<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the quarterly period ended March 31, 1996 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the transition period from ____________ to
____________
Commission file number 0-27444
F.Y.I. INCORPORATED
----------------------
(Exact name of registrant as specified in its charter)
Delaware 75-2560895
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) No.)
3232 McKinney Avenue, Suite 900, Dallas, Texas 75204
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (214) 953-7555
2911 Turtle Creek Boulevard, Suite 300, Dallas, Texas 75219
(Former address)
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.
Yes X No
------- -------
As of April 30, 1996, 5,269,615 shares of the registrant's Common
Stock, $.01 par value per share, were outstanding.
1
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F.Y.I. INCORPORATED AND SUBSIDIARIES
FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1996
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
---------------------
Item 1 Financial Statements 3
Consolidated Balance Sheets - December 31, 1995 and March 31, 1996 4
(unaudited)
Consolidated Statements of Operations - Three months ended March 31,
1996 and three months ended March 31, 1995 (unaudited) 5
Consolidated Statement of Cash Flows - Three months ended March 31,
1996 and three months ended March 31, 1995 (unaudited) 6
Notes to financial statements - March 31, 1996 (unaudited) 7
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations 9
PART II. OTHER INFORMATION
-----------------
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Index to Exhibits 14
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
General Information
F.Y.I. Incorporated ("FYI") was incorporated in September 1994 for the
purpose of creating a national provider of document management services in
various industries, primarily healthcare, professional and legal services and
financial services. Simultaneously with the closing of its initial public
offering (the "Offering") on January 23, 1996, FYI and separate wholly owned
subsidiaries acquired (the "Merger") seven companies (the "Founding Companies")
located in California, Maryland, Texas, Pennsylvania, and Michigan. The
consideration for the stock of the Founding Companies consisted of a
combination of cash and common stock of FYI.
Between September 1994 and the consummation of the Offering, FYI had not
conducted any operations and all activities until the Offering related to the
Merger and the Offering. For accounting purposes and for the purposes of the
presentation of the financial statements herein, January 31, 1996, has been
used as the effective date of the Merger.
Operating results for the interim periods is not necessarily indicative of
the results for full years. It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements of
FYI and the Founding Companies and the notes thereto included in FYI's Annual
Report on Form 10-K filed with the Securities and Exchange Commission (the
"Commission") on April 10, 1996, as amended by FYI's Form 10-K/A, filed with
the Commission on April 29, 1996.
3
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F.Y.I. Incorporated and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share data)
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
----------- ----------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 52 $10,037
Accounts receivable and notes receivable, less allowance - 8,369
Accounts receivable, officers and employees - 77
Inventory - 349
Prepaid expenses and other current assets 52 499
------ -------
Total current assets 104 19,331
PROPERTY, PLANT AND EQUIPMENT, net 15 5,116
GOODWILL, DEFERRED OFFERING COSTS AND
OTHER INTANGIBLES 2,190 1,749
ACCOUNTS RECEIVABLE, OFFICER - LONG TERM - 644
OTHER NONCURRENT ASSETS 6 559
------ -------
Total assets $2,315 $27,399
====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $1,101 $ 7,155
Short-term obligations - 47
Current maturities of long-term obligations - 227
------ -------
Total current liabilities 1,101 7,429
LONG-TERM OBLIGATIONS,
net of current maturities - 634
DEFERRED INCOME TAXES,
net of current portion - 129
------ -------
Total liabilities 1,101 8,192
------ -------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, Series A, $.01 par value, 1,000,000
and 0 shares authorized, 9,000 and 0 shares issued
and outstanding at December 31, 1995 and March 31,
1996, respectively - -
Preferred stock, $.01 par value, 1,000,000 shares
authorized, 0 shares issued and outstanding - -
Common stock, $.01 par value, 26,000,000 shares
authorized 663,125 and 5,269,615 shares issued
and outstanding at December 31, 1995 and March 31,
1996, respectively 7 53
Additional paid-in-capital 1,207 18,756
Retained earnings - 398
------ -------
Total stockholders' equity 1,214 19,207
------ -------
Total liabilities and stockholders' equity $2,315 $27,399
====== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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F.Y.I. Incorporated and Subsidiaries
Consolidated Statements of Operations
(dollars in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
-----------------------------
March 31, March 31,
1995 1996
---------- ----------
<S> <C> <C>
REVENUES:
Service revenue $- $7,407
Product revenue - 913
Other revenue - 93
-- ------
Total revenue - 8,413
COST OF SERVICES - 4,701
COST OF PRODUCTS SOLD - 718
DEPRECIATION - 212
-- -----
Gross profit - 2,782
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 2,253
-- -----
Operating income - 529
OTHER (INCOME) EXPENSE:
Interest expense - 14
Interest income - (106)
Other - (39)
-- -----
Income before income taxes - 660
PROVISION FOR INCOME TAXES - 262
-- -----
NET INCOME $- $398
== =====
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - 5,286
== =====
NET INCOME PER COMMON SHARE $- $.08
== =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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F.Y.I. Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
--------------------
March 31, March 31,
1995 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ - $ 398
Adjustments to reconcile net income to net cash provided
by operating activities
Amortization and depreciation - 305
Change in operating assets and liabilities:
Accounts receivable - (220)
Inventories - (51)
Prepaid expenses and other assets - 2,022
Accounts payable and accrued liabilities - 59
------ -------
Net cash provided by operating activities - 2,513
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (4) (617)
Cash paid for acquisitions, net of cash received - (6,509)
------ -------
Net cash used for investing activities (4) (7,126)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering, net of underwriting
discounts and other costs (128) 22,280
Proceeds from preferred stock issuance 135 -
Principal payments on short-term obligations - (2)
Principal payments on long-term obligations - (7,680)
------ -------
Net cash provided by financing activities 7 14,598
NET INCREASE IN CASH AND CASH EQUIVALENTS 3 9,985
CASH AND CASH EQUIVALENTS, beginning of period 669 52
------ -------
CASH AND CASH EQUIVALENTS, end of period $ 672 $10,037
====== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
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F.Y.I. Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION:
Simultaneously with the closing of its initial public offering (the
"Offering") on January 23, 1996, F.Y.I. Incorporated ("FYI") and separate
wholly owned subsidiaries (the "Company") acquired by merger (the "Merger")
seven companies (the "Founding Companies") located in California, Maryland,
Texas, Pennsylvania, and Michigan. The consideration for the stock of the
Founding Companies consisted of a combination of cash and common stock of FYI.
In the opinion of FYI's management, the accompanying consolidated financial
statements include the accounts of the Company and all adjustments necessary to
present fairly the Company's financial position at March 31, 1996, its results
of operations for the three months ended March 31, 1996 and 1995, and cash
flows for the three months ended March 31, 1996, and 1995. All significant
intercompany accounts have been eliminated. Although the Company believes that
the disclosures are adequate to make the information presented not misleading,
certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. These consolidated financial
statements should be read in conjunction with the combined financial statements
of the Founding Companies and the related notes thereto in FYI's Annual Report
on Form 10-K filed with the Securities and Exchange Commission (the
"Commission") on April 10, 1996, as amended by FYI's Form 10-K/A, filed with
the Commission on April 29, 1996. The results of operations for the three
month periods ended March 31,1996 and 1995, may not be indicative of the
results for the full year.
2. INITIAL PUBLIC OFFERING OF COMMON STOCK AND MERGER:
Initial Public Offering
On January 26, 1996, the FYI completed the Offering of 2,185,000 (including
the exercise of the underwriters' over-allotment option) shares of common
stock at $13.00 per share for proceeds, net of underwriter commissions and
estimated offering costs, of approximately $22.3 million. Of these net
proceeds, approximately $7.1 million was used to pay a portion of the
consideration for the Merger, and approximately $7.7 million was used to retire
certain indebtedness of the Founding Companies and the remainder will be used
for future acquisitions and general corporate purposes.
Upon closing of the Offering, the Company converted the 9,000 shares of
Series A Preferred Stock into 542,557 shares of common stock.
7
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Merger
Simultaneously with the closing of the Offering mentioned above, the
Company acquired the Founding Companies. The Company issued 1,878,933 shares
of common stock to the stockholders of the Founding Companies, in addition to
the consideration mentioned above, to effect the Merger.
Pro Forma Information
The accompanying combined operations of the Company for the three
month periods ended March 31, 1995 and 1996, include the combined operations of
the Founding Companies prior to the Offering and the Merger and, in the case of
the 1996 period, two months of operations after the Offering and Merger. The
summarized pro forma consolidated financial statements of operations data below
assumes that the Offering and the Merger had occurred and FYI's operations had
commenced on January 1, 1995, and 1996, respectively, and is as follows:
<TABLE>
<CAPTION>
Three months ended
------------------
(in thousands, except per share data)
March 31, March 31,
1995 1996
------- -------
<S> <C> <C>
Revenues $11,887 $12,330
Costs and expenses 10,540 11,122
------- -------
Income before income taxes $1,347 $1,208
Provision for income taxes 487 483
------- -------
Net income $860 $725
======= =======
Net income per share $0.16 $0.14
Number of shares used in net
income per share calculation 5,286 5,286
</TABLE>
This summarized pro forma information may not be indicative of actual
results if the transactions had occurred on the dates indicated or which may be
realized in the future. Neither expected benefits and cost reductions
anticipated by the Company nor future corporate costs of FYI nor interest
income on offering proceeds have been reflected in the above pro forma
information for 1995, nor the first month of 1996. The actual results of FYI
and its subsidiaries for the two months ended March 1996, inclusive of actual
corporate costs and interest income, have been included in the pro forma
results for the three months ended March 31, 1996.
8
<PAGE> 9
The number of shares (in thousands) used in calculating net income per
share and pro forma net income per share was determined as follows:
<TABLE>
<CAPTION>
Number
of Shares
---------
<S> <C>
Outstanding FYI shares after the Offering and the Merger 5,270
Warrants to purchase stock under the treasury stock method 16
-----
Number of shares used in pro forma net income
per share calculation 5,286
=====
</TABLE>
3. SUBSEQUENT EVENT:
In April of 1996, the Company entered into a credit agreement (the
"Credit Agreement") with a lending group (the "Lenders"). The Company may
borrow up to $35.0 million from time to time, under the secured revolving
credit and acquisition facility, subject to certain customary borrowing
capacity requirements. The Company and its subsidiaries may borrow up to an
aggregate $30.0 million of term loans under the Credit Agreement for
acquisitions under prescribed conditions. The Company and its subsidiaries may
borrow revolving credit loans up to an aggregate $5.0 million under the Credit
Agreement for working capital and general corporate purposes. The commitment
to fund revolving credit loans expires April 14, 2001. The commitment to fund
term loans expires October 15, 1997. The annual interest rate applicable to
borrowing under this facility is, at the option of the Company, (i) 1.50% plus
the prime rate or (ii) 3.00% plus the eurodollar rate.
The Credit Agreement requires mandatory prepayments in certain
circumstances. The outstanding principal balance of term loans as of October 15,
1997, shall thereafter be due and payable in fourteen equal quarterly payments
beginning January 15, 1998, and ending April 15, 2001. The outstanding
principal balance of revolving credit loans shall be due and payable on April
15, 2001. The Company currently has no borrowings outstanding under this
facility. A copy of the Credit Agreement has been filed as an exhibit to this
Form 10-Q.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
As discussed more fully in Item 1, the Company had conducted no
significant operations until the closing of the Offering and Merger on January
23, 1996. The Company seeks to acquire additional companies to create a
national single-source provider of document management services.
9
<PAGE> 10
Results of Operations - The Company
The Company had conducted no significant operations from its
inception through the Offering and the Merger. For accounting purposes and the
presentation of the actual financial results herein, January 31, 1996, has been
used as the effective date of the Merger. The Company incurred various legal,
accounting, marketing and travel costs in connection with the Offering and the
Merger, which were funded by issuance of common and preferred stock.
Additional costs associated with the Offering and the Merger are being repaid
with proceeds of the Offering.
Revenue for the three months ended March 31, 1996, was $8.4 million,
and gross profit for the three months was $2.8 million. Operating income was
$0.5 million, and net income was $0.4 million. As previously mentioned, FYI
had no operations until February 1996. For further discussion of pro forma
operations for the three months ended March 31, 1996 and 1995, see the Results
of Operations - Pro Forma.
Liquidity and Capital Resources - The Company
As of March 31, 1996, the Company had $11.9 million of working capital
and $10.0 million of cash. The Company paid off practically all of its debt
with the proceeds of the Offering with the exception of approximately $415,000
of debt with favorable interest rates and capital lease obligations of
approximately $425,000.
Subsequent to March 31, 1996, the Company negotiated a $35.0 million
line of credit (see Note 3 in the Notes to Financial Statements).
Management believes that the Company's current cash position and cash
flow from operations will be sufficient to fund planned capital expenditures and
ongoing obligations of the Company through the end of 1996. The bank financing
combined with the Company's cash reserves and 2 million shares of common stock
available under the Company's shelf registration statement will be utilized to
fund the Company's planned acquisition program.
Results of Operations - Pro Forma
As discussed in Note 2 in the Notes to Financial Statements,
summarized pro forma consolidated financial statements of operations data below
assumes the Offering and the Merger had occurred and FYI's operations had
commenced on January 1, 1995, and 1996, respectively, and is as follows:
10
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<TABLE>
<CAPTION>
Three months ended
------------------
(in thousands, except per share data)
March 31, March 31,
1995 1996
---- ----
<S> <C> <C>
Revenues $11,887 $12,330
Costs and expenses 10,540 11,122
------ ------
Income before income taxes $1,347 $1,208
Provision for income taxes 487 483
--- ---
Net income $860 $725
==== ====
Net income per share $0.16 $0.14
Number of shares used in net
income per share calculation 5,286 5,286
</TABLE>
The $443,000 or 4% increase in revenues is attributable to a 9% increase in
service revenues of $894,000. The increase in service revenues is offset by a
$417,000 or 24% decrease in product revenues, and a $34,000 or 21% decrease in
other revenue.
The increase in service revenue is largely due to i) an increase in
scanning and microfilming revenue of approximately $225,000 primarily due to an
overall increase in projects; ii) an increase in medical records release
revenues of $474,000 primarily attributable to the expansion into additional
healthcare institutions in the U.S. during 1995 and 1996; and iii) an increase
in records storage and retrieval revenues of $100,000 attributable to an
increase in volume in 1996. The decrease in product revenues resulted from
a decline in one major customer's film purchases caused by business interruption
at that customer. This decline is not expected to be permanent, as the
interruption was attributable to the federal government shutdown in late 1995.
Costs and expenses increased $582,000 or 6% largely due to i) an increase
in cost of services of approximately $586,000 or 9% primarily attributable to
the increases in service revenues; ii) cost of products decreased $396,000 as
a result of the reduction in film purchases by one major customer; and iii) an
increase in selling, general and administrative of approximately $407,000
primarily due to the establishment of corporate overhead required to execute
the acquisition program and to manage the consolidated group of companies.
The decrease in earnings before taxes of $139,000 to $1,208,000 and
decrease in net income of $135,000 to $725,000 is largely attributable to the
factors discussed above. Net income prior to the incremental corporate general
and administrative expense was $969,000, up 13% from the first quarter of 1995.
11
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.14 Credit Agreement, dated as of April 18, 1996, by and among
F.Y.I. Incorporated and its subsidiaries and Banque Paribas,
IBJ Schroder Bank & Trust, and First Source Financial LLP
10.15 Lease Agreement between F.Y.I. Incorporated and One McKinney
Plaza, Inc. (Exhibit 10.12 of Post-Effective Amendment No. 1 to
F.Y.I. Incorporated's Registration Statement on Form S-1
(Registration No. 333-1084) effective April 30, 1996, is hereby
incorporated by reference)
10.16 Employment Agreement between F.Y.I. Incorporated and Margot
Lebenberg.
