SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
Commission file no. 0-15152
FIND/SVP, Inc.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
NEW YORK 13-2670985
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
625 Avenue of the Americas, New York, N.Y. 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (212) 645-4500
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 the past 90 days.
x
Yes ---------- No--------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common stock, par value $0.0001 per share:
6,608,169 shares as of October 31, 1997.
- ---------------- -----------------
<PAGE>
FIND/SVP, Inc.
CONTENTS
PART I. FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets ............................... 3
September 30, 1997(unaudited) and December 31, 1996
Consolidated Condensed Statements of Operations ..................... 5
Nine Months Ended September 30, 1997 and 1996(unaudited)
Consolidated Condensed Statements of Operations ..................... 6
Three Months Ended September 30, 1997 and 1996(unaudited)
Consolidated Condensed Statements of Cash Flows 7
Nine Months Ended September 30, 1997 and 1996(unaudited)
Notes to Consolidated Condensed Financial ........................... 8
Statements
Management's Discussion and Analysis of ............................ 11
Financial Condition and Results of Operations
PART II. OTHER INFORMATION ............................................. 19
ITEM 1. LEGAL PROCEEDINGS .......................................... 19
ITEM 5. OTHER INFORMATION .......................................... 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ........................... 20
SIGNATURES ............................................................. 21
2
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FIND/SVP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 1997 1996
------ --------------- -------------
(unaudited) (audited)
Current assets:
Cash ...................................... $ 350,000 $ 634,000
Accounts receivable, net .................. 3,628,000 2,837,000
Note receivable ........................... 50,000 50,000
Prepaid and refundable
income taxes .......................... 852,000 549,000
Inventories ............................... 2,063,000 2,281,000
Deferred tax assets ....................... 63,000 99,000
Prepaid expenses and other
current assets ........................ 538,000 495,000
----------- -----------
Total current assets ........ 7,544,000 6,945,000
----------- -----------
Equipment and leasehold
improvements, net ....................... 4,940,000 3,935,000
Other assets:
Deferred charges .......................... 1,154,000 900,000
Goodwill, net ............................. 260,000 276,000
Cash surrender value of
life insurance ........................ 482,000 424,000
Deferred tax assets ....................... 543,000 200,000
Deferred financing fees, net .............. 116,000 123,000
Security deposits ......................... 144,000 144,000
----------- -----------
Total assets ................ $15,183,000 $12,947,000
=========== ===========
See notes to consolidated condensed financial statements.
3
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FIND/SVP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
September 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
------------------------------------ --------------- -------------
(unaudited) (audited)
Current liabilities:
<S> <C> <C>
Notes payable, current installments .................. $ 2,508,000 $ 516,000
Trade accounts payable ............................... 1,407,000 1,082,000
Accrued expenses ..................................... 1,526,000 1,382,000
Accrued interest, current installments ............... 163,000 36,000
------------ ------------
Total current liabilities ..................... 5,604,000 3,016,000
------------ ------------
Unearned retainer income ............................... 2,223,000 1,675,000
Notes payable, excluding current installments .......... 3,925,000 3,826,000
Accrued interest, excluding current installments ....... 138,000 22,000
Accrued rent payable ................................... 134,000 197,000
Deferred compensation .................................. 168,000 152,000
Shareholders' equity Preferred stock, $0.0001 par value
Authorized 2,000,000 shares; none
issued and outstanding ........................... -- --
Common stock, $0.0001 par value ......................
Authorized 10,000,000 shares
6,606,169 and 6,547,184 shares issued
and outstanding at September 30, 1997
and December 31, 1996, respectively .............. 1,000 1,000
Capital in excess of par value ....................... 3,903,000 3,861,000
Accumulated (deficit) earnings ....................... (913,000) 197,000
------------ ------------
Total shareholders' equity .................... 2,991,000 4,059,000
------------ ------------
$ 15,183,000 $ 12,947,000
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE>
FIND/SVP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
1997 1996
------------ ------------
Revenues ....................................... $ 23,930,000 $ 23,079,000
------------ ------------
Operating expenses:
Direct costs ................................. 13,810,000 12,688,000
Selling, general and
administrative expenses ..................... 11,422,000 10,042,000
Restructuring charge ......................... -- 802,000
------------ ------------
Operating loss .............................. (1,302,000) (453,000)
Interest income ................................ 10,000 14,000
Loss on sale of marketable
investment securities ....................... -- (8,000)
Interest expense ............................... (426,000) (204,000)
------------ ------------
Loss before benefit for income taxes ........ (1,718,000) (651,000)
Benefit for income taxes ....................... (608,000) (286,000)
------------ ------------
Net loss ................................. (1,110,000) (365,000)
============ ============
Loss per common and common equivalent share:
Net loss ................................... ($0.17) ($0.06)
============ ============
See notes to consolidated condensed financial statements.
5
<PAGE>
FIND/SVP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
1997 1996
------------ ------------
Revenues ....................................... $ 8,193,000 $ 7,441,000
------------ ------------
Operating expenses:
Direct costs ................................. 4,644,000 4,474,000
Selling, general and administrative
expenses .................................... 3,896,000 3,260,000
Restructuring charge ......................... -- 802,000
------------ ------------
Operating loss .............................. (347,000) (1,095,000)
Interest income ................................ 1,000 1,000
Loss on sale of marketable
investment securities ........................ -- (8,000)
Interest expense ............................... (182,000) (75,000)
------------ ------------
Loss before benefit for income taxes ........ (528,000) (1,177,000)
Benefit for income taxes ....................... (105,000) (522,000)
------------ ------------
Net loss ................................. (423,000) (655,000)
============ ============
Loss per common and common
equivalent share:
Net loss .................................... ($0.06) ($0.10)
============ ============
See notes to consolidated condensed financial statements.
6
<PAGE>
FIND/SVP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income ............................................................. $(1,110,000) $ (365,000)
----------- -----------
Adjustments to reconcile net loss to net cash (used in) provided by operating
activities:
Depreciation and amortization .............................................. 858,000 816,000
Amortization of discount on notes payable .................................. 4,000 --
Amortization of deferred financing fees .................................... 25,000 10,000
Restructuring charge ....................................................... -- 802,000
Loss on sale of marketable investment securities ........................... -- 8,000
Provision for losses on accounts receivable ................................ 164,000 186,000
Common stock issued for services ........................................... 38,000 --
Increase in deferred compensation .......................................... 16,000 15,000
Decrease in accrued rent payable ........................................... (63,000) (59,000)
Increase in cash surrender value of life insurance ......................... (58,000) (82,000)
(Increase) decrease in deferred income taxes ............................... (307,000) (94,000)
Change in assets and liabilities:
(Increase) decrease in accounts receivable ............................... (955,000) 100,000
Increase in prepaid & refundable income taxes ............................ (303,000) (355,000)
Decrease (increase) in inventories ....................................... 219,000 (466,000)
Increase in deferred financing fees ...................................... (18,000) (6,000)
Increase in prepaid expenses and deferred charges ........................ (517,000) (671,000)
Increase in trade accounts payable
and accrued expenses .................................................... 469,000 120,000
Increase in accrued interest ............................................. 243,000 1,000
Increase in unearned retainer income ..................................... 548,000 274,000
----------- -----------
Total adjustments ....................................................... 363,000 599,000
----------- -----------
Net cash (used in) provided by operating activities ..................... (747,000) 234,000
Investing Activities:
Capital expenditures ......................................................... (1,628,000) (1,085,000)
Proceeds from sale of marketable investment securities ....................... -- 168,000
----------- -----------
Net cash used in investing activities ................................... (1,628,000) (917,000)
----------- -----------
Financing Activities:
Principal borrowings under notes payable ..................................... 2,477,000 709,000
Principal payments under notes payable ....................................... (390,000) (345,000)
Proceeds from exercise of stock options ...................................... 59,000 47,000
Purchase and retirement of treasury shares ................................... (55,000) --
----------- -----------
Net cash provided by financing activities ............................... 2,091,000 411,000
----------- -----------
Net decrease in cash and cash equivalents ............................... (284,000) (272,000)
Cash and cash equivalents at December 31, 1996 and 1995 ........................ 634,000 522,000
----------- -----------
Cash and cash equivalents at September 30, 1997 and 1996 ....................... $ 350,000 $ 250,000
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
7
<PAGE>
FIND/SVP, INC. and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. MANAGEMENT'S STATEMENT
In the opinion of Management, the accompanying consolidated condensed financial
statements contain all normal and recurring adjustments necessary to present
fairly the financial position at September 30, 1997, and the results of
operations for the three and nine month periods ended September 30, 1997 and
1996 and cash flows for the nine month periods ended September 30, 1997 and
1996. Operating results for the three and nine month periods ended September 30,
1997 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1997.
The Company has reclassified certain prior year balances to conform with current
presentation.
The Company applies APB Opinion No. 25 and the related interpretations in
accounting for its stock option plan. During 1996, the FASB issued Statement No.
123, Accounting for Stock Based Compensation. Accordingly, the Company presented
pro forma net income and earnings per share information beginning with its
fiscal year-ended December 31, 1996 Financial Statements, and will present pro
forma information with future year-end financial statements.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these consolidated
condensed financial statements be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1996
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1996.
B. INCOME TAXES
The benefit for income taxes consists of federal, state and local income taxes.
The $608,000 tax benefit recognized as of September 30, 1997 represents 35.4% of
the loss before benefit for income taxes as of September 30, 1997. The benefit
represents a net operating loss carryback for federal purposes (net of tax
credits previously utilized in 1993, which the Company believes will expire
without being utilized in the future), a deferred tax benefit from a net
operating loss carryforward for federal, state and local taxes and a net
deferred tax benefit for temporary items. The effective tax benefit was 43.9% as
of September 30, 1996.
Based on the Company's recent history of prior operating earnings and its
expectations for the future, which include the Company's restructuring efforts
to improve performance, management has
8
<PAGE>
determined that the future operating income of the Company will more likely than
not be sufficient to recognize fully the net deferred tax assets.
C. BORROWINGS
On July 24, 1997, the Company signed an amendment to the Commercial Revolving
Promissory Note with the Bank, dated April 27, 1995, increasing the available
credit to $2,500,000 from $2,000,000. The $500,000 additional credit is secured
by the anticipated tax refund related to the Company's 1996 loss. During October
1997, the Company received $461,000 of this refund and the available credit was
reduced accordingly.
During October 1997, the Company entered into an agreement with a commercial
bank (the "Bank") to modify the terms of its existing Commercial Revolving Loan
(the "Note"). The Bank extended the terms of the Note from September 30, 1997 to
December 31, 1997 and amended the financial covenants and certain terms of the
Note. The interest rate, as amended, is one and one-half percent above the
Bank's prime rate. The agreement includes an automatic extension of the term of
the Note to March 26, 1998 provided the Company is in compliance with the terms
and conditions of the agreement and either the Company has entered into an
agreement with a third party to sell assets in an amount sufficient to pay off
the outstanding term loans or the Company has received a capital contribution of
no less than $1,000,000. The Company is currently in discussions with the Bank
regarding an extension or renewal of the agreement, for which there can be no
assurance.
Additionally, the Company signed a Commercial Revolving Promissory Note for up
to an additional $1,000,000 with the Bank. The terms are similar to those of the
amended $2,500,000 Note. The $1,000,000 facility is secured by SVP S.A., a major
shareholder of the Company.
The Company's Revolving and Term Promissory Notes with the Bank are secured by
all of the assets of the Company. As of September 30, 1997, there was $1,475,000
outstanding on the term loans and $2,006,000 outstanding under the revolving
credit agreement. The revolving credit agreement is used to secure certain
long-term letters of credit. As such, as of September 30, 1997, the availability
under the revolving credit agreement was $345,000.
The Company has begun negotiating with other sources of financing as an
alternative to an extension or renewal of the Commercial Revolving Promissory
Notes with the Bank. In the event that the Company is not able to extend, renew
or refinance the Notes when due and other sources of capital are not received,
there would be a material adverse affect on the Company.
9
<PAGE>
D. SUBSEQUENT EVENT
On November 4, 1997, pursuant to an Asset Purchase and Sale Agreement (the "ETRG
Sale Agreement"), between FIND/SVP Published Products, Inc. (a wholly owned
subsidiary of the Company, "Find Published") and Cyber Dialogue Inc. Find
Published sold certain assets held in its Emerging Technologies Research Group
to Cyber Dialogue Inc. Reference is made to the ETRG Sale Agreement attached to
this Form 10-Q as Exhibit (1), which agreement is incorporated herein by
reference. In accordance with the ETRG Sale Agreement, the Company will no
longer operate its Multiclient Study business , its Continuous Advisory service
and its Interactive Consumer newsletter.
The Company received a $125,000 two year note bearing interest at an annual rate
of 10%. A principal payment of $31,250 plus accrued interest is due on May 4,
1998. Commencing on August 4, 1998 and on the 4th day of each November,
February, May and August thereafter, quarterly principal payments of $15,625
plus accrued interest is due. The final payment is due November 4, 1999. The
Company holds a security interest in the Emerging Technology Research Group
database as collateral on the note.
The purchaser also assumed various liabilities in connection with the delivery
of the above services and the Company will receive a 5% royalty for a two year
period on sales of the above services. Additionally, the Company retains the
rights to its currently published off-the-shelf studies produced from data
contained within previously issued Multiclient Studies.
10
<PAGE>
FIND/SVP, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine months ended September 30, 1997 compared to nine months ended September 30,
1996. Three months ended September 30, 1997 compared to three months ended
September 30, 1996.
GENERAL
During the fourth quarter of 1996 the Company closed a $2.5 million financing
arrangement (12% subordinated notes, and warrants to purchase common stock, of
the Company) led by a fund managed by Furman Selz Investments LLC. SVP S.A., a
major shareholder of the Company, was the other participant in the financing.
The proceeds were used to adopt a more aggressive growth strategy in conjunction
with the restructuring of operations which began in the third quarter of 1996,
the goal of which is to increase the long term revenues and profitability of the
Company and to position the Company to take advantage of ongoing changes in the
marketplace for its services.
Additionally, the financing arrangement has an option for up to an additional
$2.5 million financing at the discretion of the participants. During the quarter
ended September 30, 1997 SVP S.A. exercised their option, and accordingly
purchased $475,000 of Notes and Warrants.
The growth strategy has thus far resulted in a significant increase in operating
expenses during 1997. Although the revenue levels during the third quarter of
1997 increased by 10.1% over the same period of 1996, and by 3.7% over the
second quarter of 1997, they were below the expectation for the period. As a
result, during the second half of the third quarter of 1997, the Company began
slowing the growth of operating expenses. Direct costs in the third quarter of
1997 were 56.7% of revenues compared to 58.2% for the first half of 1997.
Selling, general and administrative expenses were 47.7% of revenues for the
third quarter of 1997 compared to 47.8% for the first half of the year. The
Company anticipates a continuation of the decline in direct costs in the fourth
quarter. However, it believes that the continued material investment in selling
expenses is necessary to achieve the growth in revenues that is necessary to
positively affect operating results. There can be no assurances of such revenue
increases or the timing of such revenues.
During the third quarter of 1997, the Company borrowed an additional $284,000,
net of repayments, under its $2,500,000 Commercial Revolving Promissory Note
(the "Note") with State Street Bank and Trust Company (the "Bank") resulting in
total borrowings of $2,006,000 as of September 30, 1997. The availability under
the Note is reduced by
11
<PAGE>
approximately $150,000 as the Note secures certain long-term letters of credit.
During October 1997 the Bank extended the term of the Note from September 30,
1997 to December 31, 1997 and amended the financial covenants and certain terms
of the loan agreement. The extension includes an automatic extension of the term
of the Note to March 26, 1998 provided the Company is in compliance with the
terms and conditions of the agreement and either the Company has entered into an
agreement with a third party to sell assets in an amount sufficient to pay off
the outstanding term loans or the Company has received a capital contribution of
no less than $1,000,000. The Company is currently in discussions with the Bank
regarding an extension or renewal of the agreement, for which there can be no
assurance.
The Company also signed an additional Commercial Revolving Promissory Note for
up to $1,000,000 with the Bank. The terms are similar to those for the amended
$2,500,000 Note. The $1,000,000 facility is secured by SVP S.A. (See "Liquidity
and Capital Resources" below.)
OPERATING REVENUES
Operating Revenues increased by $851,000 or 3.7% to $23,930,000 for the
nine-month period ended September 30, 1997 and by $752,000 or 10.1% to
$8,193,000 for the three-month period ended September 30, 1997 as compared to
the comparable periods of the prior year.
The Company's Quick Consulting and Research Service revenues grew by $563,000 or
3.8% to $15,224,000 for the nine-month period ended September 30, 1997 and by
$175,000 or 3.5% to $5,167,000 for the three-month period ended September 30,
1997 as compared to the comparable periods of the prior year. The increases were
due primarily to an increase in the number of retainer clients and an increase
in the average fee paid per client.
Revenues in the Strategic Consulting and Research area increased by $429,000 or
12.4% to $3,888,000 for the nine-month period ended September 30, 1997 and by
$448,000 or 45.2% to $1,439,000 for the three-month period ended September 30,
1997 as compared to the comparable periods of the prior year. The increases
reflect increases in the number of assignments completed and the average fee per
assignment, primarily due to improved marketing coupled with the weakness
experienced in this area during the quarter ended September 30, 1996, resulting
in third quarter revenue increases in substantially all facets of the Strategic
Consulting and Research area.
Published Research revenues decreased by $132,000 or 2.8% to $4,663,000 for the
nine-month period ended September 30, 1997 and increased by $119,000 or 8.5% to
$1,528,000 for the three-month period
12
<PAGE>
ended September 30, 1997 as compared to the comparable periods of the prior
year. The decrease in revenues for the nine month period was due primarily to a
softening in the print study marketplace, partially offset by the continued
growth of revenues received from third-party on-line services. The increase for
the three month period was primarily due to an increase in revenues received
from third-party on-line services and an increase in revenues from the sale of
outside vendor studies via the Company's Information Catalog. Overall, print
study sales (including outside vendors) increased 4% for the quarter ended
September 30, 1997 versus the comparable period in 1996. In November 1997, the
Company sold certain assets and the primary businesses of its Emerging
Technologies Research Group, a part of Published Research, which will result in
a loss of revenues from this operation in the future. The Emerging Technology
Research Group operated at a loss in 1996 and for the nine month period ended
September 30, 1997.
The Company operates a small newsletter publishing operation. However, the
newsletters that are produced generated less than 1% of the Company's revenues
in 1997 and 1996.
DIRECT COSTS
Direct costs increased by 8.8% or $1,122,000 to $13,810,000 for the nine-month
period ended September 30, 1997 and by 3.8% or $170,000 to $4,644,000 for the
three-month period ended September 30, 1997 as compared to the comparable
periods of 1996. As a percent of revenues, direct costs increased to 57.7% for
the nine-month period ended September 30, 1997 from 55.0% for the corresponding
period in 1996. As a percent of revenues, direct costs decreased to 56.7% for
the three-month period ended September 30, 1997 from 60.1% for the corresponding
period in 1996. The increase in total direct costs is due to new service
offerings, such as the Continuous Advisory Service in the Emerging Technologies
Research Group, a part of Published Research, which began in June 1996, and the
planned expansion of current services. The changes in the percentage of revenue
is due mainly to the timing of costs related to the expansion of services versus
the timing of the incremental revenue.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative expenses rose by 13.7% or $1,380,000 to
$11,422,000 for the nine-month period ended September 30, 1997 and by 19.5% or
$636,000 to $3,896,000 for the three-month period ended September 30, 1997 as
compared to the corresponding periods of the prior year. As a percent of
revenues, selling, general and administrative expenses increased to 47.7% for
the nine-month period ended September 30, 1997 from 43.5% for the corresponding
period in 1996. As a percent of revenues, selling, general and administrative
expenses increased to 47.6% for the three-month period
13
<PAGE>
ended September 30, 1997 from 43.8% for the corresponding period in 1996. The
increase in expenses in the selling, general and administrative areas is due to
the continued investment in sales and promotional efforts to generate
incremental revenues in accordance with the Company's restructuring plans and
the continued management development in the general and administrative areas.
RESTRUCTURING CHARGE
During the third quarter of 1996, the Company announced a plan to restructure
and consolidate operations, concentrate resources and better position itself to
achieve its strategic objectives. The plan resulted in an $802,000 pre-tax
charge. The charge includes a writedown of certain Published Study products and
deferred charges of $490,000, severance and retirement charges of $167,000,
charges relating to marketing and planning materials which will not be used
after the restructuring of $117,000 and charges for the consolidation and
reduction of several small, unprofitable segments of business of $28,000.
OPERATING LOSS
Operating loss was $1,302,000 for the nine-month period ended September 30, 1997
as compared to operating loss of $453,000 for the corresponding period in 1996.
Operating loss was $347,000 for the three-month period ended September 30, 1997
as compared to operating loss of $1,095,000 for the corresponding period in
1996. The operating loss was due primarily to an increase operating expenses in
accordance with the Company's restructuring plans, including the use of proceeds
from financing received during the fourth quarter of 1996, without a
commensurate increase in revenues. During the second half of the quarter ended
September 30, 1997 the Company began slowing the growth of operating expenses.
More specifically, the Company began reducing direct costs, and anticipates a
continued reduction of direct costs as a percentage of revenue in the fourth
quarter of 1997. The Company anticipates a continued material investment in
selling expenses going forward. It is anticipated that the reductions in direct
costs as a percentage of revenue coupled with the investment in selling expenses
will result in improved operating results from normal operating activities in
the fourth quarter of 1997.
INTEREST INCOME AND EXPENSE
Interest income was $10,000 for the nine-month period ended September 30, 1997
and $14,000 for the corresponding period in 1996. Interest income was $1,000 for
the three-month period ended September 30, 1997 and $1,000 for the corresponding
period in 1996. Interest expense was $426,000 for the nine-month period ended
September 30,
14
<PAGE>
1997 as compared to $204,000 for the corresponding period in 1996. Interest
expense was $182,000 for the three-month period ended September 30, 1997 as
compared to $75,000 for the corresponding period in 1996. The increases in
interest expense for the periods ended September 30, 1997 were due to the
issuance of Subordinated Notes of the Company in the fourth quarter of 1996 and
the third quarter of 1997, coupled with borrowings under the Commercial
Revolving Promissory Note during the third quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended September 30, 1997, there was a negative cash flow
from operating activities of $747,000 which resulted from a net loss of
$1,110,000, an increase in accounts receivable of $955,000, an increase in
prepaid expenses and deferred charges of $517,000, an increase in prepaid and
refundable income taxes of $303,000, an increase in deferred income taxes of
$307,000, a decrease in accrued rent payable of $63,000, an increase in cash
surrender value of life insurance of $58,000 and an increase in deferred
financing fees of $18,000. This was partially offset by depreciation and
amortization of $858,000, an increase in unearned retainer income of $548,000,
an increase in trade accounts payable and accrued expenses of $469,000, an
increase in accrued interest of $243,000, a decrease in inventories of $219,000,
a provision for losses on accounts receivable of $164,000, common stock issued
for services of $38,000, amortization of deferred financing fees of $25,000, an
increase in deferred compensation of $16,000 and amortization of discount on
notes payable of $4,000.
For the nine months ended September 30, 1996, there was a positive cash flow
from operating activities of $234,000 which resulted from depreciation and
amortization of $816,000, a restructuring charge of $802,000, an increase in
unearned retainer income of $274,000, a provision for losses on accounts
receivable of $186,000, an increase in trade accounts payable and accrued
expenses of $120,000, a decrease in accounts receivable of $100,000, an increase
in deferred compensation of $15,000, amortization of deferred financing fees of
$10,000, a loss on sale of marketable investment securities of $8,000 and an
increase in accrued interest of $1,000. This was partially offset by a net loss
of $365,000, an increase in prepaid expenses and deferred charges of $671,000,
an increase in inventory of $466,000, an increase in prepaid and refundable
income taxes of $355,000, an increase in deferred income taxes of $94,000, an
increase in cash surrender value of life insurance of $82,000, a decrease in
accrued rent payable of $59,000 and an increase in deferred financing fees of
$6,000.
