NATWEST BANK N.A.
PROMISSORY NOTE
$5,000,000.00 100 Jericho Quadrangle November 3, 1995
Jericho, New York 11753
ON the earlier of DEMAND or December 31, 1995, for value received,
UNIFORCE STAFFING SERVICES, INC., (the "Borrower") promises to pay to the order
of NATWEST BANK N.A. (the "Bank") at the office of the Bank located at the place
first above stated or at such other place as the holder hereof may from time to
time appoint in writing, in lawful money of the United States of America in
immediately available funds, the principal sum of FIVE MILLION AND 00/100
($5,000,000.00) DOLLARS or such lesser amount as may then be the aggregate
unpaid principal balance of all loans made by the Bank to the Borrower hereunder
(each a "Loan" and collectively the "Loans") as shown on the schedule attached
to and made a part of this Note, on the maturity dates set forth on such
schedule. The Borrower also promises to pay interest (computed on the basis of a
360 day year for actual days elapsed) at said office in like money on the unpaid
principal amount of each Loan from time to time outstanding at a rate per annum,
to be elected by the Borrower at the time each Loan is made, equal to either (i)
a fluctuating rate equal to the Prime Rate (the rate of interest established
from time to time by the Bank as its "prime rate"; a Loan bearing interest at
this rate is sometimes hereinafter called a "Prime Rate Loan"); or (ii) a fixed
rate of 120 basis points plus the Reserve Adjusted LIBOR Rate for an Interest
Period of 1, 2, 3, 4 or 6 months (a Loan bearing interest at this rate is
sometimes hereinafter called a "LIBOR Rate Loan"); provided, that if prior to
the end of any such Interest Period the Borrower and the Bank fail to agree upon
a new Interest Period therefor so as to maintain such Loan as a LIBOR Rate Loan,
such LIBOR Rate Loan shall automatically be converted into a Prime Rate Loan at
the end of such Interest Period and shall be maintained as such until a new
Reserve Adjusted LIBOR Rate and a new Interest Period therefor are agreed upon.
Interest on each Loan shall be payable monthly on the last day of each month
commencing the first such day to occur after a Loan is made hereunder and,
together with principal, on the maturity thereof. Interest on LIBOR Rate Loans
shall also be payable on the last day of each Interest Period applicable
thereto. If any payment of principal or interest becomes due on a day on which
the banks in New York, New York, are required or permitted by law to remain
closed, such payment may be made on the next succeeding day on which such banks
are open, and such extensions shall be included in computing interest in
connection with such payment; provided, however, that if the result of any such
extension would be to extend the maturity date of any LIBOR Rate Loan into
another calendar month the payment shall be made on the immediately preceding
Business Day. The Borrower further agrees that after any stated or any
accelerated maturity of Loans hereunder, all Loans shall bear interest (computer
daily) at a rate of 3% per annum in
excess of the Prime Rate, payable on demand. In no event shall interest payable
hereunder be in excess of the maximum rate of interest permitted under
applicable law.
The Borrower hereby expressly authorizes the Bank to record on the
attached schedule the amount and date of each Loan, the rate of interest
thereon, Interest Period thereof and the date and amount of each payment of
principal. All such notations shall be presumptive as to the correctness
thereof; provided, however, the failure of the Bank to make any such notation
shall not limit or otherwise affect the obligations of the Borrower under this
Note.
In consideration of the granting of the Loans evidenced by this Note,
the Borrower hereby agrees as follows:
1. LOAN REQUESTS. Requests for LIBOR Rate Loans, and for Interest
Periods subsequent to the initial Interest Period applicable thereto, shall be
made not less than three (3) Business Days prior to the first day of each
Interest Period for each such Loan. Requests for Prime Rate Loans shall be made
not less than one (1) Business Day prior to the date the Loan is to be made. Any
request for a Loan shall be written (including by facsimile transmission)
effective upon receipt. All notices given hereunder shall be irrevocable and
shall be given no later than 11:00 a.m. (New York City time) on the day which is
not less than the number of Business Days specified above for such notice. The
Bank shall have no obligation to make any Loan hereunder.
