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EXHIBIT 10.21
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(LOGO) Bank of America Business Loan Agreement
National Trust and Savings Association
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This Agreement dated as of 8-25, 1997, is between Bank of America National
Trust and Savings Association (the "Bank") and RemedyTemp, Inc. (the
"Borrower").
1. FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS
1.1 Line of Credit Amount.
(a) During the availability period described below, the Bank will provide a
line of credit (the "Facility No. 1") to the Borrower. Subject to
subparagraph (c) below, the amount of the line of credit (the "Facility No.
1 Commitment") is Thirty Million Dollars ($30,000,000).
(b) This is a revolving line of credit with a within line facility for letters
of credit. During the availability period, the Borrower may repay principal
amounts and reborrow them.
(c) The Borrower agrees not to permit the outstanding principal balance of the
line of credit plus the outstanding amounts of any letters of credit,
including amounts drawn on letters of credit and not yet reimbursed, and
the outstanding principal balance of the Facility No. 2 Commitment to
exceed the Facility No. 1 Commitment.
1.2 Availability Period. The line of credit is available between the date of
this Agreement and February 28, 1999 (the "Facility No. 1 Expiration Date")
unless the Borrower is in default.
1.3 Interest Rate.
(a) Unless the Borrower elects an optional interest rate as described below,
the interest rate is the Bank's Reference Rate.
(b) The Reference Rate is the rate of interest publicly announced from time to
time by the Bank in San Francisco, California, as its Reference Rate. The
Reference Rate is set by the Bank based on various factors, including the
Bank's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans. The Bank
may price loans to its customers at, above, or below the Reference Rate.
Any change in the Reference Rate shall take effect at the opening of
business on the day specified in the public announcement of a change in the
Bank's Reference Rate.
1.4 Repayment Terms.
(a) The Borrower will pay interest on September 1, 1997, and then monthly
thereafter until payment in full of any principal outstanding under this
line of credit.
(b) The Borrower will repay in full all principal and any unpaid interest or
other charges outstanding under this line of credit no later than the
Facility No. 1 Expiration Date.
(c) Any amount bearing interest at an optional interest rate (as described
below) may be repaid at the end of the applicable interest period, which
shall be no later than the Facility No. 1 Expiration Date.
1.5 Optional Interest Rates. Instead of the interest rate based on the Bank's
Reference Rate, the Borrower may elect to have all or portions of the line
of credit (during the availability period) bear interest at the rate(s)
described below during an interest period agreed to by the Bank and the
Borrower. Each interest rate is a rate per year. Interest will be paid on
the last day of each interest period, and on the first day each month
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during the interest period. At the end of any interest period, the interest
rate will revert to the rate based on the Reference Rate, unless the Borrower
has designated another optional interest rate for the portion.
1.6 Short Term Fixed Rate. The Borrower may elect to have all or portions of
the principal balance of the line of credit bear interest at the Short Term
Fixed Rate, subject to the following requirements:
(a) The "Short Term Fixed Rate" means the Short Term Rate plus one and one-half
(1.50) percentage points.
(b) The "Short Term Base Rate" means the fixed interest rate per annum,
determined solely by the Bank on the first day of the applicable interest
period for the Short Term Fixed Rate portion, as the rate at which the Bank
would be able to borrow funds in the Money Market in the amount of the
Short Term Fixed Rate portion and with an interest and principal payment
schedule equal to the Short Term Fixed Rate portion and for a term equal to
the applicable interest period. The Short Term Base Rate shall include
adjustments for reserve requirements, federal deposit insurance, and any
other similar adjustment which the Bank deems appropriate. The Short Term
Base Rate is the Bank's estimate only and the Bank is under no obligation
to actually purchase or match funds for any transaction.
(c) "Money Market" means one or more wholesale funding markets available to the
Bank, including domestic negotiable certificates of deposit, eurodollar
deposits, bank deposit notes or other appropriate money market instruments
selected by the Bank.
(d) The interest period during which the Short Term Fixed Rate will be in
effect will be no shorter than 14 days and no longer than one year.
(e) Each Short Term Fixed Rate portion will be for an amount not less than Five
Hundred Dollars ($500,000).
(f) Any portion of the principal balance of the line of credit already bearing
interest at the Short Term Fixed Rate will not be converted to a different
rate during its interest period.
(g) Each prepayment of a Short Term Fixed Rate portion, whether voluntary, by
reason of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid, and a prepayment fee equal to the
amount (if any) by which:
(i) the additional interest which would have been payable on the amount
prepaid had it not been prepaid, exceeds
(ii) the interest which would have been recoverable by the Bank by placing
the amount prepaid on deposit in the Money Market for a period
starting on the date on which it was prepaid and ending on the last
day of the interest period for such portion (or the scheduled payment
date for the amount prepaid, if earlier).
1.7 Offshore Rate. The Borrower may elect to have all or portions of the
principal balance of the line of credit bear interest at the Offshore Rate
plus one and one-half (1.50) percentage points. Designation of an Offshore
Rate portion is subject to the following requirements:
(a) The interest period during which the Offshore Rate will be no shorter than
30 days and no longer than one year. The last day of the interest period
will be determined by the Bank using the practices of the offshore dollar
inter-bank market.
(b) Each Offshore Rate portion will be for an amount not less than Five Hundred
Thousand Dollars ($500,000).
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(c) The "Offshore Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All amounts
in the calculation will be determined by the Bank as of the first day of
the interest period.
Offshore Rate = Grand Cayman Rate
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(1.00 -- Reserve Percentage)
Where,
(i) "Grand Cayman Rate" means the interest rate (rounded upward to the
nearest 1/16th of one percent) at which the Bank's Grand Cayman
Branch, Grand Cayman, British West Indies, would offer U.S. dollar
deposits for the applicable interest period to other major banks in
the offshore dollar inter-bank markets.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member
banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in the Federal Reserve Board Regulation D, rounded upward to
the nearest 1/100 of one percent. The percentage will be expressed as
a decimal, and will include, but not be limited to, marginal,
emergency, supplemental, special, and other reserve percentages.