27.1 Financial data schedule
(b) Reports on Form 8-K
None
12
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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.
F.Y.I. Incorporated
Date: May 14, 1996 By: /s/ Ed H. Bowman, Jr.
------------ ---------------------
Ed H. Bowman, Jr.
Chief Executive Officer
Date: May 14, 1996 By: /s/ Robert C. Irvine
------------ --------------------
Robert C. Irvine
Chief Financial Officer (Principal Financial and
Accounting Officer)
13
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
10.14 Credit Agreement, dated as of April 18, 1996, by and among
F.Y.I. Incorporated and its subsidiaries and Banque Paribas,
IBJ Schroder Bank & Trust, and First Source Financial LLP
10.15 Lease Agreement between F.Y.I. Incorporated and One McKinney
Plaza, Inc. (Exhibit 10.12 of Post-Effective Amendment No. 1 to
F.Y.I. Incorporated's registration Statement on Form S-1
(Registration No. 333-1084) effective April 30, 1996, is
hereby incorporated by reference)
10.16 Employment Agreement between F.Y.I. Incorporated and Margot
Lebenberg.
27.1 Financial data schedule
</TABLE>
14
<PAGE> 1
Draft Dated
05/03/96, 3:59pm
CREDIT AGREEMENT
dated as of April 18, 1996
by and among
F.Y.I. INCORPORATED,
IMAGENT ACQUISITION CORP.,
RESEARCHERS ACQUISITION CORP.,
RECORDEX ACQUISITION CORP.,
DPAS ACQUISITION CORP.,
LEONARD ARCHIVES ACQUISITION CORP.,
DELIVEREX ACQUISITION CORP.,
PERMANENT RECORDS ACQUISITION CORP. and
DELIVEREX SACRAMENTO ACQUISITION CORP.
and
BANQUE PARIBAS, AS AGENT
and
THE LENDERS NAMED HEREIN
$5,000,000 REVOLVING CREDIT LOAN FACILITY
$30,000,000 TERM LOAN FACILITY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE 1 - Definitions .................................................................. 1
Section 1.1 Definitions, etc. ................................................ 1
Section 1.2 Other Definitional Provisions .................................... 30
Section 1.3 Accounting Terms and Determinations .............................. 30
Section 1.4 Financial Covenants .............................................. 31
ARTICLE 2 - Loans ........................................................................ 31
Section 2.1 Commitments ...................................................... 31
Section 2.2 Notes ............................................................ 32
Section 2.3 Repayment of Loans ............................................... 34
Section 2.4 Interest ......................................................... 35
Section 2.5 Borrowing Procedure .............................................. 36
Section 2.6 Optional Prepayments, Conversions and Continuations of Loans ..... 36
Section 2.7 Mandatory Prepayments ............................................ 37
Section 2.8 Minimum Amounts .................................................. 38
Section 2.9 Certain Notices .................................................. 38
Section 2.10 Use of Proceeds .................................................. 39
Section 2.11 Fees ............................................................. 40
Section 2.12 Computations ..................................................... 40
Section 2.13 Termination or Reduction of Commitments .......................... 40
Section 2.14 Letters of Credit ................................................ 41
ARTICLE 3 - Payments ..................................................................... 44
Section 3.1 Method of Payment ................................................ 44
Section 3.2 Pro Rata Treatment ............................................... 45
Section 3.3 Sharing of Payments, Etc. ........................................ 45
Section 3.4 Non-Receipt of Funds by the Agent ................................ 46
Section 3.5 Withholding Taxes ................................................ 46
Section 3.6 Withholding Tax Exemption ....................................... 47
ARTICLE 4 - Yield Protection and Illegality .............................................. 47
Section 4.1 Additional Costs ................................................. 47
Section 4.2 Limitation on Types of Loans ..................................... 49
Section 4.3 Illegality ....................................................... 49
Section 4.4 Treatment of Affected Loans ...................................... 50
Section 4.5 Compensation ..................................................... 50
Section 4.6 Capital Adequacy ................................................. 50
Section 4.7 Additional Interest on Eurodollar Loans .......................... 51
</TABLE>
i
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<TABLE>
<S> <C> <C>
ARTICLE 5 - Security .......................................................................... 51
Section 5.1 Collateral ............................................................. 51
Section 5.2 Guaranties ............................................................. 52
Section 5.3 New Subsidiaries ....................................................... 52
Section 5.4 New Mortgaged Properties ............................................... 53
Section 5.5 Release of Collateral .................................................. 53
Section 5.6 Setoff ................................................................. 54
Section 5.7 Landlord and Mortgagee Waivers ......................................... 54
ARTICLE 6 - Conditions Precedent .............................................................. 54
Section 6.1 Closing Date Conditions ................................................ 54
Section 6.2 Initial Extension of Credit ............................................ 58
Section 6.3 All Extensions of Credit ............................................... 60
Section 6.4 Closing Certificates .................................................. 61
Section 6.5 Term Loans ............................................................. 62
ARTICLE 7 - Representations and Warranties .................................................... 62
Section 7.1 Corporate Existence .................................................... 62
Section 7.2 Financial Statements ................................................... 63
Section 7.3 Corporate Action: No Breach ............................................ 63
Section 7.4 Operation of Business .................................................. 64
Section 7.5 Intellectual Property .................................................. 64
Section 7.6 Litigation and Judgments ............................................... 64
Section 7.7 Rights in Properties; Liens ............................................ 64
Section 7.8 Enforceability ......................................................... 64
Section 7.9 Approvals .............................................................. 65
Section 7.10 Debt ................................................................... 65
Section 7.11 Taxes .................................................................. 65
Section 7.12 Margin Securities ...................................................... 65
Section 7.13 ERISA; Plans ........................................................... 66
Section 7.14 Disclosure ............................................................. 66
Section 7.15 Capitalization ......................................................... 67
Section 7.16 Agreements ............................................................. 68
Section 7.17 Compliance with Laws .................................................. 68
Section 7.18 Investment Company Act ................................................. 68
Section 7.19 Public Utility Holding Company Act ..................................... 68
Section 7.20 Environmental Matters .................................................. 68
Section 7.21 Labor Disputes and Acts of God ......................................... 69
Section 7.22 Material Contracts ..................................................... 70
Section 7.23 Bank Accounts .......................................................... 70
Section 7.24 Outstanding Securities ................................................. 70
Section 7.25 Related Transactions Documents ......................................... 70
Section 7.26 Solvency ............................................................... 70
Section 7.27 Employee Matters ....................................................... 71
Section 7.28 Insurance .............................................................. 71
</TABLE>
ii
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<TABLE>
<S> <C> <C>
Section 7.29 Common Enterprise ........................................................ 71
Section 7.30 Post-IPO Activities ...................................................... 71
ARTICLE 8 - Affirmative Covenants .............................................................. 71
Section 8.1 Reporting Requirements ................................................... 72
Section 8.2 Maintenance of Existence, Conduct of Business ............................ 75
Section 8.3 Maintenance of Properties ................................................ 76
Section 8.4 Taxes and Claims ......................................................... 76
Section 8.5 Insurance ................................................................ 76
Section 8.6 Inspection Rights ........................................................ 78
Section 8.7 Keeping Books and Records ................................................ 78
Section 8.8 Compliance with Laws ..................................................... 78
Section 8.9 Compliance with Agreements ............................................... 78
Section 8.10 Further Assurances ....................................................... 79
Section 8.11 ERISA; Plans ............................................................. 79
Section 8.12 Trade Accounts Payable ................................................... 79
Section 8.13 Unified Cash Management System ........................................... 79
Section 8.14 No Consolidation ......................................................... 79
Section 8.15 Permitted Acquisitions ................................................... 80
ARTICLE 9 - Negative Covenants ................................................................. 80
Section 9.1 Debt ..................................................................... 80
Section 9.2 Limitation on Liens ...................................................... 81
Section 9.3 Mergers, Etc. ............................................................ 81
Section 9.4 Restricted Payments ...................................................... 82
Section 9.5 Investments .............................................................. 82
Section 9.6 Limitation on Issuance of Capital Stock .................................. 84
Section 9.7 Transactions With Affiliates ............................................ 84
Section 9.8 Disposition of Property .................................................. 84
Section 9.9 Sale and Leaseback ...................................................... 85
Section 9.10 Lines of Business ....................................................... 85
Section 9.11 Environmental Protection ................................................. 85
Section 9.12 Intercompany Transactions ................................................ 86
Section 9.13 Management Fees .......................................................... 86
Section 9.14 Modification of Other Agreements ......................................... 86
Section 9.15 Bank Accounts ........................................................... 86
Section 9.16 ERISA Plans ............................................................. 86
Section 9.17 Dividend Restrictions ................................................... 87
Section 9.18 Second-Tier Subsidiaries ................................................ 87
ARTICLE 10 - Financial Covenants ................................................................ 87
Section 10.1 Consolidated Net Worth ................................................... 87
Section 10.2 Ratio of Total Senior Debt to EBITDA ..................................... 87
Section 10.3 Ratio of Total Debt to EBITDA ............................................ 88
Section 10.4 Consolidated Fixed Charge Coverage Ratio ................................. 88
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 10.5 Consolidated Interest Coverage Ratio .................................... 88
Section 10.6 Capital Expenditures .................................................... 88
Section 10.7 Minimum EBITDA .......................................................... 89
ARTICLE 11 - Default ............................................................................ 90
Section 11.1 Events of Default ....................................................... 90
Section 11.2 Remedies ................................................................ 93
Section 11.3 Cash Collateral ......................................................... 94
Section 11.4 Performance by the Agent ............................................... 94
ARTICLE 12 - The Agent .......................................................................... 94
Section 12.1 Appointment, Powers and Immunities ...................................... 94
Section 12.2 Rights of Agent as a Lender ............................................. 95
Section 12.3 Defaults ................................................................ 95
Section 12.4 INDEMNIFICATION ......................................................... 95
Section 12.5 Independent Credit Decisions ............................................ 96
Section 12.6 Several Commitments ..................................................... 97
Section 12.7 Successor Agent ......................................................... 97
ARTICLE 13 - Miscellaneous ...................................................................... 97
Section 13.1 Expenses ................................................................ 97
Section 13.2 INDEMNIFICATION ......................................................... 98
Section 13.3 Limitation of Liability ................................................. 99
Section 13.4 No Duty ................................................................. 99
Section 13.5 No Fiduciary Relationship ............................................... 99
Section 13.6 Equitable Relief ........................................................ 99
Section 13.7 No Waiver; Cumulative Remedies .......................................... 99
Section 13.8 Successors and Assigns .................................................. 100
Section 13.9 Survival ................................................................ 103
Section 13.10 ENTIRE AGREEMENT ........................................................ 103
Section 13.11 Amendments .............................................................. 103
Section 13.12 Maximum Interest Rate ................................................... 105
Section 13.13 Notices ................................................................. 106
Section 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS ...................................................... 106
Section 13.15 Counterparts ............................................................ 107
Section 13.16 Severability ............................................................ 107
Section 13.17 Headings ................................................................ 107
Section 13.18 Construction ............................................................ 107
Section 13.19 Independence of Covenants ............................................... 107
Section 13.20 Confidentiality ......................................................... 107
Section 13.21 WAIVER OF JURY TRIAL .................................................... 108
Section 13.22 Approvals and Consent ................................................... 108
Section 13.23 Agent for Services of Process ........................................... 108
Section 13.24 Joint and Several Obligations ........................................... 108
</TABLE>
iv
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description of Exhibit Section
------- ---------------------- -------
<S> <C> <C>
A Form of Assignment and Acceptance 1.1
B Form of Borrowing Base Report 1.1
C Form of Revolving Credit Loans Note 1.1 and 2.2
D Form of Subordination Agreement 1.1
E Form of Swing Loans Note 1.1
F Form of Term Loans Note 1.1 and 2.2
G Form of Notice of Borrowings, Conversions,
Continuations or Prepayments 2.9
H Form of Borrower Addition Agreement 1.1, 5.3
I Form of Solvency Certificate 1.1, 6.2, 8.1
</TABLE>
INDEX TO SCHEDULES
------------------
<TABLE>
<CAPTION>
Schedule Description of Schedule
- - -------- -----------------------
<S> <C>
1.1(a) Mortgaged Properties
1.1(b) Permitted Holders
1.1(c) Permitted Liens
7.4 Permits, Franchises, Licenses and Authorizations constituting
Governmental Requirements or involving Governmental Authorities
7.6 Litigation and Judgments
7.7 Ownership of Real Properties
7.10 Existing Debt
7.11 Taxes
7.13 Plans
7.15 F.Y.I. Common Stock; Options, etc.
7.22 Material Contracts
7.23 Bank Accounts
7.27 Employee Matters
7.28 Insurance
9.5 Investments
</TABLE>
v
<PAGE> 7
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT, dated as of April 18, 1996, is by and among F.Y.I.
INCORPORATED ("F.Y.I."), a Delaware corporation, IMAGENT ACQUISITION CORP.
("Imagent"), a Delaware corporation, RESEARCHERS ACQUISITION CORP.
("Researchers"), a Delaware corporation, RECORDEX ACQUISITION CORP.
("Recordex"), a Delaware corporation, DPAS ACQUISITION CORP. ("DPAS"), a
Delaware corporation, LEONARD ARCHIVES ACQUISITION CORP. ("Leonard"), a
Delaware corporation, DELIVEREX ACQUISITION CORP. ("Deliverex"), a Delaware
corporation, PERMANENT RECORDS ACQUISITION CORP. ("Permanent"), a Delaware
corporation, and DELIVEREX SACRAMENTO ACQUISITION CORP. ("Sacramento"), a
Delaware corporation, each of the banks or other lending institutions which is
a party hereto (as evidenced by the signature pages of this Agreement) or which
may from time to time become a party hereto or any successor or assignee
thereof (individually, a "Lender" and, collectively, the "Lenders"), and BANQUE
PARIBAS, a bank organized under the laws of France acting through its Chicago
Branch, as agent for itself and the other Lenders (in such capacity, together
with its successors in such capacity, the "Agent").
RECITALS:
---------
a. F.Y.I. owns all of the issued and outstanding Capital Stock
of Imagent, Researchers, Recordex, DPAS, Leonard, Deliverex,
Permanent and Sacramento.
b. F.Y.I. and its Subsidiaries desire that the Lenders enter
into this Agreement pursuant to which the Lenders will extend (i) a
revolving credit facility to the Revolving Loans Borrowers (as
hereinafter defined) for working capital and general corporate
purposes and (ii) a term loan facility to the Term Loans Borrowers
(as hereinafter defined) to finance future acquisitions by the Term
Loans Borrowers.
c. F.Y.I. and the other Borrowers, the Lenders identified on the
signature pages of this Agreement and the Agent desire to enter into
this Agreement for the purposes of providing the credit facilities
referred to in Recital B preceding.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions, etc. Definitions, etc. As used in this
Agreement, the following terms shall have the following meanings:
"Accounting Changes" means as specified in Section 1.3(a).
<PAGE> 8
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person or of any business or
division of a Person, (b) the acquisition by a Person of 50% or more of the
Capital Stock of any Person or otherwise causing any Person to become a
Subsidiary of the acquiring Person, or (c) a merger, consolidation,
amalgamation or any other combination of a Person with another Person.
"Acquisition Subsidiary" means a Wholly-Owned Subsidiary of F.Y.I. (i)
that is created or used as the acquiring entity to acquire assets or to be the
surviving corporation in a merger in order to consummate a Permitted
Acquisition, or (ii) the Capital Stock of which is acquired by F.Y.I. to
consummate a Permitted Acquisition.
