REVOLVING PROMISSORY NOTE
$4,500,000.00 Dallas, Texas July 8, 1999
FOR VALUE RECEIVED, the undersigned, DIVERSIFIED CORPORATE RESOURCES,
INC., MANAGEMENT ALLIANCE CORPORATION, INFORMATION SYSTEMS CONSULTING CORP.,
TRAIN INTERNATIONAL, INC., and ▇▇▇▇▇ ASSESSMENT AND PERFORMANCE SYSTEMS, INC.
each a Texas corporation, and TEXCEL SERVICES, INC., a Pennsylvania corporation,
("Borrowers"), whose addresses for purposes of notice are ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, hereby promise, jointly and severally, to pay
to the order of COMPASS BANK, a Texas state banking corporation (the "Bank";
Bank and any subsequent holder hereof being hereinafter referred to as
"Holder"), without grace at its office at P.O. Box 650561, Dallas, Texas
75265-0561, or such other place as Holder may direct, in lawful money of the
United States of America, with interest, the principal amount of FOUR MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($4,500,000.00) (the "Maximum Principal
Amount") or, if less than such principal amount, the aggregate principal amount
(the "Advances") advanced by the Holder from time to time to the Borrowers
pursuant to the Loan Agreement (as defined below). Payment of principal and
interest shall be in accordance with the following provisions:
1. DEFINITIONS.
(a) "APPLICABLE RATE" shall mean the Compass Bank Index Rate,
unless Borrowers give Bank ten (10) days advance notice of Borrowers'
election for interest under this Note to accrue at the LIBOR Rate,
whereupon interest shall be calculated at the LIBOR Rate for the period
selected by Borrowers, which shall not be greater than the time period
prior to Maturity Date.
(b) "BUSINESS DAY" shall mean any day on which all major
departments of Holder are open for business at the address specified
herein.
(c) "COMPASS BANK INDEX RATE" shall mean at any time the
variable rate of interest published in THE WALL STREET JOURNAL's "Money
Rates" table as the prime rate. If multiple prime rates are quoted in
the table, then the highest prime rate will be the Compass Bank Index
Rate. In the event the prime rate is no longer published in the "Money
Rates" table, the Holder will choose a substitute Index Rate which is
based upon comparable information. The term "Compass Bank Index Rate"
is not intended to mean the lowest rate of interest available to the
most creditworthy borrower of Holder.
(d) "DEFAULT RATE" shall mean the lesser of the Maximum Rate
and five percentage points (5%) in excess of the Compass Bank Index
Rate.
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(e) "LIBOR RATE." shall mean a fluctuating per annum rate
equal to two and one-quarter percentage points (2-1/4%) in excess of
the LIBOR Base Rate.
(f) "LIBOR BASE RATE" shall mean the per annum interest rate
calculated by dividing LIBOR (as defined below) by a percentage equal
to one hundred percent (100%) MINUS the Eurodollar Reserve Percentage
(as defined below) in effect for Holder on the first day of the
Eurodollar Interest Period (as defined below). The term "LIBOR" means
the interest rate per annum (rounded upward to the nearest whole
multiple of one-sixteenth of one percent (0.0625%) per annum) quoted on
the Telerate Information System on the Business Day immediately
preceding the first day of the Eurodollar Interest Period as the thirty
(30) day London Interbank Offered Rate. If LIBOR is no longer published
on the Telerate Information System, then LIBOR shall be the interest
rate per annum quoted in THE WALL STREET JOURNAL. If LIBOR is no longer
published in THE WALL STREET JOURNAL, then LIBOR shall be the interest
rate per annum quoted to the Holder by major banks in the London
Interbank Eurodollar market ("LIBOR Banks") as the rate per annum at
which deposits in dollars are offered in London, England to major banks
in the London Interbank market at approximately 11:00 a.m. (New York
time) on the Business Day immediately preceding the first day of the
Eurodollar Interest Period and in an amount substantially equal to the
outstanding principal under this Note for a thirty (30) day period. The
term "Eurodollar Reserve Percentage" means for each Eurodollar Interest
Period the maximum reserve percentage in effect on the first day of
such Eurodollar Interest Period as prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for determining
reserve requirements applicable to "Eurodollar liabilities" pursuant to
Regulation D or any other then applicable regulations of the Board of
Governors (or any successor) which prescribes reserve requirements
applicable to "Eurocurrency liabilities", as presently defined in
Regulation D, or any Eurocurrency funding. The term "Eurodollar
Interest Period" means each successive thirty (30) day period prior to
Maturity Date. Each Eurodollar Interest Period shall commence on the
day on which the next preceding Eurodollar Interest Period expires. If
any Eurodollar Interest Period would otherwise expire on a day which is
not a Business Day such Eurodollar Interest Period shall be extended to
expire on the next succeeding Business Day, if the next succeeding
Business Day occurs in the same calendar month; however, if there will
be no succeeding Business Day in such calendar month, the Eurodollar
Interest Period shall expire on the immediately preceding Business Day.
