<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998
-----------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to __________________
Commission File No. 0-28274
-------------------------------------------------------------
SYKES ENTERPRISES, INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Florida 56-1383460
- --------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 North Tampa Street, Suite 3900, Tampa, FL 33602
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 813-274-1000
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $0.01 Par Value, 39,133,216 shares as of April 27, 1998
Page 1 of 45 Pages
The Exhibit Index Appears on Page 13
<PAGE> 2
PART I
ITEM 1 - FINANCIAL STATEMENTS
SYKES ENTERPRISES, INCORPORATED
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------- -------------
<S> <C> <C>
ASSETS (Unaudited)
Current assets
Cash and cash equivalents .......................... $ 70,523,067 $ 27,902,400
Receivables, including unbilled .................... 68,520,471 75,664,256
Prepaid expenses and other current assets .......... 11,377,920 13,977,704
------------- -------------
Total current assets .............................. 150,421,458 117,544,360
Property and equipment, net ......................... 71,282,183 72,889,748
Marketable securities ............................... 7,800,002 3,931,408
Investment in joint venture ......................... 2,285,142 6,253,120
Deferred charges and other assets ................... 9,874,680 10,483,075
------------- -------------
$ 241,663,465 $ 211,101,711
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current installments of long-term debt ............. $ 2,989,271 $ 1,141,424
Accounts payable ................................... 19,905,671 19,742,216
Income tax payable ................................. 2,725,177 4,378,650
Accrued employee compensation and benefits ......... 10,035,233 12,583,677
Other accrued expenses and current liabilities ..... 6,449,650 10,979,865
------------- -------------
Total current liabilities ......................... 42,105,002 48,825,832
Long-term debt ...................................... 33,312,597 2,009,480
Deferred income taxes ............................... 4,374,963 4,072,515
Deferred grants ..................................... 14,083,691 13,635,868
------------- -------------
Total liabilities ................................. 93,876,253 68,543,695
------------- -------------
Commitments and contingencies (Notes 1 and 4)
Shareholders' equity
Preferred stock, $0.01 par value, 10,000,000 shares
authorized; no shares issued and outstanding ...... -- --
Common stock, $0.01 par value; 200,000,000 shares
authorized; 39,057,626 and 39,129,986 shares
issued and outstanding ............................ 390,576 391,300
Additional paid-in capital ......................... 133,579,200 133,610,048
Retained earnings .................................. 17,106,620 15,634,963
Unrealized loss on securities, net of taxes ........ (734,518) (3,603,112)
Accumulated foreign currency translation adjustments (2,554,666) (3,475,183)
------------- -------------
Total shareholders' equity ....................... 147,787,212 142,558,016
------------- -------------
$ 241,663,465 $ 211,101,711
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE> 3
SYKES ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
1997 1998
------------ ------------
<S> <C> <C>
Revenues ................................ $ 66,596,945 $ 89,149,324
------------ ------------
Operating expenses
Direct salaries and related costs ...... 39,639,200 55,643,607
General and administrative ............. 19,305,926 23,472,489
------------ ------------
Total operating expenses .............. 58,945,126 79,116,096
------------ ------------
Income from operations .................. 7,651,819 10,033,228
Other income (expense)
Interest, net .......................... 383,469 76,748
Net loss from joint venture ............ -- (8,015,149)
Other .................................. 58,401 (12,484)
------------ ------------
Total other income (expense) .......... 441,870 (7,950,885)
------------ ------------
Income before income taxes .............. 8,093,689 2,082,343
Provision for income taxes .............. 2,946,821 3,554,000
------------ ------------
Net income (loss) ....................... $ 5,146,868 $ (1,471,657)
============ ============
Basic net income (loss) per share ....... $ 0.13 $ (0.04)
============ ============
Diluted net income (loss) per share ..... $ 0.13 $ (0.04)
============ ============
Shares outstanding
Basic .................................. 38,858,274 39,058,422
Diluted ................................ 40,164,647 40,156,812
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
SYKES ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
1997 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .............................................. $ 5,146,868 $ (1,471,657)
Depreciation and amortization .................................. 2,741,652 3,835,693
In-process research and development costs expensed
by joint venture .............................................. -- 8,042,500
Deferred income taxes .......................................... 543,557 (406,637)
Loss (gain) on disposal of property and equipment .............. 1,700 (2,230)
Changes in assets and liabilities:
Receivables, including unbilled ............................... (4,493,740) (7,373,311)
Prepaid expenses and other current assets ..................... (1,360,976) (2,807,176)
Deferred charges and other assets ............................. (1,712,782) (768,802)
Accounts payable .............................................. (368,660) (163,455)
Income taxes payable .......................................... 1,893,400 2,066,714
Accrued employee compensation and benefits .................... 1,808,617 2,548,444
Other accrued expenses and current liabilities ................ (2,017,507) 4,663,730
------------ ------------
Net cash provided by operating activities .................... 2,182,129 8,163,813
------------ ------------
Cash flows from investing activities:
Capital expenditures ........................................... (4,538,469) (5,749,649)
Investment in joint venture .................................... -- (12,016,127)
Acquisition of business ........................................ (1,800,000) --
Proceeds from sale of marketable security ...................... -- 1,000,000
Proceeds from sale of property and equipment ................... 3,854 21,205
------------ ------------
Net cash used for investing activities ...................... (6,334,615) (16,744,571)
------------ ------------
Cash flows from financing activities:
Proceeds from grants ........................................... 187,428 --
Proceeds from issuance of stock................................. -- 31,572
Proceeds from issuance of long-term debt ....................... 8,080,874 --
Payment of long-term debt ...................................... (1,771,189) (33,150,964)
------------ ------------
Net cash provided by (used for) financing activities ........ 6,497,113 (33,119,392)
------------ ------------
Adjustment for foreign currency translation ..................... (596,688) (920,517)
------------ ------------
Net increase (decrease) in cash and cash equivalents ............ 1,747,939 (42,620,667)
Cash and cash equivalents - beginning ........................... 92,836,884 70,523,067
------------ ------------
Cash and cash equivalents - ending .............................. $ 94,584,823 $ 27,902,400
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
SYKES ENTERPRISES, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
Sykes Enterprises, Incorporated and consolidated subsidiaries (the "Company")
provides integrated information technology outsourcing services including
information technology support services, information technology development
services and solutions. The Company's services are provided to a wide variety of
industries.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three-month period ended March 31, 1998 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998. For further
information, refer to the consolidated financial statements and notes thereto as
of and for the year ended December 31, 1997 included in the Company's Form 10-K
dated December 31, 1997 as filed with the United States Securities and Exchange
Commission on March 16, 1998.
NOTE 1 - ACQUISITIONS AND MERGERS
On March 31, 1997, the Company acquired Info Systems of North Carolina, Inc.
("Info Systems") in exchange for approximately 1.1 million shares of the
Company's common stock. The Company accounted for the acquisition utilizing the
pooling-of-interests method of accounting. Info Systems is engaged in the
design, development, licensing and support of information management solutions
to the retail, manufacturing and distribution industries.
On June 16, 1997, the Company acquired all of the stock of Telcare Gesellschaft
fur Telekommunikations-Mehrwertdieste mbH ("Telcare") of Wilhelmshaven, Germany,
in exchange for 750,000 shares of the Company's common stock. The Company
accounted for the acquisition utilizing the pooling-of-interests method of
accounting. Telcare operates an information technology call center and provides
technical support and service to numerous industries in Germany.
On September 26, 1997, the Company acquired all of the stock of TAS
Telemarketing Gesellschaft fur Kommunikation und Dialog mbH ("TAS I") of Bochum,
Germany in exchange for 400,000 shares of the Company's common stock. The
Company accounted for the acquisition utilizing the pooling-of-interests method
of accounting. TAS I provides technical call center support and customer care
services, database development, consulting and training services to customers in
Germany and surrounding countries.
On September 26, 1997, the Company acquired all of the stock of TAS Hedi Fabinyi
GmbH ("TAS II") of Stuttgart, Germany, in exchange for 180,000 shares of the
Company's common stock. The Company accounted for the acquisition utilizing the
pooling-of-interests method of accounting. TAS II provides technical call center
support and customer care services, to customers in Germany and surrounding
countries.
On December 31, 1997, the Company acquired all of the stock of McQueen
International Limited ("McQueen") of Galashiels, Scotland, in exchange for
3,540,000 shares of the Company's common stock. The Company accounted for the
acquisition utilizing the pooling-of-interests method of accounting. McQueen
provides inbound call center support and customer service, software fulfillment
and foreign language translation and localization services.
5
<PAGE> 6
SYKES ENTERPRISES, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
NOTE 1 - ACQUISITIONS AND MERGERS, continued
The above transactions have been accounted for as pooling-of-interests and,
accordingly, the consolidated financial statements for the periods presented
have been restated to include the accounts of Info Systems, Telcare, TAS I, TAS
II and McQueen.
Separate results of operations for the period prior to the mergers with Info
Systems, Telcare, TAS I, TAS II and McQueen are outlined below.
<TABLE>
<CAPTION>
Three months ended
March 30,
1997
------------------
<S> <C>
Revenue:
Sykes ................................................. $ 38,245,596
Info Systems .......................................... 7,022,451
Telcare ............................................... 1,404,904
TAS I ................................................. 1,090,506
TAS II ................................................ 408,000
McQueen ............................................... 18,425,488
------------
Combined ............................................... $ 66,596,945
============
Net income:
Sykes ................................................. $ 4,021,527
Info Systems .......................................... 46,186
Telcare ............................................... 42,589
TAS I ................................................. 71,000
TAS II ................................................ 28,000
McQueen ............................................... 937,566
------------
Combined ............................................... $ 5,146,868
============
Other changes in shareholders' equity:
Sykes ................................................. $ (337,279)
Info Systems .......................................... --
Telcare ............................................... --
TAS I ................................................. --
TAS II ................................................ --
McQueen ............................................... (259,409)
------------
Combined ............................................... $ (596,688)
============
</TABLE>
NOTE 2 - MARKETABLE SECURITIES
During May 1997, the Company purchased approximately 1.066 million shares of
SystemSoft Corp. common stock in conjunction with a strategic technology
exchange agreement between the parties. In accordance with Statement of
Financial Accounting Standards No. 115 "Accounting for Certain Investments in
Debt and Equity Securities", this investment is classified as an
available-for-sale security and is carried at an aggregate market value of $3.9
million as of March 31, 1998. The Company's cost basis in this investment is
$8.0 million, and the unrealized loss of $3.6 million, net of deferred income
taxes of approximately $1.1 million, is reported as a separate component of
shareholders' equity.
