount receivable by the Payee in connection with
U.S. dollar loans, or requires the Payee to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by the Payee, or (iv) affects the amount of capital required or
expected to be maintained by the Payee or any corporation controlling the Payee
and the Payee determines that the amount of capital required is increased by or
based upon the existence of the Loan or any of the Loan Documents or its
obligation to make the Loan hereunder or of commitments of this type, then
within 15 days of demand by the Payee, Maker shall pay the Payee that portion of
such increased expense incurred (including, in the case of Paragraph 7(iv), any
reduction in the rate of return on capital to an amount below that which it
could have achieved but for such change in regulation after taking into account
Payee's policies as to capital adequacy) or the amount of reduction in an amount
received which the Payee determines is attributable to making, funding and
maintaining the Loan. A certificate of Payee is to the amounts payable pursuant
to this Paragraph 7 (which certificate shall reflect in reasonable detail the
method and basis for the calculation thereof) submitted to Maker shall, absent
manifest error, be final and binding upon all of the parties hereto. Payee will
give Maker notice that Payee has determined that amounts are due and payable
pursuant to this Paragraph 7 within a reasonable time after such determination
by Payee. Payee agrees that the determination of any such increased expense
incurred or in the amount of reduction in the amount received shall be
consistent with such determination made with respect to other loans of Payee
which are similarly structured, of a similar amount and for a similar purpose.
8. (a) AVAILABILITY OF INTEREST RATE. If the Payee determines that (i)
maintenance of the Fixed Rate Advances would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, (ii) deposits
of a type and maturity appropriate to match fund a Fixed Rate Advance are not
available, or (iii) a Eurodollar Rate does not accurately reflect the cost of
making or maintaining a Fixed Rate Advance, then the Payee shall suspend the
availability of the affected LIBOR Rate Option and require any Fixed Rate
Advances outstanding under an affected LIBOR Rate Option to be converted to an
unaffected Rate Option; provided, however, with respect to the circumstance
described above in clause (iii) of this Section 8(a) only, the Fixed Rate shall
be converted to an unaffected Rate Option at the end of the Eurodollar Interest
Period applicable to such Fixed Rate Advance. Subject to the terms and
conditions of this Note, including the minimum borrowing provisions applicable
to the Fixed Rate Advance for which a new Rate Option is selected, the Maker may
select, by giving a Rate Selection Notice in not less than the Minimum Notice
Period, any unaffected Rate Option to apply to such affected Advances. If the
Maker fails to select a new Rate Option, the affected Advances shall be Floating
Rate Advances.
(b) FAILURE TO PAY OR BORROW ON CERTAIN DATES. If any payment of
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a Fixed Rate Advance occurs on a date which is not the last day of the
applicable Eurodollar Interest Period, whether because of acceleration,
prepayment or otherwise, or a Fixed Rate Advance is not made on the date
specified by the Maker for any reason other than a default by the Payee, the
Maker will indemnify the Payee for any loss or cost incurred by Payee resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Fixed Rate Advance.
(c) BANK CERTIFICATES; SURVIVAL OF INDEMNITY. A certificate of the
Payee as to the amount due under Sections 7 and 8(b) shall be final, conclusive
and binding on the Maker in the absence of manifest error. Determination of
amounts payable under such Sections 7 and 8(b) in connection with a Fixed Rate
Advance shall be calculated as though the Holder funded its Fixed Rate Advance
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Fixed Rate Advance, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the certificate shall be
payable on demand after receipt by the Maker of the certificate. The obligations
under Section 7 and 8(b) shall survive for a period of six (6) months following
repayment of the Loan.
9. PAYMENTS OF INTEREST. Accrued and unpaid interest only shall be due
and payable on the last day of each calendar month commencing on October 31,
1996 and continuing through and including September 30, 1999.
Interest shall be calculated on a 360 day year basis for the actual
number of days elapsed. If any payment of principal or interest hereunder would
become due and payable on a day which is not a Business Day, then such payment
shall be due and payable on the next succeeding Business Day.
10. PAYMENT OF PRINCIPAL. If not sooner paid (subject to the
restrictions on prepayment contained in the Loan Documents) the entire
outstanding principal balance of this Note shall be due and payable in full on
September 30, 1999.
11. APPLICATION OF PAYMENTS. If any permitted payments or prepayments
are received when no Event of Default exists hereunder or under any of the Loan
Documents, and if any such payments do not fully pay all sums evidenced by this
Note, then such payment first shall be applied to the payment of late charges
and other fees payable under this Note or the Loan Documents, then to accrued
and unpaid interest under this Note and, then, the balance of such payment shall
be applied to the outstanding principal balance of this Note in the following
order of application:
(a) The Principal Amount accruing interest at the Floating Rate at the
time of such prepayment; and
(b) The Principal Amount accruing interest at the Eurodollar Rate as of
the date of
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such prepayment in the order of the maturity dates of the Eurodollar Interest
Periods in effect at such time.
12. FACILITY. The loan evidenced by this Note is governed by the terms
of the Loan Agreement whereby advances of principal under this Note shall be
made pursuant to and subject to the Loan Agreement.
13. PREPAYMENT. Maker may from time to time, pay all or any portion of
outstanding Floating Rate Advances. A Fixed Rate Advance may not be paid prior
to the last day of the applicable Eurodollar Interest Period unless, at the time
of such prepayment, Maker pays to Holder all costs associated with the early
termination of such Fixed Rate Advance as provided in Section 8(b) herein.
14. LATE CHARGE. A late charge shall be due and payable in the amount
of five percent (5%) of the amount of any installment or payment of interest
and/or principal not paid within ten (10) days of the date on which such
installment or payment was due. Holder shall have no obligation to accept any
such delinquent payment of principal and/or interest without the accompanying
late charge, and the acceptance by Holder of such delinquent payment without the
accompanying late charge shall not constitute a waiver by Holder of the right to
enforce and collect such late charge. Maker acknowledges and agrees that the
late charge herein provided is not a charge in the nature of interest imposed
for the use of money advanced under this Note; rather, the late charge is
imposed to compensate Holder for the expense, inconvenience and economic
frustration experienced by Holder as a result of Maker's failure to make timely
payments due hereunder, and is a reasonable forecast and estimate of Holder's
actual damages and loss on account of such delinquent payment.
15. DEFAULT AND ACCELERATION. It is hereby expressly agreed that should
default occur in any payment of principal or interest stipulated, or should any
other Event of Default occur, then, and in any such event, the outstanding
principal balance of the indebtedness evidenced hereby, and any other sums
advanced hereunder or under the Loan Documents (hereinafter defined), together
with all accrued and unpaid interest, at the option of Holder and without notice
to Maker except as otherwise provided herein or in the Loan Documents, shall at
once become due and payable and may be collected forthwith, regardless of the
stipulated date of maturity. Interest shall accrue on each Advance at the
applicable Default Rate from maturity, or sooner following the occurrence of a
default hereunder and after the expiration date of any period provided for the
curing of such default and for so long as such default continues, regardless of
whether or not there has been an acceleration of the indebtedness evidenced
hereby as set forth herein. All such interest at the Default Rate shall be paid
at the time of and as a condition precedent to the curing of any such default
should Maker have the right to cure such default. Time is of the essence of this
Note. In the event this Note, or any part thereof, is collected by or through an
attorney-at-law, Maker agrees to
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41
pay all costs of collection including, but not limited to, reasonable attorneys'
fees actually incurred.
