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EXHIBIT 10.13
CREDIT AUTHORIZATION AGREEMENT
NBD Bank (the "Bank"), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, has
approved the credit facilities listed below (collectively, the "Credit
Facilities," and individually, as designated below) to Complete Business
Solutions, Inc. (the "Borrower"), a Michigan corporation, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, subject to the terms
and conditions set forth in this agreement.
1.0 CREDIT FACILITIES.
UNCOMMITTED CREDIT AUTHORIZATIONS. The Bank has approved the
uncommitted credit authorizations listed below (collectively, the "Credit
Authorizations," and individually, as designated below) subject to the terms and
conditions of this agreement and the Bank's continuing satisfaction with the
Borrower's financial status. Disbursements under the Credit Authorizations are
solely at the Bank's discretion. Any disbursement on one or more occasions
shall not commit the Bank to make any subsequent disbursement.
A. FACILITY A. The Bank has approved an uncommitted Credit
Authorization to the Borrower in the principal sum not to exceed $2,500,000.00
in the aggregate at any one time outstanding ("Facility A"). Credit under
Facility A shall be in the form of disbursements evidenced by credits to the
Borrower's account and shall be repayable as set forth in a Master Demand
Business Loan Note (Facility A) executed concurrently (referred to in this
agreement both singularly and together with any other promissory notes
referenced in this Section 1.0 as the "Notes.") The proceeds of Facility A
shall be used for the following purposes: special business purposes, including,
without limitation, the carrying of unbilled receivables in preparation for
large contracts, the purchase of proprietary software and approved acquisitions.
Facility A shall expire on August 31, 1996 unless earlier withdrawn.
B. FACILITY B (INCLUDING LETTERS OF CREDIT).
1. Authorization to Extend Credit. The Bank has approved
an uncommitted Credit Authorization to the Borrower in the principal sum not to
exceed $16,000,000.00 in the aggregate at any one time outstanding ("Facility
B"). Facility B shall include the issuance of commercial and standby letters of
credit not exceeding $3,000,000 in the aggregate at any one time outstanding
(the "Letters of Credit"). Each commercial Letter of Credit shall expire not
later than six (6) months from its date of issue. Each standby Letter of Credit
shall expire not later than one (1) year from its date of issue. Each Letter of
Credit shall be in form acceptable to the Bank. Standby Letters of Credit shall
bear a fee of 1% per year of the face amount of each standby Letter of Credit.
Commercial Letters of Credit shall bear a fee in accordance with the Bank's
standard pricing schedule for commercial letters of credit on the date any
commercial letter of credit is issued. Credit under Facility B shall be in the
form of disbursements evidenced by credits to the Borrower's account and shall
be repayable as set forth in a Master Promissory Note (Facility B) executed
concurrently (referred to in this agreement both singularly and together with
any other promissory notes referenced in this Section 1.0 as the "Notes") or by
the issuance of a commercial or standby Letter of Credit upon completion of an
application
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acceptable to the Bank. The proceeds of Facility B shall be used for the working
capital purposes. Facility B shall expire on August 31, 1996, unless earlier
withdrawn.
2. Interest. Loans under Facility B shall bear interest,
at the Borrower's option, but subject to the Bank's approval, at either:
(a) The rate announced from time to time by the Bank
as its "prime rate" (the "Prime Rate"); or
(b) the per annum rate that is equal to the sum of (i)
two percent (2%) per annum, plus (ii) the rate obtained by dividing (I) the per
annum rate of interest at which deposits in U.S. Dollars in an aggregate amount
of, and with a maturity comparable to, the loan are offered to the Bank by other
prime banks in an offshore interbank market selected by the Bank in its sole
discretion at approximately 10:00 a.m. New York time on the second Business Day
(as defined below) prior to the disbursement of the loan, by (II) an amount
equal to one minus the stated maximum rate (expressed as a decimal) of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) specified on the date of the loan
disbursement by the Board of Governors of the Federal Reserve System (or any
successor agency) for determining the maximum reserve requirement with respect
to Eurocurrency funding required to be maintained by a Federal Reserve System
member bank (the "Eurodollar Rate"). The Banks determination of all of the
foregoing shall be conclusive and, in making such determinations, the Bank
shall, if necessary, round up to the nearest whole multiple of one one-hundredth
of one percent (1/100 of 1%).
The interest rate options that the Bank makes available to the
Borrower from time to time will not necessarily be the most favorable of the
options listed above. The Bank, in its sole discretion, may decline to make any
of the foregoing interest rate options available to the Borrower at any given
time. Any rate under this agreement is not necessarily the lowest rate charged
by the Bank to any of its customers.
Notwithstanding the foregoing, if there is a draw under any
Letter of Credit, such draw shall bear interest at the Prime Rate until it is
repaid in full.
3. Maturities
(a) Maturities of Prime Rate Loans. Each loan under
this Facility B that bears interest at the Prime Rate shall be payable on demand
and the Prime Rate shall be subject to change daily.
(b) Maturities of Eurodollar Rate Loans. Each loan
under this Facility B bearing interest at the Eurodollar Rate shall be repayable
at a stated maturity of one, three or six months, as selected by the Borrower no
later than 11:00 a.m. Eastern Time on the third Business Day prior to the
advance and approved by the Bank in its sole discretion. Upon the maturity of a
Eurodollar Rate Loan under this Facility B, the Borrower may reborrow such loan
as either the Prime Rate or Eurodollar Rate if (i) it has satisfied all of the
conditions under this agreement (including, without limitation, the loan request
and notice conditions under subsection 5 below) and (ii) the Bank is willing to
extend or continue such credit. If no notice for a reborrowing at a Eurodollar
Rate is received by the Bank on or before 11:00 a.m. Eastern Time on the date
that is at least three Business Days before the maturity of any Eurodollar Rate
loan under this Facility B, such
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Eurodollar Rate loan shall, upon its maturity (if it is not repaid in full), be
converted to a Prime Rate loan under this Facility B that is due upon demand as
provided in subsection (a) above.
4. Interest Payments. Interest on each loan under this
Facility B shall be due and payable at the stated maturity, if any, or, if the
loan is payable on demand, on the 15th day of each month commencing on the first
such day following the advance of the loan. In addition, for each loan under
this Facility B that is payable at a stated maturity greater than three months,
additional interest payments shall be due every three months, beginning with the
date three months from the date the loan is advanced.
5. Loan Request. Upon request given by telephone, fax or
letter, by a person designated to the Bank as the Borrower's duly authorized
representative, for a loan under this Facility B, the Bank may advance and
credit to the Borrower's account at the Bank, or transfer to another bank
designated by the Borrower, such sums of money as may mutually be agreed upon at
the time of the request.
Notwithstanding the foregoing, any request for a loan
under this Facility B at the Eurodollar Rate must be received by the Bank no
later than 11:00 a.m. Eastern Time on the third Business Day preceding the
proposed funding date.
The Borrower and the Bank each shall, upon the other's
request, forward to the other a written confirmation of any loan under this
Facility B, including confirmation of the date, maturity, interest rate and
amount of the loan.
The Borrower shall provide the Bank with a list of the
persons designated by the Borrower as its duly authorized representatives. The
Bank may act upon the written or oral instructions of any person designated by
the Borrower as its authorized representative.