6
<PAGE> 7
SYKES ENTERPRISES, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
NOTE 3 - INVESTMENT IN JOINT VENTURE
The Company has a 50% interest in a joint venture that is accounted for using
the equity method of accounting. Accordingly, the Company records its
proportionate share of the gains and losses of the joint venture in the
consolidated statement of income.
During March 1998, the Company's joint venture entity acquired Health
International ("HI") and Prudential Service Bureau, Inc. ("PSBI"). The combined
purchase price of the two acquisitions was $72.6 million. HI is a disease
management company that provides a comprehensive managed medical care program
for employees and plan administrators. PSBI provides a wide range of call
center-based health and welfare benefits and administrative services.
These acquisitions were accounted for by the joint venture utilizing the
purchase method of accounting. As a result, the Company recorded non-recurring
charges of approximately $8.0 million, primarily representing its share of the
joint venture's acquired in-process research and development.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
During February 1998, the Company entered into a new $150.0 million syndicated
facility which provides for multi-currency lending. This new facility accrues
borrowings at tiered levels between 75 and 175 basis points above listed LIBOR
pursuant to a defined ratio calculation within the agreement. The facility,
which matures in February 2001, contains certain financial covenants associated
with debt, leverage and coverage ratios and capital expenditures and
acquisitions as defined by the agreement. There were no borrowings under this
syndicated credit facility at March 31, 1998.
The Company from time to time is involved in legal actions arising in the
ordinary course of business. With respect to these matters, management believes
that it has adequate legal defenses and/or provided adequate accruals for
related costs such that the ultimate outcome will not have a material adverse
effect on the Company's future financial position.
NOTE 5 - COMPREHENSIVE INCOME
Effective January 1, 1998 the Company has adopted Financial Accounting
Standards No. 130 "Reporting Comprehensive Income" which requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the financial statements.
Prior periods will be reclassified as required. The Company's total
comprehensive earnings were as follows:
<TABLE>
<CAPTION>
Three months ended
-------------------------------
March 30, March 31,
1997 1998
------------- ------------
<S> <C> <C>
Net income (loss) $5,146,868 $ (1,471,657)
Other comprehensive earnings (losses):
Change in equity due to foreign
currency translation adjustments (596,688) (920,517)
---------- ------------
Comprehensive earnings $4,550,180 $ (2,392,174)
========== ============
</TABLE>
NOTE 6 - EARNINGS PER SHARE
Basic earnings per share are based on the weighted average number of common
shares outstanding during the periods. Diluted earnings per share includes the
weighted average number of common shares outstanding during the periods and the
further dilution from stock options using the treasury stock method.
7
<PAGE> 8
SYKES ENTERPRISES, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 30, 1997 AND MARCH 31, 1998
(Unaudited)
NOTE 6 - EARNINGS PER SHARE, continued
The numbers of shares used in the earnings per share computation are as follows:
<TABLE>
<CAPTION>
Three months ended
----------------------------
March 30, March 31,
1997 1998
---------- ----------
<S> <C> <C>
Basic:
Weighted average common outstanding ....... 38,858,274 39,058,422
---------- ----------
Total basic ............................. 38,858,274 39,058,422
Diluted:
Dilution of stock options .................. 1,306,373 1,098,390
---------- ----------
Total diluted ........................... 40,164,647 40,156,812
========== ==========
</TABLE>
8
<PAGE> 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following should be read in conjunction with the Sykes Enterprises,
Incorporated ("Sykes" or the "Company") Consolidated Financial Statements,
including the notes thereto. The following discussion and analysis contains
forward-looking statements that involve risks and uncertainties. Future events
and the Company's actual results could differ materially from the results
reflected in these forward-looking statements, as a result of certain of the
factors set forth below and elsewhere in this analysis.
FINANCIAL CONDITION
The Company's primary sources of liquidity are equity offerings, cash flows from
operations and available borrowings under its credit facility. The Company has
utilized these proceeds and the balance of the funds available from its equity
offerings to make additional capital expenditures associated primarily with its
technical support services, to repay debt associated with entities it has
acquired subsequent to the public offerings, to acquire interest in and provide
capitalization to a joint venture entry into the healthcare service industry,
invest in technology applications to further the Company's service offerings,
and for working capital and general corporate purposes. In addition, the Company
intends similar uses from the balance of its funds, including possible
additional acquisitions. Pending any such use, the Company will invest the
balance of its funds in short-term, investment-grade securities or money market
instruments.
During February 1998, the Company entered into a new $150.0 million syndicated
facility which provides for multi-currency lending. This new facility accrues
borrowings at tiered levels between 75 and 175 basis points above listed LIBOR
pursuant to a defined ratio calculation within the agreement. The facility,
which matures in February 2001, contains certain financial covenants associated
with debt, leverage and coverage ratios and capital expenditures and
acquisitions as defined by the agreement.
During the three month period ended March 31, 1998, the Company generated
approximately $8.2 million in cash, net, from operations. The Company utilized
these funds and its available cash and cash equivalents to fund $33.2 million
repayment of debt, $12.0 million of additional capitalization in a joint venture
and $5.7 million of capital expenditures. The debt repayments were associated
with assumed debt levels resulting from certain acquisitions the Company
completed during 1997. During the first quarter of 1998, the Company invested
approximately $12.0 million of additional capital in a joint venture entity,
Sykes Health Plan Services, Inc. The capital equipment expenditures were
predominately the result of the Company's continued expansion, both domestically
and internationally, in providing technical product support services. The
Company has recently announced commencement of construction of its tenth
domestic call center (twenty-first total) and anticipates that this new facility
will become operational during the third quarter of 1998. Pursuant to
contractual terms, the Company will receive a package of incentives associated
with this center consistent with those previously obtained.
The Company believes that its current cash position, accessible funds under its
credit facilities and cash flows from future operations, will be adequate to
meet its continued expansion objectives, anticipated levels of capital
expenditures and debt repayment requirements, including those that may be
required pursuant to the integration of its acquisitions, for the foreseeable
future.
RESULTS OF OPERATIONS
For the three months ended March 31, 1998, the Company recorded consolidated
revenues of $89.1 million, an increase of approximately $22.5 million, or 34%,
from the $66.6 million
9
<PAGE> 10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, continued
of the comparable period of the previous year. These results reflect an increase
in revenues of $12.1 million from information technology support services
provided through IT call centers, an increase in revenues of $10.9 million from
fulfillment services, partially offset by a decrease of $0.5 million from
information technology services and solutions. The increase in information
technology support services revenues was primarily attributable to an increase
in the number of IT call centers providing services throughout the period and
the resultant increase in call volumes from clients. During the fourth quarter
of 1997, the Company opened two new IT call centers which were fully operational
during the first quarter of 1998. The increase in fulfillment services revenue
is primarily associated with an acquisition completed during the second quarter
of 1997 by McQueen, which was accounted for utilizing the purchase method of
accounting. The decrease in information technology services and solutions was
primarily attributable to the decrease in software sales.
Direct salaries and related costs increased approximately $16.0 million to $55.6
million, or 40%, in the three-month period in 1998 from $39.6 million in the
comparable period in 1997. As a percentage of revenues, direct salaries and
related costs increased to approximately 62% in the 1998 quarter from
approximately 60% from the same quarter in 1997. The increase in the amount of
direct salaries and related costs was primarily attributable to the change in
the Company's mix of business associated with the McQueen acquisition and the
addition of personnel to support revenue growth.
General and administrative expenses increased approximately $4.2 million to
$23.5 million, or 22%, in the 1998 period, from $19.3 million during the same
period in 1997. As a percentage of revenues, however, general and administrative
expenses decreased to 26% in 1998 from 29% in 1997. The increase in the amount
of general and administrative expenses was primarily attributable to the
addition of management, sales and administrative personnel to support the
Company's growth. The decrease as a percentage of revenues resulted from
economies of scale associated with spreading costs over a larger revenue base.
Interest and other expense was $8.0 million during the first quarter of 1998
from interest and other income of $0.4 million during the comparable 1997
period. As a percentage of revenues, interest and other expense was
approximately 9% in 1998 from interest and other income of 1% in 1997. The
increase in interest and other expense was primarily attributable to the
occurrence of approximately $8.0 million of acquisition-related, in-process
research and development costs associated with the acquisitions completed by the
joint venture, which was recorded as other expense. During 1998, the Company
repaid a significant amount of outstanding bank debt.
The provision for income taxes increased to $3.6 million in the first quarter of
1998 from $2.9 million in 1997, however, as a percentage of revenue, decreased
to 4.0% during the 1998 period when contrasted to approximately 4.4% for the
comparable 1997 period. The Company's marginal tax rate increased to 171% from
36% during the first quarter of 1997 primarily as a result of nondeductible
in-process research and development costs, associated with the acquisitions
completed by the joint venture.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following document is filed as an exhibit to this Report:
10.1 Credit Agreement between NationsBank, N.A.
and Sykes Enterprises, Incorporated dated as
of February 27, 1998.
10.2 Amendment No. 1 to Credit Agreement between
NationsBank, N.A. and Sykes Enterprises,
Incorporated dated as of March 20, 1998.
10.3 Guaranty Agreement between Sykes
Enterprises, Incorporated and HealthPlan
Services Corp. to NationsBank N.A.
dated March 16, 1998.