(d) The Borrower may not elect an Offshore Rate with respect to any portion of
the principal balance of the line of credit which is scheduled to be
repaid before the last day of the applicable interest period
(e) Any portion of the principal balance of the line of credit already bearing
interest at the Offshore Rate will not be converted to a different rate
during its interest period.
(f) Each prepayment of an Offshore Rate portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of accrued
interest on the amount prepaid, and a prepayment fee equal to the amount
(if any) by which:
(i) the additional interest which would have been payable on the amount
prepaid had it not been paid until the last day of the interest
period, exceeds
(ii) the interest which would have been recoverable by the Bank by placing
the amount prepaid on deposit in the offshore dollar market for a
period starting on the date on which it was prepaid and ending on the
last day of the interest period for such portion.
(g) The Bank will have no obligation to accept an election for an Offshore
Rate portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal to the
interest period, of an Offshore Rate portion are not available in the
offshore dollar inter-bank markets; or
(ii) the Offshore Rate does not accurately reflect the cost of an Offshore
Rate portion.
1.8 LIBOR RATE. The Borrower may elect to have all or portions of the
principal balance bear interest at the LIBOR Rate plus one and one-half
(1.50) percentage points. Designation of a LIBOR Rate portion is subject
to the following requirements:
(a) The interest period during which the LIBOR Rate will be in effect will be
one, two, three, four, six, or twelve months. The first day of the
interest period must be a day other than a Saturday or a Sunday on which
the Bank is open for business in California, New York and London and
dealing in offshore dollars *a "LIBOR Banking Day"). The last day of the
interest period and the actual number of days during the interest period
will be determined by the Bank using the practices of the London
inter-bank market.
(b) Each LIBOR Rate portion will be for an amount not less than (i) Five
Hundred Thousand Dollars ($500,000) if the interest period is one month
and (ii) Two Hundred Fifty Thousand Dollars ($250,000) if the interest
period is two months or longer.
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(c) The "LIBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All
amounts in the calculation will be determined by the Bank as of the
first day of the interest period.)
LIBOR Rate = London Inter-Bank Offered Rate
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1.00 - Reserve Percentage)
Where,
(i) "London Inter-Bank Offered Rate" means the average per annum
interest rate at which U.S. dollar deposits would be offered
for the applicable interest period by major banks in the London
inter-bank market, as shown on the Telerate Page 3750 (or such
other page as may replace it) at approximately 11:00 a.m.
London time two (2) London Banking Days before the commencement
of the interest period. If such rate does not appear on the
Telerate Page 3750 (or such other page that may replace it),
the rate for that interest period will be determined by such
alternate method as reasonably selected by Bank. A "London
Banking Day" is a day on which the Bank's London Branch is
open for business and dealing in offshore dollars.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The
percentage will be expressed as a decimal, and will include, but
not be limited to, marginal, emergency, supplemental, special,
and other reserve percentages.
(d) The Borrower shall irrevocably request a LIBOR Rate portion no later
than 12:00 noon San Francisco time on the LIBOR Banking Day preceding
the day on which the London Inter-Bank Offered Rate will be set, as
specified above.
(e) The Borrower may not elect a LIBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the
applicable interest period.
(f) Any portion of the principal balance already bearing interest at the
LIBOR Rate will not be converted to a different rate during its
interest period.
(g) Each prepayment of a LIBOR Rate portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid and a prepayment fee as described
below. A "prepayment" is a payment of an amount on a date earlier than
the scheduled payment date for such amount as required by this
Agreement. The prepayment fee shall be equal to the amount (if any) by
which:
(i) the additional interest which would have been payable during
the interest period on the amount prepaid had it not been
prepaid, exceeds
(ii) the interest which would have been recoverable by the Bank
by placing the amount prepaid on deposit in the domestic
certificate of deposit market, for eurodollar deposit market,
or other appropriate money market selected by the Bank, for a
period starting on the date on which it was prepaid and ending
on the last day of the interest period for such portion (or the
scheduled payment date for the amount prepaid, if earlier).
(h) The Bank will have no obligation to accept an election for a LIBOR Rate
portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal
to the interest period, of a LIBOR Rate portion are not
available in the London inter-bank market; or
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(ii) the LIBOR Rate does not accurately reflect the cost of a LIBOR
Rate portion.
1.9 LETTERS OF CREDIT. This line of credit may be used for financing
standby letters of credit with a maximum maturity of one (1) year but not to
extend beyond the Facility No. 1 Expiration Date. Each standby letter of credit
may include a provision providing that the maturity date may be automatically
extended each year for an additional year unless the Bank gives written notice
to the contrary. The amount of letters of credit outstanding at any one time,
(including amounts drawn on letters of credit and not yet reimbursed), may not
exceed Four Million Dollars ($4,000,000). The following letter of credit is
outstanding from the Bank for the account of the Borrower:
Letter of Credit Number Amount
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250089 $150,000
As of the date of this Agreement, this letter of credit shall be deemed to be
outstanding under this Agreement, and shall be subject to all the terms and
conditions stated in this Agreement.
The Borrower agrees:
(a) any sum drawn under a letter of credit may, at the option of the Bank,
be added to the principal amount outstanding under this Agreement. The
amount will bear interest and be due as described elsewhere in this
Agreement.
(b) if there is a default under this Agreement, to immediately prepay and
make the Bank whole for any outstanding letters of credit.
(c) the issuance of any letter of credit and any amendment to a letter of
credit is subject to the Bank's written approval and must be in form and
content satisfactory to the Bank and in favor of a beneficiary
acceptable to the Bank.
(d) to sign the Bank's form Application and Agreement for Standby Letter of
Credit.
(e) to pay any issuance and/or other fees that the Bank notifies the
Borrower will be charged for issuing and processing letters of credit
for the Borrower.
(f) to allow the Bank to automatically charge its checking account for
applicable fees, discounts, and other charges.