The Company's financing activities for the nine months ended September 30, 1997
include principal borrowings under notes payable of $2,477,000 and proceeds from
exercise of stock options of $59,000, partially offset by principal payments
under notes payable of $390,000 and purchase and retirement of treasury stock of
$55,000, resulting in
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<PAGE>
net cash provided by financing activities of $2,091,000. This compares to
principal borrowings under notes payable of $709,000 and proceeds from exercise
of stock options of $47,000, partially offset by principal payments under notes
payable of $345,000, resulting in net cash provided by financing activities of
$411,000 for the nine months ended September 30, 1996.
The Company had investing activities of $1,628,000 for capital expenditures for
the nine months ended September 30, 1997. This compares to $1,085,000 for
capital expenditures, partially offset by proceeds from sale of marketable
investment securities of $168,000, resulting in net cash used in investing
activities of $917,000 for the nine months ended September 30, 1996. The major
portion of the expenditures for the nine months ended September 30, 1997 was for
the enhancement of internal proprietary software and the purchase of computer
equipment.
The Company's working capital decreased by $1,989,000 to $1,940,000 on September
30, 1997 as compared to December 31, 1996 due primarily to the outstanding
balance on the Commercial Revolving Promissory Note with the Bank. Cash balances
were $350,000 and $634,000 on September 30, 1997 and December 31, 1996,
respectively.
On October 31, 1996, the Company and its subsidiaries entered into a Note and
Warrant Purchase Agreement (the "Agreement") with Furman Selz SBIC, L.P.
("Furman Selz"). Pursuant to the Agreement, Furman Selz purchased from the
Company and its subsidiaries, for an aggregate consideration of $2,025,000,
five-year promissory notes ("Notes") in the principal amount of $2,025,000, and
ten-year warrants ("Warrants") to purchase 900,000 shares of the Company's
common stock, par value $.0001 per share ("Common Stock"), at $2.25 per share.
The Notes accrue interest at an annual rate of 12% on the unpaid principal
balance. Accrued but unpaid interest is due and payable on November 30, 1997,
November 30, 1998 and on May 30 and November 30 of each year thereafter,
commencing on May 30, 1999, except that final payment of interest shall be due
and payable on October 31, 2001. However, one-half of the interest due and
payable on November 30, 1997 shall be deferred and payable on November 30, 2000
and one-half of the interest due and payable on November 30, 1998, May 30, 1999
and November 30, 1999 shall be deferred and payable on October 31, 2001. Any
interest deferred shall compound and accrue interest at the rate of the Notes
until paid.
The Agreement also provides that the Company and its subsidiaries may enter into
an agreement on similar terms with SVP, S.A. or affiliates thereof, pursuant to
which SVP, S.A. may purchase Notes from the Company and its subsidiaries up to
the principal amount of $475,000, and Warrants to purchase up to 211,111 shares
of Common Stock at $2.25 per share. On November 30, 1996, the Company and SVP,
S.A. entered
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into such a Note and Warrant Agreement as described above, for an aggregate
consideration of $475,000. SVP, S.A. currently owns about 1,649,485 shares of
Common Stock, including shares issuable under outstanding Warrants, or
approximately 23.5% of the outstanding shares if the warrants are exercised.
The Agreement further provides that Furman Selz and SVP, S.A. at their option,
can purchase up to the amount of their respective initial investments, up to an
additional $2,500,000 in Notes and Warrants on the same terms and conditions as
the first $2,500,000, at any time before December 31, 1997. On August 21, 1997
SVP, S.A. purchased 475,000 units, consisting of $475,000 principal amount of
Option Notes and Option Warrants to purchase 211,111 shares of Common Stock at
$2.25 per share.
On July 24, 1997, the Company signed an amendment to the Commercial Revolving
Promissory Note with the Bank, dated April 27, 1995, increasing the available
credit to $2,500,000 from $2,000,000. The $500,000 additional credit is secured
by the anticipated tax refund related to the Company's 1996 loss. During October
1997, the Company received $461,000 of this refund and the available credit was
reduced accordingly.
On October 22, 1997 the Company signed an Amendment to the Commercial Revolving
Promissory Note ("Amended Note") with the Bank, dated April 27, 1995. Various
financial terms and conditions, including the interest rate and the financial
covenants, were amended. The interest rate, as amended, is one and one-half
percent above the Bank's prime rate. The Amended Note expires on December 31,
1997. The agreement includes an automatic extension of the term of the Note to
March 26, 1998 provided the Company is in compliance with the terms and
conditions of the agreement and either the Company has entered into an agreement
with a third party to sell assets in an amount sufficient to pay off the
outstanding term loans or the Company has received a capital contribution of no
less than $1,000,000. The Company is currently in discussions with the Bank
regarding an extension or renewal of the agreement, for which there can be no
assurance.
Additionally, on October 22, 1997, the Company signed a Secured Commercial
Revolving Promissory Note with the Bank for up to an additional $1,000,000. SVP
S.A., a major shareholder of the Company, has signed a secured letter of credit
agreement with the Bank for the full amount of this Note. The terms and
conditions of this Note reflect those of the Amended Note (above). SVP S.A.,
received a one-time two percent fee for providing the secured letter of credit
which the Company believes is customary and reasonable.
The Company's Revolving and Term Promissory Notes with the Bank are secured by
all of the assets of the Company. As of September 30, 1997,
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there was $1,475,000 outstanding on the term loans and $2,006,000 outstanding
under the revolving credit agreement. The revolving credit agreement is used to
secure certain long-term letters of credit. As such, as of September 30, 1997,
the availability under the revolving credit agreement was reduced by
approximately $150,000 to approximately $345,000.
The Company expects to spend approximately $225,000 for capital items for the
remainder of 1997 and less than $1,000,000 for 1998, the major portion of which
will be for the continued enhancement of internal software and for computer
equipment.
The Company believes that cash flow from operations and borrowings under the
lines of credit, if extended or renewed for 1998, or from the possible exercise
by Furman Selz of their option to acquire notes and warrants (for which there
can be no assurance), will be sufficient to cover its expected capital
expenditures for the next 12 months and that it will have sufficient liquidity
for the next 12 months. The Company has begun negotiating with other sources of
financing as an alternative to the exercise by Furman Selz of their option
and/or an extension or renewal of the Commercial Revolving Promissory Notes with
the Bank. In the event that the Company is not able to extend, renew or
refinance the Notes when due and other sources of capital are not received,
there would be a material adverse affect on the Company.
The Company had noncash financing activities relating to the cashless exercise
of stock options. In the nine-month period ended September 30, 1997, 8,000
options were exercised at $0.63, in exchange for 2,000 shares of common stock of
the Company at prices ranging from $1.125 to $1.25. Such shares were held for a
period of at least six months before the respective exchange. The value of these
transactions was $2,000. In the nine-month period ended September 30, 1996,
225,686 options were exercised at prices ranging from $0.275 to $2.1875, in
exchange for 37,741 shares of common stock of the Company at prices ranging from
$2.125 to $3.00. Such shares were held for a period of at least six months
before the respective exchange. The value of these transactions was $91,000.
INFLATION
The Company has in the past been able to increase the price of its products and
services sufficiently to offset the effects of inflation on wages and other
expenses, and anticipates that it will be able to do so in the future.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 30, 1997, Asset Value Fund Limited Partnership ("Asset Value"), a
shareholder in the Company, commenced an action in the United States District
Court for the Southern District of New York entitled ASSET VALUE FUND LIMITED
PARTNERSHIP V. FIND/SVP, INC. AND ANDREW P. GARVIN, Civil Action No. 97 Civ.
3977 (LAK). The complaint alleges that between October 1995 and August 1996 the
Company and its president made certain oral misstatements to Paul Koether, the
principal of Asset Value, concerning the financial condition of the Company and
that those misstatements induced Asset Value to buy more shares of the Company
and to refrain from selling the shares it already held. The complaint alleges
that those misstatements give rise to causes of action for violation of Section
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and for
fraud, breach of fiduciary duty and negligent misrepresentation. The complaint
demands compensatory damages in excess of $1.5 million and punitive damages in
excess of $5 million, as well as costs and attorneys' fees.
On August 13, 1997, the Company was served with an amended complaint which
alleges that between January 1996 and August 1996, the Company and its president
made certain misstatements concerning the financial condition of the Company and
that those misstatements induced Asset Value to buy more shares of the Company
and to refrain from selling the shares it already held. The amended complaint
alleges that those misstatements give rise to causes of action for violation of
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
and for common law fraud. The complaint demands compensatory and punitive
damages in an amount to be determined at trial, as well as costs and attorneys'
fees. The Company and Mr. Garvin believe that there is absolutely no merit to
the claims in either the original complaint or the amended complaint and plan to
defend vigorously against the action. On September 29, 1997, the Company and Mr.
Garvin moved to dismiss the amended complaint. That motion has now been fully
briefed and submitted for the Court for decision.
ITEM 5. OTHER INFORMATION
On November 4, 1997, pursuant to an Asset Purchase and Sale Agreement (the "ETRG
Sale Agreement"), between FIND/SVP Published Products, Inc. (a wholly owned
subsidiary of the Company, "Find Published") and Cyber Dialogue Inc. Find
Published sold certain assets held in its Emerging Technologies Research Group
to Cyber Dialogue Inc. Reference is made to the ETRG Sale Agreement attached to
this Form 10-Q as Exhibit (1), which agreement is incorporated herein by
reference. In accordance with the ETRG Sale Agreement, the Company will no
longer operate its
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Multiclient Study business, its Continuous Advisory service and its Interactive
Consumer newsletter.
The Company received a $125,000 two year note bearing interest at an annual rate
of 10%. A principal payment of $31,250 plus accrued interest is due on May 4,
1998. Commencing on August 4, 1998 and on the 4th day of each November,
February, May and August thereafter, quarterly principal payments of $15,625
plus accrued interest is due. The final payment is due November 4, 1999. The
Company holds a security interest in the Emerging Technology Research Group
database as collateral on the note.
The purchaser also assumed various liabilities in connection with the delivery
of the above services and the Company will receive a 5% royalty for a two year
period on sales of the above services. Additionally, the Company retains the
rights to its currently published off-the-shelf studies produced from data
contained within previously issued Multiclient Studies.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
(1) Copy of ETRG Sale Agreement.
(2) Copy of Commercial Revolving Loan, dated October 22, 1997, between the
Bank and the Company.
(3) Copy of Second Modification Agreement, as of September 30, 1997, between
the Bank and the Company.
B. Reports on Form 8-K
None
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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.
FIND/SVP Inc.
- --------------
(REGISTRANT)
Date: November 14, 1997 /s/ Andrew P.Garvin
- ----------------------- ----------------------------------
Andrew P. Garvin, Chairman and
President
Date: November 14, 1997 /s/ Peter J. Fiorillo
- ----------------------- ----------------------------------
Peter J. Fiorillo
Executive Vice President
(Principal Financial Officer
and Principal Accounting Officer)
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EXHIBIT 1
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") made this 4th day of
November, 1997 by and between CYBER DIALOGUE INC., a Delaware corporation with
offices at 630 Fifth Avenue, New York, New York 10111 ("Purchaser"), and
FIND/SVP PUBLISHED PRODUCTS, INC., a Delaware corporation with offices at 625
Avenue of the Americas, New York, New York 10011 ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is willing to sell to Purchaser and Purchaser is willing to
buy from Seller, upon the terms and conditions hereinafter set forth, only those
assets held by Seller in its Emerging Technologies Research Group ("ETRG")
business ("Seller's Business"), as more fully set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. SALE OF ASSETS: Upon the terms and subject to the conditions
provided in this Agreement, Seller shall, at the Closing and as of the Closing
Date (as said terms are hereinafter defined), convey, sell, transfer, assign and
deliver to Purchaser, and Purchaser shall purchase from Seller, all of the
business and assets set forth below used by Seller in the conduct of Seller's
Business whether constituting real or personal, tangible or intangible personal
property, and whether or not in the possession or control of Seller, as such
assets exist on the Closing Date (as such term is hereinafter defined), which
assets shall consist of (hereinafter collectively referred to as the "Assets"):
(a) All ETRG survey databases, newsletters, industry briefings,
hardware and software, ETRG web site content, contracts, sponsorship forms,
press contracts, vendor lists and ETRG customer and prospect databases. Set
forth on Schedule 1(a) is a complete and accurate list such assets of the
Seller's Business as of October 31, 1997.
(b) The goodwill and all slogans or trade names used by Seller
solely in Seller's Business, including the names listed in Schedule 1(b) annexed
hereto, and all customer lists set forth in Schedule 1(a) relating to the
present and former customers of Seller's Business, which customer lists are
annexed hereto as Schedule 1(a).
(c) All rights and title to the Internet Small Business Survey as
well as all related accounts receivable, cash, revenue, orders, leads and future
leads and orders. Purchaser shall receive said assets free of any obligations
except for those obligations specifically set forth on Schedule 1(c). Set forth
on Schedule 1(c) is a complete list of all of said Internet Small Business
Survey assets and contracts as of October 31, 1997 as well as the specific
obligations related thereto which are assumed by Purchaser.
(d) The GVU contract, expense free as of the Closing, as well as
all related databases, all as set forth on Schedule 1(d).
<PAGE>
(e) Any and all machinery, equipment, Ithaca office supplies and
leasehold improvements, furniture and fixtures of Seller's Business including,
without limitation, those items listed in Schedule 1(e) annexed hereto and all
employee lists, files, papers, books, records, sales and advertising materials
and records, sales and purchase correspondence, affecting or pertaining to
Seller's ownership and/or use of the Assets.
(f) Any and all rights and interest in and to any licenses and
commercially practiced patents, copyrights, trademarks, trademark registration
applications (including all reissues, divisions, continuations and extensions
thereof), patent applications and patent disclosures docketed, if any,
including, without limitation, those listed in Schedule 1(f) annexed hereto
which are used solely in Seller's Business.
(g) Any and all rights and interests in and to all intellectual
property rights and proprietary expertise, including, without limitation,
proprietary information, technical and technological data, know-how, processes,
invention conception memoranda, computer programs and sales and advertising
information used solely in Seller's Business.
(h) Any and all permits, authorizations, approvals or indicia of
authority to operate and maintain Seller's Business as issued by any federal,
state or local government, including, without limitation, those listed in
Schedule 1(h) annexed hereto.
(i) All right, title and interest of Seller in and to (A) the
leases (for real or personal property) and contracts listed in Schedule 1(i)
attached hereto; (B) all purchase orders given by Seller for the purchase of
products, materials, supplies, and other items used in the ordinary course of
Seller's Business; and (C) all CAS (excluding existing sales to Microsoft,
American Express and Bellcore) and Internet Small Business Survey purchase
orders submitted to Seller by customers of Seller in the ordinary course of
Seller's Business with respect to which Seller has not received full payment
thereon on or prior to the Closing Date. All of such leases, contracts, purchase
orders and sales commitments specified in clauses (A), (B) and (C) of this
Section 1(i) are listed in Schedule 1(i) and are hereinafter collectively
referred to as the "Assumed Contracts". Notwithstanding the foregoing, the
parties agree that no consent to assignment of leases will be obtained.
(j) Such prepaid expenses of the Seller's Business as are set
forth in Schedule 1(j).
(k) All accounts receivable, revenues and cash payments
subsequent to October 8, 1997 related to CAS Product sold subsequent to October
8, 1997 (excluding existing sales to Microsoft, American Express and Bellcore)
all as set forth on Schedule 1(k).
(l) The Jupiter Associates contract, free of liability to
Purchaser as of the Closing, as well as all related databases, all as set forth
on Schedule 1(l).
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<PAGE>
2. PURCHASE PRICE FOR THE ASSETS: Purchaser shall pay to Seller for the
Assets a purchase price (the "Purchase Price") equal to One Hundred Twenty-Five
Thousand Dollars ($125,000.00) payable as follows:
(a) $125,000 pursuant to the terms of a certain promissory note
(the "Note") bearing interest at the rate of ten percent (10%) in the form
attached hereto as Exhibit A. Said Note is to be secured by a lien on all
existing and future ETRG Products.
(b) Five percent (5%) royalty on payment received on all sales by
Purchaser on sales of existing and future ETRG Products which are set forth on
Schedule 2(b) (Purchaser agrees to invoice in the usual course of business);
said royalties shall be for a two-year period commencing the date of Closing,
and shall be paid quarterly in arrears (payment due fifteen (15) days after the
end of each quarter) with the first payment being made three months and fifteen
days subsequent to the Closing.
(c) The Purchase Price is based upon the following allocation:
Furniture, Fixtures and Equipment $ 40,000.00
Accounts Receivable/Database $ 60,000.00
Goodwill $ 25,000.00
-----------
TOTAL PURCHASE PRICE $125,000.00
The parties agree to use the above allocation for purposes of filing their
local, state and federal income tax returns.
(d) As of the close of business on the Closing Date, the
Purchaser shall assume and thereafter pay, perform or discharge when due all of
the following liabilities and obligations ("Assumed Liabilities") and no other
liabilities or obligations:
(i) The liabilities as of the Closing under the Assumed
Contracts including but not limited to existing CAS and Newsletter subscription
contracts listed in Schedule 1(i) except for any liability under any of the
Assumed Contracts listed in Schedule 1(i) arising out of Seller's failure to
perform its obligations thereunder to the extent such performance is due on or
prior to the Closing.
(ii) The trade accounts payable related to the Seller's
Business and operations listed on Schedule 2(d)(ii) annexed hereto.
The Purchaser shall have at all times hereafter any and all
responsibility to all creditors and all third parties and to the Seller with
respect to the Assumed Liabilities and shall
3
<PAGE>
indemnify and hold the Seller harmless from and against any and all cost, loss,
liability (including reasonable attorneys' fees) arising from the Assumed
Liabilities.
(e) With the exception of the Assumed Liabilities, Purchaser
shall assume no liabilities or other obligations, commercial or otherwise, of
Seller, known or unknown, fixed or contingent, choate or inchoate, liquidated or
unliquidated, secured or unsecured or otherwise ("Excluded Liabilities").
(f) Seller shall have any and all responsibility to all creditors
and all third parties and to Purchaser with respect to, and shall pay, discharge
and perform when due, any liability or obligation of Seller not expressly
assumed by Purchaser including, without limitation, the Excluded Liabilities and
shall indemnify and hold Purchaser harmless from and against any and all cost,
loss, liability (including reasonable attorneys' fees) arising from such
obligations or liabilities.
3. DOCUMENTS TO BE DELIVERED AT CLOSING: At the Closing:
(a) Seller shall execute and deliver to Purchaser a Bill of Sale
fully executed and in form reasonably satisfactory to Purchaser's counsel,
conveying, selling, transferring and assigning to Purchaser all of the Assets
free and clear of any and all defects, liens, encumbrances, charges and equities
whatsoever.
(b) Seller shall execute or endorse and deliver to Purchaser
other duly executed separate instruments of sale, assignment or transfer,
including assignments of contract rights or leases in form suitable, where
appropriate, for filing or recording with the appropriate office or agency for
various items of the Assets or other rights of Seller to be conveyed hereunder,
where, in Purchaser's reasonable judgment, the same are necessary or desirable
in order to vest or evidence title hereto in Purchaser. Notwithstanding the
foregoing, the parties agree that no consent to assignments of leases will be
obtained.
(c) Seller shall execute or endorse and deliver instruments
effectively assigning and transferring to Purchaser all intangible assets
included in the Assets and containing appropriate warranties of title, together
with the consents, where required, of third parties with respect to such
transfers and assignments.
(d) Purchaser shall pay the Purchase Price for the Assets in
accordance with the terms of Section 2 hereof.
(e) Seller shall deliver to Purchaser a Certificate of Good
Standing from the duly authorized officer of the Seller's state of incorporation
dated not more than 30 days prior to the Closing Date.
(f) Seller shall deliver to Purchaser a certified copy of
resolutions of the
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<PAGE>
Board of Directors of Seller authorizing this Agreement and the other agreements
and instruments to be delivered pursuant thereto and the transactions
contemplated hereby and thereby.
(g) Purchaser shall deliver to Seller a certified copy of
resolutions of the Board of Directors of Purchaser authorizing this Agreement
and the other agreements and instruments to be delivered pursuant thereto and
the transactions contemplated hereby and thereby.
(h) Purchaser shall deliver to Seller a Certificate of Good
Standing from the duly authorized office of the Purchaser's state of
incorporation dated not more than thirty days prior to the Closing Date.
(i) Purchaser shall enter into satisfactory employment agreements
with Tom Miller and Peter Clemente in the form attached hereto as Schedule 3(i).
In addition, Seller shall have presented Purchaser with satisfactory evidence
that Seller had released said employees from all contractual obligations to
Seller, including but not limited to any covenants not to compete.
(j) Seller shall deliver to Purchaser a Covenant Not To Compete
Agreement from Seller and from FIND/SVP, Inc. in the form annexed hereto as
Schedule 3(j).
(k) Seller shall deliver to Purchaser an assignment of Key Man
Life Insurance policy on Mr. Thomas Miller.
4. CLOSING: The Closing of the transactions contemplated by this
Agreement, and all deliveries to be made at such time in connection therewith,
shall take place at the offices of FIND/SVP at 625 Avenue of the Americas, New
York City, New York upon the satisfaction of all of the conditions set forth in
this Agreement on November 4, 1997 (Said Closing and said date thereof, herein
referred to as the "Closing" and the "Closing Date", respectively).
5. CROSS INDEMNITIES:
(a) Seller hereby undertakes and agrees to indemnify Purchaser
(and its shareholders, officers, and directors and their respective successors,
heirs and assigns) and hold it and them harmless against and in respect of the
following:
(i) All claims, debts, liabilities and obligations of Seller
whether absolute or contingent arising out of the conduct of Seller's Business
as conducted by Seller on or prior to the Closing Date, including, but not
limited to, the Excluded Liabilities, liability to any federal, state or local
tax authority, Seller's failure to comply with any pension, profit sharing or
other employee benefit plan of Seller and whether or not such liabilities are
asserted prior to the Closing Date or thereafter, except for such liabilities
and obligations as are expressly assumed by Purchaser pursuant to this
Agreement.
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(ii) Any products liability claim or related claim or action
where the occurrence giving rise to such liability, claim or action takes place
on or prior to the Closing Date.
(iii) Any and all loss or damage sustained by Purchaser as a
result of any breach of Seller's representations, covenants and warranties
contained in this Agreement.
(iv) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and reasonable legal and other expenses incident
to any of the foregoing.
(b) Purchaser hereby undertakes and agrees to indemnify Seller
(and its shareholders, officers, and directors and their respective successors,
heirs and assigns) and hold it and them harmless against and in respect of the
following:
(i) All claims, debts, liabilities and obligations of
Purchaser whether absolute or contingent expressly assumed by Purchaser hereby
or arising out of the conduct of Seller's Business as conducted by Purchaser
after the Closing Date, including, but not limited to, liability to any federal,
state or local tax authority or under any pension, profit sharing or other
employee benefit plan as defined in Section 3(3) of ERISA of Purchaser and the
Assumed Liabilities but specifically excluding the Excluded Liabilities.
(ii) Any products liability claim or related claim or action
where the occurrence giving rise to such liability, claim or action takes place
after the Closing Date.
(iii) Any and all loss or damage sustained by Seller as a
result of any breach of Purchaser's representations, covenants and warranties
contained in this Agreement.
(iv) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and reasonable legal and other expenses incident
to any of the foregoing.