27.1 Financial Data Schedule - Three months ended
March 31, 1998
27.2 Financial Data Schedule - Three months ended
March 31, 1997 (restated)
27.3 Financial Data Schedule - Year ended
December 31, 1996 (restated)
27.4 Financial Data Schedule - Year ended
December 31, 1995 (restated)
(b) Reports on Form 8-K
The Registrant filed a Form 8-K, dated December 31, 1997, on
January 14, 1998, reporting under Item 5 the completed
business combination of the Registrant with McQueen
International Limited.
The Registrant filed a Form 8-K, dated September 26, 1997 on
February 13, 1998, reporting under Item 5 the completed
business combinations of the Registrant with TAS Telemarketing
Gesellschaft fur Kommunikation und Dialog mbH ("TAS I") and
TAS Hedi Fabinyi GmbH ("TAS II"). As part of the Form 8-K, the
Registrant filed Consolidated Financial Statements as of
December 31, 1995 and 1996 and for the year ended July 31,
1994, the five months ended December 31, 1994, and for the
years ended December 31, 1995 and 1996 which have been
restated to give retroactive effect to the combination with
TAS I and TAS II, and include the combined operations of the
Registrant, TAS I and TAS II for all periods presented.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYKES ENTERPRISES, INCORPORATED
(Registrant)
Date: April 28, 1998 By: /s/ Scott J. Bendert
------------------------------- -------------------------------
Scott J. Bendert
Senior Vice President-Finance
and Treasurer
(Principal Financial and
Accounting Officer)
12
<PAGE> 13
SYKES ENTERPRISES, INCORPORATED
FORM 10-Q
(For the Three Months Ended March 31, 1998)
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
<S> <C>
10.1 Credit Agreement between NationsBank N.A. and Sykes Enterprises,
Incorporated dated as of February 27, 1998
10.2 Amendment No. 1 to Credit Agreement between NationsBank N.A. and Sykes
Enterprises, Incorporated dated as of March 20, 1998
10.3 Guaranty Agreement between Sykes Enterprises, Incorporated and
HealthPlan Services Corp. to NationsBank N.A. dated March 16, 1998
27.1 Financial Data Schedule - Three months ended March 31, 1998
27.2 Financial Data Schedule - Three months ended March 30, 1997 (restated)
27.3 Financial Data Schedule - Year ended December 31, 1996 (restated)
27.4 Financial Data Schedule - Year ended December 31, 1995 (restated)
</TABLE>
13
<PAGE> 1
EXHIBIT 10.1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of February 17, 1998 (the "Credit
Agreement") by and between
SYKES ENTERPRISES, INCORPORATED, a Florida corporation (the
"Borrower"); and
NATIONSBANK, N.A., a national banking association existing under the
laws of the United States and having offices in Charlotte, North Carolina (the
"Bank").
RECITALS:
A. The Borrower has applied to the Bank for credit facilities in
the aggregate amount of $15,000,000.00, to be borrowed for working capital
needs, for the refinancing of indebtedness to the Bank, for documentary and
standby letters of credit and for foreign exchange transactions.
B. The Bank is willing to provide such credit facilities for the
purposes stated hereinabove based on the terms and conditions set forth in this
Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Borrower and the Bank hereby agree as follows:
ARTICLE I
Definitions
1.01 For the purposes hereof:
"Advances" shall have the meaning given to such term in
Section 2.01;
"Belgian Francs Advances" shall have the meaning given to such
term in Section 2.01;
"Belgian Francs Note" shall have the meaning given to such
term in Section 2.04;
"Belgian Subsidiary" means Sykes Holdings of Belgium B.V.B.A;
"Credit Documents" means this Credit Agreement, the Notes, the
Letter of Credit Applications, the Guaranty Agreements, the Pledge
Agreements, and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto ;
"Credit Party" means the Borrower, any of the Guarantors or
any of the Pledgors;
"Deutsche Marks Advances" shall have the meaning given to such
term in Section 2.01;
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"Deutsche Marks Note" shall have the meaning given to such
term in Section 2.05;
"Dollar Advances" shall have the meaning given to such term in
Section 2.01;
"Dollar Note" shall have the meaning given to such term in
Section 2.09;
"English Subsidiary" means __________________________________;
"Exchange Rate" means, in relation to the purchase of one
currency (for purposes of this definition the "first currency") with
another currency (for purposes of this definition the "second
currency") on a given date, the Bank's spot rate of exchange, for the
amount in question, in the London interbank market at or about 11:00
a.m. Charlotte, North Carolina time on such date for the purchase of
the first currency with the second currency, for delivery two Business
Days later;
"Foreign Currency Notes" shall mean the Krona Note, the
Guilder Note, the Belgian Francs Note, the Deutsche Marks Note, the
Pound Sterling Note, the Punts Note and the French Francs Note;
"Foreign Subsidiary Borrowers" shall mean the Swedish
Subsidiary, the Netherlands Subsidiaries, the Belgian Subsidiary, the
German Subsidiary, the English Subsidiary, the Irish Subsidiary and the
French Subsidiary;
"French Francs Advances" shall have the meaning given to such
term in Section 2.01;
"French Francs Note" shall have the meaning given to such term
in Section 2.08;
"French Subsidiary" means _____________________________;
"German Subsidiary" means Sykes Enterprises GmbH;
"Guaranty Agreements" means (i) the Guaranty Agreement
executed by the Borrower in favor of the Bank whereby the Borrower
guarantees the repayment of the obligations of the Foreign Subsidiary
Borrowers to the Bank under the Foreign Currency Notes and (ii) the
Guaranty Agreements executed by the Material Subsidiaries of the
Borrower in favor of the Bank whereby the Material Subsidiaries
guarantee the repayment of the obligations of the Borrower to the Bank
under the Credit Documents;
"Guilder Advances" shall have the meaning given to such term
in Section 2.01;
"Guilder Note" shall have the meaning given to such term in
Section 2.03;
"Krona Advances" shall have the meaning given to such term in
Section 2.01;
"Krona Note" shall have the meaning given to such term in
Section 2.02;
"Irish Subsidiary" means __________________________________;
"Letter of Credit Applications" shall have the meaning given
to such term in Section 2.13 hereof;
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"Letter of Credit Obligations" shall have the meaning given to
such term in Section 2.13 hereof;
"Letters of Credit" shall have the meaning given to such term
in Section 2.13 hereof;
"Netherlands Subsidiaries" means Sykes Enterprises
Incorporated Holdings BV and Sykes Enterprises Incorporated BV;
"Notes" means a collective reference to the Dollar Note and
the Foreign Currency Notes;
"Pledge Agreements" means any pledge agreements entered into
in accordance with the provisions of Section 4.02, in each case as
amended and modified, to secure on a pari passu basis the obligations
owing under this Credit Agreement and the Indebtedness under the
Syndicated Credit Agreement;
"Pledgors" means the Persons executing Pledge Agreements
pursuant to Section 7.11;
"Pound Sterling Advances" shall have the meaning given to such
term in Section 2.01;
"Pound Sterling Note" shall have the meaning given to such
term in Section 2.06;
"Punts Advances" shall have the meaning given to such term in
Section 2.01;
"Punts Note" shall have the meaning given to such term in
Section 2.07;
"Revolving Loan Committed Amount" shall have the meaning given
to such term in Section 2.01 hereof;
"Swedish Subsidiary" means Datasvar Support AB, Stockholm,
Sweden;
"Syndicated Credit Agreement" means that certain Credit
Agreement, dated as of February 17, 1998, by and among the Borrower,
the lenders parties thereto and NationsBank, N.A., as agent for such
lenders, together with all amendments and modifications thereto and
replacements therefor;
"Termination Date" means February 17, 2001.
1.02 Capitalized terms used herein and not otherwise defined herein
shall have their respective meanings as set forth in the Syndicated Credit
Agreement.
ARTICLE II
Credit Extensions
2.01 The Bank agrees, on the terms herein set forth, to make
revolving loan advances (the "Advances") from time to time during the period
from the date hereof to the Termination Date in an amount equal to $15,000,000
(or such higher amount as the parties hereto may from time to time agree) (the
"Revolving Loan Committed Amount"). The Bank agrees that a portion of the
Advances shall be available to (a) the Swedish Subsidiary in Krona (the "Krona
Advances") in an aggregate amount up to 14,000,000 Krona at any time
outstanding, (b) the Netherlands Subsidiaries in Guilder (the "Guilder
Advances") in an aggregate amount up to 4,000,000 Guilder, (c) the Belgian
Subsidiary in Belgian Francs (the "Belgian Franc Advances") in an aggregate
amount up to 1,000,0000 Belgian Francs, (d)
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<PAGE> 4
the German Subsidiary in Deutsche Marks (the "Deutsche Marks Advances") in an
aggregate amount up to 2,500,000 Deutsche Marks, (e) the English Subsidiary in
British Pound Sterling (the "Pound Sterling Advances") in an aggregate amount up
to ___________ British Pound Sterling, (f) the Irish Subsidiary in Punts (the
"Punts Advances") in an aggregate amount up to ___________ Punts and (g) the
French Subsidiary in French Francs (the "French Francs Advances") in an
aggregate amount up to _______ French Francs. The Bank agrees that the remaining
portion of the Advances shall be available to the Borrower in U.S. dollars (the
"Dollar Advances"). Within the limits set forth herein and in the Foreign
Currency Notes and the Dollar Note, the Bank shall make Advances, accept
payments and prepayments pursuant to the terms hereof and readvance any amount
so paid or prepaid.
2.02 The Krona Advances shall be made, shall be repaid and shall
bear interest in accordance with the terms of that certain Promissory Note dated
____________ executed by the Swedish Subsidiary in favor of the Bank in the
original principal amount of up to 14,000,000 Krona (the "Krona Note"), the
terms of which are incorporated herein by reference.
2.03 The Guilder Advances shall be made, shall be repaid and shall
bear interest in accordance with the terms of that certain Promissory Note dated
_____________ executed by the Netherlands Subsidiaries in favor of the Bank in
the original principal amount of up to 4,000,000 Guilder (the "Guilder Note"),
the terms of which are incorporated herein by reference.