(g) to pay the Bank a non-refundable fee equal to .90% per annum of the
outstanding undrawn amount of each standby letter of credit, payable
quarterly in advance, calculated on the basis of the face amount
outstanding on the day the fee is calculated. If there is a default
under this Agreement, at the Bank's option, the amount of the fee shall
be increased to 2.90% per annum, effective starting on the day the Bank
provides notice of the increase to the Borrower.
2. FACILITY NO. 2: TERM LOAN FACILITY AMOUNT AND TERMS
2.1 AMOUNT AND TERMS.
(a) During the availability period, the Borrower may request Term Loans from
the Bank in a total principal amount not to exceed Eight Million Dollars
($8,000,000) (the "Facility No. 2 Commitment").
(b) The availability period is from the date of this Agreement through
February 28, 1999 (the "Facility No. 2 Expiration Date"), unless the
Borrower is in default.
(c) Each Term Loan made by the Bank under this facility (the "Facility No.
2") will reduce the amount of the Facility No. 1 Commitment available
for extensions of credit other than Term Loans.
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"Term Loan" means a term loan under this facility used to finance an
Acceptable Acquisition.
"Acceptable Acquisition" means an Acquisition:
(i) Where the business being acquired is substantially the same as
the Borrower's present business.
(ii) Which is undertaken in accordance with all applicable requirements
of law.
(iii) Where prior, effective written consent or approval of such
Acquisition has been given by the board of directors or equivalent
governing body of the acquiree.
(iv) Where the Borrower has delivered to the Bank a compliance
certificate showing that, immediately prior to the Acquisition, the
Borrower is in full compliance with all the terms of this Agreement.
(v) Where the Borrower has delivered to the Bank pro forma balance
sheet showing that, immediately after the Acquisition, the Borrower
will be in full compliance with all of the terms and conditions of
this Agreement.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (i) the
acquisition by the Borrower of all or substantially all of the assets of a
person or entity or of any business or division of a person or entity,
(ii) the acquisition by the Borrower of in excess of fifty percent (50%)
of the capital stock, partnership interests, membership interests or equity
of any person or entity, or otherwise causing any entity to become a
subsidiary of the borrower, or (iii) a merger or consolidation or any
other combination by the Borrower with another person or entity (other
than an entity that is a subsidiary of the Borrower) provided that the
Borrower or its subsidiary is the surviving entity.
2.2 INTEREST RATE. Unless the Borrower elects an optional interest rate as
described below, the interest rate is the Bank's Reference Rate.
2.3 REPAYMENT TERMS.
(a) The Borrower will pay all accrued but unpaid interest on September 1,
1997, and then monthly thereafter and upon payment in full of the
principal of the loan.
(b) The Borrower will repay the principal amount of each Term Loan in up to 60
successive approximately equal monthly installments starting on the date
which is 30 days after the date on which each such loan is made.
(c) The Borrower may prepay the loan in full or in part at any time. The
prepayment will be applied to the most remote payment of principal due
under this Agreement.
2.4 OPTIONAL INTEREST RATES. Instead of the interest rate based on the Bank's
Reference Rate, the Borrower may elect to have all or portions of the Term
Loans bear interest at the rate(s) described below during an interest period
agreed to by the Bank and the Borrower. Each interest rate is a rate per year.
Interest will be paid on the last day of each interest period, and on the first
day each month during the interest period. At the end of any interest period,
the interest rate will revert to the rate based on the Reference Rate, unless
the Borrower has designated another optional interest rate for the portion.
2.5 LONG TERM RATE. The Borrower may elect to have all or portions of the
principal balance of the Term Loans bear interest at the Long Term Rate,
subject to the following requirements:
(a) The interest period during which the Long Term Rate will be in effect will
be one year or more.
(b) The "Long Term Rate" means the Long Term Base Rate plus one and
three-quarters (1.75) percentage points.
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(c) The "Long Term Base Rate" means the fixed interest rate per annum,
determined solely by the Bank on the first day of the applicable interest
period for the Long Term Rate portion, as the rate at which the Bank would
be able to borrow funds in the Money Market in the amount of the Long Term
Rate portion and with an interest payment frequency and principal repayment
schedule equal to the Long Term Rate portion and for a term equal to the
applicable interest period. The Long Term Base Rate shall include
adjustments for reserve requirements, federal deposit insurance, and any
other similar adjustment which the Bank deems appropriate. The Long Term
Base Rate is the Bank's estimate only and the Bank is under no obligation
to actually purchase or match funds for any transaction.
(d) "Money Market" means one or more wholesale funding markets available to
the Bank, including domestic negotiable certificates of deposit,
eurodollar deposits, bank deposit notes or other appropriate money market
instruments selected by the Bank.
(e) Each Long Term Rate portion will be for an amount not less than One
Hundred Thousand Dollars ($100,000).
(f) Any portion of the principal balance of a Term Loan already bearing
interest at the Long Term Rate will not be converted to a different rate
during its interest period.
(g) The Borrower may prepay the Long Term Rate portion in whole or in part in
the minimum amount of One Hundred Thousand Dollars ($100,000). The
Borrower will give the Bank irrevocable written notice of the Borrower's
intention to make the prepayment, specifying the date and amount of the
prepayment. The notice must be received by the Bank at least 5 banking
days in advance of the prepayment. All prepayments of principal on the
Long Term Rate portion will be applied on the most remote payment of
principal then unpaid.
(h) Each prepayment of a Long Term Rate portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by payment of all
accrued interest on the amount of the prepayment and the prepayment fee
described below.
(i) The prepayment fee will be the sum of fees calculated separately for each
Prepaid Installment, as follows:
(i) The bank will first determine the amount of interest which would
have accrued each month for the Prepaid Installment had it remained
outstanding until the applicable Original Payment Date, using the
Long Term Rate;
(ii) The Bank will then subtract from each monthly interest amount
determined in (i), above, the amount of interest which would accrue
for that Prepaid Installment if it were reinvested from the date of
prepayment through the Original Payment date, using the following
rate:
(A) If the Original Payment Date is more than 5 years after the date
of prepayment: the Treasury Rate plus one-quarter of one
percentage point;
(B) If the Original Payment Date is 5 years or less after the date
of prepayment: the Money Market Rate.