(g) "MAXIMUM RATE" shall mean, with respect to Holder, the
maximum nonusurious interest rate, if any, that at any time, or from
time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note, under the laws
which are presently in effect of the United States and the State of
Texas applicable to such Holder and to such indebtedness or, to the
extent permitted by law, and to such indebtedness or, to the extent
permitted by law, under such applicable laws of the United States and
the State of Texas which may hereafter be in effect and which allow a
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higher maximum nonusurious interest rate than applicable laws now
allow. To the extent that Tex. Rev. Civ. Stat. ▇▇▇. art. 5069-1D.001
(the "Act"), is relevant to any Holder for the purposes of determining
the Maximum Rate, Holder and each such holder may elect to determine
such applicable legal rate under the Act pursuant to the "interest rate
ceiling", from time to time in effect, as referred to in Article
1D.001(a) of the Act; provided, however, that to the extent permitted
by applicable law, Holder may, in accordance with the Act, from time to
time elect the "weekly ceiling", "monthly ceiling", "quarterly ceiling"
or the "annualized ceiling" as those terms are defined in Subchapter
"A" of the Act, and renew any such election without notice to
Borrowers.
2. PAYMENTS. Borrowers promise to pay interest, on the principal amount
owing hereunder from time to time, computed daily, at a per annum rate equal to
the lesser of the Applicable Rate or the Maximum Rate on September 30, 1999,
December 30, 1999, and March 30, 2000. All outstanding principal and accrued and
unpaid interest on this Revolving Promissory Note (the "Note") and all other
amounts due under the Security Documents (as defined below) shall be due and
payable on June 30, 2000 ("Maturity Date"). Borrowers shall be entitled to
borrow, repay and reborrow principal from the date of this Note until Maturity
Date.
3. UNAVAILABILITY OF LIBOR RATE.
In the event that:
(a) At least one Business Day before the commencement of any
Eurodollar Interest Period the Holder is advised by the LIBOR Banks
that deposits in dollars in the applicable principal amount are not
being offered in the London Interbank Eurodollar market for such
Eurodollar Interest Period; or
(b) The Holder determines that the LIBOR Base Rate plus two
and one-quarter percentage points (2-1/4%) will not adequately reflect
the cost to Holder of obtaining funds in dollars in the London
Interbank market in an amount substantially equal to the outstanding
principal in dollars; or
(c) The period of time remaining prior to the Maturity
Date is less than thirty (30) days;
then and in that event, the Holder shall give written notice thereof to
Borrowers whereupon the right of the Borrowers to have interest
determined with reference to the LIBOR Rate shall be suspended and the
applicable interest rate shall be converted into a floating rate equal
to the Compass Bank Index Rate on the last day of the then current
Eurodollar Period.
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4. OTHER PAYMENT TERMS.
(a) Should any payment become due and payable on any day other
than a Business Day for Bank, the date of such payment shall be
extended to the next succeeding Business Day, and, in the case of a
payment of principal or past due interest or any installment of either
thereof, interest shall accrue and be payable thereon for the period of
such extension at the applicable interest rate or rates specified
herein.
(b) All payments of principal and interest that are past due
shall, at the option of Bank, bear interest at a per annum interest
rate equal to the Default Rate.