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of one percent) determined by the Agent to be equal to (a) the
Eurodollar Rate for such Eurodollar Loan for such Interest Period divided by
(b) one minus the Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds fifty percent or more of any class of voting Capital
Stock of such Person; or (c) fifty percent or more of the voting Capital Stock
of which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; provided, however, in no event shall the Agent or any Lender be
deemed an Affiliate of F.Y.I. or any of its Subsidiaries.
"Agent" means as specified in the introductory paragraph of this
Agreement.
"Agent's Letter" means the letter dated as of April 18, 1996 (and accepted
by F.Y.I. as of April 18, 1996) between F.Y.I. and the Agent.
"Aggregate Borrowing Base" means at any time, without duplication, an
amount equal to (a) 85% of Eligible Receivables of all Revolving Loans
Borrowers plus (b) 50% of Eligible Inventory of all Revolving Loans Borrowers.
"Aggregate Commitment Percentage" means, as to any Lender, the percentage
equivalent of a fraction, the numerator of which is the sum of the outstanding
Revolving Credit Loans Commitment of such Lender (or, if such Commitment has
terminated or expired, the outstanding principal amount of its Revolving Credit
Loans and its Letter of Credit Liabilities), plus the Term Loans Commitment of
such Lender (or if such Commitment has terminated or expired, the outstanding
principal amount of the Term Loans of such Lender), and the denominator of
which
2
<PAGE> 9
is the sum of the outstanding Revolving Credit Loans Commitments of all
Lenders (or, if such Commitments have terminated or expired, the outstanding
principal amount of the Revolving Credit Loans and the Letter of Credit
Liabilities), plus the outstanding Term Loans Commitments of all Lenders (or if
such Commitments have terminated or expired, the outstanding principal amount
of the Term Loans of all Lenders).
"Agreement" means this Agreement and any and all amendments,
modifications, supplements, renewals, extensions or restatements hereof.
"Applicable Lending Office" means for each Lender and each Type of Loan,
the Lending Office of such Lender (or an Affiliate of such Lender) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to F.Y.I. and the
Agent as the office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" means (a) 1.50% with respect to Prime Rate Loans and
(b) 3.0% with respect to Eurodollar Loans.
"Asset Disposition" means the disposition of any or all of the Property
(other than sales of Inventory in the ordinary course of business and the grant
of a Lien as security) of F.Y.I. or any of its Subsidiaries, whether by sale,
lease, transfer, assignment, condemnation or otherwise, but excluding any
involuntary disposition resulting from casualty damage to Property.
"Assignee" means as specified in Section 13.8(b).
"Assigning Lender" means as specified in Section 13.8(b).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Agent pursuant to Section
13.8(e), in substantially the form of Exhibit A hereto.
"Bankruptcy Code" means as specified in Section 11.1(e).
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"Borrower" means any of the Revolving Loans Borrowers or the Term Loans
Borrowers, and "Borrowers" means all of such borrowers.
"Borrower Addition Agreement" means an agreement substantially in the form
attached hereto as Exhibit H pursuant to which an Acquisition Subsidiary or, to
the extent permitted
3
<PAGE> 10
hereunder, another Wholly-Owned Subsidiary of F.Y.I., becomes a Borrower under
this Agreement.
"Borrowing Base" means, for any Revolving Loans Borrower at any date of
determination, an amount equal to (a) 85% of Eligible Receivables owned by such
Revolving Loans Borrower plus (b) 50% of Eligible Inventory owned by such
Revolving Loans Borrower, plus (c) $1,000,000.
"Borrowing Base Report" means a report in substantially the form of
Exhibit B attached hereto and completed and certified by a Responsible Officer
of F.Y.I., with respect to the determination of the Borrowing Base for each
Revolving Loans Borrower.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in New York, New York or Chicago, Illinois, and
(b) with respect to all borrowings, payments, Conversions, Continuations,
Interest Periods and notices in connection with Eurodollar Loans, any day which
is a Business Day described in clause (a) above and which is also a day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Expenditures" means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by F.Y.I. or any of its Subsidiaries to acquire or construct fixed assets,
plant or equipment (including renewals, improvements or replacements, but
excluding repairs) during such period and which, in accordance with GAAP, are
classified as capital expenditures, exclusive of any expenditures for
Acquisitions.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations
are classified as a capital lease on a balance sheet of such Person under GAAP.
For purposes of this Agreement, the amount of such Capital Lease Obligations
shall be the capitalized amount thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares, partnership
interests, limited partnership interests, limited liability company interests,
membership interests, equity interests, participations, rights or other
equivalents (however designated) of corporate stock or any of the foregoing
issued by any entity (whether a corporation, a partnership or another entity).
"Change of Control" means the existence or occurrence of any of the
following: (a) any of the Capital Stock of any Borrower, other than F.Y.I., is
owned by any Person other than F.Y.I.; (b) any Person or two or more Persons
(other than the Permitted Holders) acting as a group (as defined in Section
13d-3 of the Securities Exchange Act of 1934) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of F.Y.I.; (c) individuals who, as of the
Closing Date, constitute the Board of Directors of F.Y.I. (the "F.Y.I.
Incumbent Board") cease for any reason to constitute at least a majority of the
Board of Directors of F.Y.I.; provided, however, that any individual becoming a
director of F.Y.I. subsequent to the Closing Date whose election, or nomination
for election by F.Y.I.'s shareholders was approved by a vote of at least a
majority of the directors then comprising the F.Y.I. Incumbent
4
<PAGE> 11
Board shall be considered as though such individual were a member of the
F.Y.I. Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual
or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities Exchange Act of 1934) or other
actual or threatened solicitation of proxies or contest by or on behalf of a
Person other than the Board of Directors of F.Y.I.; or (d) the consummation of
any transaction the result of which is that any Person or group beneficially
owns more of the voting stock of F.Y.I. than is beneficially owned, in the
aggregate, by the Permitted Holders.
"Closing Date" means April 18, 1996, the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any nature whatsoever upon which a Lien
is created or purported to be created by any Loan Document as security for the
Obligations or any portion thereof.
"Commitment Percentage" means, as to any Lender and as to any of its
Commitments (as may be applicable based upon the context in which such term is
used), the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of the applicable Commitment(s) of such Lender, and the
denominator of which is the aggregate amount of such applicable Commitment(s)
of all of the Lenders, as adjusted from time to time in accordance with Section
13.8.
"Commitments" means the Revolving Credit Loans Commitments and the Term
Loans Commitments.
"Consolidated Current Assets" means, at any particular time, all amounts
which, in conformity with GAAP, would be included as current assets on a
consolidated balance sheet of F.Y.I. and its Subsidiaries.
"Consolidated Current Liabilities" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as current
liabilities on a consolidated balance sheet of F.Y.I. and its Subsidiaries.
"Consolidated Current Ratio" means, at any particular time, the ratio of
Consolidated Current Assets to Consolidated Current Liabilities.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) (i) EBITDA of F.Y.I. and its Subsidiaries for such period minus
(ii) Capital Expenditures of F.Y.I. and its Subsidiaries paid during such
period, to (b) the Fixed Charges of F.Y.I. and its Subsidiaries for such
period.
"Consolidated Funded Debt" means, at any particular time, (a) all Debt of
F.Y.I. and its
5
<PAGE> 12
Subsidiaries which matures by its terms, or is renewable at the option of
F.Y.I. or any of its Subsidiaries, to a date more than one year after the
original creation of such Debt and (b) all other Debt which would be classified
as "funded indebtedness" or "long-term indebtedness" on a consolidated balance
sheet of F.Y.I. and its Subsidiaries as of such date in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, for any period, the ratio of
(a) EBITDA of F.Y.I. and its Subsidiaries for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" means, for any period, all interest on
Debt of F.Y.I. and its Subsidiaries (or other applicable Person) paid or
accrued during such period, including the interest portion of payments under
Capital Lease Obligations, but excluding any fees paid by F.Y.I. and its
Subsidiaries prior to or on the Closing Date in connection with the closing of
the transactions evidenced by this Agreement to the extent that the same have
been capitalized in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or loss)
of F.Y.I. and its Subsidiaries (or other applicable Person) for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means, at any particular time, all amounts which,
in conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of F.Y.I. and its Subsidiaries.
"Continue", "Continuation" and "Continued" shall refer to the continuation
pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan of the same
Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 13.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Currency Hedge Agreement" means any currency hedge or exchange agreement,
option or futures contract or other agreement intended to protect against or
manage a Person's exposure to fluctuations in currency exchange rates.
"Current Date" means a date occurring no more than 30 days prior to the
Closing Date or such earlier date which is reasonably acceptable to the Agent.
"Debt" means as to any Person at any time (without duplication): (a) all
indebtedness, liabilities and obligations of such Person for borrowed money,
(b) all indebtedness, liabilities and obligations of such Person evidenced by
bonds, notes, debentures, or other similar instruments, (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price
of Property or services, except trade accounts payable of such Person arising
in the ordinary course of business that are not past due by more than 120 days,
and excluding Seller Earn Out,
6
<PAGE> 13
(d) all Capital Lease Obligations of such Person, (e) all Debt of others
Guaranteed by such Person, (f) all indebtedness, liabilities and obligations
secured by a Lien existing on Property owned by such Person, whether or
not the indebtedness, liabilities or obligations secured thereby have been
assumed by such Person or are non-recourse to such Person, (g) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds and
similar instruments, (h) all indebtedness, liabilities and obligations of such
Person to redeem or retire shares of Capital Stock of such Person, (i) all
indebtedness, liabilities and obligations of such Person under Interest Rate
Protection Agreements or Currency Hedge Agreements, and (j) all indebtedness,
liabilities and obligations of such Person in respect of unfunded vested
benefits under any Plan.
"Debt Issuance" means any issuance by F.Y.I. or any other Borrower or any
Subsidiary of any Borrower of any Debt of F.Y.I. or such Borrower or
Subsidiary, respectively, which Debt is issued or sold by F.Y.I. or any other
Borrower or Subsidiary of any Borrower primarily for the purpose of raising
capital or increasing liquidity and which Debt consists of Debt of the types
referred to in clauses (a) or (b) of the definition of "Debt", but not of the
types of Debt referred to in clauses (c), (d), (e), (g), (h), (i) or (j) of the
definition of "Debt". The incurrence of Seller Subordinated Debt does not
constitute "Debt Issuance."
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation or any other amount payable by any Borrower under this
Agreement or any other Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full equal to
the sum of two percent plus the Prime Rate as in effect from time to time plus
the Applicable Margin for Prime Rate Loans; provided, however, that if such
amount in default is principal of a Eurodollar Loan and the due date is a day
other than the last day of an Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest Period therefor, two percent plus
the interest rate for such Eurodollar Loan for such Interest Period as provided
in Section 2.4(a)(ii) hereof and, thereafter, the rate provided for above in
this definition.
"Deposit Account" means a deposit account maintained by the applicable
Borrower or Borrowers with a bank selected by such Borrower or Borrowers and
reasonably acceptable to the Agent.
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, for any period, without duplication, the sum of the
following for F.Y.I. and its Subsidiaries (or other applicable Person) for such
period determined on a consolidated basis in accordance with GAAP: (a)
Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c)
income and franchise taxes to the extent deducted in determining Consolidated
Net Income, plus (d) depreciation and amortization expense and other non-cash,
non-tax items
7
<PAGE> 14
to the extent deducted in determining Consolidated Net Income, minus
(e) non-cash income to the extent included in determining Consolidated
Net Income. For purposes of calculating the EBITDA of F.Y.I. and its
consolidated Subsidiaries for any period of four consecutive fiscal quarters
including, without limitation, the four consecutive fiscal quarter period used
in determining compliance with the twelve month trailing EBITDA requirement in
clause (e) of the definition of Permitted Acquisition, the EBITDA associated
with any Person or assets acquired in a Permitted Acquisition during such
period of four consecutive fiscal quarters shall be added, without duplication,
in accordance with the following procedures: (a) if the Permitted Acquisition
and the EBITDA of the Person or assets acquired were approved in writing by
Required Lenders, that EBITDA will be included for such period, and (b) if the
Permitted Acquisition was not required to be approved in writing by Required
Lenders, (i) for any calculation of EBITDA which takes place at the end of the
fiscal quarter in which the Permitted Acquisition took place, only the actual
EBITDA generated by the acquired Person or assets following the Permitted
Acquisition will be included in the calculation of EBITDA for such period, (ii)
for any calculation of EBITDA which takes place at the end of the fiscal
quarter following the fiscal quarter in which the Permitted Acquisition took
place, the actual EBITDA generated by the acquired Person or assets following
the Permitted Acquisition in the most recent two fiscal quarters will be
multiplied by two and the result will be included in the calculation of EBITDA
for such period, (iii) for any calculation of EBITDA which takes place at the
end of the second fiscal quarter following the fiscal quarter in which the
Permitted Acquisition took place, the actual EBITDA generated by the acquired
Person or assets following the Permitted Acquisition in the most recent three
fiscal quarters will be multiplied by four-thirds (4/3) and the result will be
included in the calculation of EBITDA for such period, and (iv) for any
calculation of EBITDA which takes place at the end of the third fiscal quarter
following the fiscal quarter in which the Permitted Acquisition took place, the
actual EBITDA generated by the acquired Person or assets following the
Permitted Acquisition in the most recent four fiscal quarters will be included
in the calculation of EBITDA for such period. Consolidated Net Income of any
Borrower for any period shall be excluded from the calculation of EBITDA if and
to the extent that any Seller Earn Out is accrued or required to be paid
(without duplication) in respect of such Borrower during such period.
"Eligible Assignee" means (a) any Affiliate of a Lender or (b) any
commercial bank, savings and loan association, savings bank, finance company,
insurance company, pension fund, mutual fund or other financial institution
(whether a corporation, partnership or other entity) acceptable to the Agent
and approved by F.Y.I., which approval shall not unreasonably be withheld.
"Eligible Inventory" means, as to any Revolving Loans Borrower at any date
of determination, the value of all Inventory then owned by (and in the
possession of) such Revolving Loans Borrower and held for sale or disposition
in the ordinary course of business, in which the Agent has a perfected, first
priority security interest pursuant to the Security Documents, valued at the
lower of (a) on a first-in, first-out basis, actual cost or (b) fair market
value. Eligible Inventory shall not include any (A) Inventory that has been
shipped or delivered to a customer on consignment, a sale-or-return basis, or
on the basis of any similar understanding, or which is being stored pursuant to
a request from an account debtor as provided in paragraph (d) of the definition
of Eligible Receivables, (B) Inventory with respect to which a claim exists
disputing the
8
<PAGE> 15
applicable Borrower's title to or right to possession of such Inventory,
(C) Inventory that is not in good condition or does not comply with
any Governmental Requirement with respect to its manufacture, use or sale, (D)
Inventory that is located outside the U.S., (E) Inventory produced in violation
of the Fair Labor Standards Act, (F) Inventory that is evidenced by a
negotiable or non-negotiable document of title, and (G) Inventory that has
become obsolete, is more than one year old, or has been damaged or is not
saleable in its present state for the use for which it was manufactured or
purchased.