(iii) If (i) minus (ii) for the Prepaid Installment is greater than zero,
the Bank will discount the monthly differences to the date of
prepayment by the rate used in (ii) above. The sum of the discounted
monthly differences is the prepayment fee for that Prepaid
Installment.
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(j) The following definitions will apply to the calculation of the
prepayment fee:
"Money Market Rate" means the fixed interest rate per annum which the
Bank determines could be obtained by reinvesting a specified Prepaid
installment in the Money Market from the date of prepayment through the
Original Payment Date.
"Prepaid Payment Dates" mean the dates on which principal of the Long
Term Rate portion would been paid if there had been no prepayment. If a
portion of the principal would have been paid later than the end of the
interest period in effect at the time of prepayment, then the Original
Payment Date for that portion will be the last day of the interest
period.
"Prepaid Installment" means the amount of the prepaid principal of the
Long Term Rate portion which would have been paid on a single Original
Payment Date.
"Treasury Rate" means the interest rate yield for U.S. Government
Treasury Securities which the Bank determines could be obtained by
reinvesting a specified Prepaid Installment in such securities from the
date of prepayment through the Original Payment Date.
(k) The Bank may adjust the Treasury Rate and Money Market Rate to reflect
the compounding, accrual basis, or other costs of the Long Term Rate
portion. Each of the rates is the Bank's estimate only and the Bank is
under no obligation to actually reinvest any prepayment. The rates will
be based on information from either the Telerate or Reuters
information services, The Wall Street Journal, or other information
sources the Bank deems appropriate.
2.6 LIBOR RATE. The Borrower may elect to have all or portions of the
principal balance bear interest at the LIBOR rate plus one and three-quarters
(1.75) percentage points. Designation of LIBOR Rate portion is subject to the
following requirements:
(a) The interest period during which the LIBOR Rate will be in effect will
be one, two, three, four, or six months. The first day of the interest
period must be a day other than a Saturday or a Sunday on which the Bank
is open for business in California, New York and London and dealing in
offshore dollars (a "LIBOR Banking Day"). The last day of the interest
period and the actual number of days during the interest period will be
determined by the Bank using the practices of the London inter-bank
market.
(b) Each LIBOR Rate portion will be for an amount not less than (i) Five
Hundred Thousand Dollars ($500,000) if the interest period is one month
and (ii) Two Hundred Fifty Thousand Dollars ($250,000) if the interest
period is two months or longer.
(c) The "LIBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All
amounts in the calculation will be determined by the Bank as of the
first day of the interest period.)
LIBOR Rate = London Inter-Bank Offered Rate
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1.00 - Reserve Percentage
Where,
(i) "London Inter-Bank Offered Rate" means the average per annum
interest rate at which U.S. dollar deposits would be offered for
the applicable interest period by major banks in the London
inter-bank market, as shown on the Telerate Page 3750 (or such
other page as may replace it) at approximately 11:00 a.m. London
time two (2) London Banking Days before the commencement of the
interest period. If such rate does not appear on the Telerate
Page 3750 (or such other page that may replace it), the rate for
that interest period will be determined by such alternate method
as reasonably selected by Bank. A "London Banking Day" is a day
on which the Bank's London Branch is open for business and
dealing in offshore dollars.
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(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained
by member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The
percentage will be expressed as a decimal, and will include, but
not be limited to, marginal, emergency, supplemental, special,
and other reserve percentages.
(d) The Borrower shall irrevocably request a LIBOR Rate portion no later
than 12:00 noon San Francisco time on the LIBOR Banking Day preceding
the day on which the London Inter-Bank Offered Rate will be set, as
specified above.
(e) The Borrower may not elect a LIBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the
applicable interest period.
(f) Any portion of the principal balance already bearing interest at the
LIBOR Rate will not be converted to a different rate during its
interest period.
(g) Each prepayment of a LIBOR Rate portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid and a prepayment fee as described
below. A "prepayment" is a payment of an amount on a date earlier than
the scheduled payment date for which such amount as required by this
Agreement. The prepayment fee shall be equal to the amount (if any) by
which:
(i) the additional interest which would have been payable during
the interest period on the amount prepaid had it not been
prepaid, exceeds
(ii) the interest which would have been recoverable by the Bank
by placing the amount prepaid on deposit in the domestic
certificate of deposit market, the eurodollar deposit market,
or other appropriate money market selected by the Bank, for a
period starting on the date on which it was prepaid and ending
on the last day of the interest period for such portion (or the
scheduled payment date for the amount prepaid, if earlier).
(h) The Bank will have no obligation to accept an election for a LIBOR Rate
portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal
to the interest period, of a LIBOR Rate portion are not
available in the London Inter-bank market; or
(ii) the LIBOR Rate does not accurately reflect the cost a LIBOR
Rate portion.
3. EXPENSES
The Borrower agrees to reimburse the Bank for any expenses it incurs in the
preparation of this Agreement and any agreement or instrument required by this
Agreement. Expenses include, but are not limited to, reasonable attorney's
fees, including any allocated costs of the Bank's in-house counsel.
4. DISBURSEMENTS, PAYMENTS AND COSTS
4.1 REQUESTS FOR CREDIT. Each request for an extension of credit will be
made in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
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4.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each payment
by the Borrower will be:
(a) made at the Bank's branch (or other location) selected by the Bank from
time to time;
(b) made for the account of the Bank's branch selected by the Bank from time
to time;
(c) made in immediately available funds, or such other type of funds selected
by the Bank;
(d) evidenced by records kept by the Bank. In addition, the Bank may, at its
discretion, require the Borrower to sign one or more promissory notes.