16. WAIVERS.
(a) Except as expressly required herein or in the Loan Documents,
presentment for payment, demand, protest and notice of demand, protest and
non-payment and all other notices, except for such notices (if any) of default
provided to be given hereunder or under any of the Loan Documents, are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of
default hereunder, acceptance of a past due installment, or indulgences granted
from time to time shall be construed (i) as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note, or (ii) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by the laws of the
State of Georgia; and Maker hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Maker under this Note, either in whole or in
part, unless Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
(b) Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefit of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced by this Note. Maker hereby transfers, conveys and assigns
to Holder a sufficient amount of such homestead or exemption as may be set apart
in bankruptcy, to pay this Note in full, with all costs of collection, and does
hereby direct any trustee in bankruptcy having possession of such homestead or
exemption to deliver to Holder a sufficient amount of property or money set
apart as exempt to pay the indebtedness evidenced hereby, or any renewal
thereof, and does hereby appoint Holder the attorney-in-fact for Maker to claim
any and all homestead exemptions allowed by law.
17. GOVERNING LAW. This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State of
Georgia.
18. DEFINITIONS. As used herein, the terms "Maker" and "Holder" shall
be deemed to include their respective heirs, successors, legal representatives
and assigns, whether
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42
by voluntary action of the parties or by operation of law. In the event that
more than one person, firm or entity is a Maker hereunder, then all references
to "Maker" shall be deemed to refer equally to each of said persons, firms, or
entities, all of whom shall be jointly and severally liable for all of the
obligations of Maker hereunder.
19. LEGAL LIMITATIONS. It is the express intent hereof that the
undersigned not pay and the Holder not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be legally paid by the
undersigned under applicable law. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Note or otherwise, shall the
interest contracted for, charged or received by Holder hereunder or otherwise
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Holder in excess
of the maximum lawful amount permitted under applicable law, the interest
payable to Holder shall be reduced automatically to the maximum amount permitted
under applicable law. If Holder shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid principal balance of the Note, such excess shall be refunded
to Maker. All interest paid or agreed to be paid to Holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Holder.
20. ARBITRATION. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Note or any related agreements or instruments, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the Rules of Practice and Procedure for the Arbitration
of Commercial Disputes or Judicial Arbitration and Mediation Services, Inc.
("J.A.M.S."), and the "Special Rules" set forth below. In the event of any
inconsistency, the Special Rules shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this Note
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim in which this Note applies in any court
having jurisdiction over such action.
21. SPECIAL RULES. The arbitration shall be conducted in the city of
Maker's domicile at the time of this Note's execution and administered by
J.A.M.S., who will appoint an arbitrator; if J.A.M.S. is unable or legally
precluded from administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration; further the arbitrator shall
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43
only, upon a showing of cause, be permitted to extend the commencement of such
hearing for an additional sixty (60) days.
22. RESERVATION OF RIGHTS. Nothing in this Note shall be deemed to (i)
limit the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (ii) be a waiver by the Holder
of the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder hereto (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Holder may exercise such self help rights, foreclosure upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Note. Neither
the exercise or self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies. Nothing in this Note shall be deemed to limit the right of Maker to
seek injunctive relief.
23. TITLES. The titles of sections or paragraphs herein are used for
the convenience of the parties only and neither amplify, modify or alter in any
way the provisions of this instrument.
IN WITNESS WHEREOF, Maker has executed this Note under seal on the date
first above written.
MAKER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
(CORPORATE SEAL)
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NATIONSBANK
PROMISSORY NOTE
$10,000,000.00 Date: October 3, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
1. PROMISE TO PAY. FOR VALUE RECEIVED, the undersigned, THE PROFIT
RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (hereinafter referred
to as "Maker"), promises to pay to the order of NATIONSBANK, N.A., a national
bank (hereinafter referred to as "Payee"; Payee and any subsequent holder of all
or any part interest in this Note being hereinafter referred to collectively as
"Holder"), at the following address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
or at any such other place as Holder may designate to Maker in writing from time
to time, the principal sum of TEN MILLION AND NO/100THS DOLLARS
($10,000,000.00), or so much thereof as shall be disbursed hereunder and shall
from time to time be outstanding and unpaid, together with interest thereon at
one or more of the rates hereinafter set forth (subject to adjustment and
designation of the applicable interest rate or rates as provided below), in
lawful money of the United States of America, which at the time of payment shall
be legal tender in payment of all debts and dues, public and private, such
principal and interest to be paid in the manner hereinafter provided. This
Promissory Note (the "Note") is executed and delivered pursuant to that certain
Loan and Security Agreement, dated as of even date herewith, among Payee, Maker
and certain affiliates of Maker (hereinafter, together with all supplements and
amendments thereto, the "Loan Agreement"). This Note is the Revolver Note
referred to in, and is issued pursuant to, the Loan Agreement, and is entitled
to all of the benefits and security of the Loan Agreement. All of the terms,
covenants and conditions of the Loan Agreement and all other instruments
evidencing or securing the indebtedness hereunder are hereby made a part of this
Note and are deemed incorporated herein in full. All capitalized terms used
herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.
45
2. DEFINITIONS. As used herein, the following terms shall have the
indicated definitions:
(a) "Advance" means a Fixed Rate Advance or a Floating Rate Advance.
(b) "Business Day" means any day whereon banks are open for business in
Atlanta, Georgia and, with respect to borrowing, payment or rate selection of a
Fixed Rate Advance or a Eurodollar Interest Period, any day whereon banks are
open for business in both Atlanta, Georgia and New York, New York and whereon
dealings in U.S. dollars are carried on in the London interbank market.
(c) "Default Rate" means (i) with respect to each Floating Rate
Advance, a rate per annum equal to the Prime Rate plus two percent (2%); and
(ii) with respect to each Fixed Rate Advance for the remainder of the applicable
Eurodollar Interest Period, a rate per annum equal to the applicable Eurodollar
Rate plus two percent (2%), and after such applicable Eurodollar Interest Period
at the rate per annum equal to the Prime Rate plus two percent (2%).
(d) "Effective Date" means any Business Day designated by Maker in a
Rate Selection Notice as the date such rate selection shall become effective, or
the first day of Floating Rate Advance.
(e) "Eurodollar Interest Period" means, with respect to a Fixed Rate
Advance, a period of thirty (30) days, sixty (60) days, ninety (90) days or one
hundred eighty (180) days to the extent eurodollar borrowings of such or similar
periods are available, commencing on a Business Day and selected by the Maker in
its Rate Selection Notice; provided, however, such Eurodollar Interest Period
shall commence on the last day of the immediately preceding Eurodollar Interest
Period in the case of a rollover to a successive Eurodollar Interest Period. If
any Eurodollar Interest Period would otherwise end on a day which is not a
Business Day, such Eurodollar Interest Period shall end on the next succeeding
Business Day. Any Eurodollar Interest Period must end on or before the maturity
date of this Note.