Each disbursement and repayment of a loan under this
Facility B bearing interest at the Eurodollar Rate shall be in a minimum amount
of $1,000,000.00 and in integral multiples of $1,000,000.00 in excess thereof.
Each disbursement and repayment of a loan under this Facility B shall be made in
immediately available funds at the principal office of the Bank in Detroit,
Michigan.
6. Additional Costs. If any applicable domestic or
foreign law, treaty, rule or regulation now or later in effect (whether or not
it now applies to the Bank) or the interpretation or administration thereof by a
governmental authority charged with such interpretation or administration, or
compliance by the Bank with any guideline, request or directive of such an
authority (whether or not having the force of law), including any risk based
capital guidelines, shall: (a) affect the basis of taxation of payments to the
Bank of any amounts payable by the Borrower under this Facility B (other than
taxes imposed on the overall net income of the Bank by the jurisdiction or by
any political subdivision or taxing authority of the jurisdiction in which the
Bank has its principal office); or (b) impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by the Bank under Facility B; or (c)
impose any other condition with respect to this Facility B or the Master
Promissory Note (Facility B); or (d) affect the amount of capital required or
expected to be maintained by the Bank, if the Bank determines that the amount of
such capital is increased by or based upon the existence of the
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Bank's obligations under this Facility B and has the effect of reducing the
rate of return on the Bank's capital, as a consequence of the obligations under
this Facility B, to a level below that which the Bank could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by the Bank to be material; and, in any
of cases (a) through (d) above, the result of any of the foregoing is to
increase the cost to the Bank of maintaining any loan under this Facility B on
which interest is calculated at the Eurodollar Rate or to reduce the amount of
any sum receivable by the Bank on such a loan, then the Borrower shall pay to
the Bank, from time to time, upon request by the Bank, additional amounts
sufficient to compensate the Bank for the increased cost or reduced sum
receivable. A statement as to the amount of the increased cost or reduced sum
receivable, prepared in good faith and in reasonable detail by the Bank and
submitted by the Bank to the Borrower, shall be conclusive and binding for all
purposes absent manifest error in computation.
7. ILLEGALITY. Without limitation any other provision in this
agreement allowing the Bank to decline to allow loans under this Facility B at
the Eurodollar Rate, if: (a) the Bank determines (which determination shall be
conclusive) that the quotations of interest rates for U.S. Dollar deposits
referred to in the definition of "Eurodollar Rate" are not being provided in the
relevant amount or for the relevant maturity; or (b) it becomes unlawful for the
Bank to honor its obligation to make, maintain or renew Eurodollar Rate loans
under this Facility B; then, in any such case, (i) the Bank shall promptly
notify the Borrower of such facts, (ii) the Bank's obligation to make, maintain
or renew Eurodollar Rate loans under this Facility B, shall be suspended until
such time as the Bank may again make, renew and maintain Eurodollar Rate loans
and (iii) all then existing Eurodollar Rate loans shall, if reborrowed in
accordance with subsection 3(b) above, become Prime Rate loans upon their
maturity.
8. BROKERAGE COSTS. The Borrower shall pay to the Bank, upon the
request of the Bank, such amount or amounts as shall be sufficient (in the
reasonable opinion of the Bank) to compensate the Bank for any loss, cost or
expense which the Bank determines is attributable to: (a) any payment or
prepayment of a Eurodollar Rate loan under this Facility B on a date other than
its maturity date (whether by reason of acceleration, mandatory prepayment or
otherwise); or (b) any failure by the Borrower to borrow a Eurodollar Rate loan
under this Facility B on the date set forth in the Borrower's loan request for
such Eurodollar Rate loan. Without limiting the foregoing, such compensation
shall include an amount equal to the excess, if any, of: (i) the amount of
interest which otherwise would have accrued on the principal amount so paid,
prepaid or not borrowed, for the period from and including the date of such
payment, prepayment or failure to borrower, to but excluding the maturity date
of such Eurodollar Rate loan (or the date of such maturity specified on the loan
request therefore in the case of "unborrowed" Eurodollar Rate loans), at the
applicable rate of interest for such Eurodollar Rate loan provided for herein;
over (ii) the amount of interest (as reasonably determined by the Bank) the Bank
would have bid in the applicable interbank market for U.S. Dollar deposits for a
comparable amount and maturity. A determination of the Bank as to the amounts
payable pursuant to this subsection 9 shall be conclusive absent manifest error.
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9. DEFAULT RATE INTEREST. After the maturity of the loans under
this Facility B, whether by demand, acceleration, expiration of time, or
otherwise (except for the maturity of any Eurodollar Rate loan that has been
renewed under section 3(b) above): (a) all existing Eurodollar Rate loans will
be converted to the Prime Rate loans upon the expiration of the current interest
period with respect thereto; (b) the Prime Rate loans will bear interest at the
Prime Rate, plus three percent; and (c) all the existing Eurodollar Rate loans
shall bear interest at the applicable Eurodollar Rate, plus three percent (3%),
until they are converted as provided in clause (a) above, after which they will
bear interest at the Floating Rate, plus three percent (3%) (the rates of
interest described in clauses (b) and (c) of this subsection (9) being called
the "Default Rate").
10. PAYMENTS DUE ON DAY OTHER THAN BUSINESS DAY. Whenever any
payment under this Facility B becomes due and payable on a day that is not a
Business Day, if no event of acceleration has occurred and is continuing, the
maturity of the payment shall be extended to the next succeeding Business Day,
except that, in the case of a loan under this Facility B accruing interest at
the Eurodollar Rate, if the result of the extension would be to extend the
payment into another calendar month, the payment must be made on the immediately
preceding Business Day. As used in this agreement, "Business Day" means a day
other than a Saturday, a Sunday or any other day that commercial banks in
Detroit, Michigan are authorized or required to close under the laws of the
state of Michigan and, with respect to any loan under this Facility B accruing
interest at the Eurodollar Rate, on which dealings in United States Dollar
deposits are carried out in the interbank market selected by the Bank for
purposes of determining the Eurodollar Rate.
C. FACILITY C (PURCHASE MONEY TERM LOANS). The Bank has approved an
uncommitted credit authorization to the Borrower in the principal sum not to
exceed $2,000,000.00 in the aggregate at any one time outstanding ("Facility
C"). Facility C shall be in the form of loans evidenced by the Borrower's notes
on the Bank's form that is attached hereto as Exhibit A (referred to in this
agreement both singularly and together with any other promissory notes
referenced in this Section 1 as the "Notes"), the proceeds of which shall be
used to purchase the business equipment of the Borrower approved by the Bank.
Interest on each loan under this Facility C shall accrue, at the election of the
Borrower (which election shall be made by the Borrower at the time that a loan
is authorized under this Facility C), at: (1) the Prime Rate (as defined
above); or (2) a fixed rate quoted to the Borrower by the Bank, in the Bank's
discretion, at the time that each loan under this Facility C is requested. The
maturity of each Note under this Facility C note shall not exceed sixty (60)
months from the Note date. Payments under each loan under this Facility C
shall: (a) be made monthly commencing one (1) month after the date such loan is
made and continuing on the same day of each month thereafter until the maturity
date of such loan; and (b) each be in an amount equal to the sum of (i) the
principal amount of the loan divided by the number of months between the advance
and the maturity of the loan (both inclusive), plus (ii) all accrued but unpaid
interest on the loan as of the date such monthly payment is due.