4.3 TELEPHONE AUTHORIZATION.
(a) The Bank may honor telephone instructions for advances or repayments or
for the designation of optional interest rates given by any one of the
individuals authorized to sign loan agreements on behalf of the Borrower,
or any other individual designated by any one of such authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn from the
Borrower's account number 14969-01000, or such other of the Borrower's
accounts with the Bank as designated in writing by the Borrower.
(c) The Borrower indemnifies and excuses the Bank (including its officers,
employees, and agents) from all liability, loss, and costs in connection
with any act resulting from telephone instructions it reasonably believes
are made by any individual authorized by the Borrower to give such
instructions. This indemnity and excuse will survive this Agreement.
4.4 DIRECT DEBIT.
(a) The Borrower agrees that interest and principal payments and any fees will
be deducted automatically on the due date from checking account number
14969-01000, or such other of the Borrower's accounts with the Bank as
designated in writing by the Borrower.
(b) The Bank will debit the account on the dates the payments become due. If a
due date does not fall on a banking day, the Bank will debit the account
on the first banking day following the due date.
(c) The Borrower will maintain sufficient funds in the account on the dates
the Bank enters debits authorized by this Agreement. If there are
insufficient funds in the account on the date the Bank enters any debit
authorized by this Agreement, the debit will be reversed.
4.5 BANKING DAYS. Unless otherwise provided in this Agreement, a banking day is
a day other than a Saturday or a Sunday on which the Bank is open for business
in California. For amounts bearing interest at an offshore rate (if any), a
banking day is a day other than a Saturday or a Sunday on which the Bank is open
for business in California and dealing in offshore dollars. All payments and
disbursements which would be due on a day which is not a banking day will be due
on the next banking day. All payments received on a day which is not a banking
day will be applied to the credit on the next banking day.
4.6 TAXES. The Borrower will not deduct any taxes from any payments it makes to
the Bank. If any government authority imposes any taxes on any payments made by
the Borrower, the Borrower will pay the taxes and will also pay to the Bank, at
the time interest is paid, any additional amount which the Bank specifies as
necessary to preserve the after-tax yield the Bank would have received if such
taxes had not been imposed. Upon request by the Bank, the Borrower will confirm
that it has paid the taxes by giving the Bank official tax receipts (or
notarized copies) within 30 days after the due date. However, the Borrower will
not pay the Bank's net income taxes.
4.7 ADDITIONAL COSTS. The Borrower will pay the Bank, on demand, or the Bank's
costs or losses arising from any statute or regulation, or any request or
requirement of a regulatory agency which is applicable to all
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national banks or a class of all national banks. The costs and losses will be
allocated to the loan in a manner determined by the Bank, using any reasonable
method. The costs include the following:
(a) any reserve or deposit requirement; and
(b) any capital requirements relating to the Bank's assets and commitments
for credit.
4.8 INTEREST CALCULATION. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher
fee than if a 365-day year is used.
4.9 INTEREST ON LATE PAYMENTS. At the Bank's sole option in each instance,
any amount not paid when due under this Agreement (including interest) shall
bear interest from the due date at the Bank's Reference Rate. This may result
in compounding of interest.
4.10 DEFAULT RATE. Upon the occurrence and during the continuation of any
default under this Agreement, advances under this Agreement will at the
option of the Bank bear interest at a rate per annum which is two (2.0)
percentage points higher than the rate of interest otherwise provided under
this Agreement. This will not constitute a waiver of any default.
5. CONDITIONS
5.1 CONDITIONS TO FIRST EXTENSION OF CREDIT. The Bank must receive the
following items, in form and content acceptable to the Bank, before it is
required to extend any credit to the Borrower under this Agreement:
(a) AUTHORIZATIONS. Evidence that the execution, delivery and performance by
the Borrower (and any guarantor) of this Agreement and any instrument or
agreement required under this Agreement have been duly authorized.
(b) OTHER ITEMS. Any other items that the Bank reasonably requires.
5.2 CONDITIONS TO EACH TERM LOAN.
(a) Receipt by the Bank of an original, executed promissory note evidencing
the Term Loan.
(b) Receipt by the Bank of financial statements of the business or entity to
be acquired for the immediately preceding three (3) fiscal years.
(c) If the Acceptable Acquisition involves the Borrower's purchase of stock
of the entity being acquired, an opinion of the Borrower's counsel with
regard to such matters as the Bank may request, including without
limitation liability limitation issues.
(d) Receipt by the Bank of a compliance certificate showing that the
Borrower is in full compliance with all of the terms of this Agreement.
(e) Receipt by the Bank of evidence that, immediately prior to consummation
of the Acceptable Acquisition, the Borrower's adjusted Fixed Charge
Coverage Ratio is at lease 1.50:1, calculated over the immediately
preceding four (f) fiscal quarter. This ratio will be adjusted to
include (i) the projected debt service (principal and interest at the
then current Reference Rate) relating to the Term Loan for four (4)
fiscal quarters and (ii) any net loss (but not income) after taxes of
the business or entity to be acquired over the immediately preceding
four (4) fiscal quarters.
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fiscal quarter, using the year-to-date results on an annualized basis. For
purposes of this calculation, indebtedness outstanding during the debt
reduction period required under Paragraph 7.9 below shall be treated as if
it were being amortized over sixty (60) months. The current portion of long
term debt will be measured as of the last day of each quarter.
6. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewed representation.
6.1 ORGANIZATION OF BORROWER. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.
6.2 AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder, are within the Borrower's powers, have been duly
authorized, and do not conflict with any of its organizational papers.
6.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed
and delivered, will be similarly legal, valid, binding and enforceable.
6.4 GOOD STANDING. In each state in which the Borrower does business, it
is properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.
6.5 NO CONFLICTS. This Agreement does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
6.6 FINANCIAL INFORMATION. All financial and other information that has
been or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate knowledge of the Borrower's
(and any guarantor's) financial condition.
(b) in form and content required by the Bank.
(c) in compliance with all government regulations that apply.
6.7 LAWSUITS. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower, which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.
6.8 PERMITS, FRANCHISES. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade
name rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged.
