PROMISSORY NOTE
$7,000,000 New York, New York
November 3, 1995
1. FOR VALUE RECEIVED, UNIFORCE STAFFING SERVICES, INC. (the
"Borrower"), by this promissory note (the "Note") unconditionally promises to
pay to the order of CHEMICAL BANK (the "Bank"), in lawful money of the United
States, the principal amount of SEVEN MILLION DOLLARS ($7,000,000) or the
aggregate unpaid principal amount of all advances (individually, an "Advance"
and collectively, "Advances") made by the Bank to the Borrower and recorded on
the schedules attached hereto, whichever is less. Each Advance evidenced hereby
shall be made available and shall bear interest at the applicable rate selected
by the Borrower, subject to availability, as provided in subparagraph (a) hereof
(a "Prime Rate Advance") or subparagraph (b) hereof (an "Adjusted Libor Rate
Advance").
(a) Each Prime Rate Advance shall be made available by the Bank
to the Borrower at the Bank's New York, New York office and
shall bear interest at the rate per annum which is equal to
the Bank's Prime Rate. "Prime Rate" shall mean the rate per
annum publicly announced by the Bank at its principal office
from time to time as its prime rate. Each change in the Prime
Rate shall result in a change in the interest rate herein,
effective as of the opening of business on the day on which
such change in the Prime Rate becomes effective.
(b) Each Adjusted Libor Rate Advance shall be made available by
the Bank to the Borrower at the lending office designated by
the Bank (the "Lending Office"), shall be in a minimum amount
of $500,000 and shall bear interest for each Interest Period
(as hereinafter defined in paragraph 3) applicable thereto at
a rate per annum which is equal to 1.20% above the rate per
annum, adjusted as provided in the last sentence of this
paragraph, at which U.S. dollar deposits are offered to the
Lending Office in the London interbank market as at 11:00
a.m., local time of such Lending Office, two Working Days
prior to the first day of such Interest Period in an amount
equal to the amount of such Advance which will be outstanding
during such Interest Period for delivery on the first day of
such Interest Period for the number of days in such Interest
Period. The maximum aggregate principal amount of Adjusted
Libor Rate Advances made by the Bank to the Borrower shall not
exceed $5,000,000 outstanding at any time. "Working Day" shall
mean a day on which dealings in currencies and exchange
between banks may be carried on in New York, New York and on
which dealings in currencies and exchange between banks are
also carried on
in the London interbank market and banks are open for business
in London and the place where such Lending Office is located.
The interest rate determined hereunder shall be adjusted by
dividing such interest rate by the number equal to 1.00 minus
the rate (expressed as a decimal and rounded upward, if
necessary, to the next higher 1/16 of 1%) of reserves which
are required to be maintained (or which will be required to be
maintained), under Regulation D of the Board of Governors of
the Federal Reserve System (as in effect on the date of
determination of such interest rate), against "Eurocurrency
liabilities" (as such term is defined in Regulation D) from
time to time during the period for which the interest rate is
determined.
2. The Bank may lend, in its sole discretion in each instance, such
amounts as may be requested by the Debtor hereunder, which Loans shall in no
event exceed $7,000,000 in aggregate principal amount outstanding at any time.
Each such request for a Advance shall be made by an officer of the Borrower or
any person designated in writing by any such officer, all of which are hereby
designated and authorized by the Borrower to request Advances and agree to the
terms thereof (including without limitation the applicable interest rate and
Maturity Date with respect thereto). The Debtor shall give the Bank notice at
least two (2) Working Days prior to the date hereof and the end of each Interest
Period (as hereafter defined) specifying whether the Advance shall be a Prime
Rate Advance or an Adjusted Libor Rate Advance and the Interest Period
applicable thereto. In the event the Borrower shall fail to provide such notice,
the Advance shall be deemed to bear interest at the applicable Prime Rate.
3. "Interest Period" shall mean (i) with respect to each Adjusted
Libor Rate Advance, the period beginning on the date of such Advance and ending
1, 2 or 3 months thereafter, as agreed between the Borrower and the Bank not
less than two (2) Working Days prior to the date of such Advance. "Business Day"
shall mean a day other than a Saturday, Sunday of other day on which the Bank is
authorized to close under the laws of the State of New York.
4. Each Prime Rate Advance shall be payable on the earlier of
demand or December 31, 1995. Each Adjusted Libor Rate Advance shall be payable
on the last day of the Interest Period therefor (the "Maturity Date") but not
later than December 31, 1995. Interest on each Prime Rate Advance shall be
payable monthly on the last day of each month and upon payment or prepayment in
full of the unpaid principal amount thereof. Interest on each Adjusted Libor
Rate Advance shall be payable on the Maturity Date thereof.