Notwithstanding the aggregate amount of this Facility C stated above, the
original principal amount of each loan under this Facility C shall not exceed
the lesser of (I) 100% of the cost of the equipment purchased with loan proceeds
or (II) $2,000,000.00. Facility C shall expire on August 31, 1996 unless
earlier withdrawn.
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1.2 Term Loans. Intentionally Omitted.
2.0 Conditions Precedent.
2.1 Conditions Precedent to Initial Extension of Credit. Before the
first extension of credit under this agreement, whether by disbursement of a
loan, issuance of a letter of credit or otherwise, the Borrower shall deliver
to the Bank, in form and substance satisfactory to the Bank:
A. Loan Documents. The Notes; the letter of credit applications
required by Section 1.2; the security agreements and financing statements
required by Section 5.1; and any other loan documents which the Bank may
reasonably require to give effect to the transactions contemplated by this
agreement;
B. Evidence of Due Organization and Good Standing. Evidence
satisfactory to the Bank of the due organization and good standing of the
Borrower and every other business entity that is a party to this agreement or
any other loan document required by this agreement; and
C. Evidence of Authority to Enter into Loan Documents. Evidence
satisfactory to the Bank that (i) each party to this agreement or any other
loan document required by this agreement is authorized to enter into the
transactions contemplated by this agreement and the other loan documents, and
(ii) the person signing on behalf of each such party is authorized to do so.
2.2 Conditions Precedent to Each Extension of Credit. Before any
extension of credit under this agreement, whether by disbursement of a loan,
issuance of a letter of credit or otherwise, the following conditions shall
have been satisfied:
A. Representations. The representations contained in Section 10
shall be true on and as of the date of the extension of credit;
B. No Event of Acceleration. No event of acceleration shall have
occurred and be continuing or would result from the extension of credit;
C. Continued Satisfaction. The Bank shall have remained
satisfied with the Borrower's managerial and financial status; and
D. Additional Approvals, Opinions, and Documents. The Bank shall
have received such other approvals, opinions and documents as it may reasonably
request.
3.0 Borrowing Base. Notwithstanding any other provision of this
agreement, the aggregate principal amount outstanding at any one time under
Facility B shall not exceed the lesser of the Borrowing Base or $16,000,000.00.
"Borrowing Base" means 80% of the Borrower's trade accounts receivable in which
the bank has a perfected, first priority security interest, excluding accounts
more than 90 days past due from the date of invoice, accounts subject to offset
or defense, government, bonded, affiliate and foreign accounts, and accounts
otherwise unacceptable to the Bank.
4.0 Fees and Expenses.
4.1 Fees. The Borrower shall pay the Bank, on the date a loan is
advanced under Facility C, a fee equal to one half of one percent (1/2%) of
such loan. The Borrower acknowledges that all such fees shall have been earned
by the Bank on the date of their payment.
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4.2 Out-of-Pocket Expenses. In addition to any fee set forth in
Section 4.1 above, the Borrower shall reimburse the Bank for its out-of-pocket
expenses and reasonable attorney's fees (including the fees of in-house
counsel) allocated to the Credit Facilities.
5.0 Security.
5.1 Payment of the borrowings under the Credit Facilities shall be
secured by a first security interest, covering the following property and all
its additions, substitutions, increments, proceeds and products, whether now
owned or later acquired ("Collateral"):
A. Accounts Receivable. All of the Borrower's accounts, chattel
paper, general intangibles, instruments, and documents (as those terms are
defined in the Michigan Uniform Commercial Code), rights to refunds of taxes
paid at any time to any governmental entity, and any letters of credit and
drafts under them given in support of the foregoing, wherever located. The
Borrower shall deliver to the Bank executed security agreements and financing
statements in form and substance satisfactory to the Bank.
B. Inventory. All of the Borrower's inventory, wherever
located. The Borrower shall deliver to the Bank executed security agreements
and financing statements in form and substance satisfactory to the Bank.
C. Equipment. All of the Borrower's equipment, wherever
located. The Borrower shall deliver to the Bank executed security agreements
and financing statements in form and substance satisfactory to the Bank.
The Bank and the Borrower acknowledge that: (a) the foregoing security
interests have already been granted to the Bank pursuant to (i) Continuing
Security Agreements from the Borrower to the Bank, dated May 13, 1988, March
23, 1992 and September 20, 1994 (the "Security Agreements") and (ii) Financing
Statements in favor of the Bank that have been filed with the Secretary of
State of Michigan as document nos. C074583, C706862, C585024 and C891951 (the
"Financing Statements"); (b) the Security Agreements and Financing Statements
secure all of the Borrower's liabilities to the Bank, including, without
limitation, the Credit Facilities, the Notes and all costs and expenses
incurred by the Bank, including, without limitation, the Credit Facilities, the
Notes and all costs and expenses incurred by the Bank in connection therewith;
and (c) no additional security agreements or financing statements are required
as of the date of this agreement.
5.2 No forbearance or extension of time granted any subsequent
owner of the Collateral shall release the Borrower from liability.
5.3 Additional Collateral/Setoff. To further secure payment of the
borrowings under the Credit Facilities and all of the Borrower's other
liabilities to the Bank, the Borrower grants to the Bank a continuing security
interest in: (i) all securities and other property of the Borrower in the
custody, possession or control of the Bank (other than property held by the
Bank solely in a fiduciary capacity); and (ii) all balances of deposit accounts
of the Borrower with the Bank. The Bank shall have the right at any time to
apply its own debt or liability to the Borrower, or to any other party liable
for payment of the borrowings under the Credit Facilities, in whole or partial
payment of such borrowings or other present or future liabilities, without any
requirement of mutual maturity.
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5.4 CROSS LIEN. Any of the Borrower's other property in which the
Bank has a security interest to secure payment of any other debt, whether
absolute, contingent, direct or indirect, including the Borrower's guaranties
of the debts of others, shall also secure payment of and be part of the
Collateral for the Credit Facilities.
6.0 GUARANTIES. Intentionally Omitted.
7.0 SUBORDINATION. Intentionally Omitted.
8.0 AFFIRMATIVE COVENANTS. So long as any debt remains outstanding
under the Credit Facilities, the Borrower, and each of its subsidiaries, if
any, shall:
8.1 INSURANCE. Maintain insurance with financially sound and
reputable insurers covering its properties and business against those
casualties and contingencies and in the types and amounts as shall be in
accordance with sound business and industry practices.
8.2 EXISTENCE. Maintain its existence and business operations as
presently in effect in accordance with all applicable laws and regulations, pay
its debts and obligations when due under normal terms, and pay on or before
their due date, all taxes, assessments, fees and other governmental monetary
obligations, except as they may be contested in good faith if they have been
properly reflected on its books and, at the Bank's request, adequate funds or
security has been pledged to insure payment.
8.3 FINANCIAL RECORDS. Maintain proper books and records of account,
in accordance with generally accepted accounting principles where applicable,
and consistent with financial statements previously submitted to the Bank.
8.4 NOTICE. Give prompt notice to the Bank of the occurrence of (i)
any event of acceleration, and (ii) any other development, financial or
otherwise, which would affect the Borrower's business, properties or affairs in
a materially adverse manner.