6.9 OTHER OBLIGATIONS. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
6.10 INCOME TAX RETURNS. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year.
6.11 NO EVENT OF DEFAULT. There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.
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6.12 ERISA PLANS.
(a) The Borrower has fulfilled its obligations, if any, under the minimum
funding standards of ERISA and the Code with respect to each Plan and is
in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and has not incurred any liability with
respect to any Plan under Title IV of ERISA.
(b) No reportable event has occurred under Section 4043(b) of ERISA for which
the PBGC requires 30 day notice.
(c) No action by the Borrower to terminate or withdraw from any Plan has been
taken and no notice of intent to terminate a Plan has been filed under
Section 4041 of ERISA.
(d) No proceeding has been commenced with respect to a Plan under Section 4042
of ERISA, and no event has occurred or condition exists which might
constitute grounds for the commencement of such a proceeding.
(e) The following terms have the meanings indicated for purposes of this
Agreement:
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(ii) "ERISA" means the Employee Retirement Income Act of 1974, as
amended from time to time.
(iii) "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
(iv) "Plan" means any employee pension benefit plan maintained or
contributed to by the Borrower and insured by the Pension Benefit
Guaranty Corporation under Title IV of ERISA.
6.13 LOCATION OF BORROWER. The Borrower's place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrower's signature on this Agreement.
7. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
7.1 USE OF PROCEEDS. To use the proceeds of Facility No. 1 only for working
capital and buy-back of the Borrower's existing franchises; to use performance
and financial standby letters of credit for general business purposes and to
support self-insured workers' compensation program; and to use the proceeds of
Facility No. 2 only to finance Acceptable Acquisitions subject to the terms and
conditions of this Agreement.
7.2 FINANCIAL INFORMATION. To provide the following financial information and
statements and such additional information as requested by the Bank from time
to time:
(a) Within 120 days of the Borrower's fiscal year end, the Borrower's annual
report to shareholders, which shall include financial statements for such
year. These financial statements must be audited (with an unqualified
opinion) by a Certified Public Accountant ("CPA") acceptable to the Bank.
(b) Within 90 days of the Borrower's fiscal year end, the Borrower's Form 10-K
Annual Report.
(c) Within 45 days of the period's end, the Borrower's Form 10-Q Quarterly
Report.
(d) If filed with the Securities and Exchange Commission, the Borrower's Form
8K Current Report, within 15 days after any such filing.
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(e) Commencing with the fiscal quarter ending June 30, 1997, within 45 days of
the period's end (including the fourth fiscal quarter), a compliance
certificate of the Borrower signed by an authorized financial officer of
the Borrower setting forth (i) the information and computations (in
sufficient detail) to establish that the Borrower is in compliance with all
financial covenants at the end of the period covered by the financial
statements then being furnished and (ii) whether there existed as of the
date of such financial statements and whether there exists as of the date
of the certificate, any default under this Agreement and, if any such
default exists, specifying the nature thereof and the action the Borrower
is taking and proposes to take with respect thereto.
(f) Within 120 days of the Borrower's fiscal year end, the Borrower's financial
projections and budget on a quarterly basis for the following fiscal year.
(g) Within 30 days after mailing to the Borrower's shareholders but not later
than February 28 of each year, the Borrower's annual proxy statement.
(h) Within 90 days of the Borrower's fiscal year end, a listing of franchisee
and company-owned offices.
(i) Within 120 days of the Borrower's fiscal year end, a copy of the Borrower's
current insurance policy evidencing:
(i) coverage of the Borrower's workers' compensation liability for
1986-1996 and the annual guaranteed cost and/or stop loss policy so
long as the Borrower insures its workers' compensation liability with
an outside insurance company; or
(ii) re-insurance coverage of workers' compensation claims in excess of
Three Hundred Fifty Thousand Dollars ($350,000) per occurrence from an
insurance company acceptable to the Bank, and with an A.M. Best rating
of not less than "A".
(j) Promptly upon request of the Bank, such other statements, lists of property
and accounts, budgets, forecasts or reports as to the Borrower as the Bank
may reasonably request.
7.3 CURRENT RATIO. To maintain a ratio of current assets to current
liabilities, as of the end of each fiscal quarter, at least equal to 1.30:1.
For the purposes of this computation, all amounts outstanding under Facility
No. 1, but excluding outstanding standby letters of credit, shall be
considered current liabilities.
7.4 TANGIBLE NET WORTH. To maintain a sum of (i) Tangible Net Worth plus (ii)
loans to franchisees that are more than one (1) year old and are not in
default, at least equal to the sum of the following:
(a) Thirty-Five Million Five Hundred Thousand Dollars ($35,500,000); plus
(b) commencing with the fiscal quarter ending March 31, 1997, the sum of (i)
80% of net income after income taxes (without subtracting losses) earned in
each quarterly accounting period, minus (ii) goodwill related to Acceptable
Acquisitions not to exceed a total of Eight Million Dollars ($8,000,000)
plus (iii) the net proceeds of any capital infusions.
"Tangible Net Worth" means the gross book value of the assets of the Borrower
(exclusive of goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred charges and
other like intangibles, and notes, loans and receivables due from affiliates,
officers, and shareholders of the Borrower, except for receivables due from
franchisees and licensees incurred in the normal course of business) plus up to
Three Million Dollars ($3,000,000) in goodwill incurred from the buy-back of the
Borrower's franchisees less all liabilities, including but not limited to
accrued and deferred income taxes, and any reserves against assets.
7.5 TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. To maintain a ratio of the
Borrower's total liabilities to Tangible Net Worth not exceeding 1.80:1. "Total
liabilities" means the sum of current liabilities plus long term liabilities.
7.6 FIXED CHARGE COVERAGE RATIO. To maintain a Fixed Charge Coverage Ratio of
at least 1.25:1.
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7.7 OTHER DEBTS. Not to have outstanding or incur any direct or contingent
debts or lease obligations (other than those to the Bank), or become liable for
the debts of others without the Bank's written consent. This does not prohibit:
(a) Acquiring goods, supplies, or merchandise on normal trade credit.