2.04 The Belgian Francs Advances shall be made, shall be repaid and
shall bear interest in accordance with the terms of that certain Promissory Note
dated _____________ executed by the Belgian Subsidiary in favor of the Bank in
the original principal amount of up to 1,000,000 Belgian Francs (the "Belgian
Francs Note"), the terms of which are incorporated herein by reference.
2.05 The Deutsche Marks Advances shall be made, shall be repaid and
shall bear interest in accordance with the terms of that certain Promissory Note
dated _____________ executed by the German Subsidiary in favor of the Bank in
the original principal amount of up to 2,500,000 Deutsche Marks (the "Deutsche
Marks Note"), the terms of which are incorporated herein by reference.
2.06 The Pound Sterling Advances shall be made, shall be repaid and
shall bear interest in accordance with the terms of that certain Promissory Note
dated _____________ executed by the English Subsidiary in favor of the Bank in
the original principal amount of up to _________ Pounds Sterling (the "Pound
Sterling Note"), the terms of which are incorporated herein by reference.
2.07 The Punts Advances shall be made, shall be repaid and shall
bear interest in accordance with the terms of that certain Promissory Note dated
_____________ executed by the Irish Subsidiary in favor of the Bank in the
original principal amount of up to _________ Punts (the "Punts Note"), the terms
of which are incorporated herein by reference.
2.08 The French Franc Advances shall be made, shall be repaid and
shall bear interest in accordance with the terms of that certain Promissory Note
dated _____________ executed by the French Subsidiary in favor of the Bank in
the original principal amount of up to _________ French Francs (the "French
Francs Note"), the terms of which are incorporated herein by reference.
2.09 The Dollar Advances shall be made, shall be repaid and shall
bear interest in accordance with the terms of that certain Promissory Note of
even date herewith executed by the Borrower in favor of the Bank in the original
principal amount of up to $15,000,000 (the "Dollar Note"), the terms of which
are incorporated herein by reference.
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2.10 If the U.S. dollar equivalent of the outstanding principal
balance of the Foreign Currency Notes (based upon the most recently available
Exchange Rate) plus the outstanding principal balance of the Dollar Note plus
the U.S. dollar equivalent of the then outstanding Letter of Credit Obligations
plus the U.S. dollar equivalent of the aggregate amount of foreign exchange
contracts margined at 15% of their U.S. dollar value shall at any time exceed
U.S. $15,000,000, the Borrower shall within two Business Days after receiving
notice thereof from the Bank make a repayment to the Bank for purposes of
eliminating such excess, with such repayment to be applied first to the Dollar
Note and then to the Foreign Currency Notes (pro rata based on outstandings) to
the extent of any surplus payment amount. The Borrower agrees to deliver to the
Bank within 15 days after the end of each month in which Advances are
outstanding a certificate signed by its chief financial officer setting forth as
of the last day of such month (i) the U.S. dollar equivalent of the outstanding
principal balance of the Foreign Currency Notes (based upon the Exchange Rate as
of the last day of such month), (ii) the outstanding principal balance of the
Dollar Note, (iii) the U.S. dollar equivalent of the outstanding Letter of
Credit Obligations (based upon the Exchange Rate as of the last day of such
month), (iv) the U.S. dollar equivalent of the aggregate amount of foreign
exchange contracts margined at 15% of their U.S. dollar value (based upon the
Exchange Rate as of the last day of such month), (v) the sum of items (i), (ii),
(iii) and (iv) above and (vi) and the difference between the Revolving Loan
Committed Amount and the sum of items (i), (ii), (iii) and (iv) above.
2.11 The obligation of the Bank to make any Advance or to issue any
Letter of Credit shall be subject to the satisfaction of the following
conditions:
(a) the representations and warranties set forth in
Article III hereof shall be true and correct in all material respects
as of the day of the making of such Advance or the issuance of such
Letter of Credit, except to the extent any such representation or
warranty relates to a prior date;
(b) at the time of the making of and immediately after
the making of such Advance or the issuance of such Letter of Credit
there shall have occurred or be continuing no Event of Default, or
event which upon notice or lapse of time or both would constitute an
Event of Default; and
(c) immediately after the making of such Advance or the
issuance of such Letter of Credit, the sum of the U.S. dollar
equivalent of the outstanding principal balance of the Foreign Currency
Notes (based upon the most recently available Exchange Rate) plus the
outstanding principal balance of the Dollar Note plus the U.S. dollar
equivalent of the then outstanding Letter of Credit Obligations (based
upon the most recently available Exchange Rate) plus the U.S. dollar
equivalent of the aggregate amount of foreign exchange contracts
margined at 15% of their U.S. dollar value (based upon the most
recently available Exchange Rate) shall not exceed U.S. $15,000,000.
Each Advance made at the request of the Borrower or any Foreign Subsidiary
Borrower, as the case may be, hereunder shall be deemed to be a reaffirmation on
the date of such Advance as to the matters specified in subsections (a) and (b)
hereof.
2.12 The Borrower shall have the right from time to time to
voluntarily reduce the Revolving Loan Committed Amount; provided, however, if
upon such reduction the U.S. dollar equivalent of the outstanding principal
balance of the Foreign Currency Notes (based upon the most recently available
Exchange Rate) plus the outstanding principal balance of the Dollar Note plus
the U.S. dollar equivalent of the then outstanding Letter of Credit Obligations
(based upon the most recently available Exchange Rate) plus the U.S. dollar
equivalent of the aggregate amount of foreign exchange contracts margined at 15%
of their
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<PAGE> 6
U.S. dollar value (based upon the most recently available Exchange Rate) shall
exceed such reduced Revolving Loan Committed Amount, the Borrower shall make a
repayment to the Bank for purposes of eliminating such excess, with such
repayment to be applied first to the Dollar Note and then to the Foreign
Currency Notes (based on outstandings), to the extent of any surplus payment
amount.
2.13 The Bank also agrees to issue standby and documentary letters
of credit (the "Letters of Credit"), in U.S. dollars or in any of the applicable
currencies under the Foreign Currency Notes, on the application of the Borrower
from time to time in accordance with the following terms and conditions:
(a) the Borrower will execute a letter of credit
application on the Bank's standard form in connection with the issuance
of each Letter of Credit (hereinafter the "Letter of Credit
Applications");
(b) The form of each Letter of Credit must be
satisfactory to the Bank in its reasonable discretion;
(c) No Letter of Credit shall have a term in excess of
one year;
(d) No Letter of Credit shall have an expiration date
more than six months beyond the Termination Date;
(e) The U.S. dollar equivalent of the aggregate undrawn
amounts of the Letters of Credit at any time outstanding plus the U.S.
dollar equivalent of the outstanding principal amount of amounts drawn
under the Letters of Credit and not reimbursed by the Borrower (the
"Letter of Credit Obligations") plus the outstanding principal balance
of the Dollar Advances plus the U.S. dollar equivalent of the Foreign
Currency Notes (based upon the most recently available Exchange Rate)
plus the U.S. dollar equivalent of the aggregate amount of foreign
exchange contracts margined at 15% of their U.S. dollar value (based
upon the most recently available Exchange Rate) shall not exceed U.S.
$15,000,000;
(f) The Bank is authorized to reimburse itself for
amounts drawn under the Letters of Credit by disbursing directly to
itself proceeds of the Dollar Advances;
(g) Amounts drawn under the Letters of Credit shall be
payable in accordance with the terms of the Letter of Credit
Applications;
(h) If the expiration date of any Letter of Credit
extends beyond the Termination Date, the Borrower shall pay to the Bank
on the Termination Date an amount equal to the U.S. dollar equivalent
of the then outstanding Letter of Credit Obligations with respect to
such Letter of Credit to be held in an interest bearing cash collateral
account in the name of the Borrower as security for the reimbursement
obligations which thereafter may arise on account of subsequent
drawings or payments on any such Letter of Credit;
(i) The Borrower shall pay the Bank a 1% per annum fee on
the undrawn amount of each standby Letter of Credit, such fee to
payable _________________. The Borrower shall pay the Bank the standard
fees of the Bank upon the issuance of any documentary Letter of Credit;
(j) If at any time after the date hereof, and from time
to time, the Bank reasonably determines that the adoption or
modification of any applicable law, rule or regulation regarding
taxation, the Bank's required levels of reserves, deposits, insurance
or capital (including any allocation of capital requirements or
conditions), or similar requirements, or any interpretation or
administration
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thereof by any governmental authority, central bank or comparable
agency charged with the interpretation, administration or compliance of
the Bank with any of such requirements, has or would have the effect of
(i) increasing the Bank's costs relating to the Letters of Credit
hereunder, or (ii) reducing the yield or rate of return of the Bank on
the Letters of Credit hereunder, to a level below that which the Bank
could have achieved but for the adoption or modification of any such
requirements, the Borrower shall, within 15 days of any written request
(which request shall state in reasonable detail the basis therefor) by
the Bank, pay to the Bank such additional amounts as will compensate
the Bank for such increase in costs or reduction in yield or rate of
return of the Bank. No failure by the Bank to immediately demand
payment of any additional amounts payable hereunder shall constitute a
waiver of the Bank's right to demand payment of such amounts at any
subsequent time. Nothing herein contained shall be construed or so
operate as to require the Borrower to pay any interest, fees, costs or
charges greater than is permitted by applicable law.
ARTICLE III
Representations and Warranties
The Borrower hereby represents and warrants to the Bank that:
3.01 Corporate Power; Authorization; Enforceable Obligations .
Each of the Credit Parties has full power and authority and the legal
right to make, deliver and perform the Credit Documents to which it is party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of the Credit Documents to which it is party. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the borrowings hereunder or with the execution, delivery or performance of any
Credit Document by the Credit Parties (other than those which have been
obtained,) or with the validity or enforceability of any Credit Document against
the Credit Parties (except such filings as are necessary in connection with the
perfection of the Liens created by such Credit Documents). Each Credit Document
to which the Credit Parties are a party has been duly executed and delivered on
behalf of such Credit Parties. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of such Credit Parties
enforceable against such Credit Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.02 No Legal Bar; No Default.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the Advances and the Letters of Credit will
not violate any Requirement of Law or any Contractual Obligation of any member
of the Consolidated Group (except those as to which waivers or consents have
been obtained), and will not result in, or require, the creation or imposition
of any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
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3.03 Federal Regulations.