8.5 FINANCIAL REPORTS. Furnish to the Bank whatever information,
books, and records the Bank may reasonably request, including at a minimum (If
the Borrower has subsidiaries, all financial statements required will be
provided on a consolidated and on a separate basis):
A. within sixty (60) days after each quarterly period, a balance
sheet as of the end of that period and statements of income, cash flows, and
retained earnings from the beginning of that fiscal year to the end of that
period, certified as correct by one of its authorized agents;
B. within one hundred twenty (120) days after, and as of the end
of, each of its fiscal years, detailed financial statements including a balance
sheet and statements of income, retained earnings, and cash flows, audited by
an independent certified public accountant of recognized standing; and
C. within thirty (30) days after, and as of the end of, each
calendar month, a list of accounts receivable, aged from date of invoice,
certified as correct by one of its authorized agents.
9.0 NEGATIVE COVENANTS
9.1 DEFINITIONS. As used in this agreement, the following terms shall
have the following respective meanings:
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A. "Subordinated Debt" means debt subordinated to the Bank in
manner and by agreement satisfactory to the Bank.
B. "Tangible Net Worth" means total assets less intangible assets
and total liabilities. Intangible assets include goodwill, parents, copyrights,
mailing lists, catalogs, trademarks, bond discount and underwriting expenses,
organization expenses, and all other intangibles.
9.2 Unless otherwise noted, the financial requirements set forth in
this section shall be computed in accordance with generally accepted accounting
principles applied on a basis consistent with financial statements previously
submitted by the Borrower to the Bank.
9.3 Without the written consent of the Bank, so long as any debt
remains outstanding under the Credit Facilities, the Borrower shall not (where
appropriate, covenants apply on a consolidated basis);
A. SALE OF SHARES. Issue, sell or otherwise dispose of any
shares of its capital stock or other securities, or rights, warrants or options
to purchase or acquire any such shares or securities.
B. DEBT. Incur, or permit to remain outstanding, debt for
borrowed money or installment obligations, except debt reflected in the latest
financial statement of the Borrower furnished to the Bank prior to execution of
this agreement and not to be paid with proceeds of borrowings under the Credit
Facilities. For purposes of this covenant, the sale of any accounts receivable
shall be deemed the incurring of debt for borrowed money.
C. LIENS. Create or permit to exist any lien on any of its
property, real or personal, except existing liens known to the Bank, liens to
the Bank; liens incurred in the ordinary course of business securing current
nondelinquent liabilities for taxes, worker's compensation, unemployment
insurance, social security and pension liabilities and liens for taxes being
contested in good faith.
D. ADVANCES AND INVESTMENTS. Purchase or acquire any securities
of, or make any loans or advances to, or investments in, any person, firm or
corporation, except obligations of the United States Government, open market
commercial paper rated one of the top two ratings by a rating agency of
recognized standing, or certificates of deposit in insured financial
institutions.
E. USE OF PROCEEDS. Use, or permit any proceeds of the Credit
Facilities to be used, directly or indirectly, for the purpose of "purchasing
or carrying any margin stock" within the meaning of Federal Reserve Board
Regulation U. At the Bank's request, the Borrower shall furnish to the Bank a
completed federal Reserve Board Form U-1.
F. TANGIBLE NET WORTH [Plus Subordinated Debt]. Permit its
Tangible Net Worth [plus Subordinated Debt] to be less than $8,500,000.
G. CURRENT RATIO. Permit the ratio of its current assets to its
current liabilities to be less than 1.0 to 1.00.
10.0 REPRESENTATIONS BY BORROWER. Borrower represents that: (A) the
execution and delivery of this agreement and the Notes and the performance of
the obligations they impose do not violate any law, conflict with any agreement
by which the Borrower is bound, or require the consent or approval of any
governmental
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authority or other third party; (B) this agreement, the Notes, the Security
Agreements and the Financing Statements are valid and binding agreements,
enforceable in accordance with their terms; and (C) all balance sheets, profit
and loss statements, and other financial statements furnished to the Bank are
accurate and fairly reflect the financial condition of the organizations and
persons to which they apply on their effective dates, including contingent
liabilities of every type, which financial condition has not changed materially
and adversely since those dates. Borrower further represents that: (1) it is
duly organized, existing and in good standing under the laws of the jurisdiction
under which it was organized; and (2) the execution and delivery of this
agreement and the Notes and the performance of the obligations they impose (a)
are within its powers, (b) have been duly authorized by all necessary action of
its governing body and (c) do not contravene the terms of its articles of
incorporation or organization, its bylaws, or any partnership, operating or
other agreement governing its affairs.
11.0 Acceleration.
11.1 Events of Acceleration. If any of the following events occurs,
the Credit Facilities shall terminate and all borrowings under them shall be due
immediately, without notice, at the Bank's option, whether or not the Bank has
made demand.
A. The Borrower or any guarantor of any of the Credit Facilities
or the Notes ("Guarantor") fails to pay when due any amount payable under the
Credit Facilities or under any agreement or instrument evidencing debt to any
creditor;
B. The Borrower or any Guarantor (a) fails to observe or perform
any other term of this agreement or the Notes; (b) makes any materially
incorrect or misleading representation, warranty, or certificate to the Bank;
(c) makes any materially incorrect or misleading representation in any financial
statement or other information delivered to the Bank; or (d) defaults under the
terms of any agreement or instrument relating to any debt for borrowed money
(other than borrowings under the Credit Facilities, but including other
obligations and liabilities owing from the Borrower to the Bank), such that the
creditor declares the debt due before its maturity;
C. There is a default under the terms of any loan agreement,
security agreement or any other document executed as part of the Credit
Facilities, or any guaranty of the borrowings under the Credit Facilities
becomes unenforceable in whole or in part, or any Guarantor fails to promptly
perform under its guaranty;
D. A "reportable event" (as defined in the Employee Retirement
Income Security Act of 1974 as amended) occurs that would permit the Pension
Benefit Guaranty Corporation to terminate any employee benefit plan of the
Borrower or any affiliate of the Borrower;
E. The Borrower or any Guarantor becomes insolvent or unable to
pay its debts as they become due;
F. The Borrower or any Guarantor (a) makes an assignment for the
benefit of creditors, (b) consents to the appointment of a custodian, receiver
or trustee for it or for a substantial part of its assets or (c)
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commences any preceding under any bankruptcy, reorganization, liquidation or
similar laws of any jurisdiction;
G. A custodian, receiver or trustee is appointed for the Borrower
or any Guarantor or for a substantial part of its assets without its consent
and is not removed within 60 days after such appointment;
H. Proceedings are commenced against the Borrower or any
Guarantor under any bankruptcy, reorganization, liquidation, or similar laws of
any jurisdiction, and such proceedings remain undismissed for 60 days after
commencement; or the Borrower or Guarantor consents to the commencement of such
proceedings;
I. Any judgment is entered against the Borrower or any Guarantor,
or any attachment, levy or garnishment is issued against any property of the
Borrower or any Guarantor, in each case in an aggregate amount in excess of
$250,000.00;
J. The Borrower or any Guarantor dies;
K. The Borrower or any Guarantor, without the Bank's written
consent, (a) is dissolved, (b) merges or consolidates with any third party, (c)
leases, sells or otherwise conveys a material part of its assets or business
outside the ordinary course of business, (d) leases, purchases, or otherwise
acquires a material part of the assets of any other corporation or business
entity, except in the ordinary course of business, or (e) agrees to do any of
the foregoing, (notwithstanding the foregoing, any subsidiary may merge or
consolidate with any other subsidiary, or with the Borrower, so long as the
Borrower is the survivor);