"Eligible Receivables" means, as to any Revolving Loans Borrower at any
date of determination, without duplication, the aggregate of each Receivable
owned by such Revolving Loans Borrower created in the ordinary course of
business which satisfies each of the following conditions:
(a) Such Receivable complies with all applicable Governmental
Requirements, including, without limitation to the extent applicable,
usury laws, the Federal Truth in Lending Act and Regulation Z of the
Board of Governors of the Federal Reserve System;
(b) Such Receivable, at the date of issuance of its invoice, was
payable not more than 90 days after the original date of issuance of the
invoice therefor;
(c) Such Receivable has not been outstanding for more than 60 days
past the due date of the invoice;
(d) Such Receivable was created in connection with (i) the sale of
Inventory by the applicable Borrower in the ordinary course of business
and such sale has been fully consummated and such Inventory has been
shipped and delivered and received by the account debtor or, if such
Inventory has not been so shipped, delivered and received, such Inventory
(A) is being stored by the applicable Borrower pursuant to a request from
the account debtor and (B) has been ordered by the account debtor
pursuant to a valid purchase order, or (ii) the performance of services
by the applicable Borrower in the ordinary course of business and such
services have been completed and accepted by the account debtors;
(e) Such Receivable represents a legal, valid and binding payment
obligation of the account debtor enforceable in accordance with its terms
and arising from an enforceable contract, the performance of which
contract, insofar as it relates to such Receivable, has been completed by
the applicable Borrower.
(f) Such Receivable does not arise from the sale of any Inventory on
a bill-and hold (except as permitted in clause (d)(i) preceding),
guaranteed sale, sale-or-return, sale on approval, consignment or any
other repurchase or return basis;
(g) The applicable Borrower has good and indefeasible title to such
Receivable, the Agent holds a perfected first priority Lien on such
Receivable pursuant to the Security Documents, and such Receivable is not
subject to any Liens except Liens in favor of the
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Agent pursuant to the Loan Documents;
(h) Such Receivable does not arise out of a contract with, or an
order from, an account debtor that, by its terms (other than terms which
are invalid under applicable law), prohibits or makes void or
unenforceable the grant of a security interest to the Agent in and to
such Receivable;
(i) The amount of such Receivable included in Eligible Receivables
is not subject to any setoff, counterclaim, defense, dispute, recoupment
or adjustment other than normal discounts for prompt payment;
(j) The account debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceeding and
has not made an assignment for the benefit of creditors, suspended normal
business operations, dissolved, liquidated, terminated its existence,
ceased to pay its debts as they become due or suffered a receiver or
trustee to be appointed for any of its assets or affairs;
(k) Such Receivable is not evidenced by chattel paper or instruments
unless the Lien on such chattel paper or instrument is a perfected first
priority Lien on such chattel paper or instrument in favor of the Agent
pursuant to the Security Documents;
(l) The account debtor has not returned or refused to retain, or
otherwise notified the applicable Borrower or any other Loan Party of any
dispute concerning, or claimed nonconformity of, any of the Inventory or
services relating to such Receivable;
(m) Such Receivable is not owed by an Affiliate of any Borrower;
(n) Such Receivable is payable in Dollars;
(o) The account debtor with respect to such Receivable is not
domiciled in or organized under the laws of any country other than the
U.S., unless such Receivable is fully secured by a letter of credit
issued or confirmed by a bank acceptable to the Agent and which has
capital and surplus exceeding $100,000,000 and such letter of credit
contains terms and conditions reasonably acceptable to the Agent;
(p) Such Receivable is not owed by an account debtor as to which
more than twenty percent of the aggregate balances then outstanding on
Receivables owed by such account debtor thereon and/or its Affiliates to
the applicable Borrower are more than 90 days past due from the dates of
their original invoices;
(q) The account debtor with respect to such Receivable is not the
U.S. or any department, agency or instrumentality thereof unless, with
respect to the Lien on such Receivable in favor of the Agent, there has
been compliance with the Federal Assignment of Claims Act of 1940, as
amended to the satisfaction of the Agent;
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(r) The account debtor with respect to such Receivable is not
located in New Jersey, Minnesota, West Virginia or any other state
denying creditors access to its courts in the absence of a notice of
business activities report or other similar filing, unless the applicable
Borrower has either qualified as a foreign corporation authorized to
transact business in such state or has filed a notice of business
activities report or similar appropriate filing with the applicable state
agency for the then-current year; and
(s) Such Receivable is not owed by an account debtor as to which the
aggregate of all Receivables owing by such account debtor or an Affiliate
of such account debtor exceeds ten percent of the aggregate of all
Receivables at such date, provided that the amount of Receivables owing
by such account debtor that does not exceed ten percent of the aggregate
of all Receivables at such date shall not be excluded pursuant to this
clause (s).
The amount of the Eligible Receivables owed by an account debtor to the
applicable Borrower shall be net of, and shall be reduced by (if and to the
extent not already so reduced by virtue of the preceding clauses of this
definition), the amount of all contra accounts, reserves, credits, rebates and
(subject to the proviso below) other indebtedness, liabilities or obligations
owed by the applicable Borrower and its Subsidiaries to such account debtor;
provided, however, that the existence of any such other indebtedness,
liabilities or obligations owed by the applicable Borrower or its Subsidiaries
to such account debtor shall not, in and of itself, reduce the amount of
Eligible Receivables owed by such account debtor by the amount of such other
indebtedness, liabilities or obligations (for purposes of this sentence or
clause (i) preceding of this definition) except to the extent that such other
indebtedness, liabilities or obligations are then due.
"Environmental Law" means any federal, state, local or foreign law,
statute, code or ordinance, principle of common law, rule or regulation, as
well as any Permit, order, decree, judgment or injunction issued, promulgated,
approved or entered thereunder, relating to pollution or the protection,
cleanup or restoration of the environment or natural resources, or to the
public health or safety, or otherwise governing the generation, use, handling,
collection, treatment, storage, transportation, recovery, recycling, discharge
or disposal of Hazardous Materials, including, without limitation as to U.S.
laws, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. Section 9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource Conservation
and Recovery Act of 1976, 42 U. S. C. Section 6901 et seq., the Occupational
Safety and Health Act, 29 U S.C. Section 651 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq., the Clean Water Act, 33 U. S. C. Section 1251 et
seq., the Emergency Planning and Community Right to Know Act, 42 U. S. C.
Section 11001 et seq., the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. Section 136 et seq., and the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
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<PAGE> 18
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal, penal or civil statute, including,
without limitation, any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"Equity Issuance" means any issuance by F.Y.I., any other Borrower or any
Subsidiary of any Borrower of any Capital Stock of F.Y.I. or such other
Borrower or Subsidiary, respectively.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon the
Eurodollar Rate and the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) quoted by the Reference Lender at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) two Business Days prior to the
first day of such Interest Period for the offering by the Reference Lender to
leading banks in the London interbank market of Dollar deposits in immediately
available funds having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the Eurodollar Loan made by the
Reference Lender to which such Interest Period relates. If the Reference
Lender is not participating in any Eurodollar Loans during any Interest Period
therefor (whether as a result of Section 4.4 or for any other reason), the
Eurodollar Rate and the Adjusted Eurodollar Rate for such Loans for such
Interest Period shall be determined by reference to the amount of the Loans
which the Reference Lender would have made had it been participating in such
Loans.
"Event of Default" has the meaning specified in Section 11.1.
"Excess Cash" means, at any date of determination, the positive balance of
cash and cash equivalents of F.Y.I. and its Subsidiaries less $1,000,000.
"Excess Insurance Proceeds" means any and all proceeds of any Insurance
Recovery which F.Y.I. or its Subsidiary (as applicable) (a) has elected to not
apply to the repair, construction or replacement of the Property affected or to
the purchase of other, similar Property for use in its business or (b) has not
both (i) elected to apply to the repair, construction or replacement of the
Property affected or to the purchase of other, similar Property for use in its
business within 90 days of the event giving rise to the Insurance Recovery and
(ii) actually applied to such repair, construction, replacement or purchase (A)
within 180 days after the earliest to occur of the receipt of such proceeds by
F.Y.I., any of its Subsidiaries or the Agent, with respect to an Insurance
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Recovery relating to other than real Property, or (B) commencing within 180
days after the earliest to occur of the receipt of such proceeds by F.Y.I., any
of its Subsidiaries or the Agent and continuing in a reasonably prompt and
diligent fashion thereafter, with respect to an Insurance Recovery relating to
real Property.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of
1%)) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if
such rate is not so published on such next succeeding Business Day, the Federal
Funds Rate for any day shall be the average rate charged to the Reference
Lender on such day on such transactions as determined by the Agent.
"Fixed Charges" means, for any period, the sum of (a) Consolidated
Interest Expense of F.Y.I. and its Subsidiaries during such period, plus (b)
all scheduled payments (as such scheduled payments are reduced by application
of any prepayments) of principal with respect to the Term Loans and other
outstanding Debt during such period, plus (c) taxes of F.Y.I. and its
Subsidiaries paid or payable in cash during such period.
"F.Y.I. Common Stock" means the common stock of F.Y.I., par value $.01 per
share.
"F.Y.I. Equity Documents" means F.Y.I.'s Certificate of Incorporation and
the F.Y.I. Common Stock.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state,
provincial or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, Permit, certificate,
license, authorization or other directive or requirement of any federal, state,
county, municipal, parish, provincial or other Governmental Authority or any
department, commission, board, court, agency or any other instrumentality of
any of them.
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"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation as to the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning. The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum anticipated liability in respect thereof (assuming
such Person is required to perform thereunder).
"Guaranties" means the Guaranty Agreements in form and substance
satisfactory to the Agent executed by F.Y.I. and each of its Subsidiaries and
any other Loan Party (one executed by each such Loan Party), dated the Closing
Date, in favor of the Agent for the benefit of the Agent and the Lenders, and
any Guaranty Agreement executed pursuant to Section 5.3 hereof, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"Hazardous Material" means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is,
or is deemed to be, alone or in any combination, hazardous, hazardous waste,
toxic, a pollutant, a deleterious substance, a contaminant or a source of
pollution or contamination under any Environmental Law, including, without
limitation, asbestos, petroleum, underground storage tanks (whether empty or
containing any substance) and polychlorinated biphenyls.
"Insurance Recovery" means, with respect to any Property of F.Y.I. or any
of its Subsidiaries and any single occurrence or related occurrences with
respect thereto, the receipt or constructive receipt by F.Y.I. or any of such
Subsidiaries, or the payment by an insurance company to the Agent, of proceeds
of any such property or casualty insurance in an amount or aggregate amount (as
applicable) in excess of $100,000.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark
and service mark registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
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"Intercompany Debt" means as specified in Section 9.1(e).
"Interest Period" means, with respect to any Eurodollar Loan, each period
commencing on the date such Loan is made or Converted from a Prime Rate Loan or
(if Continued) the last day of the next preceding Interest Period with respect
to such Loan, and ending on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the applicable Borrower or
Borrowers may select as provided in Section 2.9 hereof, except that each such
Interest Period which commences on the last Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of
the appropriate subsequent calendar month. Notwithstanding the foregoing: (a)
each Interest Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day (or, if such succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); (b) any Interest Period which would otherwise extend beyond an
applicable Maturity Date shall end on such Maturity Date; (c) no more than
seven (7) Interest Periods for Eurodollar Loans shall be in effect at the same
time; (d) no Interest Period shall have a duration of less than one month and,
if the Interest Period for any Eurodollar Loans would otherwise be a shorter
period, such Loans shall not be available hereunder; (e) no Interest Period
shall have a duration of more than six months; and (f) no Interest Period for a
Term Loan may commence before and end after any principal repayment date
unless, after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans having Interest Periods that end after such principal payment
date shall be equal to or less than the amount of the Term Loans scheduled to
be outstanding hereunder after such principal payment date.
"Interest Rate Protection Agreements" means, with respect to any Borrower,
an interest rate swap, cap or collar agreement or similar arrangement between
such Borrower and one or more Lenders that are parties to this Agreement
providing for the transfer or mitigation of interest rate risks either
generally or under specified contingencies.
"Inventory" means all inventory now owned or hereafter acquired by F.Y.I.
or any of its Subsidiaries wherever located and whether or not in transit,
which is or may at any time be held for sale or lease, or furnished under any
contract (exclusive of leases of real Property covered by a Mortgage) for
service or held as raw materials, work in process, or supplies or materials
used or consumed in the business of F.Y.I. or any of its Subsidiaries.
"Investments" means as specified in Section 9.5.
"IPO" means F.Y.I.'s public offering of 2,185,000 shares of F.Y.I. Common
Stock which offering closed in January of 1996 and was made pursuant to the
[Registration Statement].
"IPO Documents" means that certain registration statement of F.Y.I.
Incorporated on Form S-1, No. 33-98608, the final version of which was filed
with the Securities and Exchange Commission on January 23, 1996, that certain
underwriting agreement between Montgomery Securities, William Blair & Co.,
L.L.C. and F.Y.I., regarding the public offering of 1,900,000 shares of common
stock, dated January 22, 1996, and each other document filed with the
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<PAGE> 22
Securities and Exchange Commission or any state securities commission in
connection with the IPO.
"Issuing Bank" means Banque Paribas.
"Lender" and "Lenders" means as specified in the initial paragraph of this
Agreement.
"Letter of Credit" means any standby letter of credit issued by the
Issuing Bank for the account of the applicable Borrower or Borrowers pursuant
to this Agreement,
"Letter of Credit Agreement" means, with respect to each Letter of Credit
to be issued by the Issuing Bank therefor, the letter of credit application and
reimbursement agreement which such Issuing Bank requires to be executed by the
account party or parties in connection with the issuance of such Letter of
Credit.
"Letter of Credit Liabilities" means, at any time, the aggregate undrawn
face amounts of all outstanding Letters of Credit and all unreimbursed drawings
under Letters of Credit issued pursuant to the Revolving Credit Loans
Commitments.
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation or other encumbrance of any kind or
nature whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law or
otherwise.
"Loan Documents" means this Agreement, the Notes, the Security Documents,
the Agent's Letter, the Letters of Credit, the Letter of Credit Agreements, any
Interest Rate Protection Agreement or Currency Hedge Agreement between F.Y.I.
or any Subsidiary of F.Y.I. and any Lender, any Subordination Agreements, and
all other agreements, documents and instruments now or hereafter executed
and/or delivered pursuant to or in connection with any of the foregoing, and
any and all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Loan Party" means F.Y.I., each of its Subsidiaries and any other Person
who is or becomes a party to any agreement, document or instrument that
Guarantees or secures payment or performance of the Obligations or any part
thereof.
"Loans" means the Term Loans, the Revolving Credit Loans and the Swing
Loans, and "Loan" means any of the Term Loans, the Revolving Credit Loans or
the Swing Loans.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the business or financial
condition or performance of F.Y.I. and its Subsidiaries, taken as a whole, (b)
the ability of F.Y.I. with respect to the Term Loans or the Borrowers with
respect to the Revolving Credit Loans to pay and perform the Obligations when
due, or (c) the validity or enforceability of (i) any of the Loan Documents,
(ii) any Lien created or purported to be created by any of the Loan Documents
or the required priority of any such Lien, or (iii) the
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rights and remedies of the Agent or the Lenders under any of the Loan Documents.
"Material Contracts" means, as to any Person, any supply, purchase,
service, employment, tax, indemnity, shareholder or other agreement or contract
for which the aggregate amount or value of services performed or to be
performed for or by, or funds or other Property transferred or to be
transferred to or by, such Person or any of its Subsidiaries party to such
agreement or contract, or by which such Person or any of its Subsidiaries or
any of their respective Properties are otherwise bound, during any fiscal year
of the Person exceeds $500,000 as of the Closing Date and $750,000 thereafter
with respect to expenditures required by such Person, or $1,000,000 as of the
Closing Date and $2,000,000 thereafter with respect to revenues which the other
party to the contract is required to pay to such Person, and any and all
amendments, modifications, supplements, renewals or restatements thereof.
"Maturity Date" means the Term Loans Maturity Date or the Revolving Credit
Loans Maturity Date, as the case may be.