(b) Endorsing negotiable instruments received in the usual course of
business.
(c) Obtaining surety bonds in the usual course of business.
(d) Additional Debts for capitalized leases which do not exceed Two Million
Dollars ($2,000,000).
7.8 OTHER LIENS. Not to create, assume, or allow any security interest or
lien (including judicial liens) on property the Borrower now or later owns,
excepts:
(a) Deeds of Trust and security agreements in favor of the Bank.
(b) Lines for taxes not yet due.
(c) Additional liens which secure capitalized leases which do not exceed Two
Million Dollars ($2,000,000).
7.9 DEBT REDUCTION REQUIREMENT. To reduce the amount of all advances
outstanding under Facility No. 1 to not more than Five Million Dollars
($5,000,000) for a period of at least 30 consecutive calendar days in each line
year. "Line-year" means the period between February 28, 1997, and February 28,
1998, and each subsequent one-year period (if any). For the purposes of this
paragraph, "advances" does not include undrawn amounts of outstanding letters
of credit.
7.10 NOTICES TO BANK. To promptly notify the Bank in writing of:
(a) any lawsuit over Five Hundred Thousand Dollars ($500,000) against the
Borrower (or any guarantor).
(b) any substantial dispute between the Borrower (or any guarantor) and any
government authority.
(c) any failure to comply with this Agreement.
(d) any material adverse change in the Borrower's (or any guarantor's)
financial condition or operations.
(e) any change in the Borrower's name, legal structure, place of business,
or chief executive office if the Borrower has more than one place of
business.
7.11 BOOKS AND RECORDS. To maintain adequate books and records.
7.12 AUDITS. To allow the bank and its agents to inspect the Borrower's
properties and examine, audit and make copies of books and records at any
reasonable time. If any of the Borrower's properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.
7.13 COMPLIANCE WITH LAWS. To comply with the laws (including any fictitious
name statute), regulations, and orders of any government body with authority
over the Borrower's business.
7.14. PRESERVATION OF RIGHTS. To maintain and preserve all rights,
privileges, and franchises the Borrower now has.
7.15. MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep the Borrower's properties in good working condition.
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7.16 COOPERATION. To take any action requested by the Bank to carry out the
intent of this Agreement.
7.17 GENERAL BUSINESS INSURANCE. To maintain and keep in force insurance of
the type usual for the business it is in, and deliver to the Bank upon the
Bank's request a copy of each insurance policy or, if permitted by the Bank, a
certificate of insurance listing all insurance in force.
7.18 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written
consent:
(a) engage in any business activities substantially different from the
Borrower's present business.
(b) liquidate or dissolve the Borrower's business.
(c) enter into any consolidation, merger, pool, syndicate, or other
combination or become a member of a joint venture, partner in a
partnership, or a member of a limited liability company.
(d) lease, or dispose of all or a substantial part of the Borrower's
business of the Borrower's assets.
(e) make Acquisitions; provided, however that the Borrower may make
Acceptable Acquisitions if the total consideration therefor, including
assumption of debt, does not exceed Eight Million Dollars ($8,000,000)
on a cumulative basis in any line year. This is in addition to the Three
Million Dollars ($3,000,000) from the buy-back of Borrower's
franchisees/licensees.
(f) sell or otherwise dispose of any assets for less than fair market value,
or enter into any sale and leaseback agreement covering any of its fixed
or capital assets.
7.19 ERISA Plans. To give prompt written notice to the Bank of:
(a) The occurrence of any reportable event under Section 4043(b) of ERISA
for which the PBGC requires 30 day notice.
(b) Any action by the Borrower to terminate or withdraw from a Plan or the
filing of any notice of intent to terminate under Section 4041 of ERISA.
(c) Any notice of noncompliance made with respect to a Plan under Section
4041(b) of ERISA.
(d) The commencement of any proceeding with respect to a Plan under Section
4042 of ERISA.
8. DEFAULT
If any of the following events occur, the Bank may do one or more of the
following: declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice. If an event of default occurs under the
paragraph entitled "Bankruptcy," below, with respect to the Borrower, then the
entire debt outstanding under this Agreement will automatically be due
immediately.
8.1 FAILURE TO PAY. The Borrower fails to make a payment under this
Agreement when due.
8.2 FALSE INFORMATION. The Borrower has given the Bank false or misleading
information or representations.
8.3 BANKRUPTCY. The Borrower (or any guarantor) files a bankruptcy
petition, a bankruptcy petition is filed against the Borrower (or any
guarantor), or the Borrower (or any guarantor) makes a general assignment for
the benefit of credits.
8.4 RECEIVERS. A receiver or similar official is appointed for the
Borrower's (or any guarantor's) business, or the business is terminated.
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8.5 LAWSUITS. Any lawsuit or lawsuits are filed on behalf of one or more trade
creditors against the Borrower in an aggregate amount of One Million Dollars
($1,000,000) or more in excess of any insurance coverage.
8.6 JUDGMENTS. Any judgments or arbitration awards are entered against the
Borrower (or any guarantor), or the Borrower (or any guarantor) enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Five Hundred Thousand Dollars ($500,000) or more in excess
of any insurance coverage.
8.7 GOVERNMENT ACTION. Any government authority takes action that the Bank
believes materially adversely affects the Borrower's (or any guarantor's)
financial condition or ability to repay.
8.8 MATERIAL ADVERSE CHANGE. A material adverse change occurs in the Borrower's
(or any guarantor's) financial condition, properties or prospects, or ability to
repay the loan.
8.9 CROSS-DEFAULT. Any default occurs under any agreement in connection with
any credit the Borrower (or any guarantor) has obtained from anyone else or
which the Borrower (or any guarantor) has guaranteed.
8.10 OTHER BANK AGREEMENTS. The Borrower (or any guarantor) fails to meet the
conditions of, or fails to perform any obligation under any other agreement the
Borrower (or any guarantor) has with the Bank or any affiliate of the Bank.