L. There is a substantial change in the existing or prospective
financial condition of the Borrower or any Guarantor which the Bank in good
faith determines to be materially adverse; or
M. The Bank in good faith shall deem itself insecure.
11.2 Remedies. If the borrowings under the Credit Facilities are not
paid at maturity, whether by demand, acceleration or otherwise, the Bank shall
have all of the rights and remedies provided by any law or agreement. Any
requirement of reasonable notice shall be met if the Bank sends the notice to
the Borrower at least seven (7) days prior to the date of sale, disposition or
other event giving rise to the required notice. The Bank is authorized to cause
all or any part of the Collateral to be transferred to or registered in its
name or in the name of any other person, firm or corporation, with or without
designation of the capacity of such nominee. The Borrower shall be liable for
any deficiency remaining after disposition of any Collateral. The Borrower is
liable to the Bank for all reasonable costs and expenses of every kind incurred
in the making or collection of the Credit Facilities, including, without
limitation, reasonable attorney's fees and court costs (whether attributable to
the Bank's in-house or outside counsel). These costs and expenses shall
include, without limitation, any costs or expenses incurred by the Bank in any
bankruptcy, reorganization, insolvency or other similar proceeding.
12.0 Miscellaneous.
12.1 Notice from one party to another relating to this agreement
shall be deemed effective if made in writing (including telecommunications) and
delivered to the recipient's address, telex number of fax number set forth
under its name below by any of the following means: (a) hand delivery, (b)
registered or certified mail, postage prepaid, with return receipt requested,
(c) first class or express mail, postage prepaid, (d) Federal Express, or like
overnight courier service or (e) fax, telex or other wire transmission with
request for assurance
11
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of receipt in a manner typical with respect to communication of that type.
Notice made in accordance with this section shall be deemed delivered upon
receipt if delivered by hand or wire transmission, 3 business days after mailing
if mailed by first class, registered or certified mail, or one business day
after mailing or deposit with an overnight courier service if delivered by
express mail or overnight courier.
12.2 No delay on the part of the Bank in the exercise of any right or
remedy shall operate as a waiver. No single or partial exercise by the Bank of
any right or remedy shall preclude any other future exercise of it or the
exercise of any other right or remedy. No waiver or indulgence by the Bank of
any default shall be effective unless in writing and signed by the Bank, nor
shall a waiver on one occasion be construed as a bar to or waiver of that right
on any future occasion.
12.3 This agreement, the Notes, and any related loan documents embody the
entire agreement and understanding between the Borrower and the Bank and
supersede all prior agreements and understandings relating to their subject
matter. If any one or more of the obligations of the Borrower under this
agreement or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrower shall not in any way be affected or impaired, and
such validity, illegality or unenforceability in one jurisdiction shall not
affect the validity, legality or enforceability of the obligations of the
Borrower under this agreement or the Notes in any other jurisdiction.
12.4 The Borrower, if more than one, shall be jointly and severally liable.
12.5 This agreement is delivered in the State of Michigan and governed by
Michigan law. This agreement is binding on the Borrower and its successors, and
shall inure to the benefit of the Bank, its successors and assigns.
12.6 Section headings are for convenience of reference only and shall not
affect the interpretation of this agreement.
13.0 Waiver of Jury Trial. The Bank and the Borrower, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this agreement or any related instrument
or agreement or any of the transactions contemplated by this agreement or any
course of conduct, dealing, statements (whether oral or written), or actions of
either of them. Neither the Bank nor the Borrower shall seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been waived. These
provisions shall not be deemed to have been modified in any respect or
relinquished by either the Bank or the Borrower except by a written instrument
executed by both of them.
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Executed by the parties on: September 14, 1995.
"BANK" "BORROWER"
NBD BANK COMPLETE BUSINESS SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------- -------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Second Vice President Its: President
ADDRESS FOR NOTICES: ADDRESS FOR NOTICES:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax/Telex No. ▇▇▇-▇▇▇-▇▇▇▇ Fax/Telex No. ▇▇▇-▇▇▇-▇▇▇▇
13
14
EXHIBIT A
INSTALLMENT BUSINESS LOAN NOTE
Due__________________ $____________________
No.__________________ ________________, 1995
PROMISE TO PAY: For value received, the undersigned (the "Borrower") promises to
pay to NBD Bank (the "Bank"), or order, at any office of the Bank in the State
of Michigan, the sum of ___________________________________________________ AND
__/100 DOLLARS ($____________________) plus interest computed on the basis of
the actual number of days elapsed in a year of 360 days at the rate of:
________% per annum (the "Note Rate") until maturity, whether by
acceleration or otherwise, and at the rate of 3% per annum above
the Note Rate on overdue principal from the date when due until
paid; or
0% per annum above the rate announced from time to time by the Bank
as its "prime" rate (the "Note Rate"), which rate may not be the
lowest rate charged by the Bank to any of its customers, until
maturity, whether by acceleration or otherwise, and at the rate
of 3% per annum above the Note Rate on overdue principal from
the date when due until paid. Each change in the "prime" rate
will immediately change the Note Rate.
In no event shall the interest rate exceed the maximum rate allowed by law; any
interest payment which would for any reason be deemed unlawful under applicable
law shall be applied to principal.
The Borrower will pay this sum in _________________ (_____) equal monthly
installments of $___________________, plus all accrued but unpaid interest as
of each payment date, commencing on ____________, 199__, and continuing on the
___ day of each month thereafter until _____________, at which time the entire
balance of unpaid principal plus accrued interest shall be due and payable
immediately. Each payment will be applied first to accrued interest, then to
principal.
CREDIT AGREEMENT: This note evidences debt under Facility A of a Credit
Authorization Agreement between the Bank and the Borrower, dated _____________,
19___, and any amendments thereto from time to time (the "Credit Agreement").
PREPAYMENT: If a fixed interest rate is specified above, the Borrower may
prepay all or any part of the principal balance of this note on one business
day's notice provided that, in addition to all principal, interest and costs
owing at the time of prepayment, the Borrower pays a prepayment premium equal
to the Current Value of (i) the interest that would have
15
accrued on the amount prepaid at the Note Rate, minus (ii) the interest that
could accrue on the amount prepaid at the Treasury Rate. In both cases,
interest will be calculated from the prepayment date to the maturity dates of
the installments being prepaid. Such maturity dates shall be determined by
applying the prepayment to the scheduled installments of principal in their
inverse order of maturity. "Treasury Rate" means the yield, as of the date of
prepayment, on United States Treasury bills, notes or bonds, selected by the
Bank in its discretion, having maturities comparable to the scheduled maturities
of the installments being prepaid. "Current Value" means the net present value
of the dollar amount of the interest to be earned, discounted at the Treasury
Rate. In no event shall the prepayment premium be less than zero. The
Borrower's notice of its intent to prepay shall be irrevocable. If the balance
of this note is accelerated in accordance with the terms of this note, the
resulting balance due shall be considered a prepayment due and payable as of
the date of acceleration. The Borrower agrees that the prepayment premium is a
reasonable estimate of loss and not a penalty. The prepayment premium is
payable as liquidated damages for the loss of bargain and its payment shall not
in any way reduce, affect or impair any other obligation of the Borrower under
this note.