5. Each Advance, the date on which it is made, the Maturity Date
and the rate charged thereon, if other than a Prime
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Rate Advance, and each payment made on account of the principal thereof shall be
noted on the appropriate schedule attached hereto. The failure of the Bank,
however, to record any such information shall not relieve the Borrower of its
obligation to repay such Advance with interest thereon as applicable. This Note
shall be used to record all Advances and payments of principal made hereunder
until it is surrendered to the Borrower by the Bank and it shall continue to be
used even though there may be periods prior to such surrender when no amount of
principal or interest is owing hereunder.
6. If all or a portion of any Adjusted Libor Rate Advance shall not
be paid when due (whether as stated, by acceleration or otherwise), such Advance
shall bear interest for the period from the due date until the Maturity Date of
such Advance at the rate per annum which is equal to 2% above the rate which
would otherwise be applicable hereunder and thereafter until paid in full at the
rate per annum which is equal to 2% above the rate which the Bank would charge
the Borrower on such Maturity Date for a Prime Rate Advance. If all or any
portion of any Prime Rate Advance is not paid when due (whether as stated, by
acceleration or otherwise), such Advance shall bear interest from the due date
until paid in full at the rate per annum which is equal to 2% above the rate
which was in effect on the due date.
7. The Borrower may not prepay any Adjusted Libor Rate Advance
without the prior written consent of the Bank.
8. If any payment in respect of a Prime Rate Advance becomes due
and payable on a day which is not a Business Day, such payment shall be made on,
and interest at the applicable rate shall be payable to, the next succeeding
Business Day. If any payment in respect of an Adjusted Libor Rate Advance
becomes due and payable on a day which is not a Working Day, such payment shall
be made on, and interest at the applicable rate shall be payable to, the next
succeeding Working Day, unless such succeeding Working Day shall fall in the
next succeeding calendar month, in which event such payment shall be made on the
next preceding Working Day, and any relevant Interest Period shall be adjusted
accordingly by the Bank.
9. Interest shall be computed on the basis of a 360 day year for
actual days elapsed. Anything in this Note to the contrary notwithstanding, the
Bank shall not be permitted to charge or receive, and the Borrower shall not be
obligated to pay, interest in excess of the maximum rate from time to time
permitted by applicable law; provided, however, if the maximum rate permitted by
law changes, the rate hereunder shall change, without notice to the Borrower, on
the same day the maximum rate permitted by law changes.
10. All payments on account of Prime Rate Advances to be made
hereunder by the Borrower shall be made in immediately
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available funds at the office of the Bank located at 7600 Jericho Turnpike,
Woodbury, New York 11797 or such other office as the Bank may designate. All
payments on account of Adjusted Libor Rate Advances to be made hereunder by the
Borrower shall be made in immediately available funds at the office of the Bank
located at 4 New York Plaza, New York, New York.
11. If any existing or future applicable law, regulation or
directive, or any change therein or in the interpretation thereof, or compliance
by the Bank with any request (whether or not having the force of law) of any
relevant central bank or other comparable agency, subjects the Bank to any tax
of any kind whatsoever with respect to this Note or changes the basis of
taxation of payments to the Bank of principal, interest or any other amount
payable hereunder (except for changes in the rate of any tax presently imposed
on the Bank) or imposes, modifies or deems applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, or advances or loans by,
or other credit extended by, or any other acquisition of funds by, any office of
the Bank which are not otherwise included in the determination of the rate
applicable to Adjusted Libor Rate Advances hereunder, or imposes on the Bank any
other condition with respect to the London interbank market or this Note or the
loans evidenced hereby, and the result of any of the foregoing is to increase
the cost to the Bank of maintaining advances or credit hereunder or to reduce
any amount receivable in respect thereof, then the Borrower agrees to pay to the
Bank, upon demand, additional amounts which will compensate the Bank for such
increased cost or reduced amount receivable as determined by the Bank with
respect to this Note. The Bank's certificate as to any additional amounts
payable pursuant to the preceding sentence shall be conclusive as to the amounts
due in the absence of manifest error.
12. Notwithstanding anything to the contrary contained elsewhere in
this Note, if any change after the date hereof in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration thereof shall make it unlawful (based on the opinion of any
counsel, whether in-house, special or general, for the Bank) for the Bank to
make or maintain any Adjusted Libor Rate Advance or to give effect to its
obligations as contemplated hereby with respect to any Adjusted Libor Rate
Advance, then, by written notice to the Borrower by the Bank the Bank may
require that all outstanding Adjusted Libor Rate Advances made hereunder be
converted to Prime Rate Advances, whereupon all such Adjusted Libor Rate
Advances shall be automatically converted to Prime Rate Advances as of the
effective Date of such notice as provided herein for purposes of this paragraph,
a notice to the Borrower by the Bank pursuant to this paragraph shall be
effective, if lawful and if any Adjusted Libor Rate Rate Advances shall then be
outstanding, on the last day
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of the then current Interest Period; otherwise, such notice shall be effective
on the date of receipt by the Borrower.