(f) "Eurodollar Rate" means, with respect to a Fixed Rate Advance for
the relevant Eurodollar Interest Period, the sum of the LIBOR Rate applicable to
that Eurodollar Interest Period plus one and three-quarters percent (1.75%) per
annum, subject to adjustment from time to time as hereinafter provided. The
Eurodollar Rate shall be rounded, if necessary, to the next higher one-sixteenth
of one percent.
(g) "Event of Default" means an Event of Default as that term is
defined in the Loan Agreement.
(h) "Fixed Rate Advance" means that portion of the Principal Amount to
which the Eurodollar Rate is applicable for a particular Eurodollar Interest
Period.
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(i) "Floating Rate" means a rate per annum equal to the Prime Rate,
changing when and as the Prime Rate changes.
(j) "Floating Rate Advance" means that portion of the Principal Amount
of the Note bearing interest at the Floating Rate.
(k) "LIBOR Rate" means the simple interest rate per annum determined by
Holder, taking into account the rates at which deposits in United States dollars
for periods of thirty (30) days, sixty (60) days, ninety (90) days and one
hundred eighty (180) days (each of the foregoing is individually referred to as
"LIBOR Rate Option") are offered in the interbank eurodollar market, and such
other factors as Holder may reasonably deem appropriate from time to time. The
LIBOR Rate is established in the discretion of Holder for the particular
indebtedness evidenced by this Note, and may not be the lowest rate based in
part upon which market for deposits in the interbank eurodollar market at which
Holder prices loans on the date on which the LIBOR Rate is established. The rate
of interest charged under this Note with respect to any selection of any of the
LIBOR Rate Options shall be the selected LIBOR Rate Option on the Effective Date
of the Rate Selection Notice, and shall continue to be the same rate of
interest, without daily adjustment, until the maturity of the selected LIBOR
Rate Option has fully elapsed or the Rate Selection Notice has been terminated
as otherwise provided herein. The LIBOR Rate Option applicable to new selections
shall be the rate of interest of the selected LIBOR Rate Option on the Effective
Date of the Rate Selection Notice. In the event that Holder shall have
determined that the dollar deposits in an amount approximately equal to the
portion of the Principal Amount to which any of the LIBOR Rate Options apply are
not available to Holder at such time in the interbank eurodollar market, or that
reasonable means within the customary operating practices of Holder do not exist
for ascertaining a LIBOR Rate, or if any change in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make in unlawful for Holder to
make or maintain LIBOR Rates with respect to the principal balance hereof or any
portion thereof or to fund any portion of the principal advanced hereunder in
the interbank eurodollar market then, Holder shall promptly notify Maker and
thereafter such portion of the principal balance hereof shall bear interest at
the Floating Rate until such time, if any, as a LIBOR Rate loan can be made by
Holder to Maker, following which Holder shall be entitled to the selection of
the LIBOR Rate Options as provided in this Note.
(l) "Minimum Notice Period" means a period commencing no later than
10:00 a.m. Atlanta, Georgia time three (3) Business Days prior to the Effective
Date of a Fixed Rate Advance.
(m) "Prime Rate" shall be the per annum rate announced by Payee from
time to time as its Prime Rate and as one of the several interest rate bases
used by Payee. Payee lends at rates both above and below the Prime Rate and is
not represented or intended to be the lowest or most favorable rate of interest
offered by Payee. If, and to the extent and from time to time, the Prime Rate of
Payee increases or decreases, then the Prime Rate under this Note shall
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47
be corresponding increased or decreased, such increase or decrease hereunder to
be effective as of the date on which such increase or decrease of the Prime
Rate of Payee occurs. The Prime Rate in effect at the end of each day shall be
the Prime Rate utilized for purposes of calculating interest under this Note
for such day. In the event that Payee shall abolish or abandon the practice of
establishing its Prime Rate, Holder shall designate a comparable reference rate
which shall be deemed to be the Prime Rate hereunder.
(n) "Principal Amount" means the principal amount outstanding from time
to time under this Note.
(o) "Rate Option" means the rate per annum equal to either (i) the
Floating Rate or (ii) the Eurodollar Rate.
(p) "Rate Selection Notice" means a written or telephonic notice (such
telephonic notice to be immediately confirmed by written or telefaxed notice)
providing irrevocable notice by the Maker to the Payee specifying (i) the
Principal Amount which shall be governed by the Eurodollar Rate, (ii) the
Eurodollar Interest Period applicable to each such amount to be governed by the
Eurodollar Rate, and (iii) the Effective Date of each such Eurodollar Rate
selection.
(a) "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to Reserve Requirements applicable to member banks of the
Federal Reserve System.
(b) "Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or scheduled changes in reserve requirements during
such Eurodollar Interest Period) which is imposed under Regulation D on
non-personal time deposits of $100,000.00 or more with a maturity date equal to
that on Eurocurrency liabilities.
3. FLOATING RATE BORROWING. Except as provided in Section 4 below,
this Note shall bear interest at the rate per annum equal to the Floating Rate
and, therefore, the initial rate of interest as of the date hereof, expressed
in simple interest terms, is 8.25% per annum. If at any time or from time to
time the Floating Rate increases or decreases, then the rate of interest
hereunder shall be correspondingly increased or decreased effective on the date
of which such increase or decrease of such Floating Rate takes effect.
4. SELECTION OF FIXED RATE ADVANCE. Subject to the terms and
conditions of this Note, Maker may elect from time to time to pay interest at a
rate per annum equal to the Eurodollar Rate rather than the rate per annum
equal to the Floating Rate, and for a Eurodollar Interest Period selected
hereunder for all or any outstanding portion of the Note
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48
(subject to the provision of Paragraph 5 below) by giving the Holder the
appropriate Rate Selection Notice in not less than the Minimum Notice Period
applicable thereto. The Principal Amount of each Fixed Rate Advance shall bear
interest from and including the first day of the Eurodollar Interest Period
applicable thereto and during such Eurodollar Interest Period. Except in
accordance with Section 7 hereof, the Rate Option applicable to such Fixed Rate
Advance shall not be changed by the Maker. Maker may select a new Eurodollar
Interest Period and Eurodollar Rate to apply to an outstanding Fixed Rate
Advance, effective as of the last day of the existing Eurodollar Interest Period
applicable to such Fixed Rate Advance, by giving a Rate Selection Notice in not
less than the Minimum Notice Period and subject to the minimum advance amount
provisions applicable to the Fixed Rate Advance selected. If at the end of a
Eurodollar Interest Period for an outstanding Fixed Rate Advance, the Maker
fails to select a new Eurodollar Rate and new Eurodollar Interest Period, then
such Advance shall be a Floating Rate Advance on and after the last day of such
existing Eurodollar Interest Period until paid or until the Effective Date of a
new Rate Option with respect thereto selected by the Maker. An outstanding
Floating Rate Advance can be converted to a Fixed Rate Advance at any time by
providing a Rate Selection Notice (and subject to the provisions of Paragraph 5
below). The Maker may not select a Fixed Rate Advance for any Advance if, on the
date of the Rate Selection Notice or the Effective Date of such selection, there
exists an Event of Default.