2. PREPAYMENT. Subject to the indemnification agreement set forth in
Section 3 hereof with respect to LIBOR Rate Loans, the Borrower may prepay any
Loan at any time in whole or in part without premium or penalty. Each such
prepayment shall be made together with interest accrued thereon to and including
the date of prepayment.
3. INDEMNITY; YIELD PROTECTION. The Borrower hereby agrees to indemnify
the Bank against any loss or expense which the Bank may sustain or incur as a
consequence of any of the following:
(a) the failure of the Borrower to borrow a LIBOR Rate Loan after
agreement shall have been reached on the amount, interest rate and Interest
Period thereof;
(b) the receipt or recovery by the Bank, whether by acceleration or
otherwise, of all or any part of a LIBOR Rate Loan prior to the last day of an
Interest Period applicable thereto; or
(c) the conversion, prior to the last day of an applicable Interest
Period into a Prime Rate Loan.
Without limiting the effect of the foregoing, the amount to be paid by
the Borrower to the Bank in order to so indemnify the Bank
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for any loss occasioned by any of the events described in the preceding
paragraph, and as liquidated damages therefor, shall be equal to the excess, if
any, discounted to its present value as of the date paid to the Bank, of (i) the
amount of interest which otherwise would have accrued on the principal amount so
received, recovered, converted or not borrowed during the period (the "Indemnity
Period") commencing with the date of such receipt, recovery, conversion, or
failure to borrow to the last day of the applicable Interest Period for such
LIBOR Rate Loan at the rate of interest applicable to such Loan (or the rate of
interest agreed to in the case of a failure to borrow) provided for herein
(prior to default) over (ii) the amount of interest which would be earned by the
Bank during the Indemnity Period if it invested the principal amount so
received, recovered, converted or not borrowed at the rate per annum determined
by the Bank as the rate it would bid in the London interbank market for a
deposit of eurodollars in an amount approximately equal to such principal amount
for a period of time comparable to the Indemnity Period.
A certificate as to any additional amounts payable pursuant to this
Section 3 setting forth the basis and method of determining such amounts shall
be conclusive, absent manifest error, as to the determination by the Bank set
forth therein if made reasonably and in good faith. The Borrower shall pay any
amounts so certified to it by the Bank within 10 days of receipt of any such
certificate.
The indemnities set forth herein shall survive payment in full of all
LIBOR Rate Loans and all other Loans made pursuant to this Note.
4. INCREASES COSTS. If the Bank determines that the effect of any
applicable law or government regulation, guideline or order of the
interpretation thereof by any governmental authority charged with the
administration thereof (such as, for example, a change in official reserve
requirements which the Bank is required to maintain in respect of loans or
deposits or other funds procured for funding such loans) is to increase the cost
to the Bank of making or continuing LIBOR Rate Loans hereunder or to reduce the
amount of any payment of principal or interest receivable by the Bank thereon,
then the Borrower will pay to the Bank on demand such additional amounts as the
Bank may reasonably determine to be required to compensate the Bank for such
additional costs or reduction. Any additional payment under this section will be
computed from the effective date at which such additional costs have to be borne
by the Bank. A certificate as to any additional amounts payable pursuant to this
Section 4 setting forth the basis and method of determining such amounts shall
be conclusive, absent manifest error, as to the determination by the Bank set
forth therein if made reasonably and in good faith. The Borrower shall pay any
amounts so certified to it by the Bank within ten (10) days of receipt of any
such certificate.