No part of the proceeds of any Advances or Letter of Credit hereunder
will be used directly or indirectly for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. No member of the Consolidated Group owns "margin stock"
except as identified in the financial statements referred to in Section 6.1 of
the Syndicated Credit Agreement and the aggregate value of all "margin stock"
owned by each member of the Consolidated Group does not exceed 25% of the value
of its assets.
3.04 Purpose of Extensions of Credit.
The Advances will be used to support the Borrower's needs for general
working capital, letters of credit and foreign exchange transactions.
3.05 Incorporated Representations and Warranties.
The representations and warranties contained in Sections 6.1, 6.2, 6.3,
6.6, 6.7, 6.9, 6.10, 6.12, 6.13, 6.14 and 6.15 of the Syndicated Credit
Agreement, as in effect as of the date hereof (the "Incorporated
Representations"), are hereby incorporated by reference and shall be binding on
the Borrower as if set forth fully herein. The incorporation by reference to the
Syndicated Credit Agreement of the Incorporated Representations pursuant to this
Section 3.05 shall survive the termination of the Syndicated Credit Agreement.
For purposes of the incorporation of the Incorporated Representations pursuant
to this Section 3.05, all references in the Incorporated Representations to "the
Agent", "a Lender", "the Lenders" or "the Required Lenders" shall be deemed to
refer to the Bank, all references in the Incorporated Representations to the
"Credit Agreement", or any similar references, shall be deemed to refer to this
Credit Agreement, all references in the Incorporated Representations to a "Note"
or the "Notes" shall be deemed to refer to one or more of the Notes as defined
in Section 1.01 hereof and all references in the Incorporated Representations to
a "Credit Document" or the "Credit Documents", or any similar references, shall
be deemed to refer to one or more of the Credit Documents as defined in Section
1.01 hereof.
ARTICLE IV
Covenants
The Borrower covenants and agrees that from the date hereof and until
payment in full of all principal and interest on the Notes and the Letter of
Credit Obligations and until the Bank's obligation to extend credit hereunder
has been terminated, the Borrower hereby agrees as follows:
4.01 Incorporated Covenants.
The affirmative and negative covenants contained in Sections 7.1
through 7.9 and Sections 8.1 through 8.9 of the Syndicated Credit Agreement, as
in effect as of the date hereof (the "Incorporated Covenants"), are hereby
incorporated by reference and shall be binding on the Borrower as if set forth
fully herein. The incorporation by reference to the Syndicated Credit Agreement
of the Incorporated Covenants pursuant to this Section 4.01 shall survive the
termination of the Syndicated Credit Agreement. For purposes of the
incorporation of the Incorporated Covenants pursuant to this Section 4.01, all
references in the Incorporated Covenants to "the Agent", "a Lender", "the
Lenders" or "the Required Lenders" shall be deemed to refer
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<PAGE> 9
to the Bank, all references in the Incorporated Covenants to the "Credit
Agreement", or any similar references, shall be deemed to refer to this Credit
Agreement, all references in the Incorporated Covenants to a "Note" or the
"Notes" shall be deemed to refer to one or more of the Notes was defined in
Section 1.01 hereof , all references in the Incorporated Covenants to a "Credit
Document" or the "Credit Documents", or any similar references, shall be deemed
to refer to one or more of the Credit Documents as defined in Section 1.01
hereof and Section 8.1(g) shall refer to the Indebtedness under the Syndicated
Credit Agreement .
4.02 Additional Guaranties and Stock Pledges.
If a Subsidiary of the Borrower becomes a Material Subsidiary, then the
Borrower will promptly notify the Bank thereof and cause such Material
Subsidiary to:
(a) execute a guaranty agreement in a form reasonably
satisfactory to the Bank (or in lieu thereof with respect to any
Foreign Subsidiary which is a Material Subsidiary, the Borrower may
deliver stock certificates and related pledge agreement evidencing the
pledge of 66% of the Voting Stock of such Foreign Subsidiary, together,
with undated stock transfer powers executed in blank, such pledge
agreement to secure on a pari passu basis the obligations of the Credit
Parties under the Credit Documents and the Indebtedness under the
Syndicated Credit Agreement); and
(b) deliver such supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and
opinions of counsel as the Bank may reasonably request.
4.03 Banking Relationship. The Borrower shall maintain a primary
banking relationship with the Bank.
ARTICLE V
Events of Default and Acceleration
5.01 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Notes or any of the Letter of Credit Applications, or
(ii) default, and such defaults shall continue for five (5) or
more Business Days, in the payment when due of any interest on the
Notes, or of any fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made herein, in any of the other Credit Documents,
or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
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<PAGE> 10
(c) Covenants.
(i) A default in the due performance or observance of any
term, covenant or agreement contained in Section 7.2, 7.3(a), 7.9, or
8.1 through 8.9, inclusive of the Incorporated Covenants or Section 4.2
hereof, or
(ii) A default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) of this Section 5.01) contained in this
Credit Agreement and such default shall continue unremedied for a
period of at least 30 days after the earlier of a responsible officer
of a Credit Party becoming aware of such default or notice thereof by
the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any material term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure periods,
if any), or (ii) except as to the Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.3(a), Section 8.3(b)
or Section 8.3(c) of the Incorporated Covenants, any Credit Document shall fail
to be in full force and effect or to give the Bank any material part of the
Liens, rights, powers and privileges purported to be created thereby; or
(e) Guaranties. Except as to the Credit Party which is dissolved,
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section
8.3(a), Section 8.3(b) or Section 8.3(c) of the Incorporated Covenants, the
guaranty given by any Guarantor hereunder or any material provision thereof
shall cease to be in full force and effect, or any Guarantor hereunder or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any guaranty; or
(f) Incorporated Events of Default. The occurrence of an "Event of
Default" under and as defined in the Syndicated Credit Agreement, as in effect
as of the date hereof which "Events of Default" (the "Incorporated Events of
Default") are hereby incorporated by reference and shall be binding on the
Borrower as if set forth fully herein. The incorporation by reference to the
Syndicated Credit Agreement of the Incorporated Events of Default shall survive
the termination of the Syndicated Credit Agreement. For purposes of the
incorporation of the Incorporated Covenants pursuant to this Section 6.1(f), all
references in the Incorporated Events of Default to "the Agent", "a Lender",
"the Lenders" or "the Required Lenders" shall be deemed to refer to the Bank,
all references in the Incorporated Events of Default to the "Credit Agreement",
or any similar references, shall be deemed to refer to this Credit Agreement,
all references in the Incorporated Default to a "Note" or the "Notes" shall be
deemed to refer to one or more of the Notes as defined in Section 1.01 hereof
and all references in the Incorporated Events of Default to a "Credit Document"
or the "Credit Documents", or any similar references, shall be deemed to refer
to one or more of the Credit Documents as defined in Section 1.01 hereof.
5.02 Upon the occurrence of any such event of default (taking into
account applicable grace periods, if any, as provided in Section 5.01 hereof)
and unless the Bank agrees to waive in writing such an event of default:
(a) the Bank's commitment to make Advances shall
terminate and all of the indebtedness of any and every kind owing by
the Borrower to the Bank or any corporate affiliate of the Bank shall
become due and payable upon written notice to the Borrower (other than
an Event of Default described in Section 9.1(f) of the Incorporated
Events of Default in which case the Bank's commitment to make Advances
shall automatically terminate and such indebtedness shall become due
and payable
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immediately without necessity of written demand) without the necessity
of any other demand, presentment, protest or notice upon the Borrower,
all of which are hereby expressly waived by the Borrower;
(b) all of the obligations of the Borrower under the
Credit Documents shall thereupon be immediately due and payable without
the necessity of any other demand, presentment, protest or notice upon
the Borrower, all of which are hereby expressly waived by the Borrower;
(c) the Bank shall have the right, immediately and
without further action by it, to set-off against the Notes and the
Guaranty Agreement all money owed by the Bank in any capacity to any
Borrower, whether or not due, and the Bank shall be deemed to have
exercised such right of set-off and to have made a charge against any
such money immediately upon the occurrence of such event of default
even though such charge is made or entered on the books of the Bank
subsequent thereto; and
(d) the Bank may demand, and the Borrower shall
immediately pay to the Bank upon such demand, cash in an amount equal
to the then outstanding Letter of Credit Obligations and foreign
exchange contract obligations of the Borrower to the Bank which will be
held in an interest bearing cash collateral account in the name of the
Borrower and under the dominion and control of the Bank as additional
security for the reimbursement obligations which may thereafter arise
on account of subsequent drawings or payments under the Letters of
Credit or such foreign exchange contracts.
ARTICLE VI
Miscellaneous
6.01 Any notice shall be conclusively deemed to have been received
by any party hereto and be effective on the day on which delivered to such party
at the address set forth below or such other address as such party shall specify
to the other party in writing, or if sent prepaid by certified or registered
mail or by telegram or telex (where the receipt of such message is verified by
return) on the third Business Day after the day on which mailed (or sent),
addressed to such party at said address:
(a) if to any Borrower at the following address:
c/o Sykes Enterprises, Incorporated
100 North Tampa Street
Suite 3900
Tampa, Florida 33602
Attention: Scott J. Bendert, Senior Vice President-
Finance, Treasurer and Chief Financial Officer
(b) if to the Bank:
NationsBank, N.A.