(c) Except for purposes of computing the Maximum Rate,
interest shall be calculated on the basis of a 360-day year applied to
the actual number of days upon which principal is outstanding by
multiplying the principal amount outstanding hereunder by the
applicable interest rate, multiplying the product thereof by the actual
number of days elapsed, and dividing the product so obtained by three
hundred sixty (360).
(d) In lieu of the interest on past due installments provided
for in this Note, Bank may collect a late charge not to exceed five
cents ($.05) for each dollar ($1.00) of each payment of interest,
principal and, if applicable, any other payment due under any of the
Security Documents which is more than ten (10) days in arrears, to
cover the extra expense involved in handling delinquent accounts;
provided however, that should such late charge constitute interest
under any applicable law, such late charge shall not, together with
other interest to be paid, charged, contracted for, received, or
reserved against, or taken on the indebtedness evidenced by this Note,
or indebtedness arising under any of the Security Documents exceed the
Maximum Rate.
5. SECURITY DOCUMENTS. The indebtedness evidenced hereby is secured by
the Revolving Loan and Security Agreement (the "Loan Agreement") dated July 8,
1999 between Borrowers and Bank, along with other documents executed in
connection with the Loan Agreement (the "Security Documents"). This Promissory
Note is included in the indebtedness referred to in the Security Documents and
is entitled to the benefits of those documents, but neither this reference to
those documents nor any provisions thereof shall affect or impair the absolute
and unconditional obligation of the Borrowers to pay the principal of and
interest on this Promissory Note when due.
6. EVENTS OF DEFAULT. The happening of any one or more of the following
events shall constitute an Event of Default:
(a) Borrowers' failure to pay principal or interest due
under this Promissory Note, as and when due and payable;
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(b) Failure by any of the Borrowers or any other person or
entity to observe any covenant or obligation contained in the Security
Documents or in any other instrument executed in connection with or
securing this Promissory Note, as and when required thereunder and such
failure continues beyond the applicable cure period, if any; or
(c) The occurrence of any event of default specified in any of
the Security Documents or in any other document, agreement or
instrument now or hereafter executed in connection with or securing
this Promissory Note.
Upon the happening of an Event of Default or at any time thereafter during the
continuance of any such event, the Holder may, with or without notice to the
Borrowers, declare this Promissory Note to be forthwith due and payable, both as
to principal and interest, without presentment, demand, protest, or other notice
of any kinds, all of which are hereby expressly waived, anything contained
herein or in any of the Security Documents or in any other instrument executed
in connection with or securing this Promissory Note to the contrary
notwithstanding. Reference is made to the Loan Agreement for a statement of the
terms and conditions under which the line of credit represented by this
Promissory Note is being made available to Borrowers and of additional terms and
conditions under which this Promissory Note may be accelerated.
7. WAIVERS. Borrowers and each guarantor, accommodation party, surety,
endorser or other person or entity liable for the payment or collection of this
Promissory Note expressly waive demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, notice of intent to
accelerate, notice of acceleration, all other notices, bringing of suit and
diligence in taking any action to collect amounts called for hereunder or
enforcing any security or guaranty, and agree to any substitution, exchange or
release of any security, with our without consideration, now or hereafter given
for this Promissory Note or the release of any party primarily or secondarily
liable hereon. Borrowers and each guarantor, accommodation party, surety,
endorser or any other person or entity liable for the payment or collection of
this Promissory Note further agrees that it will not be necessary for the owner
or Holder hereof, in order to enforce payment of this Promissory Note, to first
institute or exhaust its remedies against any maker or other party liable hereon
or to enforce its rights against any security or guaranty for this Promissory
Note, and hereby consents to the renewal and extension from time to time of this
Promissory Note, and any other indulgence with respect hereto without notice of
any such renewal, extension or indulgence, and without limit as to the number of
such renewals, extensions or indulgences or the period or periods thereof.
8. ATTORNEYS' FEES AND COSTS. Borrowers agree to pay reasonable
attorneys' fees and costs incurred by the Holder in collecting or attempting to
collect this Promissory Note, whether by suit or otherwise.