5. RESTRICTIONS ON LOANS. The amount of any Fixed Rate Advance pursuant
to this Note shall be in a minimum amount of $500,000.00.
6. TELEPHONIC NOTICES. Maker hereby authorizes the Payee to extend
Advances and effect Rate Option selections based on telephonic notices made by
any one of the following (or such other persons as Borrower may designate in
writing from time to time to Lender):
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
The Maker agrees to deliver promptly to Payee a written confirmation of each
telephone notice signed by an authorized officer of Maker. If the written
confirmation differs in any material respect from the action taken by the Payee,
the records of the Payee shall govern absent manifest error.
7. YIELD PROTECTION. With respect only to interest calculated at the
Fixed Rate, if any existing or future law, governmental rule, policy, guideline,
regulation or directive, whether or not having the force of law, or compliance
of the Payee with such, (i) subjects the Payee to any tax, duty, charge or
withholding on or from payments due from the Maker (excluding U.S. taxation of
the overall net income of the Payee), or changes the basis of taxation of
payment to the Payee in respect of the Indebtedness, or (ii) imposes or
increases or deems applicable any reserve, assessment (other than reserves and
assessments included in the
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Reserve Requirement with respect to Fixed Rate Advances), special deposit,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Payee (other than reserves and
assessments taken into account in determining the interest rate applicable to
Fixed Rate Advances), or (iii) imposes any other condition the result of which
is to increase the cost to the Payee of making, funding or maintaining U.S.
dollar loans or reduces any amount receivable by the Payee in connection with
U.S. dollar loans, or requires the Payee to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by the Payee, or (iv) affects the amount of capital required or
expected to be maintained by the Payee or any corporation controlling the Payee
and the Payee determines that the amount of capital required is increased by or
based upon the existence of the Loan or any of the Loan Documents or its
obligation to make the Loan hereunder or of commitments of this type, then
within 15 days of demand by the Payee, Maker shall pay the Payee that portion of
such increased expense incurred (including, in the case of Paragraph 7(iv), any
reduction in the rate of return on capital to an amount below that which it
could have achieved but for such change in regulation after taking into account
Payee's policies as to capital adequacy) or the amount of reduction in an amount
received which the Payee determines is attributable to making, funding and
maintaining the Loan. A certificate of Payee is to the amounts payable pursuant
to this Paragraph 7 (which certificate shall reflect in reasonable detail the
method and basis for the calculation thereof) submitted to Maker shall, absent
manifest error, be final and binding upon all of the parties hereto. Payee will
give Maker notice that Payee has determined that amounts are due and payable
pursuant to this Paragraph 7 within a reasonable time after such determination
by Payee. Payee agrees that the determination of any such increased expense
incurred or in the amount of reduction in the amount received shall be
consistent with such determination made with respect to other loans of Payee
which are similarly structured, of a similar amount and for a similar purpose.
8. (a) AVAILABILITY OF INTEREST RATE. If the Payee determines that (i)
maintenance of the Fixed Rate Advances would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, (ii) deposits
of a type and maturity appropriate to match fund a Fixed Rate Advance are not
available, or (iii) a Eurodollar Rate does not accurately reflect the cost of
making or maintaining a Fixed Rate Advance, then the Payee shall suspend the
availability of the affected LIBOR Rate Option and require any Fixed Rate
Advances outstanding under an affected LIBOR Rate Option to be converted to an
unaffected Rate Option; provided, however, with respect to the circumstance
described above in clause (iii) of this Section 8(a) only, the Fixed Rate shall
be converted to an unaffected Rate Option at the end of the Eurodollar Interest
Period applicable to such Fixed Rate Advance. Subject to the terms and
conditions of this Note, including the minimum borrowing provisions applicable
to the Fixed Rate Advance for which a new Rate Option is selected, the Maker may
select, by giving a Rate Selection Notice in not less than the Minimum Notice
Period, any unaffected Rate Option to apply to such affected Advances. If the
Maker fails to select a new Rate Option, the affected Advances shall be Floating
Rate Advances.
(b) FAILURE TO PAY OR BORROW ON CERTAIN DATES. If any payment of
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50
a Fixed Rate Advance occurs on a date which is not the last day of the
applicable Eurodollar Interest Period, whether because of acceleration,
prepayment or otherwise, or a Fixed Rate Advance is not made on the date
specified by the Maker for any reason other than a default by the Payee, the
Maker will indemnify the Payee for any loss or cost incurred by Payee resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Fixed Rate Advance.
(c) BANK CERTIFICATES; SURVIVAL OF INDEMNITY. A certificate of the
Payee as to the amount due under Sections 7 and 8(b) shall be final, conclusive
and binding on the Maker in the absence of manifest error. Determination of
amounts payable under such Sections 7 and 8(b) in connection with a Fixed Rate
Advance shall be calculated as though the Holder funded its Fixed Rate Advance
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Fixed Rate Advance, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the certificate shall be
payable on demand after receipt by the Maker of the certificate. The obligations
under Section 7 and 8(b) shall survive for a period of six (6) months following
repayment of the Loan.
9. PAYMENTS OF INTEREST. Accrued and unpaid interest only shall be due
and payable on the last day of each calendar month commencing on October 31,
1996 and continuing through and including September 30, 1999.
Interest shall be calculated on a 360 day year basis for the actual
number of days elapsed. If any payment of principal or interest hereunder would
become due and payable on a day which is not a Business Day, then such payment
shall be due and payable on the next succeeding Business Day.
10. PAYMENT OF PRINCIPAL. If not sooner paid (subject to the
restrictions on prepayment contained in the Loan Documents) the entire
outstanding principal balance of this Note shall be due and payable in full on
September 30, 1999.
11. APPLICATION OF PAYMENTS. If any permitted payments or prepayments
are received when no Event of Default exists hereunder or under any of the Loan
Documents, and if any such payments do not fully pay all sums evidenced by this
Note, then such payment first shall be applied to the payment of late charges
and other fees payable under this Note or the Loan Documents, then to accrued
and unpaid interest under this Note and, then, the balance of such payment shall
be applied to the outstanding principal balance of this Note in the following
order of application:
(a) The Principal Amount accruing interest at the Floating Rate at the
time of such prepayment; and
(b) The Principal Amount accruing interest at the Eurodollar Rate as of
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the date of such prepayment in the order of the maturity dates of the Eurodollar
Interest Periods in effect at such time.
12. FACILITY. The loan evidenced by this Note is governed by the terms
of the Loan Agreement whereby advances of principal under this Note shall be
made pursuant to and subject to the Loan Agreement.