NationsBank Plaza, NC1-002-03-10
Charlotte, North Carolina 28255
Attention: William A. Serenius,
Sr. Vice President
6.02 No failure or delay on the part of the Bank in the exercise of
any right, power or privilege hereunder or under any other Credit Document shall
operate as a waiver of any such right, power or privilege nor shall any preclude
any other or further exercise
24
<PAGE> 12
thereof. The rights and remedies herein provided are cumulative and not
exclusive or any rights or remedies provided by law.
6.03 All covenants, agreements, representations and warranties made
herein and in the other Credit Documents shall survive the making by the Bank of
the loans herein contemplated and the execution and delivery to the Bank of the
Credit Documents and shall continue in full force and effect so long as any of
the indebtedness of the Borrower to the Bank or any obligations of the Borrower
to the Bank remain outstanding and unpaid. Whenever in this Credit Agreement,
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party and all covenants, provisions
and agreements by or on behalf of the Borrower which are contained in the Credit
Documents or this Credit Agreement shall inure to the benefit of the successors
and assigns of the Bank.
6.04 Subject to previously agreed upon limits, the Borrower agrees
to pay the costs and expenses of the Bank (including reasonable attorneys' fees)
in connection with the preparation, execution and delivery of the Credit
Documents and all other documents necessary to consummate the transactions
contemplated by the commitment letter of the Bank to the Borrower. The Borrower
also agrees to pay the costs and expenses of the Bank in connection with the
enforcement of the Credit Documents and this Credit Agreement, as well as any
actual filing and recording fees and stamp and other taxes with respect thereto.
6.05 No approval required by the Bank ("Approval") hereunder nor
any modification, amendment or waiver ("Waiver") of any provision of this Credit
Agreement or any other Credit Document, nor any consent to any departure by the
Borrower therefrom ("Consent") shall in any event be effective unless the same
shall be delivered in accordance with the provisions of Section 7.01 hereof, and
then such Approval, Waiver or Consent shall be effective only in the specific
instance and for the purpose for which given, but any such Approval, Waiver or
Consent when so signed shall be effective and binding upon the Bank. Notice to
or demand on the Borrower in any case shall not entitle the Borrower to any
other or further notice or demand in the same, similar or other circumstances.
6.06 Interest, fees and premiums hereunder shall be computed on the
basis of a three hundred sixty (360) day year for the actual number of days in
the interest period unless any promissory note for foreign currency borrowings
contains a contrary calculation.
6.07 Should any installment or other payment of the principal of or
interest on any Note become due and payable on other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day
thereafter and in the case of an installment of principal, interest shall be
payable thereon at the rate per annum herein specified during such extension.
6.08 This Credit Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Credit Agreement
to produce or account for more than one such counterpart.
6.09 The terms hereof shall extend to any subsequent holder of the
Notes and the Guaranty Agreement.
6.10 The term of this Credit Agreement shall be until payment in
full of all sums payable by the Borrower hereunder, under the Notes, or
otherwise payable to the Bank, howsoever evidenced, whichever is later.
6.11 All documents executed pursuant to the transactions
contemplated herein, including without limitation this Credit Agreement and each
of the Notes, shall be deemed
25
<PAGE> 13
to be contracts made under, and for all purposes shall be construed in
accordance with, the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the jurisdiction and venue of the state
and federal courts of North Carolina for the purposes of resolving disputes
hereunder or for the purposes of collection.
26
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed under seal by their duly authorized officers in Charlotte, North
Carolina at the offices of the Bank as of the day and year first above written.
SYKES ENTERPRISES, INCORPORATED
ATTEST:
By By
---------------------------- ------------------------------------
Scott J. Bendert -
Senior Vice President-Finance, Treasurer
and Chief Financial Officer
Title
-------------------------
(Corporate Seal)
NATIONSBANK, N.A.
By:
-----------------------------------------
William A. Serenius
Senior Vice President
27
<PAGE> 1
EXHIBIT 10.2
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT AGREEMENT (this "Amendment No. 1"), dated as of March
20, 1998, among SYKES ENTERPRISES, INCORPORATED, a Florida corporation (the
"Borrower"), MCQUEEN INTERNATIONAL LIMITED (the "Guarantor"), the various
lending institutions parties hereto (each a "Lender" and collectively, the
"Lenders"), and NATIONSBANK, N.A., a national banking association, as agent for
the Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent entered
into that certain Credit Agreement, dated as of February 27, 1998 (the "Existing
Credit Agreement"); and
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent have
agreed to amend the Existing Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment No. 1, including
its preamble and recitals, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Amendment No. 1 Effective Date" is defined in Subpart 3.1.
SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment No. 1, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II. Except as so amended, the Existing Credit Agreement, the
Notes and the other Credit Documents shall continue in full force and effect.
SUBPART 2.1 Amendments to Section 1. Section 1 of the Existing Credit
Agreement is hereby amended by inserting, in the alphabetically appropriate
place, the following definition:
"Amendment No. 1" means Amendment No. 1 to Credit Agreement,
dated as of March 20, 1998, among the Borrower, the Guarantor, the
Lenders and the Agent, amending this Credit Agreement as then in
effect.
28
<PAGE> 2
SUBPART 2.2 Amendments to Section 8.1. Section 8.1 is amended by (a)
deleting the reference to "and" at the end of subsection 8.1(g), (b) changing
subsection 8.1(h) to subsection 8.1(i) and (c) adding the following subsection
(h):
(h) guaranty agreements executed by the Borrower guaranteeing
obligations of Sykes Health Plan Services, Inc. to its lender or
lenders provided the aggregate amount guaranteed thereunder shall not
exceed $50,000,000 at any time outstanding; and
SUBPART 2.3 Amendments to Section 8.4. Section 8.4 is amended in its
entirety so that such Section now reads as follows:
Make an Investment in any Person except for (i) Investments
which are consistent with the Borrower's investment policy set forth in
Section 8.4 and (ii) an Investment of up to $20,000,000 in the
aggregate in Sykes Health Plan Services, Inc.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Amendment No. 1 Effective Date. This Amendment shall be
and become effective on such date (the "Amendment No. 1 Effective Date") on or
prior to March 20, 1998, when all of the conditions set forth in this Subpart
3.1 shall have been satisfied, and thereafter, this Amendment No. 1 shall be
known, and may be referred to, as "Amendment No. 1."
SUBPART 3.1.1. Execution of Counterparts. The Agent shall have received
counterparts of this Amendment No. 1, each of which shall have been duly
executed on behalf of the Borrower, the Guarantor, the Agent and the Required
Lenders.
SUBPART 3.1.2. Legal Details, Etc. All documents executed or submitted
pursuant hereto shall be reasonably satisfactory in form and substance to the
Agent and its counsel. The Agent and its counsel shall have received all
information, and such counterpart originals or such certified or other copies of
such originals, as the Agent or its counsel may reasonably request, and all
legal matters incident to the transactions contemplated by this Amendment No. 1
shall be reasonably satisfactory to the Agent and its counsel.
PART IV
MISCELLANEOUS
SUBPART 4.1 Cross-References. References in this Amendment No. 1 to any
Part or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment No. 1.
SUBPART 4.2 Instrument Pursuant to Existing Credit Agreement. This
Amendment No. 1 is a document executed pursuant to the Existing Credit Agreement
and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.
SUBPART 4.3 Credit Documents. The Borrower hereby confirms and agrees
that the Credit Documents are, and shall continue to be, in full force and
effect, and hereby ratifies and confirms in all respects its obligations
thereunder, except that, upon the effectiveness of, and on and after the date
of, this Amendment No. 1, all references in
29
<PAGE> 3
each Credit Document to the "Credit Agreement", "thereunder", "thereof" or words
of like import referring to the Existing Credit Agreement shall mean the Amended
Credit Agreement.
SUBPART 4.4 Counterparts, Effectiveness, Etc. This Amendment No. 1 may
be executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement.
SUBPART 4.5 Governing Law; Entire Agreement. THIS AMENDMENT NO. 1 SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NORTH CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SUBPART 4.6 Successors and Assigns. This Amendment No. 1 shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 4.7 Representations and Warranties. The Borrower represents and
warrants to the Agent and the Lenders that (i) the representations and
warranties made in Section 6 of the Existing Credit Agreement are true and
correct on and as of the Amendment No. 1 Effective Date as though made on such
date and (ii) no Default or Event of Default has occurred and remains uncured as
of the Amendment No. 1 Effective Date.
30
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be executed by their respective duly authorized officers as of the day and
year first above written.
SYKES ENTERPRISES, INCORPORATED
By
------------------------------------------
Title
---------------------------------------
MCQUEEN INTERNATIONAL LIMITED
By
------------------------------------------
Title
---------------------------------------
NATIONSBANK, N.A., individually in its
capacity as a Lender and in its capacity as Agent
By
------------------------------------------
Title
---------------------------------------
CREDIT LYONNAIS ATLANTA AGENCY
By
------------------------------------------
Title
---------------------------------------
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By
------------------------------------------
Title
---------------------------------------
FLEET NATIONAL BANK
By
------------------------------------------
Title
---------------------------------------
31
<PAGE> 5
THE FIRST NATIONAL BANK OF CHICAGO
By
------------------------------------------
Title
---------------------------------------
SUNTRUST BANK, TAMPA BAY
By
------------------------------------------
Title
---------------------------------------
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By
------------------------------------------
Title
---------------------------------------
FIRST UNION NATIONAL BANK
By
------------------------------------------
Title
---------------------------------------
32
<PAGE> 1
Exhibit 10.3
GUARANTY AGREEMENT
(Parent)
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this
"Guaranty"), dated as of March __, 1998, is made by HEALTHPLAN SERVICES
CORPORATION ("HPS") and SYKES ENTERPRISES, INCORPORATED ("Sykes") (each a
"Guarantor" and collectively the "Guarantors") to NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent (the "Agent") for each of
the lenders now or hereafter party to the Credit Agreement (as defined below)
(each a "Lender" and collectively the "Lenders").