(c) The covenant of indemnity set forth in this Section 5 is
intended by the parties to be for the benefit of each other and their respective
shareholders, officers and directors and their respective successors, heirs and
assigns.
6. COVENANTS:
(a) From the date hereof, Seller and Purchaser shall take all
such action, both before and after the Closing, as may be necessary or
appropriate to consummate the transactions provided for in this Agreement in
accordance with the representations, warranties, conditions and agreements
contained herein, and shall refrain from taking any action which would result in
any of such representations or warranties not being true and correct, or any of
such conditions not being satisfied, at the Closing.
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(b) Seller covenants and agrees as follows throughout the period
from the date hereof through and including the Closing: Seller shall conduct
Seller's Business only in the ordinary course and in accordance with sound
business operations as has been previously conducted.
(c) Seller shall use its best efforts through the Closing to keep
intact the Seller's Business, to keep available its key employees and to
maintain the goodwill of its customers and vendors and other persons having
business dealings with it.
(d) Seller and Purchaser agree for a period of two years
subsequent to Closing to co-brand as "cyberdialogue://findsvp" all existing and
future ETRG Products and "off-the-shelf" studies listed on Schedules 6(d) and
6(e) attached hereto. Further, Seller shall continue to market said co-branded
products listed on Schedules 6(d) and 6(e) through promotion in its existing
outbound marketing.
(e) Seller shall produce at its sole expense all "off-the-shelf"
studies listed on Schedule 6(e) attached hereto by December 1, 1997.
(f) Seller shall at its sole expense produce and deliver all
"backlogged" Newsletters through September 30th by October 31, 1997. Said list
of "backlogged" Newsletters is set forth on Schedule 6(f) attached hereto.
(g) Seller shall make available without cost to Purchaser its
ETRG authors for direct contracting with Purchaser subsequent to Closing said;
said ETRG authors are listed on Schedule 6(g) attached hereto.
(h) Simultaneous with the Closing, Seller and Purchaser shall
issue a mutually satisfactory press release relating to the transactions
contemplated herein.
(i) Seller agrees to transfer at Closing a sum equal to all
revenues received through said date from Internet Small Business Survey sales to
clients net of (i) any royalties due, (ii) $10,000 cost contribution and (iii)
related expense incurred and paid by Seller prior to the date of Closing, all as
described in Schedule 6(i) attached hereto. At and subsequent to the date of
Closing, Seller agrees to deposit directly into an escrow account at Chase
Manhattan Bank all revenues Seller received from Internet Small Business Survey
sales. As soon as practical, the parties shall disburse the funds in the escrow
account as follows: five percent (5%) to Seller and ninety-five percent (95%) to
Purchaser.
(j) Purchaser agrees to produce the Internet Small Business
Survey to the specifications outlined in Seller's existing sales literature,
which includes commencing the fielding of focus groups, no later than ten (10)
days subsequent to Closing.
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(k) Consistent with Schedule 2(d)(i), subsequent to Closing,
Purchaser will assume all unfilled subscription liabilities. Seller shall have
no financial responsibility to Purchaser related to said unfulfilled
subscriptions, subject to all sales, revenue and cash from CAS (excluding
existing sales to Microsoft, American Express and Bellcore), Internet Small
Business Survey, Newsletter or "Net II" after Closing being the property of and
paid to Purchaser. Between October 1, 1997 and the date of Closing, Seller
agrees to deposit directly into an escrow account at Chase Manhattan Bank all
revenues received from CAS Product Sales that occur between October 1, 1997 and
Closing. As soon as practical, the parties shall disburse the funds in the
escrow account as follows: five percent (5%) to Seller and ninety-five percent
(95%) to Purchaser.
(l) All royalties derived from the book authored by Peter
Clemente which shall be published by McGraw Hill in November, 1997 shall be the
property of and assigned to Purchaser. Schedule 6(l) attached hereto lists the
existing agreements related to said book.
(m) Seller and Purchaser agree to distribute the revenue derived
from the sale of "off the shelf reports" listed in Schedules 6(d) and 6(e) and
from any future off-the-shelf reports in accordance with Schedule 6(m) attached
hereto.
(n) Subsequent to Closing, Seller agrees to supply at no cost to
Purchaser any existing (or "work in progress") "off-the-shelf" studies that may
be required by CAS clients as part of the CAS deliverable as listed on Schedule
6(d) and 6(e).
(o) During the term of this Agreement, Purchaser agrees to
promptly supply Seller at no cost a copy for internal use only of any new ETRG
Product created by Purchaser.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER: Purchaser hereby
represents and warrants to Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified, licensed and authorized to do business as a foreign corporation and
is in good standing as a foreign corporation in each jurisdiction in which the
conduct of its business requires such qualification, licensing or authorization.
Purchaser has full corporate power to own or lease its properties and carry on
its business as now being conducted.
(b) Purchaser has full corporate power and authority to execute
and deliver this Agreement and the other agreements and instruments to be
executed and delivered by it pursuant hereto and to consummate the transactions
contemplated hereby and thereby. All corporate acts and other proceedings
required to be taken by or on the part of Purchaser, including, if necessary,
all appropriate stockholder action, to authorize it to carry out this Agreement
and such other agreements and instruments and the transactions contemplated
hereby and thereby have been duly and properly taken. This Agreement has been
duly executed and delivered by Purchaser and constitutes, and such other
agreements and instruments when duly executed and
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delivered by Purchaser will constitute, legal, valid and binding obligations of
Purchaser and will be enforceable in accordance with their respective terms.
(c) Neither the execution and delivery nor the performance of
this Agreement will (i) violate any provision of law, or any judgment, writ,
injunction, decree or order of any court or other governmental authority
relating to Purchaser, or (ii) violate any will, deed, mortgage, instrument,
indenture, agreement, contract, other commitment or restriction to which
Purchaser is a party or by which it is bound, or (iii) be in conflict with, or
result in or constitute a breach or default (or an occurrence which by lapse of
time and/or the giving of notice would constitute a breach or default), on the
part of Purchaser, under any such will, deed, mortgage, instrument, indenture,
agreement, contract, other commitment or restriction, or (iv) result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon the Assets.
(d) All of the representations and warranties set forth in this
Section 7 shall be deemed renewed by Purchaser at the Closing as if made at such
time and shall survive indefinitely after the Closing Date.
8. REPRESENTATIONS AND WARRANTIES OF SELLER: The Seller represents and
warrants to Purchaser as follows:
(a) Seller now has, and by virtue of the deliveries made at the
Closing, Purchaser will obtain good and marketable title to the Assets, free and
clear of all liens, encumbrances, charges and equities of any nature whatsoever,
except as otherwise provided in this Agreement.
(b) With respect to the machinery and equipment to be sold and
transferred hereunder Seller represents and warrants that such machinery,
equipment and other like assets are and will be as of the Closing Date in good
operating condition for the operation of the Seller's Business as heretofore
conducted by Seller.
(c) Neither Seller's Business as conducted prior to the Closing
nor the ownership or sale by Seller of any of the Assets were, are or will be in
contravention of any patent, trademark, copyright or franchise agreements,
licensing agreements, or other proprietary right of any third party or was, is
or will be dependent for non-contravention upon the acquiescence, agreement or
consent of any such third party.
(d) Neither the execution and delivery nor the performance of
this Agreement will (i) violate any provision of law, or any judgment, writ,
injunction, decree or order of any court or other governmental authority
relating to Seller, or (ii) violate any will, deed, mortgage, instrument,
indenture, agreement, contract, other commitment or restriction to which Seller
is a party or by which it is bound, or (iii) be in conflict with, or result in
or constitute a breach or
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<PAGE>
default (or an occurrence which by lapse of time and/or the giving of notice
would constitute a breach or default), on the part of Seller, under any such
will, deed, mortgage, instrument, indenture, agreement, contract, other
commitment or restriction, or (iv) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon the Assets.
(e) Except as listed in Schedule 8(e) annexed hereto, Seller is
not a party to any written or oral (i) contract for the employment of any
officer or individual employee of Seller's Business not terminable by it without
liability upon notice of less than thirty (30) days or (ii) any written or oral
sales contract or commitment or contract for the future purchase of materials,
supplies, or equipment related to Seller's Business which involves an amount
greater than $5,000.00.
(f) Seller's Business has been conducted by Seller in accordance
with all applicable laws, governmental regulations and judicial and
administrative decisions, including without limiting the generality of the
foregoing, laws, regulations and decisions concerning the employment of labor
and environmental matters. All licenses or permits issuable by any governmental
authority which are necessary for the operation of Seller's Business have been
obtained and are currently in full force and effect and are set forth on
Schedule 1(h) annexed hereto; and, except as set forth on Schedule 1(h), all
such licenses and permits are freely transferrable to Purchaser without the
consent of the issuing authority.
(g) Except those set forth in Schedule 8(g) annexed hereto, there
is no claim, litigation, action, suit or proceeding, administrative or judicial,
pending or threatened against or affecting Seller, or involving any of the
Assets of Seller, at law or in equity or before any foreign, federal, state,
local or other governmental authority, nor to Seller's knowledge is there any
basis upon which any such claim, litigation, action, suit or proceeding could be
brought or initiated. Seller is not subject to or in default under any judgment,
order, writ, injunction or decree of any court or any governmental authority,
and no replevins, attachments, or executions have been issued or are now in
force against Seller. No petition in bankruptcy or receivership has ever been
filed by or against Seller. Seller is not in default under any express or
implied contract, agreement, lease or other arrangement, oral or written, to
which Seller is a party. With respect to each of the Assumed Contracts, neither
Seller nor the other party to the contract is in default thereunder.
(h) Except as set forth in Schedule 8(h), no consent,
authorization, license, permit, order, certificate or approval which has not
heretofore been obtained is required by any person, corporation, partnership,
estate, trust, governmental agency or other person or entity not a party to this
Agreement to the transactions contemplated by this Agreement.
(i) Seller has no knowledge of any termination, cancellation,
limitation, modification or change in the business relationship of Seller with
any of Seller's suppliers, customers or group of suppliers or customers.
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(j) Seller is duly organized, validly existing and in good
standing under the laws of the State of New York and is duly qualified, licensed
and authorized to do business as a foreign corporation and is in good standing
as a foreign corporation in each jurisdiction in which the conduct of its
business requires such qualification, licensing or authorization. Seller has
full corporate power and authority to execute and deliver this Agreement and the
other agreements and instruments to be executed and delivered by it pursuant
hereto and to consummate the transactions contemplated hereby and thereby. All
corporate acts and other proceedings required to be taken by or on the part of
Seller, including, if necessary, all appropriate stockholder action, to
authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby have been duly
and properly taken. This Agreement has been duly executed and delivered by
Seller and constitutes, and such other agreements and instruments when duly
executed and delivered by Seller will constitute, legal, valid and binding
obligations of Seller and will be enforceable in accordance with their
respective terms.
(k) The accounts receivable of Seller's Business existing on the
date hereof and on the Closing Date, will represent amounts duly and validly
owing to Seller from sales made in the regular and ordinary course of its
business, and to the best of Seller's knowledge all such accounts receivable
have been or will be collected to the extent of the face amount thereof, not of
allowances for doubtful accounts, in accordance with their terms and will not be
subject to any offsets, recoupments, set-offs or counterclaims.
(l) Schedule 1(f) attached hereto and incorporated herein by
reference sets forth all patents, patent applications, registered trademarks,
registered service marks, trademark and service mark applications, unregistered
trademarks and service marks, copyrights and copyright applications, owned or
filed by the Seller or in which the Seller has an interest and the nature of
such interest. No other patent, trademark or service mark, copyright or license
under any thereof, is necessary to permit Seller's Business to be conducted as
now conducted or as heretofore conducted. To the best of Seller's knowledge,
Seller is not infringing upon any patent, trademark or service mark, or
copyright or otherwise violating the rights of any third party. No proceedings
have been instituted or are threatened, and no claim has been received by the
Seller alleging any such violation, and Seller is not a party to, or bound by,
any license agreement requiring payment, except as set forth in Schedule 1(f).
(m) Neither this Agreement, nor any, Exhibit, certificate or
other document furnished or to be furnished to Purchaser pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.
There is no fact which materially adversely affects or, may materially adversely
affect the business or condition (financial or otherwise) of the Seller or any
of its properties or assets which has not been set forth herein, or in any
Exhibit, or Schedule, certificate or other document furnished or to be furnished
to Purchaser prior to the Closing Date pursuant hereto.
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(n) REAL ESTATE. With the exception of the real estate and
buildings and improvements thereon which Seller leases at 202 The Common, Suite
502, Ithaca, New York 14850 (collectively, the "Real Estate"), the Seller does
not own or lease any real estate in the conduct of Seller's Business.
(i) To Seller's knowledge, there is no intended or proposed
federal, state or local statute, ordinance, order, requirement, law, rule or
regulation (including, but not limited to, zoning changes) intended or proposed
by any person having jurisdiction over the Real Estate which may prevent or
hinder the continued use of the Real Estate as heretofore used in the conduct of
the Seller's Business. There is no suit, action, claim or legal, administrative,
arbitration or other proceeding (including without limitation, eminent domain
proceeding) or governmental investigation pending or, to the best of Seller's
knowledge intended or proposed by any person having jurisdiction over the Real
Estate against or affecting the Real Estate or the use thereof nor, to the best
of Seller's knowledge is there any basis for such matters.
(ii) There are no unpaid taxes, assessments (special,
general or otherwise) or bonds of any nature affecting the Real Estate or any
portion thereof.
(iii) All covenants, conditions, restrictions, easements and
similar matters of record or of which Seller has actual knowledge affecting the
Real Estate are presently and at Closing shall be complied with in all respects.
(iv) Neither this Agreement nor anything provided to be done
under this Agreement violates or shall violate any contract, document,
understanding, agreement, arrangement or instrument to which Seller is a party
and which affects the Real Estate.
(o) Seller has delivered to Purchaser the profit and loss
statements for Seller's Business for the years 1995, 1996 and year-to-date 1997
(all of which financial statements are collectively referred to as "Financial
Statements" and are attached hereto as Schedule 8(o)).
(p) All of the Financial Statements are true and correct and
present fairly the financial position of Seller's Business as at the dates
thereof and the results of operations and changes in financial position for the
respective periods covered by such statements.
(q) As of the date hereof, Seller's Business has no liabilities
of any nature, whether accrued, absolute, contingent or otherwise.
(r) The foregoing representations and warranties set forth in
this Section 8 shall be deemed renewed by Seller at the Closing and shall
survive the Closing Date until three years after the Closing Date (the "Cut-Off
Date").
(s) The physical properties, business and assets of Seller's
Business are and have been insured by such insurers, against such risks, in such
amounts, and upon such terms and
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conditions as are disclosed in Schedule 8(s) annexed hereto and all other
insurance policies and similar arrangements of Seller's Business are disclosed
in said Schedule. Said insurance policies and arrangements are in full force and
effect as of the date of the Closing and are adequate and customary for the
business currently engaged in by Seller.
9. CONDITIONS OF CLOSING:
(a) All obligations of Purchaser hereunder are, at the option of
Purchaser, subject to the conditions that, at the Closing Date:
(i) All representations, covenants and warranties of Seller
contained in this Agreement shall be true and correct as of the Closing Date in
all material respects.
(ii) Seller shall have performed all commitments hereunder
up to the Closing Date and shall have tendered the required documents,
instruments and certificates as set forth in Section 3 hereof.
(iii) No action, suit, proceeding or investigation by or
before any court, administrative agency or other governmental authority shall
have been instituted or threatened to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or which may affect the right of
Purchaser to own, operate or control after the Closing Date the Assets and
Seller's Business to be acquired pursuant to this Agreement.
(iv) AUTHORIZATION. All corporate action, necessary to
authorize (i) the execution, delivery and performance by the Seller of this
Agreement and any other agreements or instruments contemplated hereby or thereby
to which Seller is a party and (ii) the consummation of the transactions
contemplated hereby and thereby shall have been duly and validly taken by
Seller, and Purchaser shall have been furnished with copies of all applicable
resolutions of Seller certified by the Secretary of the Seller.
(v) DELIVERY OF CERTIFICATES AND DOCUMENTS TO BUYER. Seller
shall have delivered, or cause to be delivered, to the Purchaser certificates as
to the legal existence and good standing of Seller and copies of its
Certificates of Incorporation, as amended, issued or certified by the Secretary
of State of the State of Delaware and/or such other appropriate official
thereof.
(vi) CONSENTS. The Seller shall have obtained the approvals,
consents and authorizations of all third parties and/or governmental agencies
necessary for the consummation of the transactions contemplated hereby in
accordance with the requirements of applicable laws and agreements.
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(vii) DAMAGE OR DESTRUCTION. The Assets shall not have
suffered prior to the Closing Date any loss on account of fire, flood, accident
or any other calamity to an extent that would materially interfere with the
conduct of Seller's Business or materially impair the value of Seller's Business
as a going concern, regardless of whether any such loss or losses have been
insured against.
(b) All obligations of Seller hereunder are, at the option of
Seller subject to the conditions that, at the Closing:
(i) All representations, covenants and warranties made in
this Agreement by Purchaser shall be true and correct as of the Closing Date in
all material respects.
(ii) Purchaser shall have tendered the required documents
and certificates at the Closing as set forth in Section 3 hereof.
(iii) The payment of the Purchase Price pursuant to Section
2 hereof due at the Closing shall have been made by Purchaser.
(iv) CORPORATE ACTION. All corporate action necessary to
authorize (i) the execution, delivery and performance by Purchaser of this
Agreement and any other agreements or instruments contemplated hereby to which
Purchaser is a party and (ii) the consummation of the transactions and
performance of its other obligations contemplated hereby and thereby shall have
been duly and validly taken by Purchaser, and the Seller shall have been
furnished with copies of all applicable resolutions adopted by the Board of
Directors of Purchaser, certified by the Secretary or Assistant Secretary of
Purchaser.
(v) THREATENED OR PENDING PROCEEDINGS. No proceedings shall
have been initiated or threatened by any governmental department, commission,
board, bureau, agency or instrumentality, foreign or domestic, or any other bona
fide third party seeking to enjoin or otherwise restrain or to obtain an award
for damages in connection with the consummation of the transactions contemplated
hereby.
(vi) DELIVERY OF CERTIFICATES AND DOCUMENTS TO SELLER. The
Purchaser shall have delivered, or caused to be delivered to the Seller,
certificates as to the legal existence and good standing of Purchaser issued by
the State of Delaware and/or such other appropriate official thereof.
10. TERMINATION OF AGREEMENT:
10.1 TERMINATION. At any time prior to the Closing Date, this
Agreement may be terminated (i) by the consent of the Purchaser and Seller, (ii)
by Seller if there has been a material misrepresentation, breach of warranty or
breach of covenant by Purchaser in its representations, warranties and covenants
set forth herein, (iii) by Purchaser if there has been a material
misrepresentation, breach of warranty or breach of covenant by the Seller in its
14
<PAGE>
representations, warranties and covenants set forth herein, (iv) by the Seller
if the conditions stated in Section 9(b) have not been satisfied at or prior to
the Closing Date or (v) by Purchaser if the conditions stated in Section 9(a)
have not been satisfied at or prior to the Closing Date.
10.2 EFFECT OF TERMINATION. If this Agreement shall be terminated as
above provided, all obligations of the parties hereunder shall terminate without
liability of any party to the other; provided, however, that nothing in this
Section 10.2 shall prevent any party from seeking or obtaining damages or
appropriate equitable relief for the breach of any representation, warranty or
covenant made by any other party hereto.
10.3 RIGHT TO PROCEED. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Section 9(a) hereof have
not been satisfied at or prior to the Closing, Purchaser shall have the right to
proceed with the transactions contemplated hereby without waiving any of its
rights hereunder, and if any of the conditions specified in Section 9(b) hereof
have not been satisfied at or prior to the Closing, the Seller may determine to
proceed with the transactions contemplated hereby without waiving any of its
rights hereunder.
11. FINANCIAL ADVISORS AND EXPENSES: Each party hereto acknowledges to
the other that there are no financial advisors or brokers in connection with
this Agreement and agrees to indemnify the other for any claims by any financial
advisors or broker in connection with this Agreement and the transactions
contemplated hereby resulting from any act by such party.
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<PAGE>
12. NOTICES: Any notice or other documents to be given or delivered
hereunder by any party to any other party shall be in writing and shall be
delivered personally or sent by certified mail, postage prepaid return receipt
requested to the following addresses:
SELLER:
Find/SVP Published Products, Inc.
625 Avenue of the Americas
New York, New York 10011
Attn: John Kuranz
CC:
Breslow & Walker LLP
767 Third Avenue
New York, New York 10017
Attn: Gary T. Moomjian
PURCHASER:
Cyber Dialogue Inc.
630 Fifth Avenue - Suite 2435
New York, NY 10111
Attn: Mark Esiri
CC:
Kleban and Samor, P.C.
2425 Post Road
Southport, CT 06490
Attn: Thomas E. Dardani, Esq.
13. DISCLOSURE: Subject only to paragraph 6(h) and as may be required
by law, the parties hereto agree to keep the terms and content of this Agreement
totally confidential.
14. ROYALTY PAYMENTS: Purchaser shall provide Seller quarterly, along
with royalty payments due Seller pursuant to paragraph 2(b), a report of sales
of all Existing and Future Products. Seller shall have the ability to review
Purchaser's sales records no more than twice a year subject to written notice at
least two weeks prior to said review.
15. CLOSING POST OCTOBER 31: If the Closing takes place subsequent to
October 31, 1997 but before November 16, 1997, Purchaser agrees to reimburse
Seller for the salaries of Clemente, Miller, Addicott and Richardson for said
period.
16. (a) ARBITRATION: Any controversy, claim or breach arising out of
16
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or relating to this Agreement or the breach thereof shall be settled by
arbitration in New York, New York in accordance with the rules of the American
Arbitration Association and the judgment upon the award rendered shall be
entered in any court having jurisdiction thereof.
17. MERGER; AMENDMENT: This Agreement, the attachments hereto and the
agreements and other documents expressly referred to herein embody the entire
representations, warranties, agreements and conditions in relation to the
subject matter hereof, and no representation, warranty, understanding or
agreement, oral or otherwise, in relation thereto exists between the parties
except as herein expressly set forth. This Agreement may not be amended,
augmented or terminated orally but only as expressly provided herein or by an
instrument in writing duly executed by the parties hereto.
18. INVALIDITY: The invalidity or unenforceability of any term or
provision of this Agreement or the application of such term or provision to any
person or circumstances shall not impair or affect the remainder of this
Agreement and its application to other persons and circumstances, and the
remaining terms and provisions hereof shall not be invalidated but shall remain.
in full force and effect.
19. APPLICABLE LAW: This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
20. COUNTERPART: When Purchaser has executed and delivered to Seller a
counterpart of this Agreement and Seller has executed and delivered to Purchaser
a counterpart of this Agreement, it shall be binding upon Seller and Purchaser.
21. CAPTIONS: The captions in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretations of any provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the day and year first above written.
SELLER:
FIND/SVP PUBLISHED PRODUCTS, INC.
By: ___________________________
,
Its ,
PURCHASER:
17
<PAGE>
CYBER DIALOGUE INC.
By: ___________________________
Mark Esiri,
It's President
18
<PAGE>
$1,000,000 COMMERCIAL REVOLVING LOAN EXHIBIT 2
AND SECURITY AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY,
AND
FIND/SVP, INC. AND FIND/SVP PUBLISHED PRODUCTS, INC.