SECURITY: To secure the payment of this note and any other present or future
liability of the Borrower, whether several, joint, or joint and several, the
Borrower pledges and grants to the Bank a continuing security interest in the
following described property and all of its additions, substitutions,
increments, proceeds and products, whether now owned or later acquired
("Collateral"):
1. All securities and other property of the Borrower in the custody,
possession or control of the Bank (other than property held by the Bank
solely in a fiduciary capacity);
2. All property or securities declared or acknowledged to constitute security
for any past, present or future liability of the Borrower to the Bank;
3. All balances of deposit accounts of the Borrower with the Bank;
4. The following additional property: all of the accounts receivable,
equipment and inventory of the Borrower, all as more completely described
in the Credit Agreement and the Security Agreements (as defined in the
Credit Agreement).
BANK'S RIGHT TO SETOFF: The Bank shall have the right at any time to apply its
own debt or liability to the Borrower or to any other party liable on this note
in whole or partial payment of this note or other present or future
liabilities, without any requirement of mutual maturity.
REPRESENTATIONS BY BORROWER: Borrower represents: (a) that the execution and
delivery of this note and the performance of the obligations it imposes do not
violate any law, conflict with any agreement by which it is bound, or require
the consent or approval of any governmental authority or any third party; (b)
that this note is a valid and binding agreement, enforceable according to its
terms; and (c) that all balance sheets, profit and loss statements, and other
financial statements furnished to the Bank are accurate and fairly reflect the
financial condition of the organizations and persons to which they apply on
their effective dates, including contingent liabilities of every type, which
financial condition has not changed materially and adversely since those dates.
Borrower further represents: (i) that it is
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duly organized, existing and in good standing pursuant to the laws under which
it is organized; and (ii) that the execution and delivery of this note and the
performance of the obligations it imposes (A) are within its powers and have
been duly authorized by all necessary action of its governing body; and (B) do
not contravene the terms of its articles of incorporation or organization, its
by laws, or any partnership, operating or other agreement governing its affairs.
EVENTS OF ACCELERATION: If any of the following events occurs:
1. The Borrower or any guarantor of this note ("Guarantor") fails to pay when
due any amount payable under this note or under any agreement or instrument
evidencing debt to any creditor;
2. The Borrower or any Guarantor(a) fails to observe or perform any other term
of this note; (b) makes any materially incorrect or misleading
representation, warranty, or certificate to the Bank; (c) makes any
materially incorrect or misleading representation in any financial
statement or other information delivered to the Bank; or (d) defaults under
the terms of any agreement or instrument relating to any debt for borrowed
money (other than the debt evidenced by this note, but including other
obligations and liabilities owing from the Borrower to the Bank) such that
the creditor declares the debt due before its maturity;
3. There is a default under the terms of any loan agreement, security
agreement, or any other document executed as part of the loan evidenced by
this note, or any guaranty of the loan evidenced by this note becomes
unenforceable in whole or in part, or any Guarantor fails to promptly
perform under its guaranty;
4. A "reportable event" (as defined in the Employee Retirement Income Security
Act of 1974 as amended) occurs that would permit the Pension Benefit
Guaranty Corporation to terminate any employee benefit plan of the Borrower
or any affiliate of the Borrower;
5. The Borrower or any Guarantor becomes insolvent or unable to pay its debts
as they become due;
6. The Borrower or any Guarantor (a) makes an assignment for the benefit of
creditors, (b) consents to the appointment of a custodian, receiver, or
trustee for itself or for a substantial part of its assets or (c) commences
any proceeding under any bankruptcy, reorganization, liquidation,
insolvency or similar laws of any jurisdiction;
7. A custodian, receiver, or trustee is appointed for the Borrower or any
Guarantor or for a substantial part of its assets without the consent of
the party against which the appointment is made and is not removed within
60 days after such appointment;
8. Proceedings are commenced against the Borrower or any Guarantor under any
bankruptcy, reorganization, liquidation, or similar laws of any
jurisdiction, and such proceedings remain undismissed for 60 days after
commencement; or the Borrower or Guarantor consents to the commencement of
such proceedings;
9. Any judgment is entered against the Borrower or any Guarantor, or any
attachment, levy, or garnishment is issued against any property of the
Borrower or any Guarantor; in each case in an aggregate amount in excess of
$250,000.00;
10. The Borrower or any Guarantor dies;
11. The Borrower or any Guarantor, without the Bank's written consent, (a) is
dissolved, (b) mergers or consolidates with any third party, (c) leases,
sells or otherwise conveys a material part of its assets or business
outside the ordinary course of business, (d) leases,
3
17
purchases or otherwise acquires a material part of the assets of any other
corporation or business entity except in the ordinary course of business,
or (e) agrees to do any of the foregoing (notwithstanding the foregoing,
any subsidiary may merge or consolidate with any other subsidiary, or with
the Borrower so long as the Borrower is the survivor);
12. There is a substantial change in the existing or prospective financial
condition of the Borrower or any Guarantor which the Bank in good faith
determines to be materially adverse;
13. The Bank in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure;
then this note shall become due immediately, without notice, at the Bank's
option.
REMEDIES: If this note is not paid at maturity, whether by acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by any
law or agreement. Any requirement of reasonable notice shall be met if the
Bank sends the notice to the Borrower at least seven (7) days prior to the date
of sale, disposition or other event giving rise to the required notice. The
Bank is authorized to cause all or any part of the Collateral to be transferred
to or registered in its name or in the name of any other person, firm or
corporation, with or without designation of the capacity of such nominee. The
Borrower shall be liable for any deficiency remaining after disposition of any
Collateral. The Borrower is liable to the Bank for all reasonable costs and
expenses of every kind incurred in the making or collection of this note,
including, without limitation, reasonable attorneys' fees and court costs.
These costs and expenses shall include, without limitation, any costs or
expenses incurred by the Bank in any bankruptcy, reorganization, insolvency or
other similar proceeding.
WAIVER: Each endorser and any other party liable on this note severally: (a)
waives demand, presentment, notice of dishonor and protest; and (b) consents to
(i) any extension or postponement of time of its payment without limit as to the
number or period, (ii) any substitution, exchange or release of all or part of
the Collateral, (iii) the addition of any party and (iv) the release or
discharge of, or suspension of any rights and remedies against, any person who
may be liable for the payment of this note. No delay on the part of the Bank in
the exercise of any right or remedy shall operate as a waiver. No single or
partial exercise by the Bank of any right or remedy shall preclude any other
future exercise of it or the exercise of any other right or remedy. No waiver
or indulgence by the Bank of any default shall be effective unless in writing
and signed by the Bank, nor shall a waiver on one occasion be construed as a bar
to or waiver of that right on any future occasion.
MISCELLANEOUS: The Borrower, if more than one, shall be jointly and severally
liable, and the term "Borrower" shall mean any one or more of them. This note
shall be binding on the Borrower and its successors, and shall inure to the
benefit of the Bank, its successors and assigns. Any reference to the Bank
shall include any holder of this note. This note is delivered in the State of
Michigan and governed by Michigan law. Section headings are for convenience of
reference only and shall not affect the interpretation of this note.