W I T N E S S E T H:
WHEREAS, the Agent and Sykes HealthPlan Services, Inc (the "Borrower")
have entered into that certain Credit Agreement dated as of the date hereof (as
amended, supplemented or otherwise modified as of the date hereof, the "Credit
Agreement") and certain other Loan Documents, as defined in the Credit
Agreement; and
WHEREAS, HPS and Sykes each own fifty percent (50%) of the issued and
outstanding shares of common stock of the Borrower and will materially benefit
from the loans and advances made and to be made, and the letters of credit
issued and to be issued, under the Credit Agreement;
NOW, THEREFORE, in order to induce the Agent for the benefit of the
Lenders to enter into the Credit Agreement and to make and continue the loans
and advances thereunder, and to issue letters of credit for the account of the
Borrower, and in consideration of the mutual covenants and agreements contained
herein, each Guarantor agrees as follows:
. DEFINITIONS. All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
. GUARANTY. Prior to the Guaranty Termination Date, as defined
below, each Guarantor hereby jointly and severally, unconditionally,
absolutely, continually and irrevocably guarantees to the Agent and the Lenders
the payment and performance in full of fifty percent (50%) of the Borrower's
Liabilities (as defined below). For all purposes of this Guaranty Agreement,
"Borrower's Liabilities" means: (a) the Borrower's prompt payment in full,
when due or declared due and at all such times, of all Obligations and all
other amounts pursuant to the terms of the Credit Agreement, the Notes, and all
other Loan Documents executed in connection with the Credit Agreement and all
Hedging Obligations heretofore, now or at any time or times hereafter owing,
arising, due or payable from the Borrower to any Lenders (or affiliate
thereof), including without limitation principal, interest, premium or fee
(including, but not limited to, loan fees and attorneys' fees and expenses);
and (b) the Borrower's prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and provision to
be performed, observed or discharged by the Borrower under the Credit Agreement
<PAGE> 2
and all other Loan Documents executed in connection therewith and all Swap
Agreements. The Guarantors' obligations to the Agent and the Lenders under
this Guaranty Agreement are hereinafter collectively referred to as the
"Guarantors' Obligations". For all purposes of this Guaranty Agreement,
"Guaranty Termination Date" means the date at which the first to occur of
either (i) (a) the Borrower's Consolidated EBITDA, without giving effect, in
calculating Consolidated EBITDA, to the results of operations of any business
or Person acquired prior to the date of their Acquisition, for a twelve month
period is not less than $16,000,000 and (b) the Borrower shall have been in
compliance with Sections 8.1(a) through 8.1(d) of the Credit Agreement for four
(4) consecutive fiscal quarters, all as demonstrated to the satisfaction of the
Agent or (ii) the Borrower shall have received net proceeds of not less than
$75,000,000 from the sale of an initial public offering of its capital stock,
which proceeds shall be used to repay indebtedness outstanding under the Credit
Agreement.
Each Guarantor agrees that it is directly and primarily liable for
fifty percent (50%) of the Borrower's Liabilities.
. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal, interest,
premium, fee (including, but not limited to, loan fees and attorneys' fees and
expenses), or otherwise, when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any Default or Event of Default under the Credit
Agreement that has not been cured or waived, then any or all of the Guarantors
will, upon demand thereof by the Agent or its successors or assigns as of the
date of the Agent's demand, fully pay to the Agent, for the benefit of the
Lenders, subject to any restriction set forth in Section 2 hereof, an amount
equal to all Guarantors' Obligations then due and owing.
. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be absolute and unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, the Notes or any other Loan Document or
any other guaranty of the Borrower's Liabilities, and shall not be affected by
any action taken under the Credit Agreement, the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
agreement between the Agent or the Lenders and the Borrower or any other
Person, in the exercise of any right or power therein conferred, or by any
failure or omission to enforce any right conferred thereby, or by any waiver of
any covenant or condition therein provided, or by any acceleration of the
maturity of any of the Borrower's Liabilities, or by the release or other
disposal of any security for any of the Borrower's Liabilities, or by the
dissolution of the Borrower or the combination or consolidation of the Borrower
into or with another entity or any transfer or disposition of any assets of the
Borrower or by any extension or renewal of the Credit Agreement, any of the
Notes or any other Loan Document, in whole or in part, or by any modification,
alteration, amendment or addition of or to the Credit Agreement, any of the
Notes or any other Loan Document, any other guaranty of the Borrower's
Liabilities, or any other agreement between the Agent or the Lenders and the
Borrower or any other Person, or by any other circumstance whatsoever (with or
without notice to or knowledge of any Guarantor) which may or
<PAGE> 3
might in any manner or to any extent vary the risks of such Guarantor, or might
otherwise constitute a legal or equitable discharge of a surety or a guarantor;
it being the purpose and intent of the parties hereto that, prior to the
Guaranty Termination Date, this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
guarantees that the Guarantors' Obligations will be paid in lawful currency of
the United States of America and in immediately available funds, regardless of
any law, regulation or decree now or hereafter in effect that might in any
manner affect the Borrower's Liabilities, or the rights of the Agent or any
Lender with respect thereto as against the Borrower, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by the Borrower
of any or all of the Borrower's Liabilities.
. EVENTS OF DEFAULT. In the event that (a) a Guarantor shall
file a petition to take advantage of any insolvency statute; (b) a Guarantor
shall commence or suffer to exist a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
substantially all of its property; (c) a Guarantor shall file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country; (d) a court
of competent jurisdiction shall enter an order, judgment or decree appointing a
custodian, receiver, trustee, liquidator or conservator of a Guarantor or of
the whole or substantially all of its properties, or approve a petition filed
against a Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state or similar law of any other country, or
if, under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of a Guarantor
or of the whole or substantially all of its properties and such order,
judgment, decree, approval or assumption remains unstayed or undismissed for a
period of sixty (60) consecutive days; (e) there is commenced against a
Guarantor any proceeding or petition seeking reorganization, arrangement or
similar relief under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which proceeding or
petition remains unstayed or undismissed for a period of sixty (60) consecutive
days; (f) there shall occur an Event of Default under the Credit Agreement; or
(g) any default shall occur in the payment of amounts due hereunder (each of
the foregoing an "Event of Default" hereunder); then notwithstanding any
collateral that the Lenders may possess from Borrower, such Guarantor, any
other Guarantor or any other guarantor of the Borrower's Liabilities, or any
other party, at the Agent's election and without notice thereof or demand
therefor, so long as such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
. SUITS. Each Guarantor from time to time shall pay to the
Agent for the benefit of the Lenders, on demand, at the Agent's place of
business set forth in the Credit Agreement, the Guarantors' Obligations as they
become or are declared due, and in the event such payment is not made
forthwith, the Agent or the Lenders or any of them may proceed to suit against
such Guarantor. At the Agent's election, one or more and successive or
concurrent suits may be brought
<PAGE> 4
hereon by the Agent against any Guarantor, whether or not suit has been
commenced against the Borrower, any other Guarantor or any other guarantor of
the Borrower's Liabilities, or any other Person and whether or not the Agent or
any Lender has taken or failed to take any other action to collect all or any
portion of the Borrower's Liabilities.
. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent and the Lenders as a defense, counterclaim, set-off or cross
claim, any defense (legal or equitable) or other claim which each Guarantor may
now or at any time hereafter have against the Borrower, the Agent or the
Lenders, without waiving any additional defenses, set-offs, counterclaims or
other claims otherwise available to such Guarantor. If at any time hereafter
the Agent or any Lender employs counsel for advice or other representation to
enforce the Guarantors' Obligations that arise out of an Event of Default,
then, in any of the foregoing events, all of the reasonable attorneys' fees
arising from such services and all expenses, costs and charges in any way or
respect arising in connection therewith or relating thereto shall be paid by
such Guarantor to the Agent, for the benefit of the Lenders, on demand.
. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Lenders' heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Agent,
the Lenders or the Borrower heretofore, now or at any time hereafter,
obtaining, amending, substituting for, releasing, waiving or modifying the
Credit Agreement, the Notes or any other Loan Documents; (iv) presentment,
demand, default, non-payment, partial payment and protest; (v) the Agent or the
Lenders heretofore, now or at any time hereafter granting to the Borrower (or
any other party liable to the Lenders on account of the Borrower's Liabilities)
any indulgence or extensions of time of payment of the Borrower's Liabilities;
and (vi) the Agent or the Lenders heretofore, now or at any time hereafter
accepting from the Borrower, any other Guarantor, any other guarantor of the
Borrower's Liabilities or any other Person, any partial payment or payments on
account of the Borrower's Liabilities or any collateral securing the payment
thereof or the Agent settling, subordinating, compromising, discharging or
releasing the same. Each Guarantor agrees that the Agent and each Lender may
heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as the Agent and each Lender, in its
sole and absolute discretion, deems advisable, without in any way or respect
impairing, affecting, reducing or releasing such Guarantor from the Guarantors'
Obligations, and each Guarantor hereby consents to each and all of the
foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantors' Obligations under this Guaranty Agreement may
be enforced by the Agent on behalf of the Lenders upon demand by the Agent to
such Guarantor without the Agent being required, such Guarantor expressly
waiving any right it may have to require the Agent, to (i) prosecute collection
or
<PAGE> 5
seek to enforce or resort to any remedies against the Borrower or any other
Guarantor or any other guarantor of the Borrower's Liabilities, IT BEING
EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED GUARANTY AGREEMENT TO BY SUCH
GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE AGENT,
AND THE PROVISIONS HEREOF ENFORCED BY THE AGENT, EFFECTIVE AS OF THE FIRST DATE
ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT, or
(ii) seek to enforce or resort to any remedies with respect to any security
interests, Liens or encumbrances granted to the Agent by the Borrower, any
other Guarantor or any other Person on account of the Borrower's Liabilities or
any guaranty thereof. Neither the Agent nor any Lender shall have any
obligation to protect, secure or insure any of the foregoing security
interests, Liens or encumbrances on the properties or interests in properties
subject thereto. The Guarantors' Obligations shall in no way be impaired,
affected, reduced, or released by reason of the Agent's or any Lender's failure
or delay to do or take any of the acts, actions or things described in this
Guaranty including, without limiting the generality of the foregoing, those
acts, actions and things described in this Section 9.