OCTOBER 22ND, 1997
<PAGE>
TABLE OF CONTENTS
SECTION HEADINGS PAGE
I. DEFINITIONS.............................................. 1
1.01 DEFINED TERMS................................... 1
1.02 ACCOUNTING TERMS................................ 5
II. LOAN FACILITY............................................ 5
2.01 LOAN(S)......................................... 5
2.02 INDEMNITY....................................... 7
III. INTEREST, TERMS AND FEES................................. 7
3.01 INTEREST RATE................................... 7
3.02 TERM AND TERMINATION............................ 7
3.03 REPAYMENTS...................................... 8
3.04 OPTIONAL PREPAYMENTS............................ 8
3.06 FEES............................................ 8
IV. CONDITIONS OF LENDING.................................... 8
V. REPRESENTATIONS AND WARRANTIES........................... 9
VI. COVENANTS................................................ 13
6.01 FINANCIAL REPORTING............................. 13
6.02 AFFIRMATIVE COVENANTS........................... 14
6.03 NEGATIVE COVENANTS.............................. 16
6.04 FINANCIAL COVENANTS............................. 18
VII. GRANT OF COLLATERAL............................................... 19
VIII. DEFAULT.................................................. 22
8.01 EVENTS OF DEFAULT............................... 22
8.02 DECLARED DEFAULT................................ 23
8.03 SPECIFIC POWERS................................. 23
8.04 DUTIES AFTER DEFAULT............................ 24
8.05 BORROWERs' INDEMNIFICATION...................... 24
8.06 CUMULATIVE REMEDIES............................. 25
IX. MISCELLANEOUS............................................ 25
9.01 EXPENSES........................................ 25
9.02 SETOFF.......................................... 25
i
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9.03 COVENANTS TO SURVIVE, BINDING AGREEMENT......... 25
9.04 CROSS-COLLATERALIZATION......................... 25
9.05 CROSS-DEFAULT................................... 26
9.06 AMENDMENTS AND WAIVERS.......................... 26
9.07 NOTICES......................................... 26
9.08 TRANSFER OF LENDER'S INTEREST................... 27
9.09 NEW LAWS........................................ 27
9.10 SECTION HEADINGS, SEVERABILITY,
ENTIRE AGREEMENT............................. 28
9.11 COUNTERPARTS.................................... 28
9.12 GOVERNING LAW; CONSENT TO JURISDICTION.......... 28
9.13 UNIFORM COMMERCIAL CODE......................... 28
9.14 FURTHER ASSURANCES.............................. 28
9.15 JURY TRIAL WAIVER............................... 28
ii
<PAGE>
AGREEMENT dated October 22nd, 1997, among FIND/SVP, INC., a New York
corporation and FIND/SVP PUBLISHED PRODUCTS, INC., a New York corporation with
their principal offices located at 625 Avenue of the Americas, New York, New
York 10011-2002 (collectively, the "BORROWERS") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts bank and trust company with an office located at 225
Franklin Street, Boston, Massachusetts 02110-2804 (the "LENDER").
RECITALS
A. The Borrowers have requested that the Lender extend to the Borrower a
$1,000,000 revolving loan facility.
B. The proceeds of the loan facility shall be used for general working
capital requirements.
C. The Lender is willing to extend the loan facility to the Borrowers,
subject to the terms and conditions contained herein.
AGREEMENT
In consideration of the Recitals, which are incorporated by reference, the
terms and conditions contained herein and other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the Borrowers and the
Lender, intending to be bound legally, agree as follows:
I. DEFINITIONS.
1.01 DEFINED TERMS. As used herein the following terms shall have the
following meanings:
(a) "ACCOUNTS" shall have the definition assigned in Article VII(a).
(b) "ACCOUNT DEBTOR" and "ACCOUNT DEBTORS" shall mean the person or entity
or persons or entities obligated to the Borrowers upon the Accounts.
(c) "AFFILIATE", as applied to any Person, means any other Person directly
or indirectly through one or more intermediaries controlling, controlled by, or
under common control with, that Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of the Person, whether through the
ownership of voting securities or by contract or otherwise.
(d) "AGREEMENT" shall mean this Commercial Revolving Loan and Security
<PAGE>
SECTION HEADINGS PAGE
Agreement, as the same from time to time may be amended, supplemented or
modified.
(e) "BUSINESS DAY" shall mean a day on which commercial banks in the
Commonwealth of Massachusetts are not required or permitted by law to remain
closed and on which dealings are carried on in the London interbank market.
(f) "CAPITAL ASSETS" shall mean assets that in accordance with GAAP are
required or permitted to be depreciated or amortized on Borrowers' balance
sheet.
(g) "CAPITAL EXPENDITURES" shall mean, for any period, the aggregate amount
of all expenditures for the acquisition, construction, improvement, replacement
or purchase of Capital Assets and Intangible Assets, including, but not limited
to, expenditures under Capital Leases.
(h) "CAPITAL LEASES" shall mean capital leases, conditional sales contracts
and other title retention agreements relating to the purchase or acquisition of
Capital Assets.
(j) "CHANGE OF CONTROL" shall mean any time in which Andrew Garvin and
Amalia S.A. do not in the aggregate own at least 25% of the issued and
outstanding common stock of the Borrowers.
(k) "COLLATERAL" shall mean the property of the Borrowers described in
Article VII below.
(l) "CONTRACTUAL OBLIGATIONS" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
(n) "DEFAULT(S)" shall mean any of the events specified in Section 8.01
below, whether or not any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
(o) "DEBT" shall mean at any date, without duplication:
(i) all obligations of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds (other than
performance bonds), debentures, notes or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable and accrued
expenses arising in the ordinary course of business;
(iv) all obligations of such Person as lessee under Capital Leases;
(v) all Debt of others secured by a lien on any asset of such Person
whether or not such Debt is assumed by such Person; or
(vi) all Debt of others guarantied by such Person or entity."
<PAGE>
SECTION HEADINGS PAGE
(p) "DIVIDENDS" shall mean, for the applicable period, the aggregate of all
amounts paid or payable (without duplication) as dividends, distributions or
owner withdrawals with respect to Borrowers' shares of stock, whether now or
hereafter outstanding and includes return of capital by the Borrowers to its
shareholders.
(q) "DOLLARS" and "$" shall mean lawful currency of the United States of
America.
(r) "ERISA" shall mean the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated pursuant thereto, as amended from time
to time.
(s) "EVENT(S) OF DEFAULT" shall mean any of the events specified in Section
8.01 below, provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
(t) "GAAP" shall mean generally accepted accounting principals applied in a
manner consistent with that employed in the preparation of the financial
statements described in Section 6.01 below.
(u) "INDEBTEDNESS" shall mean all obligations that in accordance with GAAP
should be classified as liabilities upon the Borrowers' balance sheet or to
which reference should be made by footnotes thereto.
(v) "INTANGIBLE ASSETS" shall mean assets that in accordance with GAAP are
properly classifiable as intangible assets, including, but not limited to,
goodwill, deferred charges, franchises, licenses, patents, trademarks, trade
names and copyrights.
(w) "LIEN" shall mean any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law or any
jurisdiction).
(x) "LOAN(S)" shall mean any loan made by the Lender to the Borrowers
hereunder.
(y) "LOAN ACCOUNT" shall mean the loan account maintained by the Borrowers
with the Lender.
(z) "LOAN COMMITMENT" shall mean the obligation of the Lender to make Loans
to the Borrowers during the Loan Commitment Period as follows: (i) from the date
hereof
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through and including October 31, 1997, a maximum principal amount of $500,000;
(ii) from November 1, 1997 through and including November 31, 1997, a maximum
principal amount of $800,000 less the outstanding amount advanced and not repaid
during the period set forth in (i) above; (iii) from December 1, 1997 through
and including the Maturity Date, a maximum principal amount of $1,000,000 less
the outstanding amount advanced and not repaid during the periods set forth in
(i) and (ii) above.
(aa) "LOAN COMMITMENT PERIOD" shall mean the period from the date hereof
until the Maturity Date of the Loan Commitment.
(bb) "LOAN DOCUMENT(S)" shall mean this Agreement, the Note and all other
documents or agreements executed in connection herewith, together with any
amendments, supplements or modifications hereto or thereto.
(cc) "MATURITY DATE" shall mean December 31, 1997.
(dd) "NET INCOME" shall mean, for the applicable period, the consolidated
net income of the Borrowers.
(ee) "NET LOSS" shall mean, for the applicable period, the consolidated net
loss, excluding the effect of income tax benefits, of the Borrowers.
(ff) "NOTE" shall mean the Commercial Revolving Promissory Note.
(gg) "OBLIGATIONS" shall mean and include all loans, advances, interest,
indebtedness, liabilities, obligations, guaranties, covenants and duties at any
time owing by the Borrowers to the Lender of every kind and description, whether
or not evidenced by any note or other instrument, whether or not for the payment
of money, whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, including but not limited to the
indebtedness, liabilities and obligations arising under this Agreement, the
Notes and the other Loan Documents, and all costs, expenses, fees, charges,
expenses and attorneys', paralegals' and professionals' fees incurred in
connection with any of the foregoing, or in any way connected with, involving or
related to the preservation, enforcement, protection and defense of this
Agreement, the Note, the other Loan Documents, any related agreement, document
or instrument, any Lien, the Collateral and the rights and remedies hereunder or
thereunder.
(hh) "PERSON" shall mean any individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated organization or any
other juridical entity, or a government or state or any agency or political
subdivision thereof.
(ii) "PLAN" shall mean any plan of a type described in Section 4021(a) of
ERISA in respect of which the Borrowers are an "employer" as defined in Section
3(5) of ERISA.
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(jj) "POST DEFAULT RATE" shall mean at any time a rate of interest equal to
3.0% per annum in excess of the rate that would then be applicable to Prime Rate
Loans whether or not any such Prime Rate Loans are then outstanding.
(kk) "PRIME RATE" shall mean the rate of interest established from time to
time by the Lender as its "Prime Rate". Each change in the interest rate shall
take effect simultaneously with the corresponding change in the Prime Rate.
(ll) "REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
(mm) "SUBSIDIARY OR SUBSIDIARIES" of any Person shall mean any corporation
or corporations of which the Person or one or more of its Subsidiaries, owns,
directly or indirectly, at least a majority of the securities having ordinary
voting power for the election of directors.
(nn) "SUBORDINATED DEBT" shall mean Debt which is subordinated to the
Obligations.
(oo) "TANGIBLE NET WORTH" shall mean the sum of the Borrowers' Total Assets
minus the sum of (i) its Intangible Assets plus (ii) its Total Liabilities.
(pp) "TANGIBLE CAPITAL FUNDS" shall mean the Borrowers' Tangible Net Worth
plus Subordinated Debt plus the one time tax affect for lost credits in an
amount not to exceed $100,000.
(qq) "TOTAL ASSETS" shall mean total assets determined in accordance with
GAAP.
(rr) "TOTAL CURRENT ASSETS" shall mean total current assets determined in
accordance with GAAP.
(ss) "TOTAL CURRENT LIABILITIES" shall mean total current liabilities
determined in accordance with GAAP.
(tt) "TOTAL LIABILITIES" shall mean total Indebtedness determined in
accordance with GAAP.
1.02 ACCOUNTING TERMS. Except as otherwise specifically set forth in this
Agreement, each accounting term used in this Agreement shall have the meaning
given to it under GAAP. Any dispute or disagreement between the Borrowers and
the Lender relating to the determination of GAAP shall, in the absence of
manifest error, be conclusively resolved for all purposes hereof by the written
opinion with respect thereto, delivered to the Lender, of independent
accountants selected by the Borrowers and approved by the Lender for the
purposes of auditing the periodic financial statements of the Borrowers.
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II. LOAN FACILITY.
2.01 LOAN(S). Subject to the terms and conditions, and relying upon the
representations and warranties set forth in this Agreement, the Lender agrees to
make revolving loans (individually a "LOAN" and, collectively, the "LOANS") to
the Borrowers at any time until terminated as provided in Section 3.02 below,
which shall not exceed the Loan Commitment for the periods set forth in Section
1.01 (z). In addition to this Agreement, the Loans shall be evidenced by the
Commercial Revolving Promissory Note of this date, a copy of which is attached
hereto as EXHIBIT "A" (the "NOTE"). The Loans shall be subject to the following:
(a) ABILITY TO BORROW AND REBORROW. So long as the Borrowers is in
compliance with all the terms and conditions of this Agreement and is not in
Default hereunder or under any of the Loan Documents, no condition exists which
would constitute a Default but for the giving of notice or passage of time or
both, and so long as the Lender has not demanded payment or accelerated payment
of any of the then outstanding Loans due to an Event of Default, the Borrowers
may borrow, repay, and reborrow Loan funds. Loan advances must be requested no
later than 10 o'clock a.m. eastern standard time.
(b) LOAN ACCOUNT. Insofar as the Borrowers may request and the Lender
shall make Loan advances hereunder, the Lender shall enter such advances as
debits on the Loan Account. The Lender shall also record in the Loan Account, in
accordance with customary accounting procedures, (i) all other charges, expenses
and other liens properly chargeable to the Borrowers, (ii) all payments made by
the Borrowers on account of indebtedness evidenced by the Loan Account, (iii)
all proceeds of Collateral which are finally paid to the Lender in its own
office in cash or solvent credits, and (iv) other appropriate debits and
credits. The Loan Account shall reflect the amount of the Borrowers'
indebtedness to the Lender from time to time by reason of the Revolving Loan and
other appropriate charges hereunder, including debits for any interest and
principal not paid to the Lender when due and owing pursuant to the terms of the
Note. On a monthly basis, the Lender shall render a statement for the Loan
Account, which statement shall be considered correct and accepted by and
conclusively binding upon the Borrowers unless the Borrowers notifies the Lender
to the contrary within thirty (30) days of the receipt of the statement by the
Borrowers.
(c) COMPLIANCE CERTIFICATES. Commencing on or before October 20, 1997
and continuing on the twentieth day of each successive month thereafter so long
as the indebtedness of the Note is outstanding, the Borrowers shall deliver to
the Lender a Certificate of Compliance, for any and all loans from the Lender to
the Borrowers, in the form attached hereto as EXHIBIT "B", which certificate
shall be executed by the Borrowers' chief financial officer and shall state,
among other things, that: (i) the Borrowers have complied, and is then in
compliance, with all the terms, covenants and conditions of this Agreement and
the other Loan Documents which are binding upon it; (ii) there exists no Event
of Default and no event which, but for the giving of notice or passage of time
or both, would constitute such an Event of Default; and (iii) the
representations and warranties contained herein and in the other Loan Documents
are true and correct with the same effect as though such representations and
warranties had been made at the time of each Revolving Loan.
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(d) REPRESENTATIONS AND WARRANTIES CONFIRMED. All of the
representations and warranties contained herein shall have continued to be true
and materially accurate, through and including the date of each Loan advance as
though made on and as of such date except for differences where there has been
no material adverse change through and including the date of each Loan advance.
(e) COMPLIANCE. The Borrowers shall have complied with all of the
terms and conditions contained in this Agreement and the other Loan Documents
required to be performed by it on or prior to the date of each Loan advance.
(f) CORPORATE AUTHORITY CONTINUED. The corporate resolutions referred
to in Article IV hereof shall be in full force and effect and have not been
amended in any respect as of the date of each Loan advance.
(g) NO ADVERSE CHANGE. There shall have been no material adverse
change in the financial position or business of the Borrowers between the date
hereof and the date of each Loan Advance.
(h) PURPOSES. The Borrowers acknowledge and agree that the proceeds of
the Loans shall be used solely for general working capital purposes.
2.02 INDEMNITY. The Borrowers will indemnify the Lender against any
reasonable costs or expenses, arising out of development of deposits, which the
Lender may sustain or incur as a consequence of any default in payment or
default in prepayment of the principal amount of any Loan or any part thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
by and after notice of prepayment or otherwise), or the occurrence of any Event
of Default. The Lender shall provide to the Borrowers a statement, signed by an
officer of the Lender and supported where applicable by documentary evidence,
explaining the amount of any such cost or expense.
III. INTEREST, TERMS AND FEES.
3.01 INTEREST RATE.
(a) The Note shall bear, and the Borrowers promise to pay, interest on
the indebtedness on the terms and conditions set forth in the Note.
(b) LAWFUL INTEREST. It is the intent of the parties that the rate of
interest and all other charges to the Borrowers be lawful. If for any reason the
payment of a portion of interest, fees or charges as required by this Agreement
would exceed the limit established by applicable law which a commercial lender
such as the Lender may charge to a commercial borrower such as the Borrowers,
then the obligation to pay interest or charges shall automatically be reduced to
such limit and, if any amounts in excess of such limits shall be paid, then such
amounts shall be applied to the unpaid principal amount of the Obligations of
the Borrowers
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to Lender or refunded so that under no circumstances shall the interest or
charges required hereunder exceed the maximum rate allowed by law.
3.02 TERM AND TERMINATION.
(a) Unless sooner terminated as a result of the occurrence of an Event
of Default, the Loan Commitment shall terminate and be due and payable in full
on the Maturity Date. Upon termination of the Loan Commitment, the Borrowers
shall have no ability to receive, and the Lender shall have no obligation to
make any further advances under the Loan Commitment. All of the rights, interest
and remedies of the Lender and Obligations of the Borrowers under this Agreement
and the other Loan Documents shall survive termination of the Loan Commitment
until all of the Obligations of the Borrowers are fully satisfied.
(b) Provided on or before December 31, 1997 the Borrowers (i) provide
to the Lender written notice (A) that either Borrowers have entered into a final
and definitive agreement with a third party, in form and content acceptable to
the Lender, to sell assets of either of the Borrowers in an amount sufficient to
pay off the outstanding indebtedness of the Commercial Term Promissory Notes
dated April 27, 1995 and May 31, 1996 from the Borrowers to the Lender; or (B)
that either Borrowers have received a capital contribution of not less than
$1,000,000, in form and manner acceptable to the Lender; (ii) that the Borrowers
are in compliance with the terms and conditions of the Loan Documents or no
Event of Default has occurred; and (iii) that the Standby Letter of Credit can
not be terminated by its terms on or before March 26, 1998, the Borrowers may
execute and deliver to the Lender a promissory note with the same provisions,
terms and conditions as the Note but for a maturity date of March 26, 1998 (the
"REPLACEMENT NOTE").
3.03 REPAYMENTS. Any payments made by the Borrowers to the Lender shall be
credited first to late charges, costs and expenses, then to accrued and unpaid
interest and then to the outstanding principal balance due in the inverse order
of maturity.
3.04 OPTIONAL PREPAYMENTS. The Borrowers may prepay any Loans without any
penalty or premium.
3.06 FEES.
(a) COMMITMENT FEE. As additional consideration for the Loan
Commitment, the Borrowers shall pay in arrears to the Lender each month a
non-refundable commitment fee in the amount equal to one quarter of one percent
(0.25%) of the unused portion of the Loan Commitment commencing on November 1,
1997 and continuing on each first day of each succeeding month thereafter
continuing throughout the Loan Commitment Period.
(b) FACILITY FEE. As additional consideration for the extension of the
Loans, commencing October 31, 1997, the Borrowers shall pay to the Lender a
non-refundable facility fee of $5,000.00 per month for all revolving loans from
the lender to the Borrowers while such revolving loan(s) outstanding which fee
shall be deemed fully earned on the date hereof.
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Notwithstanding the foregoing so long as a Event of Default has not occurred
hereunder, the Borrowers may defer payment of the facility fee until the
Maturity Date or, if applicable, until the maturity date set forth in the
Replacement Note.
IV. CONDITIONS OF LENDING.
Without limiting the Lender's discretion not to make Revolving Loan, the
Borrowers agree that the Loans are subject to fulfillment by the Borrowers of
the following conditions precedent, all in form, scope and substance
satisfactory to the Lender and its counsel in their sole discretion:
(a) EVIDENCE OF CORPORATE ACTION. The Lender shall have received
certified copies of all corporate action taken by the Borrowers to authorize the
execution, delivery and performance of this Agreement, the Note, the other Loan
Documents, and the borrowings to be made hereunder, together with copies of the
Borrowers' Certificate of Incorporation and Bylaws, all amendments thereto, and
such other papers and documents as the Lender or its counsel may require.
(b) NOTE. The Lender shall have received the duly executed Note drawn
to its order.
(c) UCC-1 FINANCING STATEMENTS AND FIXTURE FILINGS. The Lender shall
have received from the Borrowers duly executed UCC-1 Financing Statements and
such other documents as the Lender deems necessary or proper to perfect its
security interest in the Collateral.
(d) INSURANCE. The Lender shall have received evidence of casualty,
liability and business interruption insurance in such amounts and with such
companies satisfactory to the Lender, and the Lender shall be named as a loss
payee on all such insurance.
(e) ASSIGNMENT OF LIFE INSURANCE. The Borrowers shall provide or cause
to be provided assignment(s) of life insurance policy, in form and content
acceptable to the Lender, of Andrew Garvin.
(f) STANDBY LETTER OF CREDIT. The Borrowers shall provide to the
Lender a Standby Letter of Credit, in form and content acceptable to the Lender,
in an amount of $1,000,000.00 naming the Lender as beneficiary issued by a
financial institution acceptable to the Lender in its sole discretion.
(g) OPINION OF COUNSEL. The Borrowers shall provide the Lender with an
opinion from counsel in form and content satisfactory to the Lender opining to,
among other things, the valid, binding and enforceable nature of the Loan
Documents and the authority of the Borrowers to enter into the Loan Documents.
(h) OTHER. The Lender shall have received such other documents as the
Lender deems necessary.
V. REPRESENTATIONS AND WARRANTIES.
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The Borrowers represent and warrant to the Lender that:
(a) GOOD STANDING AND QUALIFICATION. The FIND/SVP, Inc. is a
corporation duly organized, validly existing and in good standing under the laws
of the state of New York and FIND/SVP Published Products, Inc is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware. The Borrowers have all requisite corporate power and
authority to own and operate its properties and to carry on its business as
presently conducted and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction wherein the character of the properties
owned or leased by it therein or in which the transaction of its business
therein makes such qualification necessary.
(b) CORPORATE AUTHORITY. The Borrowers have full corporate power and
authority to enter into and perform the obligations under this Agreement, to
make the borrowings contemplated herein, to execute and deliver the Note, and
the other Loan Documents and to incur the obligations provided for herein and
therein, all of which have been duly authorized by all necessary and proper
corporate action. No other consent or approval or the taking of any other action
in respect of shareholders or of any public authority is required as a condition
to the validity or enforceability of this Agreement, the Note or any of the
other Loan Documents. The execution and delivery of this Agreement is for valid
corporate purposes and will not violate the Borrowers' certificate of
incorporation or bylaws.
(c) BINDING AGREEMENTS. This Agreement constitutes, and the Note and
the other Loan Documents delivered in connection herewith shall constitute,
valid and legally binding obligations of the Borrowers, enforceable in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
(d) LITIGATION. Except as set forth in SCHEDULE "5(D)", there are no
actions, suits, proceedings or investigations pending or, to the knowledge of
the officers of the Borrowers, threatened against the Borrowers before any court
or administrative agency, which either in any case or in the aggregate, if
adversely determined, would materially and adversely affect the financial
condition, assets or operations of the Borrowers, or which question the validity
of this Agreement, the Note, or any of the other Loan Documents, or any action
to be taken in connection with the transaction contemplated hereby.
(e) NO CONFLICTING LAW OR AGREEMENTS. To the best of the Borrowers'
knowledge, the execution, delivery and performance by the Borrowers of this
Agreement, the Note and the other Loan Documents (i) do not violate any
provision of the Certificate of Incorporation or Bylaws of the Borrowers, (ii)
do not violate any order, decree or judgment, or any provision of any statute,
rule or regulation, (iii) do not violate or conflict with, result in a breach of
or constitute (with notice or lapse of time, or both) a default under any
shareholder agreement, stock preference agreement, mortgage, indenture or
contract to which the Borrowers is a party, or by which any of its properties
are bound, and (iv) do not result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any property or assets
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of the Borrowers except as contemplated herein.