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18
WAIVER OF JURY TRIAL: The Bank and the Borrower, after consulting or having
had the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this note or any related instrument or
agreement or any of the transactions contemplated by this note or any course of
conduct, dealing, statements whether oral or written, or actions of either of
them. Neither the Bank nor the Borrower shall seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
These provisions shall not be deemed to have been modified in any respect
or relinquished by either the Bank or the Borrower except by a
written instrument executed by both of them.
ADDRESS BORROWER:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Mile Road COMPLETE BUSINESS SOLUTIONS,
Suite 250 INC.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇ By: __________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: President
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19
[NBD BANK LETTERHEAD]
September 5, 1996
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
Complete Business Solutions, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇:
This letter is to serve as an amendment to the Credit Authorization Agreement
(the "Agreement") executed on September 14, 1995 between NBD Bank (the "Bank")
and Complete Business Solutions, Inc. (the "Borrower").
Facility A is increased to a limit of $3,000,000 principal in the aggregate at
any one time outstanding as evidenced by credits to the Borrower's account and
shall be repayable as set forth in a Master Demand Business Loan Note executed
concurrent with this amendment. The expiries of Facilities A, B, and C shall
be amended to August 31, 1997 unless earlier withdrawn. All other terms and
conditions remain in full force and effect.
We are proud of our association with CBSI and look forward to the opportunity to
continue to assist with the company's credit and banking needs.
Please have Raj sign below and on the enclosed Master Demand Business Loan Note
to signify acceptance of this amendment.
Sincerely,
NBD BANK
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
----------------------
JAD: nal
Enclosure
Accepted and Agreed to this 10th day of September, 1996
COMPLETE BUSINESS SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: President
-------------------------
20
MASTER DEMAND BUSINESS LOAN NOTE (FACILITY A)
Due on Demand Detroit, Michigan
$3,000,000.00 September 5, 1996
PROMISE TO PAY: For value received, the undersigned (the "Borrower") promises
to pay ON DEMAND TO NBD BANK (the "Bank"), or order, at the Bank's principal
office in the State of Michigan, the sum of THREE MILLION AND 00/100 DOLLARS
($3,000,000.00), or such lesser sum as is indicated on Bank records, plus
interest computed on the basis of the actual number of days elapsed in a year
of 360 Days at the rate announced from time to time by the Bank as its "prime"
rate (the "Note Rate"), which rate may not be the lowest rate charged by the
Bank to any of its customers, until maturity, whether by demand, acceleration
or otherwise, and at the rate of 3% per annum above the Note Rate on overdue
principal from the date when due until paid. Each change in the "prime" rate
will immediately change the Note Rate.
In no event shall the interest rate exceed the maximum rate allowed by law; any
interest payment which would for any reason be deemed unlawful under applicable
law shall be applied to principal.
Interest will be computed on the unpaid principal balance from the date of each
borrowing.
The Borrower will pay this sum on demand. Until demand, the Borrower will pay
consecutive monthly installments of interest only commencing on the fifteenth
(15th) day of the first month after the first advance has been made under this
Note.
MASTER DEMAND NOTE: The Bank has authorized a discretionary credit facility
(Facility A under the Credit Agreement -- as defined below) to the Borrower in
a principal amount not to exceed the face amount of this note. Said Facility A
is in the form of loans made from time to time by the Bank to the Borrower at
the Bank's sole discretion. This note evidences the Borrower's obligation to
repay loans under Facility A. The aggregate principal amount of debt evidenced
by this note shall be the amount reflected from time to time in the records of
the Bank but shall not exceed the face amount of this note. The Borrower
acknowledges and agrees that no provision of this note and no course of dealing
by the Bank shall commit the Bank to make loans to the Borrower and that
notwithstanding any provision of this note or any other instrument or document,
all loans evidenced by this note are due and payable on demand, which may be
made by the Bank at any time, whether or not any event of acceleration then
exists.
21
CREDIT AGREEMENT: This note evidences the debt under Facility A of a Credit
Authorization Agreement between the Bank and the Borrower, dated September 14,
1995, and any amendments thereto from time to time (the "Credit Agreement").
SECURITY: To secure the payment of this note and any other present or future
liability of the Borrower, whether several, joint, or joint and several, the
Borrower pledges and grants to the Bank a continuing security interest in the
following described property and all of its additions, substitutions,
increments, proceeds and products, whether now owned or later acquired
("Collateral"):
1. All securities and other property of the Borrower in the custody,
possession or control of the Bank (other than property held by the Bank
solely in a fiduciary capacity);
2 All property or secutities declared or acknowledged to constitute
security for any past, present or future liability of the Borrower to
the Bank;
3. All balances of deposit accounts of the Borrower with the Bank;
4. The following additional property: all of the accounts receivable,
equipment and inventory of the Borrower, all as more completely
described in the Credit Agreement and the Security Agreements (as
defined in the Credit Agreement).
BANK'S RIGHT TO SETOFF: The Bank shall have the right at any time to apply its
own debt or liability to the Borrower or to any other party liable on this note
in whole or partial payment of this note or other present or future
liabilities, without any requirement of mutual maturity.
REPRESENTATIONS BY BORROWER: Borrower represents: (a) that the execution and
delivery of this note and the performance of the obligations it imposes do not
violate any law, conflict with any agreement by which it is bound, or require
the consent or approval of any governmental authority or any third party; (b)
that this note is a valid and binding agreement, enforceable according to its
terms; and (c) that all balance sheets, profit and loss statements, and other
financial statements furnished to the Bank are accurate and fairly reflect the
financial condition of the organizations and persons to which they apply on
their effective dates, including contingent liabilities of every type, which
financial condition has not changed materially and adversely since those dates.
Each Borrower further represents: (i) that it is duly organized, existing and in
good standing pursuant to the laws under which it is organized; and (ii) that
the execution and delivery of this note and the performance of the obligations
it imposes (A) are within its powers and have been duly authorized by all
necessary action of its governing body; and (B) do not contravene the terms of
its articles of incorporation or organization, its by laws, or any partnership,
operating or other agreement governing its affairs.
EVENTS OF ACCELERATION: If any of the following events occurs, this note shall
be due immediately without notice at the Bank's option whether or not the Bank
has made demand.