"Maximum Rate" means, with respect to any Lender, the maximum non-usurious
interest rate (or, if the context so permits or requires, an amount of interest
calculated at such rate), if any, that any time or from time to time may be
contracted for, taken, reserved, charged or received with respect to the
particular Obligations as to which such rate is to be determined, payable to
such Lender pursuant to this Agreement or any other Loan Document, under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable laws
now allow. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change in any
interest rate provided for herein based upon the Maximum Rate resulting from a
change in the Maximum Rate shall take effect without notice to the applicable
Borrower or Borrowers at the time of such change in the Maximum Rate. For
purposes of determining the Maximum Rate under Texas law if, contrary to the
intent of the parties, Texas law is ever used to determine the Maximum Rate,
the applicable rate ceiling shall be the indicated rate ceiling described in,
and computed in accordance with, Article 5069-1.04, Vernon's Texas Civil
Statutes; provided, however, that, to the extent permitted by applicable law,
the Agent shall have the right to change the applicable rate ceiling from time
to time in accordance with applicable law.
"Mortgaged Properties" means, collectively, the fee-owned Properties and
leasehold interests in the Properties listed on Schedule 1.1(a) hereof which
are or are to be subject to the Mortgages, and any such after-acquired
Properties which become subject to a Mortgage pursuant to Section 5.4 hereof.
"Mortgages" means the deed of trusts, leasehold deeds of trust, mortgages,
leasehold mortgages, collateral assignments of leases and other real estate
security documents executed and delivered on or about the Closing Date or
thereafter pursuant to this Agreement by F.Y.I. or any of its Subsidiaries or
any other Loan Party in favor of the Agent for the benefit of the Agent and the
Lenders with respect to any Mortgaged Property, and any and all amendments,
modifications,
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supplements, renewals or restatements thereof.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by or are required from
any Loan Party or any ERISA Affiliate since 1974 and which is covered by Title
IV of ERISA.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the gross
amount of cash received by F.Y.I. or any of its Subsidiaries from such Asset
Disposition, minus (b) the amount, if any, of all taxes paid or payable by
F.Y.I. or any of its Subsidiaries directly resulting from such Asset
Disposition (including the amount, if any, estimated by F.Y.I. in good faith at
the time of such Asset Disposition for taxes payable by F.Y.I. or any of its
Subsidiaries on or measured by net income or gain resulting from such Asset
Disposition), minus (c) the reasonable out-of-pocket costs and expenses
incurred by F.Y.I. or such Subsidiary in connection with such Asset Disposition
(including reasonable brokerage fees paid to a Person other than an Affiliate
of F.Y.I. and including any transfer or similar taxes) excluding any fees or
expenses paid to an Affiliate of F.Y.I., minus (d) amounts applied to the
repayment of indebtedness (other than the Obligations) secured by a Permitted
Lien on the Property subject to the Asset Disposition, minus (e) the actual
amount refunded to the seller as a result of a post-closing purchase price
adjustment which occurs within 180 days of the closing and is provided for in
the asset purchase agreement or the stock purchase agreement as provided to the
Lenders prior to the Acquisition. "Net Proceeds" with respect to any Asset
Disposition shall also include proceeds (after deducting any amounts specified
in clauses (b), (c) and (d) of the preceding sentence) of insurance with
respect to any actual or constructive loss of Property, an agreed or
compromised loss of Property or the taking of any Property under the power of
eminent domain and condemnation awards and awards in lieu of condemnation for
the taking of Property under the power of eminent domain, except such proceeds
and awards as are released to and used by F.Y.I. or any of its Subsidiaries in
accordance with Section 8.5(b). "Net Proceeds" means, with respect to any
Equity Issuance or Debt Issuance, (a) the gross amount of cash or other
consideration received from such Equity Issuance or Debt Issuance, as the case
may be, minus (b) the reasonable out-of-pocket costs and expenses incurred by
the issuer in connection with such Equity Issuance or Debt Issuance, as the
case may be (including reasonable underwriting fees paid to a Person other than
an Affiliate of F.Y.I.) excluding any fees or expenses paid to an Affiliate of
F.Y.I..
"Nonconsenting Lender" means as specified in Section 13.11.
"Notes" means the Revolving Credit Loans Notes, the Swing Loans Note, and
the Term Loans Notes, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof and all substitutions therefor
(including promissory notes issued by any Borrower pursuant to Section 13.8),
and "Note" means any of such promissory notes.
"Obligations" means any and all (a) indebtedness, liabilities and
obligations of the Loan Parties, or any of them, to the Agent, the Issuing Bank
and the Lenders, or any of them, evidenced by and/or arising pursuant to any of
the Loan Documents, now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several or joint and several, including, without limitation, (i) the
obligations of the Loan Parties to repay
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the Loans, the Letter of Credit Liabilities and the Reimbursement Obligations,
to pay interest on the Loans, the Letter of Credit Liabilities and
Reimbursement Obligations (including, without limitation, interest accruing
after any, if any, bankruptcy, insolvency, reorganization or other similar
filing) and to pay all fees, indemnities, costs and expenses (including
attorneys' fees) provided for in the Loan Documents and (ii) the indebtedness
constituting the Loans, the Letter of Credit Liabilities, the Reimbursement
Obligations and such fees, indemnities, costs and expenses, and (b)
indebtedness, liabilities and obligations of F.Y.I. or any of its Subsidiaries
under any and all Interest Rate Protection Agreements and Currency Hedge
Agreements that it may enter into with any Lender to the extent permitted by
Section 9.1(f).
"Operating Lease" means, with respect to any Person, any lease, rental or
other agreement for the use by that Person of any Property which is not a
Capital Lease Obligation.
"Outstanding Credit" means, at any particular time, the sum of (a) the
outstanding principal amount of the Revolving Credit Loans, plus (b) the
outstanding principal amount of the Swing Loans, plus (c) the Letter of Credit
Liabilities.
"Paribas" means Banque Paribas, a bank organized under the laws of the
Republic of France.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the
case of a Multiemployer Plan, at any time since September 2, 1974, by any
Borrower or any ERISA Affiliate for employees of any Borrower or any ERISA
Affiliate.
"Peril" means as specified in Section 8.5(a).
"Permit" means any permit, certificate, approval, order, license or other
authorization.
"Permitted Acquisition" means any Acquisition which has been approved in
writing by the Agent and Required Lenders or any other Acquisition which
satisfies each of the following requirements: (a) the acquiror (or surviving
corporation if the acquisition is by means of a merger) is (i) F.Y.I. or any
other Borrower (subject to the limitations of Section 9.18), or (ii) any
Acquisition Subsidiary which becomes a Borrower prior to or concurrently with
the Acquisition pursuant to Section 5.3 (unless disapproved by the Agent, which
disapproval shall be conclusively presumed by the failure of the Agent for any
reason to execute the appropriate Borrower Addition Agreement in the space
provided for acceptance by the Agent), (b) the assets to be acquired in
connection with such Acquisition are assets that are to be used in the existing
businesses of the
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acquiror as such business is presently conducted, (c) such acquisition has been
approved by the Board of Directors of the acquired entity, (d) the acquired
entity shall have generated positive EBITDA during the twelve-month period
preceding the Acquisition, as audited or reviewed by an accounting firm
acceptable to the Agent, after adjusting for excess owners' compensation and
other pro forma charges as validated by the Agent, (e) drawings to fund such
Acquisitions will be permitted only to the extent that the outstanding
principal amount of the Loans do not exceed 2.5 times EBITDA for the four
fiscal quarters most recently completed of F.Y.I. and its Subsidiaries (and
including the acquired entity's trailing twelve month EBITDA, if audited or
reviewed by an accounting firm acceptable to the Agent) (EBITDA may include
proforma adjustments to an acquired entity's earnings acceptable to the Agent),
(f) after any time at which $9,000,000 in Loans is or has been outstanding, no
single Permitted Acquisition shall exceed $4,000,000, in total consideration
(including any Debt assumed or guaranteed in connection therewith), without
Required Lenders' approval, (g) after any time at which $9,000,000 in Loans is
or has been outstanding, the aggregate amount of all such subsequent
Acquisitions shall not exceed $8,000,000, in total consideration (including any
Debt assumed or guaranteed in connection therewith) in any twelve month period
without Required Lenders' approval, (h) prior to and after giving effect to the
Acquisition, no Default shall exist, (i) after giving effect to such
acquisition, F.Y.I. will not violate any financial covenant, (j) no material
part of the Property or business operations to be acquired is located outside
the U.S. or Canada, and (k) the Borrower shall have complied with Sections 6.5
and 8.15; provided, however, that up to $2,000,000 (valued at total purchase
consideration including any Debt assumed or guaranteed in connection therewith)
in Acquisitions made during the term of this Agreement will be deemed to be
Permitted Acquisitions despite their failure to meet the requirements of items
(d) or (j) preceding so long as (i) no such acquired entity or entities shall
have annual sales in excess of $4,000,000 or cumulative EBITDA losses
(individually for any one such acquired entity or in the aggregate for all such
acquired entities) in excess of $300,000 incurred in the twelve-month period
preceding the respective dates of acquisition, and (ii) Mexico is the only
jurisdiction outside the U.S. or Canada where any material part of the Property
or business operations of the entity or entities to be acquired is located.
"Permitted Acquisition Documents" means any acquisition agreement and each
other material agreement, document or instrument executed or delivered in
connection with or pursuant to any Permitted Acquisition.
"Permitted Capital Expenditures" means as specified in Section 10.6.
"Permitted Holders" means (a) the individuals listed on Schedule 1.1(b)
attached hereto and incorporated herein by reference, and (b) any spouse,
parent, sibling, child or grandchild of any of the aforesaid individuals (in
each case, whether such relationship arises from birth, adoption or through
marriage) or any trust established for the benefit of any such individuals or
any spouse, parent, sibling, child or grandchild of any such individuals (in
each case whether such relationship arises from birth, adoption or through
marriage).
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"Permitted Liens" means:
(a) Liens disclosed on Schedule 1.1(c) hereto;
(b) Liens securing the Obligations in favor of the Agent (for the benefit
of the Agent and the Lenders) pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions or other
restrictions on the use of real Property or, as to the real Property referred to
in clause (ii) below only, imperfections to title that (i) as to any Mortgaged
Property, do not (individually or in the aggregate) materially affect the value
of the Property encumbered thereby or materially impair the ability of F.Y.I. or
any of its Subsidiaries to use such Property in its businesses, and none of
which is violated in any material respect by existing or proposed structures or
land use, and (ii) as to any real Property other than Mortgaged Property, were
entered into in the ordinary course of business and could not have a Material
Adverse Effect;
(d) Liens for taxes, assessments or other governmental charges that are not
delinquent or which are being contested in good faith and for which adequate
reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers, landlords or
other similar statutory Liens securing obligations that are not yet due and are
incurred in the ordinary course of business or which are being contested in good
faith and for which adequate reserves have been established;
(f) Liens resulting from good faith deposits to secure payment of workmen's
compensation or other social security programs or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, contracts (other
than for payment of Debt) or leases, all in the ordinary course of business;
(g) Purchase-money Liens on any Property hereafter acquired or the
assumption after the Closing Date of any Lien on Property existing at the time
of such acquisition (and not created in contemplation of such acquisition), or a
Lien incurred or assumed after the Closing Date in connection with any
conditional sale or other title retention agreement or Capital Lease Obligation;
provided that:
(i) any Property subject to the foregoing is acquired by F.Y.I. or any
of its Subsidiaries in the ordinary course of its business and the Lien on
the Property attaches concurrently or within 90 days after the acquisition
thereof;
(ii) the Debt secured by any Lien so created, assumed or existing
shall not exceed the lesser of the cost or fair market value at the time of
acquisition of the Property covered thereby;
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(iii) each such Lien shall attach only to the Property so
acquired and the proceeds thereof; and
(iv) the Debt secured by all such Liens shall not exceed
$2,000,000 at any time outstanding in the aggregate;
(h) Easements, rights-of-way, restrictions and other Liens and
imperfections to title that are approved by the Agent and are listed on
Exhibit B to any Mortgage; and
(i) Any extension, renewal or replacement of any of the foregoing,
provided that Liens permitted hereunder shall not be extended or spread to
cover any additional indebtedness or Property; and
(j) Liens securing either (i) the $2,400,000 Prince Georges County,
Maryland Variable Rate Demand/Fixed Rate Revenue Bonds (B&B Records Center,
Inc. Facility), 1989 issue, but only to the extent that a Borrower has
acquired the assets or Capital Stock of B&B Information and Image
Management, Inc. in a Permitted Acquisition and the Liens relate only to
the assets acquired and secure only Debt outstanding at the time of the
Permitted Acquisition and which Debt is permitted under Section 9.1(h), or
(ii) other industrial development bonds to the extent that no Permitted
Acquisition of B&B Information and Image Management, Inc. has been
consummated by any Borrower or any Subsidiary of any Borrower and the Debt
evidenced by such other industrial development bonds is permitted under
Section 9.1(h) (but at no time may the Borrowers or their respective
Subsidiaries taken as a whole have any Liens on any of their Properties or
revenues under both clauses j(i) and j(ii) at the same time, and if at any
time any of the Liens of the type described in clause (j)(i) affect any
Property or revenue of any Borrower or any Subsidiary of any Borrower, no
Liens of the type described in clause (j)(ii) will be permitted);
provided, however, that none of the Permitted Liens (except those in favor of
the Agent) may attach or relate to the Capital Stock of or any other ownership
interest in F.Y.I. or any of its Subsidiaries.
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, Governmental Authority
or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of ERISA
established or maintained or contributed to by any Loan Party opposing counsel
any ERISA Affiliate, including any Pension Plan.
"Prime Rate" means, at any time, the greater of (a) the rate of interest
per annum then most recently established by Banque Paribas as announced at its
Chicago office as its highest commercial prime rate then in effect, which rate
may not be the lowest rate of interest charged by Banque Paribas to its
commercial borrowers, or (b) the Federal Fund Rate plus one-half of one percent
(1/2%). Each change in any interest rate provided for herein based upon the
Prime Rate
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resulting from a change in the Prime Rate shall take effect without
notice to the applicable Borrower or Borrowers at the time of such change in
the Prime Rate.
"Prime Rate Loans" means Loans that bear interest at rates based upon the
Prime Rate.
"Principal Office" means the principal office of the Agent in Chicago,
Illinois, presently located at 227 West Monroe Street, Suite 3300, Chicago,
Illinois 60606.
"Pro Formas" means the unaudited consolidated balance sheets of F.Y.I. and
its consolidated Subsidiaries dated as of December 31, 1995 after giving effect
to the Related Transactions, including, without limitation, the making of the
initial Loans, which Pro Formas are attached to the Closing Certificate.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"Projections" means F.Y.I.'s forecasted consolidated (a) balance sheets,
(b) income statements, and (c) cash flow statements, together with appropriate
supporting details and a statement of underlying assumptions, prepared on or
about the Closing Date (i) after giving effect to the Related Transactions,
including, without limitation, the funding of the Loans, which Projections are
attached to the Closing Certificate.
"Property" means property of all kinds, real, personal or mixed, tangible
or intangible (including, without limitation, all rights relating thereto),
whether owned or acquired on or after the Closing Date.
"Quarterly Date" means the last day of each March, June, September and
December of each year, the first of which shall be the first such day after the
Closing Date.
"Receivables" means, as at any date of determination thereof, each and
every "account" as such term is defined in the UCC and includes, without
limitation, the unpaid portion of the obligation, as stated on the respective
invoice, or, if there is no invoice, other writing, of a customer of F.Y.I. or
any of its Subsidiaries in respect of Inventory sold and shipped or services
rendered by F.Y.I. or any of its Subsidiaries.
"Reference Lender" means Banque Paribas.
"Register" means as specified in Section 13.8(d).