13. PREPAYMENT. Maker may from time to time, pay all or any portion of
outstanding Floating Rate Advances. A Fixed Rate Advance may not be paid prior
to the last day of the applicable Eurodollar Interest Period unless, at the time
of such prepayment, Maker pays to Holder all costs associated with the early
termination of such Fixed Rate Advance as provided in Section 8(b) herein.
14. LATE CHARGE. A late charge shall be due and payable in the amount
of five percent (5%) of the amount of any installment or payment of interest
and/or principal not paid within ten (10) days of the date on which such
installment or payment was due. Holder shall have no obligation to accept any
such delinquent payment of principal and/or interest without the accompanying
late charge, and the acceptance by Holder of such delinquent payment without the
accompanying late charge shall not constitute a waiver by Holder of the right to
enforce and collect such late charge. Maker acknowledges and agrees that the
late charge herein provided is not a charge in the nature of interest imposed
for the use of money advanced under this Note; rather, the late charge is
imposed to compensate Holder for the expense, inconvenience and economic
frustration experienced by Holder as a result of Maker's failure to make timely
payments due hereunder, and is a reasonable forecast and estimate of Holder's
actual damages and loss on account of such delinquent payment.
15. DEFAULT AND ACCELERATION. It is hereby expressly agreed that should
default occur in any payment of principal or interest stipulated, or should any
other Event of Default occur, then, and in any such event, the outstanding
principal balance of the indebtedness evidenced hereby, and any other sums
advanced hereunder or under the Loan Documents (hereinafter defined), together
with all accrued and unpaid interest, at the option of Holder and without notice
to Maker except as otherwise provided herein or in the Loan Documents, shall at
once become due and payable and may be collected forthwith, regardless of the
stipulated date of maturity. Interest shall accrue on each Advance at the
applicable Default Rate from maturity, or sooner following the occurrence of a
default hereunder and after the expiration date of any period provided for the
curing of such default and for so long as such default continues, regardless of
whether or not there has been an acceleration of the indebtedness evidenced
hereby as set forth herein. All such interest at the Default Rate shall be paid
at the time of and as a condition precedent to the curing of any such default
should Maker have the right to cure such default. Time is of the essence of this
Note. In the event this Note, or any part thereof, is collected by or through an
attorney-at-law, Maker agrees to pay all costs of collection including, but not
limited to, reasonable attorneys' fees actually incurred.
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16. WAIVERS.
(a) Except as expressly required herein or in the Loan Documents,
presentment for payment, demand, protest and notice of demand, protest and
non-payment and all other notices, except for such notices (if any) of default
provided to be given hereunder or under any of the Loan Documents, are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of
default hereunder, acceptance of a past due installment, or indulgences granted
from time to time shall be construed (i) as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note, or (ii) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by the laws of the
State of Georgia; and Maker hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Maker under this Note, either in whole or in
part, unless Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
(b) Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefit of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced by this Note. Maker hereby transfers, conveys and assigns
to Holder a sufficient amount of such homestead or exemption as may be set apart
in bankruptcy, to pay this Note in full, with all costs of collection, and does
hereby direct any trustee in bankruptcy having possession of such homestead or
exemption to deliver to Holder a sufficient amount of property or money set
apart as exempt to pay the indebtedness evidenced hereby, or any renewal
thereof, and does hereby appoint Holder the attorney-in-fact for Maker to claim
any and all homestead exemptions allowed by law.
17. GOVERNING LAW. This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State of
Georgia.
18. DEFINITIONS. As used herein, the terms "Maker" and "Holder" shall
be deemed to include their respective heirs, successors, legal representatives
and assigns, whether by voluntary action of the parties or by operation of law.
In the event that more than one person, firm or entity is a Maker hereunder,
then all references to "Maker" shall be deemed to refer equally to each of said
persons, firms, or entities, all of whom shall be jointly and
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severally liable for all of the obligations of Maker hereunder.
19. LEGAL LIMITATIONS. It is the express intent hereof that the
undersigned not pay and the Holder not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be legally paid by the
undersigned under applicable law. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Note or otherwise, shall the
interest contracted for, charged or received by Holder hereunder or otherwise
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Holder in excess
of the maximum lawful amount permitted under applicable law, the interest
payable to Holder shall be reduced automatically to the maximum amount permitted
under applicable law. If Holder shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid principal balance of the Note, such excess shall be refunded
to Maker. All interest paid or agreed to be paid to Holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Holder.
20. ARBITRATION. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Note or any related agreements or instruments, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the Rules of Practice and Procedure for the Arbitration
of Commercial Disputes or Judicial Arbitration and Mediation Services, Inc.
("J.A.M.S."), and the "Special Rules" set forth below. In the event of any
inconsistency, the Special Rules shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this Note
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim in which this Note applies in any court
having jurisdiction over such action.
21. SPECIAL RULES. The arbitration shall be conducted in the city of
Maker's domicile at the time of this Note's execution and administered by
J.A.M.S., who will appoint an arbitrator; if J.A.M.S. is unable or legally
precluded from administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration; further the arbitrator shall
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only, upon a showing of cause, be permitted to extend the commencement of such
hearing for an additional sixty (60) days.
22. RESERVATION OF RIGHTS. Nothing in this Note shall be deemed to (i)
limit the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (ii) be a waiver by the Holder
of the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder hereto (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Holder may exercise such self help rights, foreclosure upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Note. Neither
the exercise or self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies. Nothing in this Note shall be deemed to limit the right of Maker to
seek injunctive relief.
23. TITLES. The titles of sections or paragraphs herein are used for
the convenience of the parties only and neither amplify, modify or alter in any
way the provisions of this instrument.
IN WITNESS WHEREOF, Maker has executed this Note under seal on the date
first above written.
MAKER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
(CORPORATE SEAL)
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EXHIBIT A-1
NATIONSBANK
PROMISSORY NOTE
(TERM NOTE)
$____________ Date: ___________, 1997
Atlanta, Georgia
1. PROMISE TO PAY. FOR VALUE RECEIVED, the ndersigned, THE PROFIT
RECOVERY GROUP INTERNATIONAL, INC., a Georgia corporation (hereinafter referred
to as "Maker"), promises to pay to the order of NATIONSBANK, N.A., a national
bank (hereinafter referred to as "Payee"; Payee and any subsequent holder of all
or any part interest in this Note being hereinafter referred to collectively as
"Holder"), at the following address:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
or at any such other place as Holder may designate to Maker in writing from time
to time, the principal sum of ___________________ AND NO/100THS DOLLARS ($
__________.00), or so much thereof as shall be disbursed hereunder and shall
from time to time be outstanding and unpaid, together with interest thereon at
the rates hereinafter set forth (subject to adjustment and designation of the
applicable interest rate or rates as provided below), in lawful money of the
United States of America, which at the time of payment shall be legal tender in
payment of all debts and dues, public and private, such principal and interest
to be paid in the manner hereinafter provided. This Promissory Note (the "Note")
is executed and delivered pursuant to that certain Loan and Security Agreement,
dated September 27, 1996, among Payee, Maker and certain affiliates of Maker
(hereinafter, together with all supplements and amendments thereto, the "Loan
Agreement"). This Note is a Term Note referred to in, and is issued pursuant to,
the Loan Agreement, and is entitled to all of the benefits and security of the
Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement
and all other instruments evidencing or securing the indebtedness hereunder are
hereby made a part of this Note and are deemed incorporated herein in full. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.