1. The Borrower or any guarantor of this note ("Guarantor") fails to pay when
due any amount payable under this note or under any agreement or instrument
evidencing debt to any creditor;
2
22
2. The Borrower or any Guarantor (a) fails to observe or perform any other
term of this note; (b) makes any materially incorrect or misleading
representation, warranty, or certificate to the Bank; (c) makes any
materially incorrect or misleading representation in any financial
statement or other information delivered to the Bank; or (d) defaults under
the terms of any agreement or instrument relating to any debt for borrowed
money (other than the debt evidenced by this note, but including other
obligations and liabilities owing from the Borrower to the Bank) such that
the creditor declares the debt due before its maturity;
3. There is a default under the terms of any loan agreement, security
agreement, or any other document executed as part of the loan evidenced by
this note, or any guaranty of the loan evidenced by this note becomes
unenforceable in whole or in part, or any Guarantor fails to promptly
perform under its guaranty;
4. A "reportable event" (as defined in the Employee Retirement Income Security
Act of 1974 as amended) occurs that would permit the Pension Benefit
Guaranty Corporation to terminate any employee benefit plan of the Borrower
or any affiliate of the Borrower;
5. The Borrower or any Guarantor becomes insolvent or unable to pay its debts
as they become due;
6. The Borrower or any Guarantor (a) makes an assignment for the benefit of
creditors, (b) consents to the appointment of a custodian, receiver, or
trustee for itself or for a substantial part of its assets or (c) commences
any proceeding under any bankruptcy, reorganization, liquidation,
insolvency or similar laws of any jurisdiction;
7. A custodian, receiver, or trustee is appointed for the Borrower or any
Guarantor or for a substantial part of its assets without the consent of
the party against which the appointment is made and is not removed within
60 days after such appointment;
8. Proceedings are commenced against the Borrower or any Guarantor under any
bankruptcy, reorganization, liquidation, or similar laws of any
jurisdiction, and such proceedings remain undismissed for 60 days after
commencement; or the Borrower or Guarantor consents to the commencement of
such proceedings;
9. Any judgment is entered against the Borrower or any Guarantor, or any
attachment, levy, or garnishment is issued against any property of the
Borrower or any Guarantor, in each case, in an aggregate amount in
excess of $250,000.00;
10. The Borrower or any Guarantor dies;
11. The Borrower or any Guarantor, without the Bank's written consent, (a) is
dissolved, (b) mergers or consolidates with any third party, (c) leases,
sells or otherwise conveys a material part of its assets or business
outside the ordinary course of business, (d) leases, purchases or
otherwise acquires a material part of the assets of any other corporation
or business entity except in the ordinary course of business, or (e)
agrees to do any of the foregoing (notwithstanding the foregoing, any
subsidiary may merge or consolidate with any other subsidiary, or with the
Borrower so long as the Borrower is the survivor);
12. There is a substantial change in the existing or prospective financial
condition of the Borrower or any Guarantor which the Bank in good faith
determines to be materially adverse;
13. The Bank in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure.
3
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REMEDIES: If this note is not paid at maturity, whether by acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by any
law or agreement. Any requirement of reasonable notice shall be met if the Bank
sends the notice to the Borrower at least seven (7) days prior to the date of
sale, disposition or other event giving rise to the required notice. The Bank is
authorized to cause all or any part of the Collateral to be transferred to or
registered in its name or in the name of any other person, firm or corporation,
with or without designation of the capacity of such nominee. The Borrower shall
be liable for any deficiency remaining after disposition of any Collateral. The
Borrower is liable to the Bank for all reasonable costs and expenses of every
kind incurred in the making or collection of this note, including, without
limitation, reasonable attorneys' fees and court costs. These costs and expenses
shall include, without limitation, any costs or expenses incurred by the Bank in
any bankruptcy, reorganization, insolvency or other similar proceeding.
WAIVER: Each endorser and any other party liable on this note severally: (a)
waives demand, presentment, notice of dishonor and protest; and (b) consents to
(i) any extension or postponement of time of its payment without limit as to the
number or period, (ii) any substitution, exchange or release of all or part of
the Collateral, (iii) the addition of any party and (iv) the release or
discharge of, or suspension of any rights and remedies against, any person who
may be liable for the payment of this note. No delay on the part of the Bank in
the exercise of any right or remedy shall operate as a waiver. No single or
partial exercise by the Bank of any right or remedy shall preclude any other
future exercise of it or the exercise of any other right or remedy. No waiver or
indulgence by the Bank of any default shall be effective unless in writing and
signed by the Bank, nor shall a waiver on one occasion be construed as a bar to
or waiver of that right on any future occasion.
MISCELLANEOUS: The Borrower, if more than one, shall be jointly and severally
liable, and the term "Borrower" shall mean any one or more of them. This note
shall be binding on the Borrower and its successors, and shall inure to the
benefit of the Bank, its successors and assigns. Any reference to the Bank
shall include any holder of this note. This note is delivered in the State of
Michigan and governed by Michigan law. Section headings are for convenience of
reference only and shall not affect the interpretation of this note.
WAIVER OF JURY TRIAL: The Bank and the Borrower, after consulting or having had
the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this note or any related instrument or
agreement or any of the transactions contemplated by this note or any course of
conduct, dealing, statements whether oral or written, or actions of either of
them. Neither the Bank nor the Borrower shall seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been waived. These
provisions shall not be deemed to have been modified in any respect or
relinquished by either the Bank or the Borrower except by a written instrument
executed by both of them.
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ADDRESS: BORROWER:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Mile Road COMPLETE BUSINESS SOLUTIONS,
Suite 250 INC.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
Title: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: President
5
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MASTER PROMISSORY NOTE (FACILITY B)
$16,000,000 Detroit, Michigan
September 14, 1995
For value received, on demand or at such other maturity or maturities
as are set forth in the Bank's records, Complete Business Solutions, Inc. (the
"Borrower") promises to pay to the order of NBD Bank (the "Bank"), at the
Bank's principal office in the State of Michigan, in lawful money of the United
States of America and in immediately available funds, the principal sum of
SIXTEEN MILLION AND 00/100 DOLLARS ($16,000,000), or such lesser amount as is
indicated on the Bank's records, together with interest computed on the balance
from time to time unpaid on the basis of the actual number of days elapsed in a
year of 360 days at the rate(s) per annum determined from time to time pursuant
to the Credit Agreement (as defined below) and reflected on the Bank's records,
which interest shall be payable in accordance with the terms set forth in the
Credit Agreement, and to pay interest on overdue principal at the Default Rate
provided in the Credit Agreement.
In no event shall the interest rate exceed the maximum rate allowed by
law. Any interest which would for any reason be deemed unlawful under
applicable law shall be applied to principal.
Waiver: The Borrower and each endorser of this note and any other
party liable for the debt evidenced by this note severally: (a) waives demand,
presentment, notice of dishonor and protest of this note; and (b) consents to
(i) any extension or postponement of time of its payment without limit as to
number or period, (ii) any substitution, exchange or release of all or any part
of any collateral securing this note, (iii) the addition of any party and (iv)
the release, discharge, or suspension of any rights and remedies against any
person who may be liable for the payment of this note. No delay on the part of
the holder in the exercise of any right or remedy shall operate as a waiver.
No single or partial exercise by the holder of any right or remedy shall
preclude any future exercise of that right or remedy or the exercise of any
other right or remedy. No waiver or indulgence by the holder of any default
shall be effective unless it is in writing and signed by the holder, nor shall
a waiver on one occasion be construed as a bar to or waiver of any right on
any future occasion.
This note evidences debt under Facility B of a certain Credit
Authorization Agreement between the Bank and the Borrower, dated September 14,
1995, as amended from time to time (the "Credit Agreement"), all of the terms
of which Credit Agreement are incorporated by reference into this note.
Reference should be made to the Credit Agreement for additional terms and
conditions, including, without limitation, interest rate, maturity, default and
acceleration provisions.
6
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WAIVER OF JURY TRIAL: The Bank and the Borrower, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this note, or any related instrument or
agreement, or any of the transactions contemplated by this note, or any course
of conduct, dealing, statements (whether oral or written), or actions of either
of them. Neither the Bank nor the Borrower shall seek to consolidate, by
counterclaim or otherwise, any such action in which a jury trial has been
waived with any other action in which a jury trial cannot be or has not been
waived. These provisions shall not be deemed to have been modified in any
respect or relinquished by either the Bank or the Borrower except by a written
instrument executed by both of them.
ADDRESS: COMPLETE BUSINESS SOLUTIONS,
INC.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Suite 250 --------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇ Its: President