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5. CHANGE IN CIRCUMSTANCES. In the event, and on each occasion, that on
the day two (2) Business Days prior to the commencement of any Interest Period
for a LIBOR Rate Loan, the Bank shall have determined (a) that dollar deposits
in the amount of the requested principal amount of such LIBOR Rate Loan are not
generally available in the London interbank market, (b) that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to the Bank of making or maintaining such LIBOR Rate Loan during such
Interest Period, or (c) that reasonable means do not exist for ascertaining the
Reserve Adjusted LIBOR Rate, the Bank shall, as soon as practicable thereafter,
give written or telex notice of such determination to the Borrower. In the event
of any such determination, until the circumstances giving rise to such notice no
longer exist, no LIBOR Rate Loans will be made or continued hereunder. Any LIBOR
Rate Loan then outstanding will be converted into a Prime Rate Loan on the
expiration of the then current Interest Period. Each determination by the Bank
hereunder shall be conclusive absent manifest error.
6. CHANGE IN LEGALITY. (a) Notwithstanding anything to the contrary
herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for the Bank to
make or maintain any LIBOR Rate Loan, then, by written notice the Borrower, the
Bank may:
(i) declare that LIBOR Rate Loans will not thereafter be made by the
Bank hereunder, whereupon the Borrower shall be prohibited from requesting LIBOR
Rate Loans from the Bank hereunder unless such declaration is subsequently
withdrawn; and
(ii) require that all outstanding LIBOR Rate Loans made by it to be
converted to Prime Rate Loans, in which event (x) all such LIBOR Rate Loans
shall be automatically converted to Prime Rate Loans as of the effective date of
such notice as provided in paragraph (b) below and (y) all payments and
prepayments of the principal which would otherwise have been applied to repay
the converted LIBOR Rate Loans shall instead be applied to repay the Prime Rate
Loans resulting from the conversion of such LIBOR Rate Loans.
(b) For purposes of this Section 6, a notice to the Borrower by the
Bank pursuant to paragraph (a) above shall be effective, if lawful, on the last
day of the then current Interest Period; in all other cases, such notice shall
be effective on the day of receipt by the Borrower.
7. Warranties and Representations. The Borrower represents and warrants
that: a) the financial statements of the Borrower heretofore furnished to the
Bank are complete and correct and fairly represent the financial condition of
the Borrower as at the
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dates thereof and for the periods covered thereby, which financial condition has
not materially, adversely, changed since the date of the most recently dated
balance sheet heretofore furnished to the Bank; b) the Borrower shall not use
any part of the proceeds of any Loan to purchase or carry any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or to extend credit to others for the purpose of purchasing or
carrying any margin stock; c) there is no pending or, to the knowledge of the
Borrower, threatened action or proceeding affecting the Borrower before any
court, governmental agency or arbitrator which, if determined adversely to the
Borrower, would have a materially adverse effect on the financial condition of
the Borrower except as described in the financial statements for the Borrower
heretofore furnished to the Bank; and d) on the occasion of the granting of each
Loan all representations and warranties contained herein shall be true and
correct and with the same force and effect as though such representations and
warranties had been made on and as of the date of the making of each such Loan.
8. COLLATERAL SECURITY. This Note is secured pursuant to the terms of
continuing general security agreements from the Borrower and certain affiliated
corporations. As collateral security for the payment of any and all sums owing
under this Note and all other obligations, direct or contingent, joint, several
or independent, of the Borrower and each endorser and guarantor hereof now or
hereafter existing, due or to become due to, or held, or to be held by, the
Bank, whether created directly or indirectly or acquired by assignment or
otherwise, (all of such obligations, including this Note, are hereinafter called
the "Obligations"), the Borrower hereby grants to the Bank a lien on and
security interest in any and all deposits or other sums at any time credited by
or due from the Bank to the Borrower, whether in regular or special depository
accounts or otherwise, and any and all monies, securities and other property of
the Borrower, and the proceeds thereof, now or hereafter held or received by or
in transit to the Bank from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and any such deposits,
sums, monies, securities and other property, may at any time after demand be
set-off, appropriated and applied by the Bank against any of the Obligations
whether or not such Obligations are then due or are secured by any collateral,
or, if they are so secured, whether or not such collateral held by the Bank is
considered to be adequate.