56
2. DEFINITIONS. As used herein, the following terms shall have the
indicated definitions:
(a) "Business Day" means any day whereon banks are open for business in
Atlanta, Georgia and, with respect to borrowing, payment or rate selection of
the Fixed Rate or a Eurodollar Interest Period, any day whereon banks are open
for business in both Atlanta, Georgia and New York, New York and whereon
dealings in U.S. dollars are carried on in the London interbank market.
(b) "Default Rate" means (i) with respect to the Floating Rate, a rate
per annum equal to the Prime Rate plus two percent (2%); and (ii) with respect
to the Fixed Rate for the remainder of the applicable Eurodollar Interest
Period, a rate per annum equal to the applicable Eurodollar Rate plus two
percent (2%), and after such applicable Eurodollar Interest Period at the rate
per annum equal to the Prime Rate plus two percent (2%).
(c) "Effective Date" means any Business Day designated by Maker in a
Rate Selection Notice as the date such rate selection shall become effective.
(d) "Eurodollar Interest Period" means, with respect to the Fixed Rate,
a period of thirty (30) days, sixty (60) days, ninety (90) days or one hundred
eighty (180) days to the extent eurodollar borrowings of such or similar periods
are available, commencing on a Business Day and selected by the Maker in its
Rate Selection Notice; provided, however, such Eurodollar Interest Period shall
commence on the last day of the immediately preceding Eurodollar Interest Period
in the case of a rollover to a successive Eurodollar Interest Period. If any
Eurodollar Interest Period would otherwise end on a day which is not a Business
Day, such Eurodollar Interest Period shall end on the next succeeding Business
Day. Any Eurodollar Interest Period must end on or before the maturity date of
this Note.
(e) "Eurodollar Rate" means, with respect to the relevant Eurodollar
Interest Period, the sum of the LIBOR Rate applicable to that Eurodollar
Interest Period plus one and three-quarters percent (1.75%) per annum, subject
to adjustment from time to time as hereinafter provided. The Eurodollar Rate
shall be rounded, if necessary, to the next higher one-sixteenth of one percent.
(f) "Event of Default" means an Event of Default as that term is
defined in the Loan Agreement.
(g) "Fixed Rate" means the rate per annum for the applicable Eurodollar
Rate selected from time to time pursuant to this Note.
(h) "Floating Rate" means a rate per annum equal to the Prime Rate,
changing when
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and as the Prime Rate changes.
(i) "LIBOR Rate" means the simple interest rate per annum determined by
Holder, taking into account the rates at which deposits in United States dollars
for periods of thirty (30) days, sixty (60) days, ninety (90) days and one
hundred eighty (180) days (each of the foregoing is individually referred to as
"LIBOR Rate Option") are offered in the interbank eurodollar market, and such
other factors as Holder may reasonably deem appropriate from time to time. The
LIBOR Rate is established in the discretion of Holder for the particular
indebtedness evidenced by this Note, and may not be the lowest rate based in
part upon which market for deposits in the interbank eurodollar market at which
Holder prices loans on the date on which the LIBOR Rate is established. The rate
of interest charged under this Note with respect to any selection of any of the
LIBOR Rate Options shall be the selected LIBOR Rate Option on the Effective Date
of the Rate Selection Notice, and shall continue to be the same rate of
interest, without daily adjustment, until the maturity of the selected LIBOR
Rate Option has fully elapsed or the Rate Selection Notice has been terminated
as otherwise provided herein. The LIBOR Rate Option applicable to new selections
shall be the rate of interest of the selected LIBOR Rate Option on the Effective
Date of the Rate Selection Notice. In the event that Holder shall have
determined that the dollar deposits in an amount approximately equal to the
Principal Amount are not available to Holder at such time in the interbank
eurodollar market, or that reasonable means within the customary operating
practices of Holder do not exist for ascertaining a LIBOR Rate, or if any change
in any law or regulation or in the interpretation thereof by any governmental
authority charged with the administration or interpretation thereof shall make
in unlawful for Holder to make or maintain LIBOR Rates with respect to the
principal balance hereof or to fund the principal advanced hereunder in the
interbank eurodollar market then, Holder shall promptly notify Maker and
thereafter such portion of the principal balance hereof shall bear interest at
the Floating Rate until such time, if any, as a LIBOR Rate loan can be made by
Holder to Maker, following which Holder shall be entitled to the selection of
the LIBOR Rate Options as provided in this Note.
(j) "Minimum Notice Period" means a period commencing no later than
10:00 a.m. Atlanta, Georgia time three (3) Business Days prior to the Effective
Date of a Fixed Rate Advance.
(k) "Prime Rate" shall be the per annum rate announced by Payee from
time to time as its Prime Rate and as one of the several interest rate bases
used by Payee. Payee lends at rates both above and below the Prime Rate and is
not represented or intended to be the lowest or most favorable rate of interest
offered by Payee. If, and to the extent and from time to time, the Prime Rate of
Payee increases or decreases, then the Prime Rate under this Note shall be
corresponding increased or decreased, such increase or decrease hereunder to be
effective as of the date on which such increase or decrease of the Prime Rate of
Payee occurs. The Prime Rate in effect at the end of each day shall be the Prime
Rate utilized for purposes of calculating interest under this Note for such day.
In the event that Payee shall abolish or abandon the practice of establishing
its Prime Rate, Holder shall designate a comparable reference rate which shall
be deemed to be the Prime Rate hereunder.
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(l) "Principal Amount" means the principal amount outstanding from time
to time under this Note.
(m) "Rate Option" means the rate per annum equal to either (i) the
Floating Rate or (ii) the Eurodollar Rate.
(n) "Rate Selection Notice" means a written or telephonic notice (such
telephonic notice to be immediately confirmed by written or telefaxed notice)
providing irrevocable notice by the Maker to the Payee specifying (i) the
Eurodollar Interest Period which Maker desires to select, and (ii) the Effective
Date of each such Eurodollar Rate selection.
(o) "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to Reserve Requirements applicable to member banks of the
Federal Reserve System.
(p) "Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or scheduled changes in reserve requirements during
such Eurodollar Interest Period) which is imposed under Regulation D on
non-personal time deposits of $100,000.00 or more with a maturity date equal to
that on Eurocurrency liabilities.
3. FLOATING RATE BORROWING. Except as provided in Section 4 below, this
Note shall bear interest at the rate per annum equal to the Floating Rate and,
therefore, the initial rate of interest as of the date hereof, expressed in
simple interest terms, is____% per annum. If at any time or from time to time
the Floating Rate increases or decreases, then the rate of interest hereunder
shall be correspondingly increased or decreased effective on the date of which
such increase or decrease of such Floating Rate takes effect.