13. The Borrower agrees to pay all the Bank's costs and
out-of-pocket expenses (including, without limitation, reasonable attorneys'
fees) arising in connection with the enforcement of, and preservation of its
rights under, this Note.
14. The Borrower agrees to indemnify the Bank for, and to hold the
Bank harmless from, any loss or expense which the Bank may sustain or incur,
including any interest payment by the Bank to lenders of funds borrowed by it in
order to make or maintain the loans evidenced hereby, as a consequence of (i)
default by the Borrower in payment of the principal amount of, or interest on,
this Note and (ii) with respect to Adjusted Libor Rate Advances, payment by the
Borrower on a day other than the Maturity Date thereof as a result of
acceleration of the obligations hereunder or otherwise. This covenant shall
survive payment of this Note.
15. Upon the occurrence, with respect to the Borrower, or any
endorser or guarantor, of any of the following: default in payment of this Note
or any other obligation of any nature or description to the Bank including,
without limitation any obligations pursuant to the Term Loan Note dated June 6,
1994 made by the Borrower payable to the Bank or pursuant to the terms of that
certain Revolving Credit and Term Loan Agreement among the Borrower, certain of
its subsidiaries and National Westminster Bank USA dated as of June 19, 1991, as
such agreement was amended pursuant to (i) a First Amendment dated as of
November 1, 1991, (ii) a Second Amendment dated as of November 30, 1992, of
which 50% of the indebtedness due thereunder was assigned to the Bank pursuant
to the Second Amendment (collectively, the "Obligations"), (iii) a Third
Amendment dated August 31, 1994, and (iv) a Fourth Amendment dated as of April
26, 1995 (as amended, the "Agreement"); the occurrence of any material breach of
any covenant or provision of any agreement between the Bank and any of them;
calling a meeting of any creditors; filing of a voluntary or involuntary
petition under the Federal Bankruptcy Code which, in the case of an involuntary
petition, is not dismissed, discharged or bonded within 60 days of the date of
such petition; insolvency; failure to pay or remit any tax when assessed or due
unless contested in good faith by appropriate proceedings, for which adequate
reserves are being provided; failing to furnish financial information or to
permit inspection of books or records; making any material representation to the
Bank in obtaining credit; then the Obligations shall be due and payable
immediately without notice or demand.
16. The Bank shall have a continuing lien and/or right of set-off
on deposits (general and special) and credits with the Bank of the Borrower and
every endorser and guarantor, and may apply all or part of same to the
Obligations (whether contingent or unmatured), at any time or times, without
notice. The Bank shall
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have a continuing lien on all property of the Borrower and every endorser and
guarantor and the proceeds thereof held or received by or for the Bank for any
purpose. Any notice of disposition of property shall be deemed reasonable if
mailed at least five (5) days before such disposition to the last address of the
Borrower or such endorser or guarantor on the Bank's records. Each of the
Borrower and each endorser and guarantor agrees to pay the costs and expenses
(including, without limitation, reasonable attorneys' fees) of enforcing the
Obligations. Each of the Borrower and each maker, endorser and guarantor waives
protest and, in any litigation (whether or not relating to the Obligations) in
which the Bank and any of them shall be adverse parties, waives the right to
interpose any set-off or counterclaim of any nature or description. Time for
payment extended by law shall be included in the computation of interest.
17. The Borrower hereby irrevocably (a) submits, in any legal
proceeding relating to this Note, to the non-exclusive in personam jurisdiction
of any state or United States court of competent jurisdiction sitting in the
State of New York and agrees to suit being brought in any such court, and (b)
agrees that nothing contained herein shall affect the Bank's right to effect
service of process in any other manner permitted by law; and the Borrower and
the Bank hereby irrevocably waive, in any such legal proceeding, trial by jury.
18. This Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
UNIFORCE STAFFING SERVICES, INC.
By:______________________________
Harry V. Maccarrone
Vice President - Finance
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PRIME RATE ADVANCES
Unpaid
Amount Interest Amount of Principal
of Maturity Rate Per Principal Balance of Notation
Date Advance Date Annum Paid Advance Made By
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ADJUSTED LIBOR RATE ADVANCES
Unpaid
Amount Interest Amount of Principal
of Maturity Rate Per Principal Balance of Notation
Date Advance Date Annum Paid Advance Made By
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