"Registered Note" means as specified in Section 2.2(b).
"Registered Note Register" means as specified in Section 13.8(h).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
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"Regulatory Change" means, with respect to any Lender, any change after
the Closing Date in any U.S. federal or state laws or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of lenders
including such Lender of or under any U.S. federal or state laws or foreign
laws or regulations (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.
"Reimbursement Obligation" means the obligation of the applicable Borrower
or Borrowers (as account party or parties, respectively) to reimburse the
Issuing Bank for any drawing under a Letter of Credit.
"Related Transactions" means, collectively, (a) the making of the Loans,
(b) the execution and delivery of the Related Transactions Documents, and (c)
the payment of all fees, costs and expenses associated with the foregoing.
"Related Transactions Documents" means the Loan Documents, the F.Y.I.
Equity Documents, the IPO Documents and all other agreements, documents and
instruments executed and/or delivered pursuant to or in connection with any of
the foregoing.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, discharge, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
"Remedial Action" means a actions required to (a) cleanup, remove, respond
to, treat or otherwise address Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so that they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment, (c) perform studies and investigations on the extent and nature of
any actual or suspected contamination, the remedy or remedies to be used or
health effects or risks of such contamination, or (d) perform post-remedial
monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Required Lenders" means, at any date of determination, Lenders having in
the aggregate at least 66 2/3% (in Dollar amount as to any one or more of the
following) of the sum of the aggregate outstanding Revolving Credit Loans
Commitments (or, if such Commitments have terminated or expired, the aggregate
outstanding principal amount of the Revolving Credit Loans and the aggregate
Letter of Credit Liabilities), plus the aggregate outstanding Term Loans
Commitments (or if such Commitments have terminated or expired, the aggregate
outstanding principal amount of the Term Loans).
"Required Payment" means as specified in Section 3.4.
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"Reserve Requirement" means, for any Eurodollar Loan of any Lender for any
Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $1,000,000 against "Eurocurrency Liabilities" as such term is used in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
Lenders by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate
or the Adjusted Eurodollar Rate is to be determined or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Responsible Officer" means, as to any Loan Party, the chief financial
officer, chief operating officer or chief executive officer of such Person.
"Restricted Payment" means (a) any dividend or other distribution (whether
in cash, Property or obligations), direct or indirect, on account of (or the
setting apart of money for a sinking or other analogous fund for) any shares of
any class of Capital Stock of F.Y.I. or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in equity securities of
F.Y.I.; (b) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of F.Y.I. or any of its
Subsidiaries now or hereafter outstanding; (c) any loan, advance or payment
(pursuant to a tax sharing agreement or otherwise) to F.Y.I.; and (d) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of F.Y.I. or any of its Subsidiaries now or hereafter outstanding.
"Revolving Credit Loans" means as specified in Section 2.1(a).
"Revolving Credit Loans Commitment" means, as to any Lender, the
obligation of such Lender to make or continue Revolving Credit Loans and incur
or participate in Letter of Credit Liabilities hereunder in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Lender on the signature pages hereto under
the heading "Revolving Credit Loans Commitment" or, if such Lender is a party
to an Assignment and Acceptance, the amount set forth in the most recent
Assignment and Acceptance of such Lender, as the same may be reduced or
terminated pursuant to Section 2.13 or 11.2, and "Revolving Credit Loans
Commitments" means such obligations of all Lenders, minus, as of any date of
determination, the aggregate outstanding principal balance of all Swing Loans
on such date. As of the Closing Date, the aggregate principal amount of the
Revolving Credit Loans Commitments is $5,000,000.
"Revolving Credit Loans Lender" means, as of any date of determination, a
Lender which has a Revolving Credit Loans Commitment.
"Revolving Credit Loans Maturity Date" means April 15, 2001.
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"Revolving Credit Loans Notes" means the promissory notes made by the
Revolving Loans Borrowers evidencing the Revolving Credit Loans, in the form of
Exhibit C hereto, and also includes such promissory notes issued in registered
form pursuant to Section 2.2(b).
"Revolving Loans Borrower" means any of F.Y.I., Imagent, Researchers,
Recordex, DPAS, Leonard, Deliverex, Permanent, Sacramento, any Acquisition
Subsidiary which becomes a Borrower in accordance with Section 5.3(d) (unless
disapproved by the Agent, which disapproval shall be conclusively presumed by
the failure of the Agent for any reason to execute the Borrower Addition
Agreement in the space provided for acceptance by the Agent), and any other
Wholly-Owned Subsidiary of F.Y.I. which executes a Borrower Addition Agreement
approved by the Agent in its reasonable discretion from time to time, and
"Revolving Loans Borrowers" means all of such Revolving Loans Borrowers.
"Security Agreements" means security agreements in form and substance
satisfactory to the Agent executed by F.Y.I. and each of its Subsidiaries and
any other Loan Party (one executed by each such Loan Party), dated the Closing
Date, in favor of the Agent for the benefit of the Agent and the Lenders, and
any security agreement executed pursuant to Section 5.3 hereof, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"Security Documents" means the Guaranties, the Security Agreements and the
Mortgages, as they may be amended, modified, supplemented, renewed, extended or
restated from time to time, and any and all other agreements, deeds of trust,
mortgages, chattel mortgages, security agreements, pledges, guaranties,
assignments of proceeds, assignments of income, assignments of contract rights,
assignments of partnership interests, assignments of royalty interests,
assignments of performance or other collateral assignments, completion or
surety bonds, standby agreements, subordination agreements, undertakings and
other agreements, documents, instruments and financing statements now or
hereafter executed and/or delivered by any Loan Party in connection with or as
security or assurance for the payment or performance of the Obligations or any
part thereof.
"Seller Earn Out" means any obligation incurred by a Borrower in
connection with a Permitted Acquisition which (i) is only payable by the
Borrower for performance by a seller, or a shareholder, officer or director of
a seller, of obligations over the passage of time (e.g., non-compete payments)
or in the event certain future performance goals are achieved with respect to
the assets or business acquired, excluding any noncompete payments in excess of
fifteen percent (15%) of the purchase price and excluding performance-based
payments which are greater than 100% of the earnings or cash flow on which they
are based, (ii) is subordinate to the Obligations as provided in the
Subordination Agreement, and (iii) provides that the maximum potential
liability of the Borrower with respect thereto is limited.
"Seller Subordinated Debt" means any Debt of F.Y.I. (and not of any
Subsidiary of F.Y.I.) which (a) is owed to a seller as part of the purchase
consideration for a Permitted Acquisition, (b) is subordinated to the
Obligations pursuant to a Subordination Agreement, (c) does not, when
aggregated with the principal balance of all other Seller Subordinated Debt,
exceed $7,500,000 in principal amount, (d) does not have an interest rate in
excess of twelve percent (12%) per annum,
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and (e) is unsecured. Amounts of Seller Subordinated Debt in excess of
$2,500,000 which amortize prior to the final maturity of the latest maturing
portion of the Obligations will be treated as a part of Total Senior Debt for
purposes of calculating compliance with Section 10.2 and shall be added to the
amount of all Loans for purposes of the calculations set forth in clause (e) of
the definition of Permitted Acquisitions. Seller Subordinated Debt may be
convertible into Capital Stock of F.Y.I.
"Solvency Certificate" means a certificate substantially in the form of
Exhibit I attached hereto.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and circumstances existing at such time, represents the amount (net of
contribution rights) that can reasonably be expected to become an actual or
matured liability.
"Subordination Agreement" means a Subordination Agreement in the form
attached hereto as Exhibit D, relating to Seller Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors (or Persons performing similar functions)
of such corporation or entity (irrespective of whether or not at the time, in
the case of a corporation, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries.
"Swing Loans" means as specified in Section 2.1(b).
"Swing Loans Borrower" means any of F.Y.I., Imagent, Researchers,
Recordex, DPAS, Leonard, Deliverex, Permanent, Sacramento, any Acquisition
Subsidiary which becomes a Borrower in accordance with Section 5.3(d) (unless
disapproved by the Agent, which disapproval
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shall be conclusively presumed by the failure of the Agent for any reason to
execute the Borrower Addition Agreement in the space provided for acceptance by
the Agent), and any other Wholly-Owned Subsidiary of F.Y.I. which executes a
Borrower Addition Agreement approved by the Agent in its reasonable discretion,
and "Swing Loans Borrowers" means all of such Swing Loans Borrowers.
"Swing Loans Commitment" means the obligation of Paribas to make or
continue Swing Loans hereunder in an aggregate principal amount up to but not
exceeding the amount set forth opposite Paribas' name on the signature pages
hereto under the heading "Swing Loans Commitment," as the same may be reduced
or terminated pursuant to Section 2.13 or Section 11.2. As of the Closing
Date, the Swing Loans Commitment is $1,000,000.
"Swing Loans Maturity Date" means the earlier of (a) April 15, 2001, or
(b) the date designated by Paribas, in its sole discretion, as the Swing Loans
Maturity Date upon notice hereafter given by Paribas to the Swing Loans
Borrowers.
"Swing Loans Note" means the promissory note made by the Swing Loans
Borrower evidencing the Swing Loans, in the form of Exhibit E hereto.
"Term Loans" means as specified in Section 2.1(c).
"Term Loans Borrower" means any of F.Y.I., Imagent, Researchers, Recordex,
DPAS, Leonard, Deliverex, Permanent, Sacramento, any Acquisition Subsidiary
which becomes a Borrower in accordance with Section 5.3(d) (unless disapproved
by the Agent, which disapproval shall be conclusively presumed by the failure
of the Agent for any reason to execute the Borrower Addition Agreement in the
space provided for acceptance by the Agent) and any other Wholly-Owned
Subsidiary of F.Y.I. which executes a Borrower Addition Agreement approved by
the Agent in its reasonable discretion, and "Term Loans Borrowers" means all of
such Term Loans Borrowers.
"Term Loans Commitment" means, as to any Lender, the obligation of such
Lender to make or continue Term Loans hereunder in an aggregate principal
amount up to but not exceeding the amount set forth opposite the name of such
Lender on the signature pages hereto under the heading "Term Loans Commitment",
as the same may be reduced or terminated pursuant to Section 2.13 or 11.2, and
"Term Loans Commitments" means such obligations of all Lenders. As of the
Closing Date, the aggregate principal amount of the Term Loans Commitments is
$30,000,000.
"Term Loans Commitments Termination Date" means the first to occur of
October 15, 1997 or the date on which the Term Loans Commitments are terminated
pursuant to the terms of this Agreement.
"Term Loans Lender" means, as of any date of determination, a Lender which
has a Term Loans Commitment.
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"Term Loans Maturity Date" means April 15, 2001.
"Term Loans Notes" means the promissory notes made by F.Y.I. evidencing
the Term Loans, in the form of Exhibit F hereto, and also includes such
promissory notes issued in registered form pursuant to Section 2.2(b).
"Total Capitalization" means, at any particular time, an amount equal to
the sum of (a) Consolidated Funded Debt plus (b) Consolidated Net Worth.
"Total Debt" means, at any particular time, the aggregate principal amount
of all Debt of F.Y.I. and its Subsidiaries outstanding, determined on a
consolidated basis.
"Total Senior Debt" means, at any particular time, the aggregate principal
amount of the Total Debt that is not Seller Subordinated Debt.
"Type" means any type of Loan (i.e., a Prime Rate Loan or Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas
and/or any other jurisdiction, the laws of which may be applicable to or in
connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"UCP" means as specified in Section 2.14(b).
"Unified Cash Management System" means as specified in Section 8.13.
"U.S." means the United States of America.
"Wholly-Owned Subsidiary" means, with respect to any Person, a Subsidiary
of such Person all of whose outstanding Capital Stock (other than directors'
qualifying shares, if any) shall at the time be owned by such Person and/or one
or more of its Wholly-Owned Subsidiaries.
Section 1.2 Other Definitional Provisions Other Definitional
Provisions. All definitions contained in this Agreement are equally applicable
to the singular and plural forms of the terms defined. The words "hereof",
"herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise specified, all Article and
Section references pertain to this Agreement. Terms used herein that are
defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP consistent with such accounting principles
applied in the preparation of the audited financial statements referred to in
Section 7.2(a). All financial information delivered to the Agent pursuant to
Section 8.1 shall be prepared in accordance with GAAP applied on a basis
consistent
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with such accounting principles applied in the preparation of the audited
financial statements referred to in Section 7.2(a) or in accordance with
Section 8.7. In the event that any "Accounting Changes" (as defined below)
occur and such changes result in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then F.Y.I. and the
Agent agree to enter into negotiations in order to amend such provisions of
this Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the Borrowers' financial
condition shall be the same after such Accounting Changes as if such Accounting
Changes had not been made. Until such time as such an amendment shall have
been executed and delivered by the Borrowers, the Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes had not
occurred. "Accounting Changes" means: (a) changes in accounting principles
required by the promulgation of any rule, regulations, pronouncement or opinion
by the Financial Accounting Standards Board, the American Institute of
Certified Public Accounts or the Securities and Exchange Commission (or
successors thereto or agencies with similar functions) after the Closing Date;
and (b) changes in accounting principles approved by F.Y.I.'s certified public
accountants and implemented after the Closing Date.
(b) F.Y.I. shall deliver to the Agent and the Lenders, at the same
time as the delivery of any annual, quarterly or monthly financial statement
under Section 8.1, (i) a description, in reasonable detail, of any material
variation between the application of GAAP employed in the preparation of the
next preceding annual, quarterly or monthly financial statements as to which no
objection has been made in accordance with the last sentence of subsection (a)
preceding and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement (including Article 10 hereof),
neither F.Y.I. nor any of its Subsidiaries will change the last day of its
fiscal year from December 31, or the last days of the first three fiscal
quarters of F.Y.I. and its Subsidiaries in each of its fiscal years from that
existing on the Closing Date. Any Subsidiary of F.Y.I. created or acquired
after the Closing Date shall, as soon as reasonably practicable, be put on a
fiscal year ending December 31.
Section 1.3 Financial Covenants. The financial covenants
contained in Article 10 shall be calculated as follows: (i) all such covenants
shall be calculated on a consolidated basis for F.Y.I. and its Subsidiaries,
(ii) Capital Expenditures and taxes as a component used in calculating the
financial covenants contained in Article 10 shall, for the fiscal quarters of
F.Y.I. and its Subsidiaries commencing after and completed subsequent to the
Closing Date and ending prior to March 31, 1997, be calculated on a combined
pro forma basis based on the actual historic Capital Expenditures and taxes of
F.Y.I. and its Subsidiaries as individual corporations prior to their
consolidation and thereafter shall be calculated based on the four fiscal
quarters of F.Y.I. and its Subsidiaries then most recently ended, and (iii)
Consolidated Interest Expense, as a component used in calculating the financial
covenants contained in Article 10 shall, for the fiscal quarters of F.Y.I. and
its Subsidiaries commencing after and completed subsequent to the Closing Date
and ending prior to March 31, 1997, be calculated on an annualized basis based
on the number of fiscal quarters commencing after and completed subsequent to
the Closing Date, and
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<PAGE> 37
thereafter shall be calculated based on the four fiscal quarters of F.Y.I. and
its Subsidiaries then most recently ended.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make one or more revolving
credit loans to the Revolving Loans Borrowers from time to time from and
including the Closing Date to but excluding the Revolving Credit Loans Maturity
Date up to but not exceeding the amount of such Lender's Revolving Credit Loans
Commitment as then in effect; provided, however, that the Outstanding Credit
shall not at any time exceed the Aggregate Borrowing Base; and provided
further, however, that the Outstanding Credit for which any Revolving Loans
Borrower is the borrower and the account party shall not at any time exceed
such Revolving Loans Borrower's Borrowing Base. (Such revolving credit loans
referred to in this Section 2.1(a) now or hereafter made by the Lenders to the
Revolving Loans Borrowers from and including and after the Closing Date are
hereinafter collectively called the "Revolving Credit Loans".) Subject to the
foregoing limitations and the other terms and conditions of this Agreement, the
Revolving Loans Borrowers may borrow, repay and reborrow the Revolving Credit
Loans hereunder.