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9. LIMITATIONS ON INTEREST.
(a) It is the intention of the Bank and the Borrowers to
conform strictly to any applicable usury laws. Accordingly, if the
transactions contemplated hereby would be usurious under any applicable
law, then, in that event, notwithstanding anything to the contrary in
this Promissory Note, the Security Documents or any other agreement
entered into in connection with or as security for or guaranteeing the
Loan Agreement or this Promissory Note, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under
applicable law that is contracted for, taken, reserved, charged or
received by the Bank under this Promissory Note, the Security Documents
or under any other agreement entered into in connection with or as
security for or guaranteeing the Loan Agreement or this Promissory Note
shall under no circumstances exceed the Maximum Rate, and any excess
shall be canceled automatically and, if theretofore paid, shall, at the
option of the Bank, be credited by the Bank on the principal amount of
any indebtedness owed to the Bank by the Borrowers or refunded by the
Bank to the Borrowers; and (ii) in the event that the maturity of this
Promissory Note is accelerated or in the event of any required or
permitted prepayment, then such consideration that constitutes interest
under law applicable to the Bank may never include more than the
Maximum Rate, and excess interest, if any, provided for in this
Promissory Note, the Security Documents or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall, at the option of the Bank, be credited by the
Bank on the principal amount of any indebtedness owed to the Bank by
the Borrowers or refunded by the Bank to the Borrowers.
(b) Notwithstanding anything herein to the contrary, in no
event will interest payable to the Bank exceed the Maximum Rate (after
taking into account all charges payable to the Bank which constitute
interest under such applicable law), but if any amount referred to in
this Promissory Note which would be payable to the Bank but for the
applicability of usury or other laws limiting the consideration payable
to the Bank is not paid to the Bank as a result of the applicability of
such laws, then interest on the outstanding principal balance of this
Promissory Note payable to the Bank shall, to the extent permitted by
the law, accrue at the Maximum Rate (after taking into account all
charges payable to the Bank which constitute interest under applicable
law) until the total amount received by the Bank equals the amount it
would have received had no such laws been applicable.
10. APPLICABLE LAW; ASSIGNS. This Note shall be governed by, and
construed in accordance with, the laws of the State of Texas (except that
Finance Code, Chapter 346 of Vernon's Texas Codes Annotated, which regulates
certain revolving credit loan accounts and revolving tri-party accounts, shall
not apply to this Promissory Note or any transaction
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contemplated hereby); subject, however, to the effect of applicable federal law.
Unless changed in accordance with law, the applicable rate under Texas law shall
be the indicated rate ceiling from time to time in effect as provided in Tex.
Rev. Civ. Stat. ▇▇▇. art. 5069-1D.001. As used herein, the terms "Borrowers",
"Bank" and "Holder" shall be deemed to include their respective successors,
legal representatives and assigns, whether by voluntary action of the parties or
by operation of law.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇ have caused this Promissory Note to be
duly executed and delivered as of effective July 8, 1999.
BORROWERS:
DIVERSIFIED CORPORATE RESOURCES, INC.,
a Texas corporation
By:
-----------------------------------------
▇. ▇▇▇ ▇▇▇▇▇▇▇, President
MANAGEMENT ALLIANCE CORPORATION,
a Texas corporation
By:
-----------------------------------------
M. ▇▇▇ ▇▇▇▇▇▇▇, Vice President
INFORMATION SYSTEMS CONSULTING
CORP., a Texas corporation
By:
-----------------------------------------
M. ▇▇▇ ▇▇▇▇▇▇▇, Vice President
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TEXCEL SERVICES, INC.,
a Pennsylvania corporation
By:
-----------------------------------------
M. ▇▇▇ ▇▇▇▇▇▇▇, Vice President
TRAIN INTERNATIONAL, INC.,
a Texas corporation
By:
-----------------------------------------
M. ▇▇▇ ▇▇▇▇▇▇▇, Vice President
▇▇▇▇▇ ASSESSMENT AND PERFORMANCE
SYSTEMS, INC., a Texas corporation
By:
-----------------------------------------
M. ▇▇▇ ▇▇▇▇▇▇▇, Vice President
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