4. SELECTION OF FIXED RATE. Subject to the terms and conditions of this
Note, Maker may elect from time to time that interest accrue at a rate per annum
equal to the Eurodollar Rate rather than the rate per annum equal to the
Floating Rate, and for a Eurodollar Interest Period selected hereunder for all
(but not less than all) of the outstanding principal balance of this Note by
giving the Holder the appropriate Rate Selection Notice in not less than the
Minimum Notice Period applicable thereto. The Principal Amount shall bear
interest from and including the first day of the Eurodollar Interest Period
applicable thereto and during such Eurodollar Interest Period. Except in
accordance with Section 7 hereof, the Rate Option shall not be changed by the
Maker. Maker may select a new Eurodollar Interest Period and Eurodollar Rate to
apply to the Principal Amount, effective as of the last day of the existing
Eurodollar Interest Period, by giving a Rate Selection Notice in not less than
the Minimum Notice Period. If at the end of a Eurodollar Interest Period the
Maker fails to select a new Eurodollar Rate and new Eurodollar Interest Period,
then the Principal Amount shall accrue interest at the Floating Rate on and
after the last day of such existing Eurodollar Interest Period
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59
until paid or until the Effective Date of a new Rate Option selected by the
Maker. The Maker may not select the Fixed Rate if, on the date of the Rate
Selection Notice or the Effective Date of such selection, there exists an Event
of Default.
5. RESTRICTIONS ON FIXED RATE. Notwithstanding anything in this Note to
the contrary, Maker may not select that this Note accrue at the Fixed Rate
unless the outstanding principal balance of this Note as of the date of such
election is equal to or greater than $500,000.00.
6. TELEPHONIC NOTICES. Maker hereby authorizes the Payee to effect Rate
Option selections based on telephonic notices made by any one of the following
(or such other persons as Borrower may designate in writing from time to time to
Lender):
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
The Maker agrees to deliver promptly to Payee a written confirmation of each
telephone notice signed by an authorized officer of Maker. If the written
confirmation differs in any material respect from the action taken by the Payee,
the records of the Payee shall govern absent manifest error.
7. YIELD PROTECTION. With respect only to interest calculated at the
Fixed Rate, if any existing or future law, governmental rule, policy, guideline,
regulation or directive, whether or not having the force of law, or compliance
of the Payee with such, (i) subjects the Payee to any tax, duty, charge or
withholding on or from payments due from the Maker (excluding U.S. taxation of
the overall net income of the Payee), or changes the basis of taxation of
payment to the Payee in respect of the Indebtedness, or (ii) imposes or
increases or deems applicable any reserve, assessment (other than reserves and
assessments included in the Reserve Requirement with respect to principal
accruing at the Fixed Rate), special deposit, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, the Payee (other than reserves and assessments taken into account
in determining the Fixed Rate), or (iii) imposes any other condition the result
of which is to increase the cost to the Payee of making, funding or maintaining
U.S. dollar loans or reduces any amount receivable by the Payee in connection
with U.S. dollar loans, or requires the Payee to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by the Payee, or (iv) affects the amount of capital required or
expected to be maintained by the Payee or any corporation controlling the Payee
and the Payee determines that the amount of capital required is increased by or
based upon the existence of the Loan or any of the Loan Documents or its
obligation to make the Loan hereunder or of commitments of this type, then
within 15 days of demand by the Payee, Maker shall pay the Payee that portion of
such increased expense incurred (including, in the case of Paragraph 7(iv), any
reduction in the rate of return on capital to an amount below that which it
could have achieved but for such change in regulation after taking into account
Payee's policies as to capital adequacy) or the amount of reduction in an amount
received which the Payee
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determines is attributable to making, funding and maintaining the Loan. A
certificate of Payee is to the amounts payable pursuant to this Paragraph 7
(which certificate shall reflect in reasonable detail the method and basis for
the calculation thereof) submitted to Maker shall, absent manifest error, be
final and binding upon all of the parties hereto. Payee will give Maker notice
that Payee has determined that amounts are due and payable pursuant to this
Paragraph 7 within a reasonable time after such determination by Payee. Payee
agrees that the determination of any such increased expense incurred or in the
amount of reduction in the amount received shall be consistent with such
determination made with respect to other loans of Payee which are similarly
structured, of a similar amount and for a similar purpose.
8. (a) AVAILABILITY OF INTEREST RATE. If the Payee determines that (i)
maintenance of the Fixed Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, (ii) deposits
of a type and maturity appropriate to match fund a Fixed Rate loan are not
available, or (iii) a Eurodollar Rate does not accurately reflect the cost of
making or maintaining the Fixed Rate, then the Payee shall suspend the
availability of the affected LIBOR Rate Option and require that the Fixed Rate
under an affected LIBOR Rate Option to be converted to an unaffected Rate
Option. Subject to the terms and conditions of this Note, the Maker may select,
by giving a Rate Selection Notice in not less than the Minimum Notice Period,
any unaffected Rate Option to apply to this Note. If the Maker fails to select a
new Rate Option, this Note shall accrue interest at the Floating Rate.
(b) BANK CERTIFICATES; SURVIVAL OF INDEMNITY. A certificate of the
Payee as to the amount due under Section 7 shall be final, conclusive and
binding on the Maker in the absence of manifest error. Determination of amounts
payable under such Section 7 shall be calculated as though the Holder funded its
Fixed Rate loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Fixed Rate loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the certificate
shall be payable on demand after receipt by the Maker of the certificate. The
obligations under Section 7 shall survive for a period of six (6) months
following repayment of the Loan.
9. PAYMENTS OF PRINCIPAL AND INTEREST. Commencing one (1) month from
the date of this Note and continuing on the same day of each calendar month
thereafter through and including [the day which is 12 months from the date of
the Note], there shall be due and payable monthly installments consisting only
of accrued and unpaid interest under this Note; thereafter, commencing one (1)
month after [the day which is 12 months from the date of the Note] and
continuing on the same day of each calendar month thereafter through and
including [the day which is 47 months from the date of the Note], there shall be
due and payable monthly installments consisting of (i) all accrued and unpaid
interest under this Note, and (ii) principal in the amount of [1/60 of the
original principal amount of the Note].
Interest shall be calculated on a 360 day year basis for the actual
number of days elapsed. If any payment of principal or interest hereunder would
become due and payable on a
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day which is not a Business Day, then such payment shall be due and payable on
the next succeeding Business Day.
10. MATURITY DATE. If not sooner paid (subject to the restrictions on
prepayment contained in the Loan Documents) the entire outstanding principal
balance of this Note shall be due and payable in full 48 months from the date of
this Note.