(b) Swing Loans. Subject to the terms and conditions of this
Agreement, upon request of F.Y.I. on behalf of the Swing Loans Borrower and
subject to the discretionary consent of Paribas as provided herein, Paribas
agrees to make one or more swing loans to the Swing Loans Borrowers from time
to time from and including the Closing Date to but excluding the Swing Loans
Maturity Date up to but not exceeding the amount of Paribas' Swing Loans
Commitment as then in effect. (Such swing loans referred to in this Section
2.1(b) now or hereafter made by Paribas to the Swing Loans Borrowers from and
including and after the Closing Date are hereinafter collectively called the
"Swing Loans".) Notwithstanding anything to the contrary contained in this
Section 2.1(b), or elsewhere in this Agreement, Paribas shall not be obligated,
pursuant to this Section 2.1(b) or otherwise, to make any Swing Loan to or for
the account of any Swing Loans Borrower, and no Swing Loan Borrower shall be
entitled to borrow, pursuant to this Section 2.1(b) unless and until Paribas
shall have consented to each such Swing Loan, which consent may or may not be
given by Paribas in its sole discretion. Prior to the Swing Loans Maturity
Date, the Swing Loans Borrowers may, subject to the discretionary consent of
Paribas as provided herein, borrow, repay, and reborrow Swing Loans up to the
Swing Loans Commitment in accordance with the terms of this Agreement. Paribas
shall not make any Swing Loans on or after the Swing Loans Maturity Date.
Notwithstanding anything to the contrary contained in this Section 2.1(b) or
elsewhere in this Agreement, Paribas shall not be obligated, pursuant to this
Section 2.1(b) or otherwise, to make any Swing Loan to or for the account of
any Swing Loans Borrower, and no Swing Loans Borrower shall be entitled to
borrow, pursuant to this Section 2.1(b) if, after giving full effect to the
requested Swing Loan, the Outstanding Credit for which such Swing Loans
Borrower is the borrower and the Account Party would exceed such Borrower's
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<PAGE> 38
Borrowing Base, or the Outstanding Credit would exceed an amount equal to the
lesser of (i) the Aggregate Borrowing Base or (ii) the Revolving Credit Loans
Commitments at such time.
(c) Term Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make one or more term loans to the
Term Loans Borrowers from time to time from and including the Closing Date to
but excluding October 15, 1997 up to but not exceeding the amount of such
Lender's Term Loans Commitment. (Such term loans referred to in this Section
2.1(c) made by the Lenders to the Term Loans Borrowers are hereinafter
collectively called the "Term Loans".) Notwithstanding anything else herein or
elsewhere to the contrary, the obligation of each Lender to make Term Loans
shall terminate on October 15, 1997.
(d) Continuation and Conversion of Loans. Subject to the terms
and conditions of this Agreement, the applicable Borrower or Borrowers may
borrow the Loans as Prime Rate Loans or, except for Swing Loans, as Eurodollar
Loans and, until the applicable Maturity Date, the applicable Borrower or
Borrowers may Continue Eurodollar Loans or Convert Loans other than Swing Loans
of one Type into Loans of the other Type. The Swing Loans will be made and
maintained only as Prime Rate Loans.
(e) Lending Offices. Loans of each Type made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2 Notes.
(a) Unregistered Notes. The Revolving Credit Loans made by each
Lender shall be evidenced by a single promissory note of the Revolving Loans
Borrowers in substantially the form of Exhibit C hereto, dated the Closing
Date, payable to the order of such Lender in a principal amount equal to its
Revolving Credit Loans Commitment as originally in effect and otherwise duly
completed. The Swing Loans made by Paribas shall be evidenced by a single
promissory note of the Swing Loans Borrowers in substantially the form of
Exhibit E hereto dated the Closing Date payable to the order of Paribas in a
principal amount equal to its Swing Loans Commitment as originally in effect
and otherwise duly completed. The Term Loans made by each Lender shall be
evidenced by a single promissory note of the Term Loans Borrowers in
substantially the form of Exhibit F hereto, dated the Closing Date, payable to
the order of such Lender in a principal amount equal to its Term Loans
Commitment as originally in effect and otherwise duly completed. Each Lender
is hereby authorized by the applicable Borrower or Borrowers to endorse on the
schedule (or a continuation thereof) attached to each Note of such Lender, to
the extent applicable, the date, amount and Type of and the Interest Period for
each Loan made by such Lender to the applicable Borrower or Borrowers and the
amount of each payment or prepayment of principal of such Loan received by such
Lender, provided that any failure by such Lender to make any such endorsement
shall not affect the obligations of the applicable Borrower or Borrowers under
such Note or this Agreement in respect of such Loan.
(b) Registered Notes. Any Lender that is not a U.S. Person and
that could become completely exempt from withholding of U.S. taxes in respect
of payment of any Obligations due to such Lender hereunder relating to any of
its Term Loans or Revolving Credit Loans if such
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<PAGE> 39
Term Loans or Revolving Credit Loans were in registered form for U.S. Federal
income tax purposes may request the applicable Borrower or Borrowers (through
the Agent), and the applicable Borrower or Borrowers agree thereupon, to
exchange such Lender's Note evidencing its Term Loans or Revolving Credit Loans
for a promissory note or notes registered as provided in Section 13.8(h) hereof
(a "Registered Note"). Registered Notes may not be exchanged for Notes that
are not in registered form.
(c) Basis of Loans. The Lenders and the Revolving Loans Borrowers
acknowledge and agree that the Lenders are willing to make Revolving Credit
Loans to any Revolving Loans Borrower only if the other Revolving Loans
Borrowers are liable for payment thereof and, accordingly and in order to avoid
the necessity of the issuance of a separate Revolving Credit Loans Note for
each Revolving Loans Borrower the payment of which would be guaranteed by each
of the other Revolving Loans Borrowers, each of the Revolving Loans Borrowers
desires to be a co- borrower of, and jointly and severally liable for, payment
of the Revolving Credit Loans. None of the Revolving Loans Borrowers is a co-
borrower with respect to a Revolving Credit Loan or is executing a Revolving
Credit Loans Note as a co-maker thereof as a condition to or otherwise in
connection with any Loan to such Revolving Loans Borrower, other than a
Revolving Credit Loan the proceeds of which are used by such Revolving Loans
Borrower. Paribas and the Swing Loans Borrowers acknowledge and agree that
Paribas is willing to make Swing Loans to any Swing Loans Borrower only if the
other Swing Loans Borrowers are liable for payment thereof and, accordingly and
in order to avoid the necessity of the issuance of a separate Swing Loans Note
for each Swing Loans Borrower the payment of which would be guaranteed by each
of the other Swing Loans Borrowers, each of the Swing Loans Borrowers desires
to be a co-borrower of, and jointly and severally liable for, payment of the
Swing Loans. None of the Swing Loans Borrowers is a co-borrower with respect
to a Swing Loan or is executing a Swing Loans Note as a co- maker thereof as a
condition to or otherwise in connection with any Loan to such Swing Loans
Borrower, other than a Swing Loan the proceeds of which are used by such Swing
Loans Borrower. The Lenders and the Term Loans Borrowers acknowledge and agree
that the Lenders are willing to make Term Loans to any Term Loans Borrower only
if the other Term Loans Borrowers are liable for payment thereof and,
accordingly and in order to avoid the necessity of the issuance of a separate
Term Loans Note for each Term Loans Borrower the payment of which would be
guaranteed by each of the other Term Loans Borrowers, each of the Term Loans
Borrowers desires to be a co-borrower of, and jointly and severally liable for,
payment of the Term Loans. None of the Term Loans Borrowers is a co-borrower
with respect to a Term Loan or is executing a Term Loans Note as a co-maker
thereof as a condition to or otherwise in connection with any Loan to such Term
Loans Borrower, other than a Term Loan the proceeds of which are used by such
Term Loans Borrower.
Section 2.3 Repayment of Loans.
(a) Each of the Revolving Loans Borrowers shall jointly and
severally pay to the Agent for the account of each applicable Lender the
outstanding principal of the Revolving Credit Loans (and the outstanding
principal of the Revolving Credit Loans shall be due and payable) on the
Revolving Credit Loans Maturity Date.
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<PAGE> 40
(b) Each of the Swing Loans Borrowers shall jointly and severally
pay to the Agent for the account of Paribas the outstanding principal amount
of the Swing Loans (and the outstanding principal of the Swing Loans shall be
due and payable) on the Swing Loans Maturity Date.
(c) Each of the Term Loans Borrowers shall jointly and severally
pay to the Agent for the account of each applicable Lender the outstanding
principal of the Term Loans existing as of October 15, 1997 (and the outstanding
principal of the Term Loans shall be due and payable) in fourteen (14) equal
quarterly installments on the dates set forth below in an amount sufficient to
amortize fully the Term Loans by the Term Loans Maturity Date:
Payment Date
------------
January 15, 1998
April 15, 1998
July 15, 1998
October 15, 1998
January 15, 1999
April 15, 1999
July 15, 1999
October 15, 1999
January 15, 2000
April 15, 2000
July 15, 2000
October 15, 2000
January 15, 2001
April 15, 2001
In addition, each of the Term Loans Borrowers shall jointly and severally pay
to the Agent for the account of each applicable Lender all outstanding
principal of the Term Loans (and all outstanding principal of the Term Loans
shall be due and payable) on the Term Loans Maturity Date.
Section 2.4 Interest.
(a) Interest Rate. The Revolving Loans Borrowers (with respect to
the Revolving Credit Loans), the Swing Loans Borrowers (with respect to the
Swing Loans) and the Term Loans Borrowers (with respect to the Term Loans)
shall jointly and severally pay to the Agent for the account of each Lender
interest on the unpaid principal amount of each Loan made by such Lender to the
Revolving Loans Borrowers, the Swing Loans Borrowers and the Term Loans
Borrowers, respectively, for the period commencing on the date of such Loan to
but excluding the date such Loan shall be paid in full, at the following rates
per annum:
(i) during the periods such Loan is a Prime Rate Loan,
the lesser of (A) the Prime Rate plus the Applicable Margin or (B) the
Maximum Rate; and
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(ii) during the periods such Loan is a Eurodollar
Loan, the lesser of (A) the Eurodollar Rate plus the Applicable
Margin or (B) the Maximum Rate.
(b) Payment Dates. Accrued interest on the Loans shall be due and
payable in arrears as follows:
(i) in the case of Prime Rate Loans, on each Quarterly
Date;
(ii) in the case of each Eurodollar Loan, on the last day
of the Interest Period with respect thereto;
(iii) upon the payment or prepayment of any Loan or the
Conversion of any Loan to a Loan of the other Type (but only on the
principal amount so paid, prepaid or Converted); and
(iv) on the Maturity Date for such Loan.
(c) Default Interest. Notwithstanding the foregoing, the
Revolving Loans Borrowers (with respect to the Revolving Credit Loans and
Reimbursement Obligations), the Swing Loans Borrowers (with respect to Swing
Loans) or Term Loans Borrowers (with respect to Term Loans) shall jointly and
severally pay to the Agent for the account of each Lender interest at the
applicable Default Rate on any principal of any Loan made by such Lender to the
Revolving Loans Borrowers, Swing Loans Borrowers or Term Loans Borrowers, any
Reimbursement Obligation and (to the fullest extent permitted by law) any other
amount payable by the applicable Borrowers under this Agreement or any other
Loan Document to such Lender, which is not paid in full when due (whether at
stated maturity, by acceleration or otherwise), for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate shall be payable from time to time
on demand by the Agent.
Section 2.5 Borrowing Procedure. F.Y.I., with respect to the
Revolving Credit Loans, for and on behalf of the applicable Revolving Loans
Borrower or Borrowers, F.Y.I., with respect to the Swing Loans for and on
behalf of the applicable Swing Loans Borrower or Borrowers, and F.Y.I., with
respect to the Term Loans, for and on behalf of the applicable Term Loans
Borrower or Borrowers, shall give the Agent notice of each borrowing hereunder
in accordance with Section 2.9. Not later than 12:00 noon (Chicago, Illinois
time) on the date specified for each borrowing hereunder, each Lender will make
available the amount of the Loan to be made by it on such date to the Agent, at
the Principal Office, in immediately available funds, for the account of the
applicable Borrower or Borrowers. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available to the
applicable Borrower or Borrowers by wire transfer of immediately available
funds to the applicable Deposit Account no later than 1:00 p.m.
Section 2.6 Optional Prepayments, Conversions and Continuations
of Loans. Subject to Sections 2.7 and 2.8, the applicable Borrower or
Borrowers shall have the right from time to time to prepay the Loans, to
Convert all or part of a Loan (other than a Swing Loan) of one Type into a Loan
of another Type or to Continue Eurodollar Loans; provided that: (a) F.Y.I. for
and
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on behalf of itself or the applicable Borrowers, as the case may be, shall give
the Agent notice of each such prepayment, Conversion or Continuation as
provided in Section 2.9, (b) Eurodollar Loans may only be Converted on the last
day of the Interest Period, unless the applicable Borrower or Borrowers,
concurrently with making any such prepayment, pays all amounts owing to the
Agent and the Lenders under Section 4.5, (c) except for Conversions of
Eurodollar Loans into Prime Rate Loans, no Conversions or Continuations shall
be made while a Default has occurred and is continuing, and (d) optional
prepayments requested by F.Y.I. for the applicable Term Loans Borrower or
Borrowers to be applied to the Term Loans shall be applied to the
then-remaining installments of principal of the Term Loans pro rata.
Section 2.7 Mandatory Prepayments.
(a) Insurance Recovery. F.Y.I. shall, within two Business Days
after it or any of its Subsidiaries receives any Excess Insurance Proceeds, pay
(or cause to be paid) to the Agent, as a prepayment of the Term Loans, an
aggregate amount equal to such Excess Insurance Proceeds.
(b) Asset Dispositions. F.Y.I. shall, within two Business Days
after each day on which it or any of its Subsidiaries receives any Net Proceeds
from an Asset Disposition, pay to the Agent, as a prepayment of the Term Loans,
an aggregate amount equal to 100% of the Net Proceeds from such Asset
Disposition. Notwithstanding the foregoing, no such prepayment will be
required pursuant to this Section 2.7(b) (i) from the Net Proceeds from any
single Asset Disposition of used equipment if such Net Proceeds are $250,000 or
less and are fully re-invested in equipment used in the ordinary course of the
business of the Person making such Asset Disposition within 180 days of such
Asset Disposition, so long as the Net Proceeds from all such Asset Dispositions
in any one calendar year do not exceed $250,000, (ii) from the Net Proceeds of
any expropriation or condemnation of real Property if and to the extent that
such Net Proceeds are, as a result of such expropriation or condemnation,
re-invested in similar real Property or used to modify other then-existing real
Property used in the ordinary course of the business of the Person whose real
Property is affected thereby within 180 days of receipt of proceeds of such
expropriation or condemnation or (iii) until the cumulative Net Proceeds
received in any calendar year from all Asset Dispositions (other than the Net
Proceeds satisfying each of the requirements in clause (i) above) exceed
$500,000, in which case a prepayment shall be made in the amount of the Net
Proceeds from any specific Asset Disposition, or portion thereof, causing the
limit to be exceeded. Notwithstanding the foregoing, in connection with any
Asset Disposition consisting of the disposition of assets acquired in a
Permitted Acquisition, to the extent that the disposition of such assets was
contemplated and disclosed to the Agent at the time of the consummation of the
Permitted Acquisition in which the assets were acquired, and if such Asset
Disposition occurs within one year of the closing of the Permitted Acquisition,
the prepayment required under this Section 2.7(b) shall be limited to the
lesser of 100% of the Net Proceeds of the Asset Disposition or an amount equal
to the principal amount of any Term Loans advanced in connection with the
Permitted Acquisition. If any prepayment required by the preceding sentence is
made prior to the Term Loans Commitment Termination Date, such prepayment shall
be applied to the outstanding principal balance of the Term Loans at the time
of such prepayment and the amount available to be borrowed under the Term Loans
Commitments shall be increased by an amount equal to the principal amount of
the Term Loans so prepaid (but in no event to an amount which, when
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<PAGE> 43
added to the remaining principal balance of the Term Loans, would exceed the
Term Loans Commitments).