8.11 ERISA PLANS. The occurrence of any one or more of the following events
with respect to the Borrower, provided such event or events could reasonably be
expected, in the judgment of the Bank, to subject the Borrower to any tax,
penalty or liability (or any combination of the foregoing) which, in the
aggregate, could have a material adverse effect on the financial condition of
the Borrower with respect to a Plan:
(a) A reportable event shall occur with respect to a Plan which is, in the
reasonable judgment of the Bank likely to result in the termination of such
Plan for purposes of Title IV of ERISA.
(b) Any Plan termination (or commencement of proceedings to terminate a Plan)
or the Borrower's full or partial withdrawal from a Plan.
8.12 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the conditions
of, or fails to perform any obligation under, any term of this Agreement not
specifically referred to in this Article.
9. ENFORCING THIS AGREEMENT; MISCELLANEOUS
9.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.
9.2 CALIFORNIA LAW. This Agreement is governed by California law.
9.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not assign
this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.
9.4 ARBITRATION.
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, including but not limited to those that
arise from:
(i) This Agreement (including any renewals, extensions or modifications of
this Agreement);
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(ii) Any document, agreement or procedure related to or delivered in
connection with this Agreement;
(iii) Any violation of this Agreement; or
(iv) Any claims for damages resulting from any business conducted
between the Borrower and the Bank, including claims for injury to
persons, property or business interests (torts).
(b) At the request of the Borrower or the Bank, any such controversies or
claims will be settled by arbitration in accordance with the United States
Arbitration Act. The United States Arbitration Act will apply even though
this Agreement provides that it is governed by California law.
(c) Arbitration proceedings will be administered by the American Arbitration
Association and will be subject to its commercial rules of arbitration.
(d) For purposes of the application of the statute of limitations, the filing
of an arbitration pursuant to this paragraph is the equivalent of the
filing of a lawsuit, and any claim or controversy which may be arbitrated
under this paragraph is subject to any applicable statute of limitations.
The arbitrators will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to dismiss
the arbitration on that basis.
(e) If there is a dispute as to whether an issue is arbitrable, the arbitrators
will have the authority to resolve any such dispute.
(f) The decision that results from an arbitration proceeding may be submitted
to any authorized court of law to be confirmed and enforced.
(g) The procedure described above will not apply if the controversy or claim,
at the time of the proposed submission to arbitration, arises from or
relates to an obligation to the Bank secured by real property located in
California. In this case, both the Borrower and the Bank must consent to
submission of the claim or controversy to arbitration. If both parties do
not consent to arbitration, the controversy or claim will be settled as
follows:
(i) The Borrower and the Bank will designate a referee (or a panel of
referees) selected under the auspices of the American Arbitration
Association in the same manner as arbitrators are selected in
Association-sponsored proceedings;
(ii) The designated referee (or the panel of referees) will be
appointed by a court as provided in California Code of Civil
Procedure Section 638 and the following related sections;
(iii) The referee (or the presiding referee of the panel) will be an
active attorney or a retired judge; and
(iv) The award that results from the decision of the referee (or the
panel) will be entered as a judgment in the court that appointed
the referee, in accordance with the provisions of California Code
of Civil Procedure Sections 644 and 645.
(h) This provision does not limit the right of the Borrower or the Bank to:
(i) exercise self-help remedies such as setoff;
(ii) foreclose against or sell any real or personal property
collateral; or
(iii) act in a court of law, before, during or after the arbitration
proceeding to obtain:
(A) an interim remedy; and/or
(B) additional or supplementary remedies.
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(i) The pursuit of or a successful action for interim, additional or
supplementary remedies, or the filing of a court action, does not
constitute a waiver of the right to the Borrower or the Bank, including
the suing party, to submit the controversy or claim to arbitration if
the other party contests the lawsuit. However, if the controversy or
claim arises from or relates to an obligation to the Bank which is
secured by real property located in California at the time of the
proposed submission to arbitration, this right is limited according to
the provision above requiring the consent of both the Borrower and the
Bank to seek resolution through arbitration.
(j) If the Bank forecloses against any real property securing this
Agreement, the Bank has the option to exercise the power of sale under
the deed of trust or mortgage, or to proceed by judicial foreclosure.
9.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Bank retains all
rights, even if it makes a loan after default. If the Bank waives a default, it
may enforce a later default. Any consent or waiver under this Agreement must be
in writing.
9.6 ADMINISTRATION COSTS. The Borrower shall pay the Bank for all
reasonable costs incurred by the Bank in connection with administering this
Agreement.
9.7 ATTORNEY'S FEES. The Borrower shall reimburse the Bank for any
reasonable costs and attorney's fees incurred by the Bank in connection with
the enforcement or preservation of any rights or remedies under this Agreement
and any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
agreement. In the event that any case is commenced by or against the Borrower
under the Bankruptcy Code (Title 11, United States Code) or any similar or
successor statue, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection,
or enforcement of any rights of the Bank in such a case. As used in this
paragraph, "attorney's fees" includes the allocated costs of the Bank's
in-house counsel.
9.8 ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the Bank
and the Borrower concerning this credit; and
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
9.9 NOTICES. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, to the addresses on the
signature page of this Agreement, or to such other addresses as the Bank and
the Borrower may specify from time to time in writing.
9.10 HEADINGS. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
9.11 COUNTERPARTS. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same agreement.
9.12 PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes the Credit
Agreement entered into as of July 5, 1995, between the Bank and the Borrower,
and any credit outstanding thereunder shall be deemed to be outstanding under
this Agreement.
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This Agreement is executed as of the date stated at the top of the first page.
[LOGO]
Bank of America RemedyTemp, Inc.
National Trust and Savings Association
x /s/ ▇.▇. ▇▇▇▇▇ x /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- ---------------------------
By: ▇.▇. ▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President and
Chief Financial Officer
Address where notices to the Bank Address where notices to the
are to be sent: Borrower are to be sent:
Inland Empire Regional Commercial
Banking Office #1496
3650 14th Street, Second Floor ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ San Juan ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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