(c) Each Guarantor further agrees with respect to this Guaranty
that such Guarantor shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities
until the Facility Termination Date.
. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall
be effective as of the date of the initial Advance under the Credit Agreement
and shall continue in full force and effect until the earlier of (i) the
Guaranty Termination Date or (ii) the Facility Termination Date. The Agent
shall give each Guarantor written notice of such termination in accordance with
Section 17 hereof. This Guaranty Agreement shall be binding upon and inure to
the benefit of each Guarantor, the Agent and the Lenders and their respective
successors and assigns. Notwithstanding the foregoing, no Guarantor may,
without the prior written consent of the Agent, assign any rights, powers,
duties or obligations hereunder. Any claim or claims that the Agent and the
Lenders may at any time hereafter have against a Guarantor under this Guaranty
Agreement may be asserted by the Agent or any Lender by written notice directed
to such Guarantor.
. REPRESENTATIONS AND WARRANTIES. Each Guarantor warrants and
represents to the Agent for the benefit of the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its
certificate of incorporation or other documents of corporate governance or any
agreement to which such Guarantor is a party, or any applicable laws.
. EXPENSES. Each Guarantor agrees to be liable for the payment
of all reasonable fees and expenses, including without limitation, attorney's
fees and costs of collection, incurred by the Agent and each Lender in
connection with the enforcement of this Guaranty Agreement.
<PAGE> 6
. REINSTATEMENT. Each Guarantor agrees that this Guaranty
Agreement shall continue to be effective or be reinstated, as the case may be,
at any time payment received by the Agent under the Credit Agreement or this
Guaranty Agreement is rescinded or must be restored for any reason.
. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
. RELIANCE. Each Guarantor represents and warrants to the
Agent, for the benefit of the Agent and the Lenders, that: (a) such Guarantor
has adequate means to obtain from Borrower, on a continuing basis, information
concerning Borrower and Borrower's financial condition and affairs and has full
and complete access to Borrower's books and records; (b) such Guarantor is not
relying on the Agent or any Lender, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of Borrower and Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Agent or any Lender, its or their employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that neither the Agent nor any Lender has any duty or
responsibility whatsoever, now or in the future, to provide to such Guarantor
any information concerning Borrower or Borrower's financial condition and
affairs, other than as expressly provided herein, and that, if such Guarantor
receives any such information from the Agent or any Lender, its or their
employees, agents or other representatives, such Guarantor will independently
verify the information and will not rely on the Agent or any Lender, its or
their employees, agents or other representatives, with respect to such
information.
. TERMINATION. This Guaranty Agreement and all obligations of
the Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the earlier of the Guaranty Termination
Date or the Facility Termination Date.
. NOTICE. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telefacsimile (where the receipt
of such message is verified by return) expressly provided for hereunder, when
received at such telephone or telefacsimile number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national
<PAGE> 7
overnight courier service, on the first Business Day after the day on which
delivered to such service against receipt therefor, addressed to such party at
said address:
<TABLE>
<S> <C>
(a) if to the Borrower or Sykes: if to HPS:
c/o Sykes HealthPlan Services, Inc. c/o Sykes HealthPlan Services, Inc.
3501 Frontage Road 3501 Frontage Road
Tampa, Florida 33607 Tampa, Florida 33607
Attention: Mr. Jack Murray III Attention: Phil Dingle
Telephone: (813) 289-1000 Telephone: (813) 289-1000
Telefacsimile: (813) 289-9359 Telefacsimile: (813) 289-9359
(b) if to the Agent: with a copy to:
NationsBank, N.A. NationsBank, National Association
Independence Center, 15th Floor 400 N. Ashley Drive, 2nd Floor
NC1-001-15-04 Tampa, Florida 33602
Charlotte, North Carolina 28255 Attention: James E. Harden, Jr.,
Attention: Ken Deffendall, Agency Services Senior Vice President
Telephone: (704) 388-6482 Telephone: (813) 224-5147
Telefacsimile: (704) 386-9923 Telefacsimile: (813) 224-5770
</TABLE>
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 17.
. GOVERNING LAW.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE
THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(B) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF HILLSBOROUGH,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
EXPRESSLY WAIVES ANY OBJECTION
<PAGE> 8
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN,
OR TO THE GUARANTY AGREEMEN EXERCISE OF JURISDICTION OVER
IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION
OR PROCEEDING, AND THE BORROWER HEREBY IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) THE BORROWER AGREES THAT SERVICE OF PROCESS
MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN SECTION
17, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B)
HEREOF SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE THE
BORROWER OR ANY OF THE BORROWER'S PROPERTY OR ASSETS MAY BE
FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE
LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN
DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
THEREWITH, THE BORROWER, THE AGENT AND THE LENDERS HEREBY
AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO
TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[SIGNATURE PAGE FOLLOWS.]
<PAGE> 9
IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
GUARANTORS:
HEALTHPLAN SERVICES CORPORATION
By:___________________________________________
Name: ________________________________________
Title: _______________________________________
SYKES ENTERPRISES, INCORPORATED
By:___________________________________________
Name: ________________________________________
Title:________________________________________
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By:___________________________________________
Name: James E. Harden, Jr.
Title: Senior Vice President
GUARANTY AGREEMENT
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY CONSOLIDATED FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q OF SYKES ENTERPRISES, INC. FOR THE THREE MONTH PERIOD ENDED MARCH 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 27,902,400
<SECURITIES> 0
<RECEIVABLES> 76,393,770
<ALLOWANCES> (666,245)
<INVENTORY> 0
<CURRENT-ASSETS> 117,607,629
<PP&E> 122,569,627
<DEPRECIATION> (49,679,879)
<TOTAL-ASSETS> 211,101,711
<CURRENT-LIABILITIES> 48,825,832
<BONDS> 0
0
0
<COMMON> 391,300
<OTHER-SE> 142,166,716
<TOTAL-LIABILITY-AND-EQUITY> 211,101,711
<SALES> 0
<TOTAL-REVENUES> 89,149,324
<CGS> 0
<TOTAL-COSTS> 55,643,607
<OTHER-EXPENSES> 23,472,489
<LOSS-PROVISION> (8,027,633)
<INTEREST-EXPENSE> 76,748
<INCOME-PRETAX> 2,082,343
<INCOME-TAX> 3,554,000
<INCOME-CONTINUING> (1,471,657)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,471,657)
<EPS-PRIMARY> $(0.04)
<EPS-DILUTED> $(0.04)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY CONSOLIDATED FINANCIAL INFORMATION FOR
THE THREE MONTHS ENDED MARCH 30, 1997 EXTRACTED FROM FORM 10-Q FOR THE THREE
MONTH PERIOD ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FORM 10-Q.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-30-1997
<CASH> 94,584,823
<SECURITIES> 0
<RECEIVABLES> 60,597,939
<ALLOWANCES> (198,917)
<INVENTORY> 0
<CURRENT-ASSETS> 164,694,252
<PP&E> 55,503,873
<DEPRECIATION> 0
<TOTAL-ASSETS> 226,308,618
<CURRENT-LIABILITIES> 48,833,188
<BONDS> 0
0
0
<COMMON> 388,604
<OTHER-SE> 147,863,160
<TOTAL-LIABILITY-AND-EQUITY> 226,308,618
<SALES> 0
<TOTAL-REVENUES> 66,596,945
<CGS> 0
<TOTAL-COSTS> 39,639,200
<OTHER-EXPENSES> 19,305,926
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 383,469
<INCOME-PRETAX> 8,093,689
<INCOME-TAX> 2,946,821
<INCOME-CONTINUING> 5,146,868
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,146,868
<EPS-PRIMARY> $ 0.13
<EPS-DILUTED> $ 0.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY CONSOLIDATED FINANCIAL INFORMATION FOR
THE YEAR ENDED DECEMBER 31, 1996 EXTRACTED FROM FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM
10-K.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 92,836,884
<SECURITIES> 0
<RECEIVABLES> 57,468,402
<ALLOWANCES> (498,129)
<INVENTORY> 0
<CURRENT-ASSETS> 158,073,998
<PP&E> 78,512,408
<DEPRECIATION> (24,891,978)
<TOTAL-ASSETS> 214,523,531
<CURRENT-LIABILITIES> 48,700,625
<BONDS> 0
0
0
<COMMON> 388,583
<OTHER-SE> 143,754,546
<TOTAL-LIABILITY-AND-EQUITY> 214,523,531
<SALES> 0
<TOTAL-REVENUES> 218,995,751
<CGS> 0
<TOTAL-COSTS> 134,235,748
<OTHER-EXPENSES> 67,823,910
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 596,828
<INCOME-PRETAX> 16,794,480
<INCOME-TAX> 6,489,937
<INCOME-CONTINUING> 10,304,543
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,304,543
<EPS-PRIMARY> $ 0.30
<EPS-DILUTED> $ 0.29
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY CONSOLIDATED FINANCIAL INFORMATION FOR
THE YEAR ENDED DECEMBER 31, 1995 EXTRACTED FROM FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM
10-K.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,033,508
<SECURITIES> 0
<RECEIVABLES> 35,134,839
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45,302,586
<PP&E> 37,873,038
<DEPRECIATION> 0
<TOTAL-ASSETS> 85,958,329
<CURRENT-LIABILITIES> 45,581,408
<BONDS> 0
0
0
<COMMON> 272,024
<OTHER-SE> 17,929,187
<TOTAL-LIABILITY-AND-EQUITY> 85,958,329
<SALES> 0
<TOTAL-REVENUES> 155,956,584
<CGS> 0
<TOTAL-COSTS> 101,702,512
<OTHER-EXPENSES> 47,172,960
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,685,656
<INCOME-PRETAX> 5,571,253
<INCOME-TAX> 2,857,610
<INCOME-CONTINUING> 2,713,643
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,713,643
<EPS-PRIMARY> $ 0.09
<EPS-DILUTED> $ 0.09
</TABLE>