11. APPLICATION OF PAYMENTS. If any permitted payments or prepayments
are received when no Event of Default exists hereunder or under any of the Loan
Documents, and if any such payments do not fully pay all sums evidenced by this
Note, then such payment first shall be applied to the payment of late charges
and other fees payable under this Note or the Loan Documents, then to accrued
and unpaid interest under this Note and, then, to the outstanding principal
balance of this Note. Following any partial prepayment of this Note, following
the date of such prepayment, monthly installments shall be due and payable
consisting of (i) all accrued and unpaid interest, and (ii) equal installments
of principal based upon an amortization of the outstanding principal balance of
the Note following such prepayment over the number of monthly installments
payable between such date and the maturity date of this Note.
12. FACILITY. The loan made pursuant to this Note is governed by the
terms of the Loan Agreement whereby the loan evidenced by this Note shall be
made pursuant to and subject to the Loan Agreement.
13. PREPAYMENT. Maker may, from time to time, pay all or any portion
this Note without prepayment premium or penalty provided that, at the time of
such prepayment, this Note is accruing interest at the Floating Rate. If a
prepayment of all or any portion of the outstanding amount of this Note is made
at the time that this Note is accruing interest at the Fixed Rate, then there
shall be due and payable as a condition to such prepayment a prepayment premium
equal to any loss or cost incurred by Holder resulting from such prepayment
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the fixed rate under this Note.
14. LATE CHARGE. A late charge shall be due and payable in the amount
of five percent (5%) of the amount of any installment or payment of interest
and/or principal not paid within ten (10) days of the date on which such
installment or payment was due. Holder shall have no obligation to accept any
such delinquent payment of principal and/or interest without the accompanying
late charge, and the acceptance by Holder of such delinquent payment without the
accompanying late charge shall not constitute a waiver by Holder of the right to
enforce and collect such late charge. Maker acknowledges and agrees that the
late charge herein provided is not a charge in the nature of interest imposed
for the use of money advanced under this Note; rather, the late charge is
imposed to compensate Holder for the expense, inconvenience and economic
frustration experienced by Holder as a result of Maker's failure to make timely
payments due hereunder, and is a reasonable forecast and estimate of Holder's
actual damages and loss on account of such delinquent payment.
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15. DEFAULT AND ACCELERATION. It is hereby expressly agreed that should
default occur in any payment of principal or interest stipulated, or should any
other Event of Default occur, then, and in any such event, the outstanding
principal balance of the indebtedness evidenced hereby, and any other sums
advanced hereunder or under the Loan Documents (hereinafter defined), together
with all accrued and unpaid interest, at the option of Holder and without notice
to Maker except as otherwise provided herein or in the Loan Documents, shall at
once become due and payable and may be collected forthwith, regardless of the
stipulated date of maturity. Interest shall accrue at the applicable Default
Rate from maturity, or sooner following the occurrence of a default hereunder
and after the expiration date of any period provided for the curing of such
default and for so long as such default continues, regardless of whether or not
there has been an acceleration of the indebtedness evidenced hereby as set forth
herein. All such interest at the Default Rate shall be paid at the time of and
as a condition precedent to the curing of any such default should Maker have the
right to cure such default. Time is of the essence of this Note. In the event
this Note, or any part thereof, is collected by or through an attorney-at-law,
Maker agrees to pay all costs of collection including, but not limited to,
reasonable attorneys' fees actually incurred.
16. WAIVERS.
(a) Except as expressly required herein or in the Loan Documents,
presentment for payment, demand, protest and notice of demand, protest and
non-payment and all other notices, except for such notices (if any) of default
provided to be given hereunder or under any of the Loan Documents, are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of
default hereunder, acceptance of a past due installment, or indulgences granted
from time to time shall be construed (i) as a novation of this Note or as a
reinstatement of the indebtedness evidenced hereby or as a waiver of such right
of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note, or (ii) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by the laws of the
State of Georgia; and Maker hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note, shall operate to release, discharge, modify, change or
affect the original liability of Maker under this Note, either in whole or in
part, unless Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
(b) Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefit of any statute of limitations and any
moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced
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by this Note. Maker hereby transfers, conveys and assigns to Holder a sufficient
amount of such homestead or exemption as may be set apart in bankruptcy, to pay
this Note in full, with all costs of collection, and does hereby direct any
trustee in bankruptcy having possession of such homestead or exemption to
deliver to Holder a sufficient amount of property or money set apart as exempt
to pay the indebtedness evidenced hereby, or any renewal thereof, and does
hereby appoint Holder the attorney-in-fact for Maker to claim any and all
homestead exemptions allowed by law.
17. GOVERNING LAW. This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State of
Georgia.
18. DEFINITIONS. As used herein, the terms "Maker" and "Holder" shall
be deemed to include their respective heirs, successors, legal representatives
and assigns, whether by voluntary action of the parties or by operation of law.
In the event that more than one person, firm or entity is a Maker hereunder,
then all references to "Maker" shall be deemed to refer equally to each of said
persons, firms, or entities, all of whom shall be jointly and severally liable
for all of the obligations of Maker hereunder.
19. LEGAL LIMITATIONS. It is the express intent hereof that the
undersigned not pay and the Holder not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be legally paid by the
undersigned under applicable law. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Note or otherwise, shall the
interest contracted for, charged or received by Holder hereunder or otherwise
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Holder in excess
of the maximum lawful amount permitted under applicable law, the interest
payable to Holder shall be reduced automatically to the maximum amount permitted
under applicable law. If Holder shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid principal balance of the Note, such excess shall be refunded
to Maker. All interest paid or agreed to be paid to Holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The provisions of this
paragraph shall control all existing and future agreements between Maker and
Holder.
20. ARBITRATION. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Note or any related agreements or instruments, including any claim based on or
arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the Rules of Practice and Procedure for the Arbitration
of
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Commercial Disputes or Judicial Arbitration and Mediation Services, Inc.
("J.A.M.S."), and the "Special Rules" set forth below. In the event of any
inconsistency, the Special Rules shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this Note
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim in which this Note applies in any court
having jurisdiction over such action.
21. SPECIAL RULES. The arbitration shall be conducted in the city of
Maker's domicile at the time of this Note's execution and administered by
J.A.M.S., who will appoint an arbitrator; if J.A.M.S. is unable or legally
precluded from administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration; further the arbitrator shall only, upon
a showing of cause, be permitted to extend the commencement of such hearing for
an additional sixty (60) days.
22. RESERVATION OF RIGHTS. Nothing in this Note shall be deemed to (i)
limit the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (ii) be a waiver by the Holder
of the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder hereto (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to
foreclose against any real or personal property collateral, or (c) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver. The
Holder may exercise such self help rights, foreclosure upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this Note. Neither
the exercise or self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies. Nothing in this Note shall be deemed to limit the right of Maker to
seek injunctive relief.
23. TITLES. The titles of sections or paragraphs herein are used for
the convenience of the parties only and neither amplify, modify or alter in any
way the provisions of this instrument.
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IN WITNESS WHEREOF, Maker has executed this Note under seal on the date
first above written.
MAKER:
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC., a Georgia
corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Senior
Vice President
Attest:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., Secretary
(CORPORATE SEAL)
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