(f) TAXES. With respect to all taxable periods of the Borrowers the
Borrowers have filed all tax returns required to be filed by it and has paid all
federal, state, municipal, franchise and other taxes shown on such filed returns
has reserved against the same, as required by GAAP, and the Borrowers know of no
unpaid assessments against them.
(g) FINANCIAL STATEMENTS. The Borrowers have delivered to the Lender
the certified balance sheet of the Borrowers as of December 31, 1996, and the
certified related statements of income, retained earnings and cash flows for the
fiscal year then ended. Such statements fairly present the consolidated
financial condition of the Borrowers as of the dates and for the periods
referred to therein and have been prepared in accordance with GAAP applied on a
consistent basis by the Borrowers throughout the periods involved. There are no
liabilities, direct or indirect, fixed or contingent, of the Borrowers as of the
date of the balance sheet which are not reflected therein or in the notes
thereto, other than liabilities or obligations not material in amount which are
not required to be reflected in corporate balance sheets prepared in accordance
with GAAP. There has been no material adverse change in the financial condition,
business, operations, affairs or prospects of the Borrowers since the date of
such financial statements except as set forth on the attached SCHEDULE "5(g)".
(h) EXISTENCE OF ASSETS AND TITLE THERETO. The Borrowers have good and
marketable title to its properties and assets, including, as of December 31,
1996, the properties and assets reflected in the financial statements referred
to above. These properties and assets are not subject to any mortgage, pledge,
lien, lease, security interest, encumbrance, restriction or charge except those
permitted under the terms of this Agreement or as set forth in SCHEDULE "5(H)",
and none of the foregoing prohibit or interfere with ownership of the Borrowers'
assets or the operation of its business presently conducted thereon.
(i) REGULATIONS G, T, U AND X.The proceeds of the borrowings hereunder
will not be used, directly or indirectly, for the purposes of purchasing or
carrying any margin stock in contravention of Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System.
(j) COMPLIANCE. The Borrowers are not in default with respect to or in
violation of any order, writ, injunction or decree of any court or of any
federal, state, municipal or other governmental department, commission, board,
bureau, agency, authority or official, or in violation of any law, statute, rule
or regulation to which it or its properties is or are subject, where such
default or violation would materially and adversely affect the financial
condition of the Borrowers. Each of the Borrowers represents that it has not
received notice of any such default from any party. Each of the Borrowers is not
in default in the payment or performance of any of its obligations to any third
parties or in the performance of any mortgage, indenture, lease, contract or
other agreement to which it is a party or by which any of its assets or
properties are bound in an amount in excess of $5,000.00.
(k) LEASES. Each of the Borrowers enjoys quiet and undisturbed
possession under all leases under which it is operating, and all such leases are
valid and subsisting and each
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of the Borrowers is not in default under any of its leases. The leases to which
the each of the Borrowers is currently a party are set forth on the attached
SCHEDULE "5(k)".
(l) PENSION PLANS. To the best of the Borrowers' knowledge, no fact,
including but not limited to any "REPORTABLE EVENT", as that term is defined in
Section 4043 of ERISA, as the same may be amended from time to time exists in
connection with any Plan of the Borrowers which might constitute grounds for
termination of any such Plan by the Pension Benefit Guaranty Corporation or for
the appointment by the appropriate United States District Court of a Trustee to
administer any such Plan. No "PROHIBITED TRANSACTION" as defined by ERISA exists
or will exist upon the execution and delivery of this Agreement or the
performance by the parties hereto of their respective duties and obligations
hereunder. The Borrowers agree to do all acts including, but not limited to,
making all contributions necessary to maintain compliance with ERISA and agrees
not to terminate any such Plan in a manner or do or fail to do any act which
could result in the imposition of a lien on any property of the Borrowers
pursuant to Section 4068 of ERISA. The Borrowers have not incurred any
withdrawal liability under the Multiemployer Pension Plan Amendment Act of 1980.
The Borrowers have no unfunded liability in contravention of ERISA.
(m) OFFICE. The chief executive office and principal place of business
of the Borrowers, and the office where its records concerning Collateral are
kept are as set forth in the first paragraph of this Agreement.
(n) PLACES OF BUSINESS. The Borrowers have no other places of business
and locates no Collateral, specifically including books and records, at any
location other than those set forth in the attached SCHEDULE "5(N)".
(o) CONTINGENT LIABILITIES. The Borrowers are not a party to any
suretyship, guarantyship, or other similar type agreement; and it has not
offered its endorsement to any individual, concern, corporation or other entity
or acted or failed to act in any manner which would in any way create a
contingent liability that does not appear in the financial statements referred
to above.
(p) CONTRACTS. No contract, governmental or otherwise, to which the
Borrowers are a party, is subject to renegotiation, nor is the Borrowers in
default of any material contract.
(q) UNION CONTRACTS AND PENSION PLANS. The Borrowers are not a party
to any collective bargaining, union or pension plan agreement, except as set
forth on the attached SCHEDULE "5(q)". The pension plans set forth on SCHEDULE
"5(q)" are in full force and effect and are not currently subject to the
renegotiation. The Borrowers are in full compliance with the terms and
conditions of all such pension plans and knows of no threatened work stoppage by
any employees.
(r) LICENSES. To the best of the Borrowers' knowledge, the Borrowers
have all licenses, permits, approvals and other authorizations required by any
government,
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agency or subdivision thereof, or from any licensing entity necessary for the
conduct of its business, all of which the Borrowers represent to be current,
valid and in full force and effect.
(s) COLLATERAL. The Borrowers are and shall continue to be the sole
owner of the Collateral free and clear of all liens, encumbrances, security
interests and claims except the liens and the security interests granted to the
Lender. The Borrowers are fully authorized to sell, transfer, pledge or grant to
the Lender a security interest in each and every item of the Collateral; all
documents and agreements related to the Collateral shall be true and correct and
in all respects what they purport to be; all signatures and endorsements that
appear thereon shall be genuine and all signatories and endorsers shall have
full capacity to contract; none of the transactions underlying or giving rise to
the Collateral shall violate any applicable state or federal laws or
regulations; all documents relating to the Collateral shall be legally
sufficient under such laws or regulations and shall be legally enforceable in
accordance with their terms; and the Borrowers agree to defend the Collateral
against the claims of all persons other than the Lender.
(t) FINANCIAL INFORMATION. All financial information including, but
not limited to, information relating to the Accounts submitted by the Borrowers
to the Lender, whether previously or in the future, is and will be true and
correct in all material respects, and is and will be complete insofar as may be
necessary to give the Lender a true and accurate knowledge of the subject
matter.
(u) ENVIRONMENTAL HEALTH AND SAFETY LAWS. The Borrowers have not
received any notice, order, petition, or similar document in connection with or
arising out of any violation or possible violation of any environmental health
or safety law, regulation or order, and the Borrowers know of no basis for any
such violation or threat thereof for which it may become liable.
(v) PARENT, AFFILIATE OR SUBSIDIARY CORPORATIONS. The Borrowers have
no parent corporation and, except as set forth on the attached SCHEDULE "5(W)",
has no domestic or foreign Affiliate or Subsidiary corporations.
VI. COVENANTS.
6.01 FINANCIAL REPORTING. The Borrowers covenant and agree that from the
date hereof until payment in full of all Obligations and the termination of this
Agreement, the Borrowers shall furnish to the Lender the following, all to be
prepared on a consolidating basis and in conformity with GAAP, applied on a
basis con Borrowers consistent with the preceding period:
(a) within one hundred twenty (120) days after the end of each fiscal
year of the Borrowers, the Form 10-K of the Borrowers showing the operations and
financial condition of the Borrowers at the close of such year together with
audited certified consolidated financial statements of the Borrowers prepared by
independent certified public accountants of recognized standing selected by the
Borrowers and reasonably acceptable to the Lender (the form of such statements
to be reasonably satisfactory to the Lender), showing the operations and
financial
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conditions of the Borrowers at the close of such fiscal year (for purposes
hereof, any of the so called "big six accounting firms" or any successor such
accounting firms shall be deemed acceptable to the Lender);
(b) within sixty (60) days after the end of each of the first three
(3) quarters of each year, of the Borrowers, the Form 10-Q of the Borrowers,
showing the operations and financial condition of the Borrowers at the close of
such fiscal quarters together with unaudited consolidated financial statements
prepared by the Borrowers (the form of such statements to be reasonably
satisfactory to the Lender), showing the operations and financial conditions of
the Borrowers at the close of such fiscal quarters;
(c) within twenty (20) days after the end of each month, internally
prepared financial statements of the Borrowers in form and content reasonably
satisfactory to the Lender, including a balance sheet as of such month, a profit
and loss statement and a statement of cash flows for the month then ended, all
prepared in accordance with GAAP, applied on a basis consistent with that of the
preceding period;
(d) within ten (10) days after the end of each month each of the
following which shall include FIND/SVP Published Products, Inc. and FIND/SVP
Internet Services, Inc.: (i) accounts receivable and accounts payable aging for
the preceding month, (ii) a statement, in form and content acceptable to the
Lender, comparing the cash disbursement and receipts for the last two (2)
preceding months, (iii) a monthly statement, in form and content acceptable to
the Lender, of Capital Assets not previously reported on any financial
statements along with any applicable schedules or attachments and (iv) a
Certificate of Compliance is the form of the attached EXHIBIT "B" ;
(e) within ten (10) days upon the Lender's written request from time
to time, such other information about the financial condition and operations of
the Borrowers as the Lender may reasonably request.
6.02 AFFIRMATIVE COVENANTS. The Borrowers covenant and agree from the date
hereof until payment in full of all Obligations and termination of this
Agreement, the Borrowers shall:
(a) INSURANCE AND ENDORSEMENT.Keep its properties and business insured
against fire and other hazards (so-called "All Risk" coverage) in amounts and
with companies reasonably satisfactory to the Lender covering such risks as are
herein set forth; maintain public liability coverage, against claims for
personal injuries or death; and maintain all worker's compensation, employment
or similar insurance as may be required by applicable law. All insurance shall
be in amounts reasonably satisfactory to the Lender and shall contain such
terms, be in such form, be for such periods, and be written by carriers duly
licensed by the state of New York and reasonably satisfactory to the Lender.
Without limiting the generality of the foregoing, such insurance must provide
that it may not be canceled without thirty (30) days prior written notice to the
Lender. With respect to the Collateral, and on the Borrowers' All Risk coverage,
the Borrowers shall cause the Lender to be endorsed as a loss payee. In the
event of failure to
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provide and maintain insurance as provided herein, the Lender may, at its
option, provide such insurance and charge the amount thereof to the Loans. The
Borrowers shall furnish to the Lender certificates or other satisfactory
evidence of compliance with the foregoing insurance provisions. The Borrowers
irrevocably appoint the Lender as its attorney-in-fact, coupled with an
interest, to make proofs of loss and claims for insurance, and to receive
payments of the insurance and execute all documents, checks and drafts in
connection with payments of the insurance.
(b) TAXES AND OTHER LIENS. Comply with all statutes and government
regulations and pay all taxes, assessments, governmental charges or levies, or
claims for labor, supplies, rent and other obligations made against it or its
property which, if unpaid, might become a lien or charge against the Borrowers
or their properties, except liabilities being contested in good faith and
against which, if requested by the Lender, the Borrowers shall set up reserves
in amounts and in form reasonably satisfactory to the Lender.
(c) PLACE OF BUSINESS. Maintain its chief places of business and chief
executive offices at the address set forth in the beginning of this Agreement,
unless, the Borrowers shall have given the Lender thirty (30) days prior written
notice of any change in such places of business.
(d) INSPECTIONS. Upon three (3) days prior notice, allow the Lender by
or through any of its officers, attorneys, accountants or other agents
designated by the Lender, for the purpose of ascertaining whether or not each
and every provision hereof and of the other Loan Documents, is being performed,
to enter the offices and plants of the Borrowers to examine or inspect any of
the properties, books and records or extracts therefrom, to make copies of such
books and records or extracts therefrom, and to discuss the affairs, finances
and accounts thereof with the Borrowers all at such times and as often as the
Lender or any representatives of the Lender may reasonably request.
(e) LITIGATION. Advise the Lender of the commencement or threat of
litigation, including arbitration proceedings and any proceedings before any
governmental agency, which is instituted against the Borrowers and is reasonably
likely to have a material adverse effect upon the condition, financial,
operating or otherwise, of the Borrowers or where the amount involved or claimed
is Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00), or more.
(f) MAINTAIN EXISTENCE. Maintain its corporate existence and comply
with all applicable statutes, rules and regulations.
(g) MAINTAIN ASSETS. Maintain its properties in good repair, working
order and operating condition. The Borrowers shall immediately notify the Lender
of any event causing material loss in the value of its assets.
(h) ERISA. Immediately notify the Lender of any event which causes it
to become subject to ERISA and, upon becoming subject thereto, they shall comply
in all
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material respects with ERISA.
(i) NOTICE OF CERTAIN EVENTS. Give prompt written notice to the Lender
of:
(i) any dispute that arises between the Borrowers and any governmental
regulatory body or law enforcement agency;
(ii) any labor controversy resulting or likely to result in a strike
or work stoppage against the Borrowers;
(iii) any proposal by any public authority to acquire the assets or
business of the Borrowers;
(iv) the location of any Collateral other than at the Borrowers'
places of business disclosed in this Agreement other than Collateral in transit
in the ordinary course of the Borrowers' business;
(v) any proposed or actual change of the name, identity or corporate
structure of the Borrowers;
(vi) any other matter which has resulted or is likely to result in a
material adverse change in the financial condition or operations of the
Borrowers; and
(vii) any information received by the Borrowers with respect to
Accounts that may materially affect the value thereof or the rights and remedies
of the Lender with respect thereto.
(j) DEFAULTS. Give prompt written notice to the Lender upon the
occurrence of any Default or of any event which, but for giving of notice or
passage of time or both, would constitute an Event of Default, signed by the
president or chief financial officer of the Borrowers describing such occurrence
and the steps, if any, being taken to cure the Default.
(k) ACCOUNT DUTIES. Comply with any and all federal, state and local
laws affecting its business, including, but not limited to, payment of all
federal and state taxes. The Borrowers agree to indemnify and hold the Lender
harmless from all claims, actions and losses, including reasonable attorneys'
fees and costs actually incurred by the Lender arising from any contention, that
there has been a failure to comply with such laws.
(l) COLLATERAL DUTIES. Do whatever the Lender may reasonably request
from time to time by way of obtaining, executing, delivering and filing
financing statements, assignments, landlord's or mortgagee's waivers, and other
notices and amendments and renewals thereof, and the Borrowers will take
reasonable steps in order to create and maintain a valid and enforceable first
lien upon, pledge of, and first priority security interest in, any and all of
the Collateral. If the Borrowers fail to timely provide financing statements,
the Lender is authorized to file financing statements without the signature of
the Borrowers and to execute and file such
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financing statements on behalf of the Borrowers as specified by the Uniform
Commercial Code to perfect or maintain its security interest in all of the
Collateral. All charges, expenses and fees which the Lender incurs in filing any
of the foregoing, together with costs and expenses of any lien search required
by the Lender, and any taxes relating thereto, shall be charged to the balance
of the Revolving Loans and added to the Obligations.
(m) AUDIT BY LENDER; FEES. Permit the Lender to audit the books and
records of the Borrowers at such times and in such manner and detail as the
Lender deems, in the Lender's reasonable discretion, are necessary. The
Borrowers shall promptly pay the Lender annual audit fees in the amount of
$2,500 commencing on April 27, 1998 and continuing on each April 27 hereafter.
The Lender may charge such audit fees to the Borrowers' Loan Account.
(n) OFFICERS AND DIRECTORS. Promptly notify the Lender in writing upon
any changes or additions to the Borrowers' officers or directors or the
occurrence of a Change of Control.
(o) MANAGEMENT ADVISOR, SUMMARY REPORT AND BUSINESS PLAN. (i) On or
before November 1, 1997, select, in its sole and absolute discretion, a
management advisor, from the list of approved advisors provided to the Borrowers
by the Lender, to prepare a summary report of the condition, financial and
otherwise, of the Borrowers and review the operations of the Borrowers and
assist in the preparation and implementation of the Borrowers' business plan as
more particularly set forth below and assist in securing additional financing,
if necessary. Such management advisor shall report directly to the Boards of
Directors of the Borrowers.
(ii) Upon receipt and review of the summary report as set forth below
and the Borrowers' business plan, the Lender will have the option, in its sole
and absolute discretion, to require the management advisor to assist the
Borrowers during the implementation of the Borrowers' business plan and to
continue until such time as such services are no longer necessary or
appropriate.
(iii) On or before December 4, 1997, submit true and complete copies
of the management advisor's summary report and the Borrowers' business plan and
annual budget for the period ending December 31, 1998 including a balance sheet,
income statement, sources and uses of cash statement and all schedules and
attachments thereto along with a certified copy of the resolutions of the
Borrowers' board of directors approving such business plan and annual budget.
6.03 NEGATIVE COVENANTS. The Borrowers covenant and agree that from the
date hereof until payment in full of all Obligations and termination of this
Agreement, the Borrowers shall not without the prior written consent of the
Lender:
(a) ENCUMBRANCES. Except as set forth on the attached SCHEDULE "5(H)",
incur or permit to exist any lien, mortgage, charge or other encumbrance against
any of its properties or assets, whether now owned or hereafter acquired,
except: (i) liens required or expressly permitted by this Agreement; (ii)
pledges or deposits in connection with or to secure
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worker's compensation, unemployment or liability insurance; (iii) tax liens
which are being contested in good faith and for which sufficient reserves have
been maintained in compliance with this Agreement and (iv) purchase money
security interests and encumbrances incurred in the ordinary course of business
of the Borrowers;
(b) LIMITATION ON INDEBTEDNESS. Except for the Borrowers' $59,000
Limited Guaranty of a $100,000 loan made by the Lender to Peter Fiorillo,
create, incur or guaranty any indebtedness or obligation for trade debt,
borrowed money from, or issue or sell any obligations of the Borrowers to any
lender or Person other than the Lender.
(c) CONTINGENT LIABILITIES. Assume, guaranty, endorse or otherwise
become liable upon the obligations of any person, firm or corporation, or enter
into any purchase or option agreement or other arrangement having substantially
the same effect as such a guarantee, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
(d) CONSOLIDATION OR MERGER. Merge into or consolidate with or into
any corporation.
(e) LOANS, ADVANCES, INVESTMENTS. Use the proceeds of the Loans,
either directly or indirectly, to make or permit to exist any loans or advances
to, or purchase any stock, other than securities or evidences or indebtedness
of, or make or permit to exist any investment, including without limitation the
acquisition of stock of a corporation, or acquire any interest whatsoever in,
any other person or entity.
(f) SALE AND LEASE OF ASSETS. Sell, lease or otherwise dispose of any
of its assets, except in the ordinary course of business, without the Lender's
written consent which shall not be unreasonably withheld and shall be requested
by the Borrowers at least fifteen days prior any closing, except for replacement
of equipment having a substantially equal or greater value than the equipment
replaced or sold in the ordinary course of business. The Borrowers acknowledge
and agree that it shall not be unreasonable for the Lender to withhold consent
in the event the net proceeds from the sale of its assets are not in an amount
sufficient to pay off the outstanding indebtedness of the Commercial Term
Promissory Notes dated April 27, 1997 and May 31, 1997 from the Borrowers, among
others, to the Lender
(g) NAME CHANGES. Change its corporate name or conduct its business
under any trade name other than as set forth in this Agreement.
(h) CHANGE OF CONTROL. Suffer any Change in Control of the Borrowers.
(i) PROHIBITED TRANSFERS. Transfer, in any manner, either directly or
indirectly, any cash, property, or other assets to any parent or any Affiliate
or Subsidiary, other than sales made in the ordinary course of business and for
fair consideration on terms no less favorable than if such sale had been an
arms-length transaction between the Borrowers and an unaffiliated entity.
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SECTION HEADINGS PAGE
(j) USE OF PROCEEDS. Except for FIND/SVP Internet Services, Inc. apply
any of the proceeds from the Loans to any Affiliate or Subsidiary if such
Affiliate or Subsidiary is not a party to this loan transaction.
(k) NO MANAGEMENT/OWNERSHIP CHANGE. Suffer any change in the
management or ownership of the Borrowers which the Lender deems, in its
reasonable discretion, to be a material adverse change.
(l) LEASEBACKS. Lease any real estate or other capital asset from any
lessor who shall have acquired such property from the Borrowers.
(m) BUSINESS OPERATIONS. Engage in any business other than the
business in which it is currently engaged or a business reasonably related
thereto.
(n) ASSIGNMENT OF CLAIMS ACT. Take any action or fail to take any
action, either directly or indirectly, or cooperate in any way, so as to allow
any party, other than the Lender, to comply with the Federal Assignment of
Claims Act.
(o) ADDITIONAL INVESTMENTS. The Borrowers covenant and agree to not
receive any additional investments, including, but not limited to the proceeds
under the Standby Letter of Credit, unless such investment is in the form of
Subordinated Debt, in form and manner acceptable to the Lender, or is an equity
investment in the Borrower(s).
6.04 FINANCIAL COVENANTS. The Borrowers agree and covenant that from the
date hereof until payment in full and performance of all Obligations, it shall
not:
(a) TANGIBLE CAPITAL FUNDS. Permit at any time its Tangible Capital
Funds to be less than the following which will be tested monthly:
DATES TANGIBLE CAPITAL FUNDS
September 30, 1997 $4,425,000
October 31, 1997 $4,305,000
November 30, 1997 $4,200,000
Subject to the conditions precedent set forth in Section 3.02(b) above,
the Borrowers shall not permit at any time its Tangible Capital Funds
to be less than the following which will be tested monthly:
December 31, 1997 $4,095,000
January 31, 1998 $3,990,000
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February 28, 1998 $3,970,000
(b) CURRENT RATIO. Permit at any time its ratio of Total Current
Assets to Total Current Liabilities to be less than 1.25 to 1.0 which will be
tested monthly.
(c) NET INCOME. Permit any of the following to occur which will be
tested monthly:
(i) Net Loss for the month ended September 30, 1997 to exceed
$225,000.00;
(ii) Net Loss for the month ending October 31, 1997 to exceed
$200,000.00;
(iii) Net Loss for the month ending November 30, 1997 to exceed
$175,000.00;
Subject to the conditions precedent set forth in Section 3.02(b) above,
the Borrowers shall not permit at any time its Tangible Capital Funds
to be less than the following which will be tested monthly:
(i) Net Loss for the month ending December 31, 1997 to exceed
$175,000.00;
(ii) Net Loss for the month ending January 31, 1998 to exceed
$175,000.00; or
(iii) Net Loss for the month ending February 28, 1998 to exceed
$50,000.00.
(d) CAPITAL EXPENDITURES. Permit Capital Expenditures to exceed
$75,000.00 a month on a cumulative basis to be tested monthly.