9. DEFINITIONS. As used herein:
(a) "Business Day" means any day other than a Saturday, Sunday or
other business day on which commercial banks in New York, New York are
authorized or required to close under federal law or the Laws of the State of
New York and, if the applicable day relates to a LIBOR Rate Loan, an Interest
Period, or notice with respect to a LIBOR Rate Loan, a day on which dealings in
Dollar
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deposits are also carried on in the London Interbank market and banks are open
for business in London.
(b) "Reserve Adjusted LIBOR Rate" means with respect to any Interest
Period, the average of the respective rates per annum at which deposits in U.S.
dollars are offered by a Reference Bank (selected by the Bank) in the London
interbank market at approximately 11:00 A.M. (London time) two (2) Business Days
before the first day of such Interest Period in an amount approximately equal to
the principal amount of the LIBOR Rate Loan to which such Interest Period is to
apply and for a period of time comparable to such Interest Period divided by one
minus the LIBOR Reserve Percentage and rounded upward, if necessary, to the next
higher 1/16 of 1%.
"LIBOR Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City which deposits exceeding one billion dollars in
respect of "Eurocurrency Liabilities" as such term is used in Regulation D of
the Board of Governors of the Federal Reserve System, (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rates of LIBOR Rate Loans are determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
the Bank to United States residents). The Reserve Adjusted LIBOR Rate shall be
adjusted automatically on and as of the effective date of any change in the
LIBOR Reserve Percentage.
"Reference Banks" means banks appearing in the display designated
as page "LIBO" on the Reuters' Monitor Money Rates Service (or such other page
as may replace the LIBOR page on that service for the purpose of displaying
London Interbank Offered Rates of major banks); provided that if no such offered
rate shall appear on such display, "Reference Banks" shall mean one or more
major banks in the London interbank market as selected by the Bank.
(c) "Interest Period" means that period selected by the Borrower,
within the limitations of the first paragraph of this Note, during which a LIBOR
Rate Loan may bear interest at the LIBOR Rate plus a margin of 120 basis points.
10. MISCELLANEOUS.
(a) The Borrower agrees to pay on demand all of the Bank's costs and
expenses, including reasonable counsel fees, in connection with collection of
any sums due to the Bank and enforcement of its rights under this Note.
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(b) No modification or waiver of any provision of this Note shall
be effective unless such modification or waiver shall be in writing and signed
by a duly authorized officer of the Bank and the Borrower, and the same shall
then be effective only for the period and on the conditions and for the specific
instances specified in such writing. No failure or delay by the Bank in
exercising any right, power or privilege hereunder shall operate as a waiver
hereof; nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any rights, power or privilege.
(c) The Borrower hereby waives presentment, demand for payment,
notice of protest, notice of dishonor, and any ad all other notices or demands
except as otherwise expressly provided for herein.
(d) This Note shall be construed in accordance with and governed by
the laws of the State of New York and the Borrower consents to the jurisdiction
of the courts of New York in any action brought to enforce any rights of the
Bank under this Note.
(e) The Borrower waives trial by jury and the right to interpose
any set-off or counterclaim in any litigation in any court with respect to, in
connection with, or arising out of, this Note or any instrument or document
delivered pursuant hereto or the validity, protection, interpretation,
collection or enforcement hereof or thereof.
The Borrower acknowledges that this instrument is PAYABLE ON DEMAND,
and that any condition or requirement set forth in any other agreement between
the Borrower and the Bank is not the only basis upon which demand can be made
hereunder.
UNIFORCE STAFFING SERVICES, INC.
By: /s/ Harry V. Maccarrone
------------------------------
Harry V. Maccarrone
Vice President - Finance
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LOAN AND REPAYMENT SCHEDULE
PROMISSORY NOTE DATED NOVEMBER 3, 1995
UNIFORCE STAFFING SERVICES, INC.
TO
NATWEST BANK N.A.
Amount
Unpaid of
Amount of Rate of Last Day Principal Principal Notation
Date Loan Interest In Period Repayment Balance Made By
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