VII. GRANT OF COLLATERAL.
To secure the prompt payment and performance of the Obligations, the
Borrowers pledge, assign, transfer and grant to the Lender a continuing, first
priority lien and security interest in the following property of the Borrowers
(the "COLLATERAL"):
(a) All accounts (the "ACCOUNTS"), as that term is defined in Section
9-106 of the Uniform Commercial Code as in effect from time-to-time in the State
of Connecticut (the "UCC"), including, without limitation, all accounts
receivable, book debts and other forms of obligations, other than forms of
obligations evidenced by Chattel Paper or Instruments, as those terms are
defined below, now owned or hereafter received or acquired by or belonging or
owing to the Borrowers, including, without limitation, under any trade name,
style or division thereof, whether arising out of goods sold or services
rendered by the Borrowers or from any other transaction, whether or not the same
involves the sale of goods or services by the Borrowers, including, without
limitation, any such obligation which may be characterized as an account or
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SECTION HEADINGS PAGE
contract right under the UCC, and all of the Borrowers' rights in to and under
all purchase orders or receipts now owned or hereafter acquired by it for goods
or services, and all of the Borrowers' rights to any goods represented by any of
the foregoing, including, without limitation, unpaid seller's rights of
rescission, replevin, reclamation or repossessed goods, and all monies due or to
become due to the Borrowers under all purchase orders and contracts for the sale
of goods or the performance of services or both by the Borrowers, whether or not
yet earned by performance on the part of the Borrowers or in connection with any
other transaction, now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of such purchase orders and
contracts, and all collateral security and guaranties of any kind given by any
person with respect to any of the foregoing;
(b) All chattel paper (the "CHATTEL PAPER"), as that term is defined
in Section 9-105(1)(b) of the UCC, now owned or hereafter acquired by the
Borrowers;
(c) All contracts, undertakings, franchise agreements or other
agreements (collectively, the "CONTRACTS"), other than rights evidenced by
Chattel Paper, Documents or Instruments, as those terms are defined below, in or
under which the Borrowers may now or hereafter have any right, title or
interest, including, without limitation, with respect to an Account, any
agreement relating to the terms of payment or the terms of performance thereof;
(d) All documents (the "DOCUMENTS"), as that term is defined in
Section 9-105(1)(f) of the UCC, now owned or hereafter acquired by the
Borrowers;
(e) All equipment (the "EQUIPMENT"), as that term is defined in
Section 9-109(2) of the UCC, now or hereafter owned or acquired by the Borrowers
and, in any event, shall include, without limitation, all machinery, tools,
dyes, equipment, furnishings, vehicles and computers and other electronic data
processing and other office equipment, any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto;
(f) All general intangibles (the "GENERAL INTANGIBLES"), as that term
is defined in Section 9-106 of the UCC, now owned or hereafter acquired by the
Borrowers and, in any event, shall include, without limitation, all right, title
and interest which the Borrowers may now or hereafter have in or under any
Contract, all customer lists, Trademarks, as defined below, Patents, as defined
below, right in intellectual property, interests in partnerships, joint ventures
and other business associations, licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions, whether or not patented or
patentable, technical information, procedures, designs, knowledge, know-how,
software, database, data, skill, expertise, recipes, experience, processes,
models, drawings, blueprints, catalogs, materials and records, goodwill
including, without limitation, the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License, as
defined below, claims in or under insurance policies, including unearned
premiums, uncertificated securities, deposit accounts, rights to receive tax
refunds and other payments and rights of indemnification;
(g) All instruments (the "INSTRUMENTS"), as that term is defined in
Section 9-
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SECTION HEADINGS PAGE
105(1)(i) of the UCC, now owned or hereafter acquired by the Borrowers,
including, without limitation, all Note and other evidences of indebtedness,
other than instruments that constitute, or are a part of a group or writings
that constitute, Chattel Paper;
(h) All inventory (the "INVENTORY"), as that term is defined in
Section 9-109(4) of the UCC, wherever located, now or hereafter owned or
acquired by the Borrowers and, in any event, shall include all inventory,
merchandise, goods and other personal property which are held by or on behalf of
the Borrowers for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process or
materials used or consumed or to be used or consumed in the Borrowers' business,
or the processing, packaging, promotion, delivery or shipping of the same, and
all finished goods, whether or not such inventory is listed on any schedules,
assignments or reports furnished to the Lender from time-to-time and whether or
not the same is in transit or in the constructive, actual or exclusive occupancy
or possession of the Borrowers or is held by the Borrowers or by others for the
Borrowers' account, including, without limitation, all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by suppliers
and all inventory which may be located on premises of the Borrowers or of any
carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or
other persons;
(i) All Patent Licenses (as defined below), Trademark Licenses, or
other licenses of rights or interests now held or hereafter acquired by the
Borrowers (collectively, the "LICENSES");
(j) All of the following (collectively, "PATENT LICENSES") now owned
or hereafter acquired by the Borrowers: any written agreement granting any right
with respect to any invention on which a Patent (as defined below) is in
existence;
(k) All of the following (individually, a "PATENT" and collectively,
the "PATENTS") in which the Borrowers now hold and hereafter acquired any
interest: (i) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters patent of
the United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country and (ii) all reissues, continuations,
continuations-in-part or extensions thereof;
(l) All of the following (collectively, the "TRADEMARK LICENSES") now
owned or hereafter acquired by the Borrowers: any written agreement granting any
right to use any Trademark or Trademark registration;
(m) All of the following (collectively, "TRADEMARKS") now owned or
hereafter acquired by the Borrowers: (i) all trademarks, tradenames, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, now existing
or hereafter adopted or acquired, all registrations and recordings and
applications in the United
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SECTION HEADINGS PAGE
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof and (ii) all reissues, extensions or renewals thereof; and
(n) All proceeds (the "PROCEEDS"), as that term is defined in Section
9-306(1) of the UCC, and in any event shall include, without limitation, (i) any
and all Accounts, Chattel Paper, Instruments, cash and other proceeds payable to
the Borrowers from time-to-time in respect of any of the foregoing collateral
security, (ii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to the Borrowers from time-to-time with respect to any of the
collateral security, (iii) any and all payments (in any form whatsoever) made or
due and payable to the Borrowers from time-to-time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the collateral security by any governmental body, authority, bureau or
agency (or any person acting under color of governmental authority) and (iv) any
and all other amounts from time-to-time paid or payable under or in connection
with any of the collateral security.
VIII. DEFAULT.
8.01 EVENTS OF DEFAULT. The Obligations shall, at the option of the Lender,
become immediately due and payable without notice or demand unless otherwise
provided herein upon the occurrence of any of the following events
(collectively, "EVENTS OF DEFAULT" and individually, an "EVENT OF DEFAULT"):
(a) failure of the Borrowers to pay any installment of principal or
interest or any other Obligation arising under this Agreement, the Note or the
other Loan Documents or such failure by an guarantor or surety for any of the
Obligations;
(b) breach of any covenant contained in Section 6.04 of this Agreement
or any representation or warranty contained herein in any material respect;
(c) breach of any covenant or agreement contained herein (other than
in Section 6.04 of this Agreement) which is not remedied within ten (10) days
after written notice is mailed by the Lender to the Borrowers;
(d) the making by the Borrowers of any material misrepresentation of a
material fact to the Lender;
(e) insolvency (failure of the Borrowers to pay their debts as they
mature or when the fair value of the Borrowers' assets is less than its
liabilities) of the Borrowers or any guarantor or surety for the Obligations, or
business failure, appointment of a receiver or custodian, or assignment for the
benefit of creditors or the commencement of any proceedings under any bankruptcy
or insolvency law by or against the Borrowers or any guarantor or surety for the
Obligations; appointment of a committee of creditors or liquidating banks, or
offering of a composition or extension to creditors by, for or of the Borrowers;
however, if an involuntary bankruptcy petition is filed, an Event of Default
shall not occur unless such petition is not dismissed within thirty (30) days of
filing;
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(f) the loss, renovation or failure to renew any license and/or permit
now held or hereafter acquired by the Borrowers which materially affects the
ability of the Borrowers to continue their operations as presently conducted;
(g) a default in any other Loan Document after any applicable cure
periods or other agreements between the Lender and the Borrowers or any
guarantor or surety of the Obligations;
(h) dissolution of the Borrowers;
(i) failure by the Borrowers to pay or perform any other Indebtedness
in excess of $20,000, or if any such other Indebtedness shall be accelerated, or
if there shall exist any default under any instrument, document or agreement
governing, evidencing or securing such other Indebtedness; or
(j) a material adverse change in the condition of the Borrowers,
financial or otherwise, as determined by the Lender in its sole and reasonable
discretion.
Upon the happening of any one or more Events of Default, any requirements
upon the Lender to make further Revolving Loans or issue Letters of Credit
hereunder shall terminate. The Borrowers expressly waives any presentment,
demand, protest, notice of protest or other notice of any kind. The Lender may
proceed to enforce the rights of the Lender whether by suit in equity or by
action at law, whether for specific performance of any covenant or agreement
contained in this Agreement, the Note or any other Loan Documents, or in aid of
the exercise of any power granted in either this Agreement, the Note or the
other Loan Documents, or it may proceed to obtain judgment or any other relief
whatsoever appropriate to the enforcement of such rights, or proceed to enforce
any legal or equitable right which the Lender may have by reason of the
occurrence of any Event of Default hereunder.
8.02 DECLARED DEFAULT. Upon demand or the occurrence of an Event of
Default, the Lender shall have in any jurisdiction where enforcement hereof is
sought, in addition to all other rights and remedies which the Lender may have
under law and equity, the following rights and remedies, all of which may be
exercised with or without further notice to the Borrowers and without a prior
judicial or administrative hearing or notice, which notice and hearing are
expressly waived: (a) to enforce or foreclose the liens and security interests
created under the Loan Documents, this Agreement or under any other agreement
relating to the Collateral by any available judicial procedure or without
judicial process, (b) to enter any premises where any Collateral may be located
for the purpose of taking possession or removing the same, (c) to sell, assign,
lease, or otherwise dispose of Collateral or any part thereof, either at public
or private sale, in lots or in bulk, for cash, on credit or otherwise, with or
without representations or warranties, and upon such terms as shall be
acceptable to the Lender, all at the Lender's sole option and as the Lender in
its sole discretion may deem advisable, (d) to bid or become purchaser at any
such sale if public, free from any right of the Borrowers of redemption, after
sale, which is expressly waived by the Borrowers, and (e) at the option of the
Lender, to apply or
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SECTION HEADINGS PAGE
be credited with the amount of all or any part of the Obligations owing to the
Lender against the purchase price bid by the Lender at any such sale.
8.03 SPECIFIC POWERS. (a) The Lender may at any time, after demand or the
occurrence of an Event of Default, at the Lender's sole discretion: (i) give
notice of assignment to any account debtor of the Borrowers; (ii) collect
Accounts directly and charge the collection costs and expenses to the Borrowers'
demand deposit account; (iii) settle or adjust disputes and claims directly with
account debtors of the Borrowers for amounts and upon terms which the Lender
considers advisable, and credit the demand deposit account with the net amounts
received in payment of Accounts; (iv) exercise all other rights granted in this
Agreement and the other Loan Documents; (v) receive, open and dispose of all
mail addressed to the Borrowers and notify the Post Office authorities to change
the address for delivery of the Borrowers' mail to an address designated by the
Lender; (vi) endorse the name of the Borrowers on any checks or other evidence
of payment that may come into possession of the Lender and on any invoice,
freight or express bill, bill of lading or other documents; (vii) in the name of
the Borrowers or otherwise, demand, sue for, collect and give acquittance for
any and all monies due or to become due on Accounts; (viii) compromise,
prosecute or defend any action, claim or proceeding concerning Accounts; and
(ix) do any and all things necessary and proper to carry out the purposes
contemplated in this Agreement, to carry out the purposes contemplated in this
Agreement, the other Loan Documents and any other agreement between the parties.
(b) The Lender and any person acting as its attorney hereunder shall
not be liable for any acts or omissions or for any error of judgment or mistake
of fact or law, except for bad faith and willful misconduct. The Borrowers agree
that the powers granted hereunder, being coupled with an interest, shall be
irrevocable so long as any Obligation remains unsatisfied. Notwithstanding the
foregoing, it is understood that the Lender is under no duty to take any of the
foregoing actions and that after having made demand upon the account debtors of
the Borrowers for payment, the Lender shall have no further duty as to the
collection or protection of Accounts or any income therefrom and no further duty
to preserve any rights pertaining thereto, other than the safe custody thereof.
8.04 DUTIES AFTER DEFAULT. (a) The Borrowers will, at the Lender's request,
assemble all Collateral and make it available to the Lender at places which the
Lender may reasonably select, and will make available to the Lender all premises
and facilities of the Borrowers for the purpose of the Lender taking possession
of Collateral or of removing or putting the Collateral in salable form. In the
event any goods called for in any sales order, contract, invoice or other
instrument or agreement evidencing or purporting to give rise to any Account
shall not have been delivered or shall be claimed to be defective by any
customer, the Lender shall have the right in its discretion to use and deliver
to such customer any goods of the Borrowers to fulfill such order, contract or
the like so as to make good any such Account. If any Collateral shall require
repairing, maintenance, preparation, or the like, or is in process or other
unfinished state, the Lender shall have the right, but shall not be obligated,
to do such repairing, maintenance, preparation, processing or completion of
manufacturing for the purpose of putting the same in such salable form as the
Lender shall deem appropriate, but the Lender shall have the right to sell or
dispose of such Collateral without such processing.
<PAGE>
SECTION HEADINGS PAGE
(b) The net cash proceeds resulting from the collection, liquidation,
sale, lease or other disposition of Collateral shall be applied first to the
expenses, including all reasonable attorneys' and professional fees, of
retaking, holding, storing, processing and preparing for sale, selling,
collecting, liquidating and the like and then to the satisfaction of all
Obligations, application as to particular Obligations or against principal or
interest to be at the Lender's sole discretion and the balance of the proceeds,
if any, shall be paid to the Borrowers. The Borrowers shall be liable to the
Lender and shall pay to the Lender on demand any deficiency which may remain
after such sale, disposition, collection or liquidation of Collateral.
8.05 BORROWERs' INDEMNIFICATION. The Lender shall not, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the liquidation of any of the
Collateral, including the settlement, collection or payment of any of the
Collateral accounts or any instrument received in payment thereof, or any damage
resulting therefrom. The Borrowers shall indemnify and hold harmless the Lender
against any claim, loss or damage arising out of the liquidation of any of the
Collateral, including the settlement, collection or payment of any of the
Collateral accounts or any instrument received in payment thereof, provided that
the Lender acted in a commercially reasonable manner in its liquidation of any
of the Collateral.
8.06 CUMULATIVE REMEDIES. The enumeration of the Lender's rights and
remedies set forth in this Article is not intended to be exhaustive and the
exercise by the Lender of any right or remedy shall not preclude the exercise of
any other rights or remedies, all of which shall be cumulative and shall be in
addition to any other right or remedy given hereunder or under any other
agreement between the parties or which may now or hereafter exist in law or at
equity or by suit or otherwise. No delay or failure to take action on the part
of Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
event of default. No course of dealing between the Borrowers and the Lender or
their employees shall be effective to change, modify or discharge any provision
of this Agreement or to constitute a waiver of any default.
IX. MISCELLANEOUS.
9.01 EXPENSES. Whether or not the transaction herein contemplated shall be
consummated, the Borrowers agree to pay all out-of-pocket expenses (including
reasonable fees and expenses of the Lender's counsel) of the Lender incurred in
connection with the preparation of this Agreement, the Note, the other Loan
Documents and any amendments or supplements hereto and thereto, and all expenses
(including reasonable fees and expenses of the Lender or the Lender's counsel)
incidental to the collection of monies due hereunder or under the Note or the
other Loan Documents and/or the enforcement of the rights (including the
protection thereof) of the Lender under any provisions of this Agreement, and
the Note and the other Loan Documents. The Lender agrees that its counsel fees,
through the closing, shall be calculated on an hourly basis.
<PAGE>
SECTION HEADINGS PAGE
9.02 SETOFF. The Borrowers give the Lender a lien and right of setoff for
all the Obligations upon and against all its deposits, credits, collateral and
property now or hereafter in the possession or control of the Lender or in
transit to it. The Lender may, upon demand or the occurrence of any Event of
Default, apply or set off the same, or any part thereof, to any Obligations of
the Borrowers to the Lender.
9.03 COVENANTS TO SURVIVE, BINDING AGREEMENT. All covenants, agreements,
warranties and representations made herein, in the Note, in the other Loan
Documents, and in all certificates or other documents of the Borrowers shall
survive the advances of money made by the Lender to the Borrowers hereunder and
the delivery of the Note, and the other Loan Documents. All such covenants,
agreements, warranties and representations shall be binding upon and inure to
the benefit of the Lender and its successors and assigns, whether or not so
expressed.
9.04 CROSS-COLLATERALIZATION. All Collateral which the Lender may at any
time acquire from the Borrowers or from any other source in connection with
Obligations arising under this Agreement and the other Loan Documents shall
constitute collateral for each and every Obligation, without apportionment or
designation as to particular Obligations. All Obligations, however and whenever
incurred, shall be secured by all Collateral however and wherever acquired. The
Lender shall have the right, in its sole discretion, to determine the order in
which the Lender's rights in or remedies against any Collateral are to be
exercised and which type of Collateral or which portions of Collateral are to be
proceeded against and the order of application of proceeds of Collateral as
against particular Obligations.
9.05 CROSS-DEFAULT. The Loans shall be cross-defaulted with each other and
with current and future financing accommodations extended or to be extended by
the Lender to the Borrowers and with the Subordinated Debt so that a default
under any loan to the Borrowers shall be an Event of Default hereunder and under
all of the other loans extended by the Lender.
9.06 AMENDMENTS AND WAIVERS. This Agreement, the Note, the other Loan
Documents, and any term, covenant or condition hereof or thereof may not be
changed, waived, discharged, modified or terminated except by a writing executed
by the parties hereto or thereto. Notwithstanding the foregoing and without
limiting the Lender's right to exercise any of its other rights or remedies
hereunder, in the event that the Lender, in its sole discretion, elects to waive
compliance by the Borrowers of any terms or conditions set forth in this
Agreement, the Note or any other Loan Documents, the Borrowers shall pay to the
Lender all costs and expenses in connection therewith including, but not limited
to, reasonable attorneys' fees. The failure on the part of the Lender to
exercise, or the Lender's delay in exercising, any right, remedy or power
hereunder or under the Note or the other Loan Documents shall not preclude any
other or future exercise thereof, or the exercise of any other right, remedy or
power.
9.07 NOTICES. All notices, requests, consents, demands and other
communications hereunder shall be in writing and shall be mailed by registered
or certified first class mail or delivered by an overnight courier to the
respective parties to this Agreement as follows:
<PAGE>
SECTION HEADINGS PAGE
If to the Borrowers: FIND/SVP, Inc.
625 Avenue of the Americas
New York, NY 10011-2002
Attention: Mr. Peter Fiorillo
FIND/SVP Published Products, Inc.
625 Avenue of the Americas
New York, NY 10011-2002
Attention: Mr. Peter Fiorillo
With a copy to: Breslow & Walker, LLP
767 Third Avenue
New York, NY 10011
Attn: Gary T. Moomjian, Esq.
If to the Lender: State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110-2804
Attention: Ms. Arlene M. Doherty
With a copy to: Diserio Martin O'Connor & Castiglioni, LLP
One Atlantic Street
Stamford, Connecticut 06901
Attention: Kevin T. Katske, Esq.
9.08 TRANSFER OF LENDER'S INTEREST. The Borrowers agree that the Lender, in
its sole discretion and upon prior written notice to the Borrowers, may freely
sell, assign or otherwise transfer participations, portions, co-lender interests
or other interests in all or any portion of the indebtedness, liabilities or
obligations arising in connection with or in any way related to the financing
transactions of which this Agreement is a part. In the event of any such
transfer, the transferee may, in the Lender's sole discretion, have and enforce
all the rights, remedies and privileges of the Lender. The Borrowers consent to
the release by the Lender to any potential transferee, so long as such
transferee is a financial institution, of any and all information including,
without limitation, financial information pertaining to the Borrowers as the
Lender, in its sole discretion, may deem appropriate. If such transferee so
participates with the Lender in making loans or advances hereunder or under any
other agreement between the Lender and the Borrowers, the Borrowers grant to
such transferee and such transferee shall have an is hereby given a continuing
lien and security interest in any money, securities or other property of the
Borrowers in the custody or possession of such transferee, including the right
of setoff, to the extent of such transferee's participation in the Obligations.
9.09 NEW LAWS. In the event that any law, regulation, treaty or official
directive or the interpretation or application thereof by any court or
governmental authority or the compliance with any guideline or request of any
governmental authority:
<PAGE>
SECTION HEADINGS PAGE
(a) subjects the Lender to any tax with respect to any amounts payable
hereunder or under the Note by the Borrowers or otherwise with respect to the
transactions contemplated hereunder, except for taxes on the overall net income
of the Lender imposed by the United States of America, the Commonwealth of
Massachusetts, or any central bank or agency thereof, or
(b) imposes, modifies or deems applicable any deposit, insurance,
reserve, special deposit, capital maintenance or similar requirement against
assets held by, or deposits in or for the account of, or loans or advances or
commitments to make the Revolving Loans or advances by the Lender, other than
such requirements the effect of which is included in the determination of the
interest rates for the Revolving Loans or advances made thereunder, or
(c) imposes upon the Lender any other condition with respect to the
Revolving Loans or advances to be made thereunder;
and the result of any of the foregoing is to increase the cost of the Lender,
reduce the income receivable by or return on equity of the Lender or impose any
expense upon the Lender with respect to the Revolving Loans or advances
thereunder, the Lender shall so notify the Borrowers. The Borrowers agree to pay
the Lender the amount of such increases in cost, reduction in income, reduced
return on equity or additional expenses as and when such cost, reduction in
income, reduced return on equity or additional expense is incurred or
determined, plus interest, upon presentation by the Lender of a statement in the
amount and setting forth the Lender's calculation thereof, in determining such
amount, the Lender may use any reasonable averaging and attribution methods;
which statement shall be deemed true and correct absent manifest error. Such
amount shall be deemed to be an advance under the Revolving Loan Commitment, as
the case may be.
9.10 SECTION HEADINGS, SEVERABILITY, ENTIRE AGREEMENT. Section and
subsection headings have been inserted herein for convenience of the Lender only
and shall not be construed as part of this Agreement. Every provision of this
Agreement, the Note and the other Loan Documents is intended to be severable; if
any term or provision of this Agreement, the Note, the other Loan Documents, or
any other document delivered in connection herewith shall be invalid, illegal or
unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not in any
way be affected or impaired thereby. All Exhibits and Schedules to this
Agreement shall be deemed to be part of this Agreement. This Agreement, the
other Loan Documents, and the Exhibits and Schedules attached hereto and thereto
embody the entire agreement and understanding between the Borrowers and the
Lender and supersede all prior agreements and understandings relating to the
subject matter hereof unless otherwise specifically reaffirmed or restated
herein.
9.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered shall be an
original, and it shall not be necessary when making proof of this Agreement to
produce or account for more than one counterpart.
9.12 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement and the other
Loan
<PAGE>
SECTION HEADINGS PAGE
Documents, and all transactions, assignments and transfers hereunder and
thereunder, and all the rights of the parties, shall be governed as to validity,
construction, enforcement and in all other respects by the laws of the
Commonwealth of Massachusetts. The Borrowers agree that the courts of the
Commonwealth of Massachusetts or the United States District Courts in the
Commonwealth of Massachusetts shall have jurisdiction to hear and determine any
claims or disputes pertaining to the financing transactions of which this
Agreement is a part and/or to any matter arising or in any way related to this
Agreement or any other agreement between the Lender and the Borrowers expressly
submit and consent in advance to such jurisdiction in any action or proceeding.
9.13 UNIFORM COMMERCIAL CODE. The Borrowers shall comply with, and Lender
shall have all the rights and remedies of a secured party under the Uniform
Commercial Code, as enacted in Massachusetts, as amended.
9.14 FURTHER ASSURANCES. At the request of the Lender, the Borrowers agree
that at their expense, it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Lender may request, in order to perfect and protect any
security granted or purported to be granted hereby including, but not limited to
UCC-1 financing statements, or to enable the Lender to exercise and enforce its
rights and remedies hereunder.
9.15 JURY TRIAL WAIVER. THE BORROWER WAIVES TRIAL BY JURY IN ANY COURT IN
ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART
OR THE ENFORCEMENT OF ANY OF LENDER'S RIGHTS AND FURTHER WAIVES, DILIGENCE,
DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF ANY
RENEWALS OR EXTENSIONS. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
The parties have executed this Agreement on October 22nd, 1997.
Signed in the presence of:
____________________________ FIND/SVP, INC.
____________________________ By____________________________
Peter Fiorillo
Its Executive Vice President
____________________________ FIND/SVP PUBLISHED PRODUCTS, INC.
SECTION HEADINGS PAGE
<PAGE>
____________________________ By____________________________
Peter Fiorillo
Its Executive Vice President
____________________________ STATE STREET BANK AND
TRUST COMPANY
____________________________ By____________________________
Arlene M. Doherty
Its Vice President
<PAGE>
SECTION HEADINGS PAGE
STATE OF NEW YORK )
) ss.: New York
COUNTY OF NEW YORK )
On this the 22nd day of October, 1997, before me, the undersigned
officer, personally appeared Peter Fiorillo, who acknowledged himself to be the
Executive Vice President of FIND/SVP, INC., a corporation, and that he, as such
officer, being authorized so to do, executed the foregoing instrument for the
purposes therein contained and acknowledged the same to be his free act and deed
individually and as such officer, and the free act and deed of the corporation.
IN WITNESS WHEREOF, I hereunto set my hand.
--------------------------
Notary Public
My Commission Expires:
STATE OF NEW YORK )
) ss.: New York
COUNTY OF NEW YORK )
On this the 22nd day of October, 1997, before me, the undersigned
officer, personally appeared Peter Fiorillo, who acknowledged himself to be the
Executive Vice President of FIND/SVP PUBLISHED PRODUCTS, INC., a corporation,
and that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained and acknowledged the same to be
his free act and deed individually and as such officer, and the free act and
deed of the corporation.
IN WITNESS WHEREOF, I hereunto set my hand.
--------------------------
Notary Public
My Commission Expires:
<PAGE>
SECTION HEADINGS PAGE
STATE OF CONNECTICUT )
) ss.: _________
COUNTY OF FAIRFIELD )
On this the 22nd day of October, 1997, before me, the undersigned
officer, personally appeared Arlene M. Doherty, who acknowledged herself to be a
Vice President of State Street Bank and Trust Company, a bank and trust company,
and that she, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained and acknowledged the same to be
her free act and deed individually and as such officer, and the free act and
deed of the bank and trust company.
IN WITNESS WHEREOF, I hereunto set my hand.
--------------------------
Notary Public
My Commission Expires:
<PAGE>
SECTION HEADINGS PAGE
SECOND MODIFICATION AGREEMENT EXHIBIT 3
Agreement, made as of September 30, 1997, among FIND/SVP, INC., a New
York corporation with an office located at 625 Avenue of the Americas, New York,
New York 10011-2002 ("FIND/SVP"); FIND/SVP PUBLISHED PRODUCTS, INC., a Delaware
corporation with an office located at 625 Avenue of the Americas, New York, New
York 10011-2002 ("FIND/SVP PUBLISHED"); FIND/SVP INTERNET SERVICES, INC., a
Delaware corporation with an office located at 625 Avenue of the Americas, New
York, New York 10011-2002 (the "Guarantor") (FIND/SVP and FIND/SVP Published are
sometimes individually referred to as the "BORROWER" and collectively referred
to as the "BORROWERS" and the Borrowers and the Guarantor are sometimes
individually referred to as the "OBLIGOR" and collectively referred to as the
"OBLIGORS") and STATE STREET BANK AND TRUST COMPANY, a Massachusetts bank and
trust company with an office located at 225 Franklin Street, Boston,
Massachusetts 02110-2804 (the "LENDER").
RECITALS
A. Pursuant to the Commercial Revolving Loan, Term Loan and Security
Agreement dated April 27, 1995 (the "1995 LOAN AGREEMENT"), the Lender extended
to the Borrowers the following: (a) a $2,000,000 revolving loan facility (the
"$2,000,000 REVOLVING LOAN") and (b) a $2,000,000 term loan facility (the
"$2,000,000 TERM LOAN") as evidenced by the $2,000,000 Commercial Revolving
Promissory Note dated April 27, 1995 (the "$2,000,000 REVOLVING NOTE") and the
$2,000,000 Commercial Term Promissory Note dated April 27, 1995 (the "$2,000,000
TERM NOTE"), respectively.
B. Pursuant to the Commercial Term Loan and Security Agreement dated
May 31, 1996 (the "1996 LOAN AGREEMENT"), the Lender extending to the Borrowers
a $500,000 term loan facility (the "$500,000 TERM LOAN") as evidenced by the
$500,000 Commercial Term Promissory Note dated May 31, 1996 (the "$500,000 TERM
NOTE").
C. The Lender has replaced the $2,000,000 Revolving Loan and the
$2,000,000 Revolving Note with the $2,500,000 revolving loan facility (the
"$2,500,000 REVOLVING LOAN") as evidenced by the $2,500,000 Replacement
Commercial Revolving Promissory Note dated July 24, 1997 (the "$2,500,000
REVOLVING NOTE").
D. Pursuant to the Guaranty dated July 24, 1997 (the "GUARANTY"), the
Guarantor guarantied the performance of the Borrowers' obligations to the
Lender, including, but not limited to, the loans set forth herein.
E. Pursuant to the Modification Agreement dated July 24, 1997 (the
"MODIFICATION AGREEMENT"), the Borrowers and the Lender modified the 1995 Loan
Agreement and the 1996 Loan Agreement.
F. The Borrowers have requested and the Lender has agreed to modify the
1995 Loan Agreement and 1996 Loan Agreement subject to the terms and conditions
below.
<PAGE>
AGREEMENT
In consideration of the Recitals, which are incorporated by this
reference, other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, and the mutual promises and covenants contained in this
Agreement, the parties, intending to be bound legally, agree as follows:
1. DEFINITIONS. All terms defined in the 1995 Loan Agreement, the 1996
Loan Agreement and all other documents executed in connection therewith
(collectively, the "LOAN DOCUMENTS") unless modified herein shall have the same
definitions set forth therein and are incorporated by this reference.
2. AMENDMENTS. All of the provisions of the Loan Documents shall remain
in full force and effect except as follows or as otherwise set forth in this
Agreement:
(a) The interest rate of "0.25% above the Prime Rate" in paragraph 1 of
the $2,500,000 Revolving Note and the Amended and Restated Exhibit A attached to
the 1995 Loan Agreement is deleted and the interest rate of "1.50% above the
Prime Rate" is substituted therefor.
(b) The date "September 30, 1997" in paragraph 4 of the $2,5000,000
Revolving Note and the Amended and Restated Exhibit A attached to the 1995 Loan
Agreement is deleted and the date "December 31, 1997" is substituted therefor.
(c) Paragraph 6 of the $2,5000,000 Revolving Note and the Amended and
Restated Exhibit A attached to the 1995 Loan Agreement is deleted is its
entirety and the following is substituted therefor:
"The Makers agree that if the Makers (i) shall fail to make
payments required under this Note when due, or (ii) an Event
of Default shall have occurred under the Loan Agreement or
any other documents executed in connection herewith or
therewith (including this Note and the Loan Agreement,
collectively the "LOAN DOCUMENTS") (an "EVENT OF DEFAULT"),
then, upon the occurrence of an Event of Default, the entire
indebtedness with accrued interest thereon due under this
Note shall, at the option of the Holder, accelerate and
become immediately due and payable without notice."
(d) The following is inserted in between paragraphs (p) and (q) of
Section 1.01 of the 1995 Loan Agreement:
"(p-1) "DEBT" shall mean at any date, without duplication:
(i) all obligations of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds (other than
performance bonds), debentures, notes or other similar
instruments;
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<PAGE>
(iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable and
accrued expenses arising in the ordinary course of business;
(iv) all obligations of such Person as lessee under Capital Leases;
(v) all Debt of others secured by a lien on any asset of such Person
whether or not such Debt is assumed by such Person; and
(vi) all Debt of others guarantied by such Person or entity."
(e) The words "deferred charges" are after the word "goodwill" in
paragraph (x) of Section 1.01 of the 1995 Loan Agreement:
(f) The following is inserted in between paragraphs (af) and (ag) of
Section 1.01 of the 1995 Loan Agreement:
"(af-1) "NET LOSS" shall mean, for the applicable period,
the consolidated net loss, excluding the effect of income
taxes benefits, of the Borrowers in accordance with GAAP."
(g) The following is inserted in between paragraph (at) and (au) of
Section 1.01 of the 1995 Loan Agreement:
"(at-1) "SUBORDINATED DEBT" shall mean Debt which is fully
subordinated to the Obligations."
(h) Paragraph (av) of Section 1.01 of the 1995 Loan Agreement is
deleted and the following is substituted therefor:
"(av) "TANGIBLE CAPITAL FUNDS" shall mean the Borrowers'
Tangible Net Worth plus Subordinated Debt plus the one time
tax affect for lost credits in an amount not to exceed
$100,000."
(i) The following is inserted in between paragraph (n) and (m) of
Section 1.01 of the 1996 Loan Agreement:
"(n-1) "DEBT" shall mean at any date, without duplication:
(i) all obligations of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds (other
than performance bonds), debentures, notes or other similar
instruments;
(iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
and accrued expenses arising in the ordinary course of
business;
(iv) all obligations of such Person as lessee under Capital
Leases;
(v) all Debt of others secured by a lien on any asset of such
Person whether or not such Debt is assumed by such Person;
and
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<PAGE>
(vi) all Debt of others guarantied by such Person or entity."
(j) The words "deferred charges" are after the word "goodwill" in
paragraph (u) of Section 1.01 of the 1996 Loan Agreement:
(k) The following is inserted in between paragraph (ai) and (aj) of
Section 1.01 of the 1996 Loan Agreement:
"(ai-1) "SUBORDINATED DEBT" shall mean Debt which is fully
subordinated to the Obligations."
(l) Paragraph (ak) of Section 1.01 of the 1996 Loan Agreement is
deleted and the following is substituted therefor:
"(ak) "TANGIBLE CAPITAL FUNDS" shall mean the Borrowers'
Tangible Net Worth plus Subordinated Debt plus the one time
tax affect for lost credits in an amount not to exceed
$100,000."
(m) The letter "(a)" in inserted before the word "Unless" in the first
sentence of Section 3.02 of the 1995 Loan Agreement.
(n) The following is inserted after the last sentence in Section 3.02
of the 1995 Loan Agreement:
"(b) Provided on or before December 31, 1997 the Borrowers (i) provide
to the Lender written notice (A) that either Borrowers have entered
into a final and definitive agreement with a third party, in form and
content acceptable to the Lender, to sell assets of either of the
Borrowers in an amount sufficient to pay off the outstanding
indebtedness of the Commercial Term Promissory Notes dated April 27,
1995 and May 31, 1996 from the Borrowers to the Lender; or (B) that
either Borrowers have received a capital contribution of not less than
$1,000,000, in form and manner acceptable to the Lender; and (ii) that
the Borrowers are in compliance with the terms and conditions of the
Loan Documents or no Event of Default has occurred, the Borrowers may
execute and deliver to the Lender a promissory note with the same
provisions, terms and conditions as the Revolving Note but for a
maturity date of March 26, 1998 (the "REPLACEMENT NOTE")."
(o) Section 3.06 (b) of the 1995 Loan Agreement is deleted in its
entirety and the following is substituted therefor:
"(b) COMMITMENT FEE. As additional consideration for the extension of
the Loans, commencing October 31, 1997, the Borrowers shall pay to the Lender a
non-refundable commitment fee of $5,000.00 per month for all revolving loans
from the Lender to the Borrowers while such revolving loan(s) are outstanding
which fee shall be deemed fully earned on the date hereof. Notwithstanding the
foregoing so long as a Event of Default has not occurred hereunder, the
Borrowers may defer payment of the commitment fee until the Maturity Date or,
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<PAGE>
if applicable, until the maturity date set forth in the Replacement Note."
(p) The following is inserted after Section 3.04 of the 1996 Loan
Agreement:
"Section 3.05 COMMITMENT FEE. As additional consideration for the
extension of the Loans, commencing October 31, 1997, the Borrowers shall pay to
the Lender a non-refundable commitment fee of $5,000.00 per month for all
revolving loans from the Lender to the Borrowers while such revolving loan(s)
are outstanding which fee shall be deemed fully earned on the date hereof.
Notwithstanding the foregoing so long as a Event of Default has not occurred
hereunder, the Borrowers may defer payment of the commitment fee until the
Maturity Date. "
(q) Section V. entitled "Representation and Warranties" of the 1995
Loan Agreement and the 1996 Loan Agreement is deleted and the following is
substituted therefor:
"The Borrowers represent and warrant to the Lender that:
(a) GOOD STANDING AND QUALIFICATION. FIND/SVP is a
corporation duly organized, validly existing and in good
standing under the laws of the state of New York. FIND/SVP
Published is a corporation duly organized, validly existing
and in good standing under the laws of the state of
Delaware. Each of the Borrowers has all requisite corporate
power and authority to own and operate its properties and to
carry on its business as presently conducted and is
qualified to do business and is in good standing as a
foreign corporation in each jurisdiction wherein the
character of the properties owned or leased by it therein or
in which the transaction of its business therein makes such
qualification necessary.
(b) CORPORATE AUTHORITY. The Borrowers have full
corporate power and authority to enter into and perform the
obligations under this Agreement, to make the borrowings
contemplated herein, to execute and deliver the Note, and
the other Loan Documents and to incur the obligations
provided for herein and therein, all of which have been duly
authorized by all necessary and proper corporate action. No
other consent or approval or the taking of any other action
in respect of shareholders or of any public authority is
required as a condition to the validity or enforceability of
this Agreement, the Note or any of the other Loan Documents.
The execution and delivery of this Agreement is for valid
corporate purposes and will not violate the Borrowers'
certificate of incorporation or bylaws.
(c) BINDING AGREEMENTS. This Agreement constitutes, and
the Note and the other Loan Documents delivered in
connection herewith shall constitute, valid and legally
binding obligations of the Borrowers, enforceable in
accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally.
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(d) LITIGATION. Except as set forth in SCHEDULE "5(D)",
there are no actions, suits, proceedings or investigations
pending or, to the knowledge of the officers of the
Borrowers, threatened against the Borrowers before any court
or administrative agency, which either in any case or in the
aggregate, if adversely determined, would materially and
adversely affect the financial condition, assets or
operations of the Borrowers, or which question the validity
of this Agreement, the Note, or any of the other Loan
Documents, or any action to be taken in connection with the
transaction contemplated hereby.
(e) NO CONFLICTING LAW OR AGREEMENTS. To the best of
the Borrowers' knowledge, the execution, delivery and
performance by the Borrowers of this Agreement, the Note and
the other Loan Documents (i) do not violate any provision of
the Certificate of Incorporation or Bylaws of the Borrowers,
(ii) do not violate any order, decree or judgment, or any
provision of any statute, rule or regulation, (iii) do not
violate or conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a default
under any shareholder agreement, stock preference agreement,
mortgage, indenture or contract to which the Borrowers are a
party, or by which any of its properties are bound, and (iv)
do not result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any
property or assets of the Borrowers except as contemplated
herein.
(f) TAXES. With respect to all taxable periods of the
Borrowers, the Borrowers have filed all tax returns required
to be filed by it and have paid all federal, state,
municipal, franchise and other taxes shown on such filed
returns have reserved against the same, as required by GAAP,
and the Borrowers know of no unpaid assessments against it.
(g) FINANCIAL STATEMENTS. The Borrowers have delivered
to the Lender the certified balance sheet of the Borrowers
as of December 31, 1996, and the certified related
statements of income, retained earnings and cash flows for
the fiscal year then ended. Such statements fairly present
the consolidated financial condition of the Borrowers as of
the dates and for the periods referred to therein and have
been prepared in accordance with GAAP applied on a
consistent basis by the Borrowers throughout the periods
involved. There are no liabilities, direct or indirect,
fixed or contingent, of the Borrowers as of the date of the
balance sheet which are not reflected therein or in the
notes thereto, other than liabilities or obligations not
material in amount which are not required to be reflected in
corporate balance sheets prepared in accordance with GAAP.
There has been no material adverse change in the financial
condition, business, operations, affairs or prospects of the
Borrowers since the date of such financial statements except
as set forth in SCHEDULE "5(G)".
(h) EXISTENCE OF ASSETS AND TITLE THERETO. The
Borrowers have good and marketable title to their properties
and assets, including, as of December 31,
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1996, the properties and assets reflected in the financial
statements referred to above. These properties and assets
are not subject to any mortgage, pledge, lien, lease,
security interest, encumbrance, restriction or charge except
those permitted under the terms of this Agreement or as set
forth in SCHEDULE "5(h)", and none of the foregoing prohibit
or interfere with ownership of the Borrowers' assets or the
operation of its business presently conducted thereon.
(i) REGULATIONS G, T, U AND X.The proceeds of the
borrowings hereunder will not be used, directly or
indirectly, for the purposes of purchasing or carrying any
margin stock in contravention of Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve
System.
(j) COMPLIANCE. The Borrowers are not in default with
respect to or in violation of any order, writ, injunction or
decree of any court or of any federal, state, municipal or
other governmental department, commission, board, bureau,
agency, authority or official, or in violation of any law,
statute, rule or regulation to which it or its properties is
or are subject, where such default or violation would
materially and adversely affect the financial condition of
the Borrowers. The Borrowers represent that they have not
received notice of any such default from any party. Except
as set forth in the attached SCHEDULE "5(d)", the Borrowers
are not in default in the payment or performance of any of
its obligations to any third parties or in the performance
of any mortgage, indenture, lease, contract or other
agreement to which it is a party or by which any of its
assets or properties are bound in an amount in excess of
$5,000.00.
(k) LEASES. The Borrowers enjoy quiet and undisturbed
possession under all leases under which it is operating, and
all such leases are valid and subsisting and the Borrowers
are not in default under any of its leases. The leases to
which each of the Borrowers are currently parties are set
forth on the attached SCHEDULE "5(k)".
(l) PENSION PLANS. To the best of the Borrowers'
knowledge, no fact, including but not limited to any
"REPORTABLE EVENT", as that term is defined in Section 4043
of ERISA, as the same may be amended from time to time
exists in connection with any Plan of the Borrowers which
might constitute grounds for termination of any such Plan by
the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States District Court
of a Trustee to administer any such Plan. No "PROHIBITED
TRANSACTION" as defined by ERISA exists or will exist upon
the execution and delivery of this Agreement or the
performance by the parties hereto of their respective duties
and obligations hereunder. The Borrowers agree to do all
acts including, but not limited to, making all contributions
necessary to maintain compliance with ERISA and agree not to
terminate any such Plan in a manner or do or fail to do any
act which could result in the imposition of a lien on any
property of the Borrowers pursuant to Section 4068 of ERISA.
The Borrowers have not incurred any withdrawal
7
<PAGE>
liability under the Multi-employer Pension Plan Amendment
Act of 1980. The Borrowers have no unfunded liability in
contravention of ERISA.
(m) OFFICE. The chief executive office and principal
place of business of the Borrowers, and the office where
their records concerning Collateral are kept are as set
forth in the first paragraph of this Agreement.
(n) PLACES OF BUSINESS. The Borrowers have no other
places of business and locates no Collateral, specifically
including books and records, at any location other than
those set forth in the attached SCHEDULE "5(n)".
(o) CONTINGENT LIABILITIES. The Borrowers are not a
party to any suretyship, guarantyship, or other similar type
agreement; and they have not offered their endorsement to
any individual, concern, corporation or other entity or
acted or failed to act in any manner which would in any way
create a contingent liability that does not appear in the
financial statements referred to above.
(p) CONTRACTS. No contract, governmental or otherwise,
to which the Borrowers are a party, is subject to
renegotiation, nor are the Borrowers in default of any
material contract.
(q) UNION CONTRACTS AND PENSION PLANS. The Borrower are
not a party to any collective bargaining, union or pension
plan agreement, except as set forth on the attached SCHEDULE
"5(q)". The pension plans set forth on SCHEDULE "5(q)" are
in full force and effect and are not currently subject to
the renegotiation. The Borrowers are in full compliance with
the terms and conditions of all such pension plans and knows
of no threatened work stoppage by any employees.
(r) LICENSES. To the best of the Borrowers' knowledge,
the Borrowers have all licenses, permits, approvals and
other authorizations required by any government, agency or
subdivision thereof, or from any licensing entity necessary
for the conduct of its business, all of which the Borrowers
represent to be current, valid and in full force and effect.
(s) COLLATERAL. The Borrowers are and shall continue to
be the sole owner of the Collateral free and clear of all
liens, encumbrances, security interests and claims except
the liens and the security interests granted to the Lender.
The Borrowers are fully authorized to sell, transfer, pledge
or grant to the Lender a security interest in each and every
item of the Collateral; all documents and agreements related
to the Collateral shall be true and correct and in all
respects what they purport to be; all signatures and
endorsements that appear thereon shall be genuine and all
signatories and endorsers shall have full capacity to
contract; none of the transactions underlying or giving rise
to the Collateral shall violate any applicable state or
federal laws or regulations; all documents relating to the
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<PAGE>
Collateral shall be legally sufficient under such laws or
regulations and shall be legally enforceable in accordance
with their terms; and the Borrowers agree to defend the
Collateral against the claims of all persons other than the
Lender.
(t) FINANCIAL INFORMATION. All financial information
including, but not limited to, information relating to the
Accounts submitted by the Borrowers to the Lender, whether
previously or in the future, is and will be true and correct
in all material respects, and is and will be complete
insofar as may be necessary to give the Lender a true and
accurate knowledge of the subject matter.
(u) ENVIRONMENTAL HEALTH AND SAFETY LAWS. The Borrowers
have not received any notice, order, petition, or similar
document in connection with or arising out of any violation
or possible violation of any environmental health or safety
law, regulation or order, and the Borrowers know of no basis
for any such violation or threat thereof for which it may
become liable.
(v) PARENT, AFFILIATE OR SUBSIDIARY CORPORATIONS. The
Borrowers have no parent corporation and, except as set
forth on the attached SCHEDULE "5(w)", have no domestic or
foreign Affiliate or Subsidiary corporations."
(r) The phrase "Certificate of Compliance, for any and all loans from
the Lender to the Borrowers, in the form of the Amended and Restated Exhibit "C"
and" is inserted before the words "internally prepared financial statements" in
Section 6.01(c) to the 1995 Loan Agreement and the 1996 Loan Agreement.
(s) The following is inserted after paragraph (c) of Section 6.01 of
the 1995 Loan Agreement and the 1996 Loan Agreement:
"(c-1) within ten (10) days after the end of each month each of
the following which shall include FIND/SVP Internet Services, Inc.:
(i) accounts receivable and accounts payable aging for the preceding
month, (ii) a statement, in form and content acceptable to the Lender,
comparing the cash disbursement and receipts for the last two (2)
preceding months, (iii) a monthly statement, in form and content
acceptable to the Lender, of Capital Assets not previously reported on
any financial statements along with any applicable schedules or
attachments and (iv) a Certificate of Compliance is the form of the
attached EXHIBIT "C" ; and"
(t) The following is inserted after paragraph (n) of Section 6.02 of
the 1995 Loan Agreement and the 1996 Loan Agreement:
"(o) MANAGEMENT ADVISOR, SUMMARY REPORT AND BUSINESS PLAN. (i) On or
before November 1, 1997, select, in their sole and absolute discretion, a
management advisor from the list of approved advisors provided to the Borrower
by the Lender to prepare a summary report of the condition, financial and
otherwise, of the Borrower and review the operations of the
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Borrower and assist in the preparation and implementation of the Borrower's
business plan as more particularly set forth below and assist in securing
additional financing, if necessary. Such management advisor shall report
directly to the Board of Directors of the Borrower.
(ii) Upon receipt and review of the summary report as set forth below
and the Borrower's business plan, the Lender will have the option, in its sole
and absolute discretion, to require the management advisor to assist the
Borrower during the implementation of the Borrower's business plan and to
continue until such time as such services are no longer necessary or
appropriate.
(iii) On or before December 4, 1997, submit true and complete copies of
the management advisor's summary report and the Borrower's business plan and
annual budget for the period ending December 31, 1998 including a balance sheet,
income statement, sources and uses of cash statement and all schedules and
attachments thereto along with a certified copy of the resolutions of the
Borrower's board of directors approving such business plan and annual budget."
(u) Section 6.03 of the 1995 Loan Agreement and 1996 Loan Agreement is
deleted and the following is substituted therefor:
"6.03 NEGATIVE COVENANTS. The Borrowers covenant and
agree that from the date hereof until payment in full of all
Obligations and termination of this Agreement, the Borrowers
shall not without the prior written consent of the Lender:
(a) ENCUMBRANCES. Except as set forth on the attached
SCHEDULE "5(H)", incur or permit to exist any lien,
mortgage, charge or other encumbrance against any of its
properties or assets, whether now owned or hereafter
acquired, except: (i) liens required or expressly permitted
by this Agreement; (ii) pledges or deposits in connection
with or to secure worker's compensation, unemployment or
liability insurance; (iii) tax liens which are being
contested in good faith and for which sufficient reserves
have been maintained in compliance with this Agreement and
(iv) purchase money security interest and other encumbrances
incurred in the ordinary course of business of the
Borrowers;
(b) LIMITATION ON INDEBTEDNESS. Except for FIND/SVP's
$59,000 Limited Guaranty of a $100,000 loan made by the
Lender to Peter Fiorillo, create, incur or guaranty any
indebtedness or obligation for trade debt, borrowed money
from, or issue or sell any obligations of the Borrowers to
any lender or Person other than the Lender.
(c) CONTINGENT LIABILITIES. Assume, guaranty, endorse
or otherwise become liable upon the obligations of any
person, firm or corporation, or enter into any purchase or
option agreement or other arrangement having substantially
the same effect as such a guarantee, except by the
endorsement of negotiable
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instruments for deposit or collection or similar
transactions in the ordinary course of business.
(d) CONSOLIDATION OR MERGER. Merge into or consolidate
with or into any corporation.
(e) LOANS, ADVANCES, INVESTMENTS. Use the proceeds of
the Loan, either directly or indirectly, to make or permit
to exist any loans or advances to, or purchase any stock,
other than securities or evidences or indebtedness of, or
make or permit to exist any investment, including without
limitation the acquisition of stock of a corporation, or
acquire any interest whatsoever in, any other person or
entity.
(f) SALE AND LEASE OF ASSETS. Sell, lease or otherwise
dispose of any of their assets, except in the ordinary
course of business, without the Lender's written consent
which shall not be unreasonably withheld and shall be
requested by the Borrowers at least fifteen days prior any
closing, except for replacement of equipment having a
substantially equal or greater value than the equipment
replaced or sold in the ordinary course of business. The
Borrowers acknowledge and agree that it shall not be
unreasonable for the Lender to withhold consent in the event
the net proceeds from the sale of their assets are not in an
amount sufficient to pay off the outstanding indebtedness of
the Commercial Term Promissory Notes dated April 27, 1997
and May 31, 1997 from the Borrower, among others, to the
Lender
(g) NAME CHANGES. Change its corporate name or conduct
its business under any trade name other than as set forth in
this Agreement.
(h) CHANGE OF CONTROL. Suffer any Change in Control of
the Borrowers.
(i) PROHIBITED TRANSFERS. Transfer, in any manner,
either directly or indirectly, any cash, property, or other
assets to any parent or any Affiliate or Subsidiary, other
than sales made in the ordinary course of business and for
fair consideration on terms no less favorable than if such
sale had been an arms-length transaction between the
Borrowers and an unaffiliated entity.
(j) USE OF PROCEEDS. Apply any of the proceeds from the
Loans to any Affiliate or Subsidiary if such Affiliate or
Subsidiary is not a party to this loan transaction except
for FIND/SVP Internet Services, Inc.
(k) NO MANAGEMENT/OWNERSHIP CHANGE. Suffer any change
in the management or ownership of the Borrowers which the
Lender deems, in its reasonable discretion, to be a
material adverse change.
(l) LEASEBACKS. Lease any real estate or other capital
asset from any
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lessor who shall have acquired such property from the
Borrowers.
(m) BUSINESS OPERATIONS. Engage in any business other
than the business in which it is currently engaged or a
business reasonably related thereto.
(o) ASSIGNMENT OF CLAIMS ACT. Take any action or fail
to take any action, either directly or indirectly, or
cooperate in any way, so as to allow any party, other than
the Lender, to comply with the Federal Assignment of Claims
Act."
(p) Additional Investments. The Borrowers covenant and
agree to not receive any additional investments, including,
but not limited to the proceeds under the Standby Letter of
Credit, unless such investment is in the form of
Subordinated Debt, in form and manner acceptable to the
Lender, or an equity investment in the Borrower(s).
(v) Section 6.04(a) of the 1995 Loan Agreement and of the 1996 Loan
Agreements deleted and the following is substituted therefor:
"(a) TANGIBLE CAPITAL FUNDS. Permit at any time their
tangible capital funds which will be tested monthly to be
less than the following:
DATES TANGIBLE CAPITAL FUNDS
September 30, 1997 $4,425,000
October 31, 1997 $4,305,000
November 30, 1997 $4,200,000
Subject to the conditions precedent set forth in Section 3.02(b)
above, the Borrowers shall not permit at any time its Tangible Capital
Funds to be less than the following which will be tested monthly:
December 31, 1997 $4,095,000
January 31, 1998 $3,990,000
February 28, 1998 $3,970,000
(w) Sections 6.04(b) and (c) of the 1995 Loan Agreement and the 1996
Loan Agreement are deleted in their entirety.
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(x) Section 6.04(d) of the 1995 Loan Agreement and the 1996 Loan
Agreement is amended and the phrase "which will be tested monthly" is inserted
after the word "time".
(y) Section 6.04(e) of the 1995 Loan Agreement and of the 1996 Loan
Agreement is deleted and the following is substituted therefor:
(e) NET INCOME. Permit any of the following to occur which will be
tested monthly:
(i) Net Loss to be greater than $225,000 for the month ended
September 30, 1997;
(ii) Net Loss to be greater than $200,000 for the month ending
October 31, 1997;
(iii) Net Loss to be greater than $175,000 for the month ending
November 30, 1997;
Subject to the conditions precedent set forth in Section 3.02(b) above,
the Borrowers shall not permit at any time its Tangible Capital Funds
to be less than the following which will be tested monthly:
(i) Net Loss to be greater than $175,000 for the month ending
December 31, 1997;
(ii) Net Loss to be greater than $175,000 for the month ending
January 31, 1998; or
(iii) Net Loss to be greater than $50,000 for the month ending
February 28, 1998.
(z) The following is inserted after Section 6.04(e) of the 1995 Loan
Agreement and the 1996 Loan Agreement:
"(f) MAXIMUM CAPITAL EXPENDITURES. Permit Capital Expenditures to
exceed $75,000.00 a month on a cumulative basis to be tested monthly."
(aa) Section 9.05 of the 1995 Loan Agreement is deleted and the
following is substituted therefor:
"The Loan shall be cross-defaulted with each other and with current and
future financing accommodations extended or to be extended by the
Lender to the Borrowers and with all Subordinated Debt so that a
default under any loan to the Borrowers shall be an Event of Default
hereunder and under all of the other loans
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extended by the Lender."
(bb) Section 9.05 of the 1996 Loan Agreement is deleted and the
following is substituted therefor:
"The Loans shall be cross-defaulted with each other and with current
and future financing accommodations extended or to be extended by the
Lender to the Borrowers and with all Subordinated Debt so that a
default under any loan to the Borrowers shall be an Event of Default
hereunder and under all of the other loans extended by the Lender."
3. FURTHER REQUIREMENTS. Simultaneous with the execution and delivery
of this Agreement, the Borrowers shall deliver to the Lender the following:
(a) a Good Standing Certificate issued by the Secretary of
State of the State of incorporation for each Borrower and from each state the
Borrowers are qualified to do business as a foreign corporation; and
(b) such other documentation as is required by the Lender,
all in form and content satisfactory to the Lender.
4. ACKNOWLEDGMENTS. Each of the Obligors acknowledges and agrees that:
(a) The aggregate amount of indebtedness of which the
Obligors are jointly, severally, legally, validly and enforceably indebted to
the Lender under the Loan Documents, as amended, replaced and supplemented by
this Agreement and all other documents executed in connection herewith
(collectively, the "AMENDED LOAN DOCUMENTS") without defense, counterclaim or
offset as of October 17, 1997 is: (i) $1,000,000.00 with respect to the
$2,000,000 Term Loan and (ii) $1,841,959 with respect to the $2,500,000
Revolving Loan; and (iii) $350,000.00 with respect to the $500,000 Term Loan
(the "EXISTING DEBT") plus interest accruing therein.
(b) The Borrowers are jointly and severally legally, validly
and enforceably liable for any and all reasonable costs and expenses of
collection and attorneys' fees related to or in any way arising out of the
Amended Loan Documents and the Existing Debt.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
representations, warranties and covenants contained in the Loan Documents are
true and correct on and as of the date hereof except to the extent that any of
the foregoing may have been amended and restated as set forth in Section 2(s)
above. Without limiting the generality of the foregoing, the Obligors jointly
and severally represent, warrant and covenant that:
(a) NO LIQUIDATION. There are no liquidation or dissolution
proceedings pending or threatened against the Obligors and no other event has
occurred which affects or threatens the corporate existence of the Obligors.
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<PAGE>
(b) ADVISED BY COUNSEL. The Obligors each acknowledge that
(i) they have been advised by counsel in the preparation, negotiation, execution
and delivery of this Agreement; (ii) they have made an independent decision to
enter into this Agreement without reliance on any representation, warranty,
covenants or undertaking by the Lender, (iii) the Lender has no fiduciary
obligation toward any of the Obligors with respect to this Agreement or the
other Amended Loan Documents, (iv) the relationship between the Obligors and the
Lender pursuant to this Agreement and the other Amended Loan Documents is and
shall be solely that of debtor and creditor, respective; and (v) each of the
Obligors understands the meaning and legal effect of this Agreement.
(c) SECRETARIES' CERTIFICATE. The resolutions contained in
the Secretaries' Certificates of the Borrowers dated April 27, 1995, May 31,
1996 and July 21, 1997 and the resolutions contained in the Secretary's
Certificate of the Guarantor dated July 21, 1997 (collectively, the
"RESOLUTIONS") have not in any way been rescinded or modified and have been in
full force and effect since their adoption to and including the date hereof and
are now in effect. The Resolutions are the only proceedings of the Obligors now
in force relating to or affecting the matters referred to therein except for the
resolution dated October 26, 1996 and authorize the Obligors to make the
modifications described herein and the resolutions referenced in the Officers'
Certificates of FIND/SVP, Inc. dated October 21, 1997, FIND/SVP Published
Products, Inc. dated October 21, 1997 and the Guarantor dated October 21, 1997.
(d) NO LITIGATION. Except as set forth in Section 2(s)
above, there are no pending, or to any of the Obligors' knowledge threatened,
legal proceedings to which any of the Obligors is a party and which materially
adversely affect the transactions contemplated by this Agreement or the other
Amended Loan Documents or materially adversely affect their abilities to conduct
their businesses.
(e) COMPLIANCE WITH LAW. The execution and delivery of this
Agreement, the consummation of the transactions contemplated herein, the
fulfillment of or compliance with the terms and conditions of this Agreement or
any of the other Amended Loan Documents is not prevented or limited by, or
conflicts with or results in a breach of terms, conditions or provisions of the
Obligers' certificate of incorporation and bylaws or any evidence of
indebtedness, agreement or instrument of whatever nature to which the Obligors
are now a party or by which any of the Borrowers are bound, or constitutes a
default under any of the foregoing.
(f) NO VIOLATION OF LAW. To the best of their knowledge,
each of the Obligors is not in violation of any federal, state or local law,
regulation or order, and each of the Obligors has not received any notice of any
such violation.
(g) PRESERVED COLLATERAL. Each of the Obligors shall
preserve, maintain and protect the security provided for in the Amended Loan
Documents and shall defend the rights and interests of the Lender in the
Collateral (as defined in the Security Agreement) against the claims and demands
of all persons.
(h) NOTICE OF DEFAULT. As soon as any of the Obligors
becomes aware that
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<PAGE>
any Event of Default exists or has occurred, whether under this Agreement, any
of the other Amended Loan Documents or any other agreements for borrowed money
regardless of whether such other agreement has been entered into with the
Lender, such Obligors will immediately notify and thereafter deliver to the
Lender a written notice specifying the nature and duration thereof, and what
action such Obligor is taking or proposes to take with respect thereof.
(i) GOOD STANDING AND QUALIFICATION. Each of the Obligors is
a corporation duly organized, validly existing and in good standing under the
laws of the state of incorporation as set forth on the first page of this
Agreement. Each of the Obligors has all requisite corporate power and authority
to own and operate its properties and to carry on its businesses as presently
conducted and is qualified to do business and to be in good standing as a
foreign corporation in each jurisdiction where the character of the property
owned or leased by it therein or in which the transaction of its business
therein makes such qualifications necessary.
(j) CORPORATE AUTHORITY. The Obligors have full corporate
power and authority to enter into and perform the obligations under this
Agreement, to execute and deliver the Amended Loan Documents and to incur the
obligations provided for herein and therein, all of which have been duly
authorized by all necessary and proper corporate action. No other consent or
approval or the taking of any other action in respect of shareholders or any
public authority is required as a condition to the validity or enforceability of
this Agreement, or any of the other Amended Loan Documents. The execution and
delivery of this Agreement is for valid corporate purposes.
(k) BINDING AGREEMENT. This Agreement and the other Amended
Loan Documents constitute valid and legally binding obligations of the Borrowers
enforceable against each in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
(l) COMPLIANCE. Each of the Obligors is not in default with
respect to or in violation of any order, writ, injunction or decree of any court
or of any federal, state municipal or other governmental department, commission,
board, bureau, agency, authority or official, or in violation of any law,
statute, rule or regulation to which they or their properties is or are subject,
where such default or violation would materially and adversely affect the
financial condition of any of the Borrowers. Each of the Borrowers represents
that it has not received notice of any such default from any party. Each of the
Borrowers is not in default from the payment or performance of any of its
respective obligations to any third parties or in the performance of any
mortgage, indenture, lease, contract or other agreement to which it is a party
or by which any of its assets or properties are bound.
6. WAIVER OF COVENANT DEFAULTS. The Lender waives the covenant defaults
by the Borrowers for the period ended June 30, 1997 for Section 6.04 of the 1995
Loan Agreement and the 1996 Loan Agreement.
7. SECURITY AGREEMENT REAFFIRMATION. (a) The Borrowers acknowledge,
agree and reaffirm that the 1995 Loan Agreement and the 1996 Loan Agreement
shall secure all of the
16
<PAGE>
obligations of the Borrowers to the Lender including, but not limited to, the
obligations of the Borrowers under (i) the $2,000,000 Term Note and the
$2,500,000 Revolving Note, and (ii) the $500,000 Term Note, respectively
(b) The Guarantor acknowledges, agrees and reaffirms that
its Security Agreement dated July 27, 1997 shall secure all of the obligations
of the Guarantor to the Lender including, but not limited to, the obligations of
the Guarantor under the Guaranty.
8. EVENTS OF DEFAULT. The occurrence of any Event of Default under any
of the other Amended Loan Documents or the non-compliance with any of the
material terms, or material misrepresentation or inaccuracy of any of the
acknowledgments or representations hereof shall constitute an Event of Default
under this Agreement.
9. REMEDIES. Upon the occurrence of any Event of Default, the Lender
shall have in any jurisdiction where enforcement hereof is sought, in addition
to all other rights and remedies which the Lender may have under law and equity,
all of the rights and remedies set forth in the Amended Loan Documents.
10. CUMULATIVE REMEDIES. The enumeration of the Lender's rights and
remedies set forth in this Agreement and the other Amended Loan Documents is not
intended to be exhaustive and the exercise by the Lender of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative and shall be in addition to any other right or remedy given
hereunder or under any other agreement between the parties or which may now or
hereafter exist in law or at equity or by suit or otherwise. No delay or failure
to take action on the part of the Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any of the Obligors and the Lender or their employees shall be effective
to change, modify or discharge any provision of this Agreement or to constitute
a waiver of any default.
11. AMENDMENT AND RESTATEMENT. Upon the execution of this Agreement and
all other documents executed in connection herewith, the other Loan Documents
are restated to the extent that this Agreement and all other documents executed
in connection herewith, restates them and are amended to the extent that this
Agreement and all other documents executed in connection herewith amends them.
Except as specifically amended by the terms of this Agreement or any other
documents executed in connection herewith, all terms and conditions set forth in
the Loan Documents, together with all schedules and exhibits attached thereto,
shall remain in full force and effect. This Agreement and all other documents
executed in connection herewith, to the extent that any of them are inconsistent
with the Loan Documents, supersedes the Loan Documents and any and all prior
written or oral amendments to the Loan Documents.
12. NOTICES. All notices, requests, consents, demands and other
communications hereunder shall be in writing and shall be mailed by registered
or certified first class mail or delivered by an overnight courier to the
respective parties to this Agreement as follows:
17
<PAGE>
If to the Borrowers:
Find/SVP, Inc.
625 Avenue of the Americas
New York, New York 10011-2002
Attn: Mr. Peter Fiorillo
Chief Financial Officer
Find/SVP Published Products, Inc.
625 Avenue of the Americas
New York, New York 10011-2002
Attn: Mr. Peter Fiorillo
Chief Financial Officer
If to the Guarantor:
Find/SVP Internet Services, Inc.
625 Avenue of the Americas
New York, New York 10011-2001
Attn: Mr. Peter Fiorillo
Chief Financial Officer
With a copy to:
Breslow & Walker, LLP
767 Third Avenue
New York, New York 10011
Attn: Gary T. Moomjian, Esq.
If to the Lender:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110-2804
Attn: Ms. Arlene M. Doherty
Vice President
With a copy to:
Diserio Martin O'Connor & Castiglioni, LLP
One Atlantic Street
Stamford, Connecticut 06901
Attn: Kevin T. Katske, Esq.
13. EXPENSES. The Obligors agree that each is jointly and severally
responsible for
18
<PAGE>
the payment to the Lender for the preparation, negotiation and consummation of
this Agreement and the other Amended Loan Documents which includes without
limitation, reasonable attorneys' fees and related disbursements.
14. MISCELLANEOUS.
(a) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures were upon the same instrument. It shall not be necessary in
making proof of this Agreement to produce or account for more than one
counterpart.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Obligors shall not assign this Agreement,
or any related document, or any of their rights without the prior written
consent of the Lender.
(c) FAILURE OR DELAY NOT A WAIVER. No delay or omission by
the Lender to exercise any right under this Agreement or the other Amended Loan
Documents shall impair any such right, and any such delay or omission shall not
be construed to be a waiver thereof. A waiver of any single breach or default
under this Agreement or the other Amended Loan Documents shall not be deemed a
waiver of any other breach or default. Any waiver, amendment to, consent or
approval under this Agreement or the other Amended Loan Documents by the Lender
must be in writing to be effective and must be signed by the Lender.
(d) SEVERABILITY. If any provision of this Agreement or the
other Amended Loan Documents shall be determined to be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions, and of such provision in other jurisdictions, shall
not be affected or impaired thereby.
(e) HEADINGS. Section headings are for convenience of
reference only, and shall not affect the interpretation or meaning of any
provision of this Agreement.
(f) GOVERNING LAW AMENDED. This Agreement and the other Loan
Documents, and all transactions, assignments and transfers hereunder and
thereunder, and all the rights of the parties, shall be governed as to validity,
construction, enforcement and in all other respects by the laws of the
Commonwealth of Massachusetts. The Obligors agree that the courts of the
Commonwealth of Massachusetts or the United States District Courts in the
Commonwealth of Massachusetts shall have jurisdiction to hear and determine any
claims or disputes pertaining to the financing transactions of which this
Agreement is a part and/or to any matter arising or in any way related to this
Agreement or any other agreement between the Lender and the Obligors expressly
submit and consent in advance to such jurisdiction in any action or proceeding.
(g) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties, and supersedes all prior discussions and
negotiations relating to the subject matter hereof. The terms of this Agreement
cannot be changed or terminated orally, and shall be deemed effective as of the
date accepted by the Lender by its duly authorized officer. This
19
<PAGE>
Agreement and the other Amended Loan Documents may not be amended or terminated
except by a writing signed by the party against whom enforcement thereof is
sought.
15. RELEASE. EACH OF THE OBLIGORS RELEASES, REMISES AND DISCHARGES THE
LENDER, JOINTLY AND SEVERALLY, FROM ALL ACTIONS, CAUSES OF ACTIONS, SUITS, SUMS
OF MONEY, COVENANTS, CONTRACTS, CONTROVERSIES, AGREEMENTS, PROMISES, VACANCIES,
TRESPASSES, DAMAGES, JUDGMENTS, EXTENTS, EXECUTIONS, CLAIMS AND DEMANDS IN LAW
OR EQUITY WHICH ANY OF THE OBLIGORS EVER HAD, NOW HAS OR WHICH ANY OF THEM SHALL
HAVE AGAINST THE LENDER ARISING OUT OF ANY ACTION, OR INACTION OF THE LENDER IN
CONNECTION WITH THE LOAN DOCUMENTS OCCURRING PRIOR TO THE DATE OF THIS
AGREEMENT.
16. JURY TRIAL WAIVER. EACH OF THE OBLIGORS WAIVES TRIAL BY JURY IN ANY
COURT AND IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION
WITH OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AND THE
OTHER AMENDED LOAN DOCUMENTS ARE A PART OR THE ENFORCEMENT OF ANY OF THE BANK'S
RIGHTS AND REMEDIES. THE OBLIGORS ACKNOWLEDGE THAT EACH MAKES THIS WAIVER
KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER EXTENSIVE CONSIDERATION OF
THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.
20
<PAGE>
The parties hereto have executed this Agreement on the date first
written above.
FIND/SVP, INC.
By ___________________________
Its
FIND/SVP PUBLISHED PRODUCTS, INC.
By ___________________________
Its
FIND/SVP INTERNET SERVICES, INC.
By ________________________________
Its
STATE STREET BANK AND TRUST COMPANY
By ___________________________
Arlene M. Doherty
Its Vice President
21
<PAGE>
STATE OF NEW YORK )
) ss.: City of New York
COUNTY OF NEW YORK )
On this the 22nd day of October, 1997, before me, the undersigned
officer, personally appeared _________________, who acknowledged himself to be
the __________ of FIND/SVP, INC. , a corporation, and that he, as such officer,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained and acknowledged the same to be his free act and deed
individually and as such officer, and the free act and deed of the corporation.
In Witness Whereof, I hereunto set my hand.
--------------------------
Notary Public
My Commission Expires:
STATE OF NEW YORK )
) ss.: City of New York
COUNTY OF NEW YORK )
On this the 22nd day of October, 1997, before me, the undersigned
officer, personally appeared ______________, who acknowledged himself to be the
____________ of FIND/SVP PUBLISHED PRODUCTS, INC., a corporation, and that he,
as such officer, being authorized so to do, executed the foregoing instrument
for the purposes therein contained and acknowledged the same to be his free act
and deed individually and as such officer, and the free act and deed of the
corporation.
In Witness Whereof, I hereunto set my hand.
--------------------------
Notary Public
My Commission Expires:
22
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