(c) Equity Issuances. F.Y.I. shall, on each day that it or any of
its Subsidiaries receives any Net Proceeds from any Equity Issuance, pay to the
Agent, as a prepayment of the Term Loans, an aggregate amount equal to 50% of
the Net Proceeds from such Equity Issuance; provided, however, that no
prepayment shall be required if and to the extent that the Capital Stock issued
in such Equity Issuance is (i) issued to a Seller as part of the purchase
consideration for a Permitted Acquisition, (ii) issued to raise cash
exclusively for part of the purchase consideration for a specific Permitted
Acquisition contemplated at the time of such issuance and the proceeds of which
are subsequently expended for such purpose, or (iii) issued to an officer,
director, employee or consultant of either F.Y.I. or a Subsidiary of F.Y.I. in
consideration for services rendered or pursuant to any employee benefit or
incentive plan.
(d) Debt Issuances. F.Y.I. shall, on each day that it or any of
its Subsidiaries receives any Net Proceeds from any Debt Issuance, pay to the
Agent, as a prepayment of the Term Loans, an aggregate amount equal to 100% of
the Net Proceeds from such Debt Issuance. No Debt Issuances may be made
without the prior written consent of the Agent and the Required Lenders.
(e) Borrowing Base. If at any time the Outstanding Credit exceeds
an amount equal to the lesser of (i) the Aggregate Borrowing Base or (ii) the
Revolving Credit Loans Commitments at such time, within one Business Day after
the occurrence thereof each of the Revolving Loans Borrowers shall jointly and
severally pay to the Agent the amount of such excess as a prepayment of the
Revolving Credit Loans (or, if the Revolving Credit Loans have been paid in
full, to reduce or to provide cash collateral to secure the outstanding Letter
of Credit Liabilities). If at any time the Outstanding Credit for which any
Revolving Loans Borrower is the borrower and the account party exceeds such
Borrower's Borrowing Base, such Borrower, within one Business Day of the
occurrence thereof, shall pay to the Agent the amount of such excess as a
prepayment of the Revolving Credit Loans (or if the Revolving Credit Loans
have been paid in full, to reduce or to provide cash collateral to reduce the
outstanding Letter of Credit Liabilities of such Borrower).
(f) Application of Mandatory Prepayments. Except as specifically
provided in the last sentence of Section 2.7(b), all prepayments pursuant to
subsections (a) through (d) preceding shall, as required by such subsections,
be applied to the then-remaining installments of principal of the Term Loans in
inverse order of maturity.
Section 2.8 Minimum Amounts. Except for Conversions and
prepayments pursuant to Section 2.7 and Article 4, each borrowing, each
Conversion and each prepayment of principal of the Loans shall be in an amount
at least equal to $500,000 or an integral multiple of $100,000 in excess
thereof, or, with respect to Swing Loans only, $100,000 or an integral multiple
of $50,000 in excess thereof (borrowings, prepayments or Conversions of or into
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder shall be deemed separate
borrowings, prepayments and Conversions for purposes of the foregoing, one for
each Type or Interest Period).
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Section 2.9 Certain Notices. Notices by the applicable Borrower
or Borrowers to the Agent of terminations or reductions of Commitments, of
borrowings, Conversions, Continuations and prepayments of Loans and of the
duration of Interest Periods shall be irrevocable and shall be effective only
if received by the Agent not later than 11:00 a.m. (Chicago, Illinois time) on
the Business Day prior to or on the date of the relevant termination,
reduction, borrowing, Conversion, Continuation or prepayment or the first day
of such Interest Period specified below:
<TABLE>
<CAPTION>
Notice Number of
------ Business Days Prior
-------------------
<S> <C>
Terminations or Reductions of Commitments 1
Borrowing of Prime Rate Loans same day
Borrowing of Eurodollar Loans 3
Conversions or Continuations of Loans 3
Prepayment of Prime Rate Loans same day
Prepayments of Eurodollar Loans 3
</TABLE>
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.8 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day). Notices of borrowings, Conversions, Continuations or
prepayments shall be in the form of Exhibit G hereto, appropriately completed
as applicable. Each such notice of the duration of an Interest Period shall
specify the Loans to which such Interest Period is to relate. The Agent shall
promptly notify the Lenders of the contents of each such notice. In the event
the applicable Borrower or Borrowers fail to select the Type of Loan, or the
duration of any Interest Period for any Eurodollar Loan, within the time period
and otherwise as provided in this Section 2.9, such Loan (if outstanding as
Eurodollar Loan) will be automatically Converted into a Prime Rate Loan on the
last day of preceding Interest Period for such Loan or (if outstanding as a
Prime Rate Loan) will remain as, or (if not then outstanding) will be made as,
a Prime Rate Loan. No Borrower may borrow any Eurodollar Loans, Convert any
Loans into Eurodollar Loans or Continue any Loans as Eurodollar Loans if the
interest rate for such Eurodollar Loans would exceed the Maximum Rate.
Section 2.10 Use of Proceeds.
(a) The Revolving Loans Borrowers jointly and severally represent
and warrant to the Agent and the Lenders that the proceeds of the Revolving
Credit Loans to be made on and after the Closing Date shall be used for working
capital and general corporate purposes of the Revolving Loans Borrowers in the
ordinary course of business.
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(b) The Term Loans Borrowers jointly and severally represent and
warrant to the Agent and the Lenders that the proceeds of the Term Loans shall
be used only by the Term Loans Borrowers to finance partially or wholly future
Permitted Acquisitions, including the transaction costs of the Term Loans
Borrowers associated with such Permitted Acquisitions.
(c) The Swing Loans Borrowers jointly and severally represent and
warrant to the Agent and the Lenders that the proceeds of the Swing Loans to be
made on and after the Closing Date shall be used for working capital and
general corporate purposes of the Swing Loans Borrowers in the ordinary course
of business.
(d) None of the proceeds of any Loan have been or will be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, as amended, or to purchase or carry any
margin stock (within the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System).
Section 2.11 Fees.
(a) Each of the Revolving Loans Borrowers jointly and severally
agrees to pay to the Agent for the account of each Lender a commitment fee on
the daily average unused or unfunded amount of such Lender's Revolving Credit
Loans Commitment, for the period from and including the Closing Date to and
including the Revolving Credit Loans Maturity Date, at the rate of one-half of
one percent (0.50%) per annum based on a 360 day year and the actual number of
days elapsed, which accrued commitment fees shall be payable in arrears on the
Closing Date and each Quarterly Date beginning on June 30, 1996 and on the
Revolving Credit Loans Maturity Date. Each of the Term Loans Borrowers jointly
and severally agrees to pay to the Agent for the account of each Lender a
commitment fee on the daily average unused or unfunded amount of such Lender's
Term Loans Commitment, for the period from and including the Closing Date to
and including October 15, 1997, at the rate of three- quarters of one percent
(0.75%) per annum based on a 360 day year and the actual number of days
elapsed, which accrued commitment fees shall be payable in arrears on each
Quarterly Date beginning on June 30, 1996 and on October 15, 1997.
(b) Each of the Borrowers jointly and severally agrees to pay to
the Agent such additional fees as are specified in the Agent's Letter, which
fees shall be payable in such amounts and on such dates as are specified
therein.
Section 2.12 Computations. Interest and fees payable by the
Borrowers hereunder and under the other Loan Documents on all Loans, other than
Prime Rate Loans, shall be computed on the basis of a year of 360 days and the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which payable unless, in the case of interest,
such calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may be.
Section 2.13 Termination or Reduction of Commitments. Each of the
Term Loans Borrowers, with respect to the Term Loans, and each of the Revolving
Loans Borrowers, with
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respect to the Revolving Credit Loans Commitments, shall have the right to
terminate or reduce in part the unused portion of the Term Loans Commitments
and the Revolving Credit Loans Commitments, respectively, at any time and from
time to time, provided that (a) F.Y.I., with respect to the Term Loans for and
on behalf of itself and the other Term Loans Borrowers, and F.Y.I., with
respect to the Revolving Credit Loans for and on behalf of itself and the other
Revolving Loans Borrowers, respectively, shall give notice of each such
termination or reduction as provided in Section 2.9 and (b) each partial
reduction shall be in an aggregate amount at least $500,000 or an integral
multiple of $100,000 in excess thereof, with respect to the Revolving Credit
Loans Commitments, and $500,000 or an integral multiple of $100,000 in excess
thereof, with respect to the Term Loans Commitments. Neither the Revolving
Credit Loans Commitments nor the Term Loans Commitments may be reinstated or
increased after they have been terminated.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, each of
the Revolving Loans Borrowers may utilize the Revolving Credit Loans
Commitments by requesting that the Issuing Bank issue Letters of Credit;
provided, that the aggregate amount of outstanding Letter of Credit Liabilities
shall not at any time exceed $1,000,000. Upon the date of issue of each Letter
of Credit, the Issuing Bank shall be deemed, without further action by any
party hereto, to have sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have purchased from the Issuing
Bank, a participation to the extent of such Lender's Commitment Percentage in
such Letter of Credit.
(b) F.Y.I., with respect to the Revolving Credit Loans for and on
behalf of itself and the other Revolving Loans Borrowers, shall give the
Issuing Bank (with a copy to the Agent) at least five Business Days irrevocable
prior notice (effective upon receipt) specifying the date of each Letter of
Credit and the nature of the transactions to be supported thereby. Upon
receipt of such notice the Issuing Bank shall promptly notify each applicable
Lender of the contents thereof and of such Lender's Commitment Percentage of
the amount of the proposed Letter of Credit. Each Letter of Credit shall have
an expiration date that does not exceed one year from the date of issuance and
that does not extend beyond the Revolving Credit Loans Maturity Date, shall be
payable in Dollars, shall support a transaction entered into in the ordinary
course of the account party's or parties' business, shall be satisfactory in
form and substance to the Issuing Bank, and shall be issued pursuant to such
agreements, documents and instruments (including a Letter of Credit Agreement)
as the Issuing Bank may reasonably require, none of which shall be inconsistent
with this Section 2.14. Each Letter of Credit shall (i) provide for the
payment of drafts presented for, on or thereunder by the beneficiary in
accordance with the terms thereof, when such drafts are accompanied by the
documents (if any) described in the Letter of Credit and (ii) to the extent not
inconsistent with the terms hereof or any applicable Letter of Credit
Agreement, be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
(together with any subsequent revision thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Bank, the
"UCP"), and shall, as to matters not governed by the UCP, be governed by, and
construed and interpreted in accordance with, the laws of the State of Texas.
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(c) Each of the Revolving Loans Borrowers jointly and severally
agree to pay to the Agent for the account of each Lender (except as provided
in the proviso below), in arrears on each Quarterly Date beginning on June 30,
1996 and on the Revolving Credit Loans Maturity Date, a nonrefundable letter of
credit fee with respect to each Letter of Credit issued in an amount equal to
(i) the rate per annum equal to the Applicable Margin (for Revolving Credit
Loans) for Eurodollar Loans in effect on the date of issuance of such Letter of
Credit (with respect to the fee due on the first Quarterly Date after issuance)
or on the first day of the applicable quarterly or other period beginning after
the calendar quarter during which the issuance of such Letter of Credit
occurred (with respect to the fee due on each subsequent Quarterly Date or on
the Revolving Credit Loans Maturity Date), multiplied by (ii) the daily average
face amount of the Letters of Credit in effect during the applicable period.
The Agent agrees to pay to each Lender or Issuing Bank (as applicable),
promptly after receiving any payment of letter of credit fees referred to above
in this subsection (c), such Lender's Commitment Percentage of such fees or
such Issuing Bank's fees (as applicable), respectively. The Borrower further
agrees to pay to the Issuing Bank for its own account, on the date of issuance
of such Letter of Credit and on each anniversary of such date of issuance (if
such Letter of Credit then remains outstanding), an amount equal to the greater
of one-quarter of one percent (0.25%) of the face amount of the Letter of
Credit being issued or $750.00. In addition to the foregoing fees, each of the
Revolving Loans Borrowers shall pay or reimburse the Issuing Bank for such
normal and customary costs and expenses, including, without limitation,
administrative, issuance, amendment, payment and negotiation charges, as are
incurred or charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(d) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment or other drawing under such Letter of Credit, the
Issuing Bank shall promptly notify F.Y.I. and each applicable Lender as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. If at any time the Issuing Bank shall make a payment to a
beneficiary of a Letter of Credit pursuant to a drawing under such Letter of
Credit, each Lender will pay to the Issuing Bank, immediately upon the Issuing
Bank's demand at any time commencing after such payment until reimbursement
therefor in full by the account party or parties, an amount equal to such
Lender's Commitment Percentage of such payment, together with interest on such
amount for each day from the date of such payment to the date of payment by
such Lender of such amount at a rate of interest per annum equal to the Federal
Funds Rate.
(e) Each of the Revolving Loans Borrowers shall be irrevocably and
unconditionally and jointly and severally obligated to immediately reimburse
the Issuing Bank for any amounts paid by the Issuing Bank upon any drawing
under any Letter of Credit, without presentment, demand, protest or other
formalities of any kind. The Issuing Bank will pay to each such Lender such
Lender's Commitment Percentage of all amounts received from or on behalf of the
account party or parties for application in payment, in whole or in part, of
the Reimbursement Obligation in respect of any Letter of Credit, but only to
the extent such Lender has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to subsection (d) above. Outstanding Reimbursement
Obligations shall bear interest at the Default Rate and such interest shall be
payable on demand.
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(f) The Reimbursement Obligations of the account party or parties
under this Agreement and the other Loan Documents shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and the other Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(i) Any lack of validity or enforceability of any Letter
of Credit or any other Loan Document;
(ii) Any amendment or waiver of or any consent to
departure from any Loan Document;
(iii) The existence of any claim, setoff, counterclaim,
defense or other right which any Loan Party or other Person may have
at any time against any beneficiary of any Letter of Credit, the
Agent, the Issuing Bank, the Lenders or any other Person, whether, in
connection with this Agreement or any other Loan Document or any
unrelated transaction;
(iv) Any statement, draft or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect whatsoever, provided, that the failure of
the Issuing Bank to discover such forgery, fraud, invalidity or
insufficiency shall not have constituted gross negligence or willful
misconduct by the Issuing Bank;
(v) Payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, provided, that such
payment shall not have constituted gross negligence or willful
misconduct of the Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not
similar to any of the foregoing, provided that such other circumstance
or event shall not have been the result of the gross negligence or
willful misconduct of the Issuing Bank.
(g) Each of the Borrowers assume all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Agent, the Issuing Bank, the Lenders nor
any of their respective officers or directors shall have any responsibility or
liability to F.Y.I., any other Borrower or any other Person for: (i) the
failure of any draft to bear any reference or adequate reference to any Letter
of Credit, or the failure of any documents to accompany any draft at
negotiation, or the failure of any Person to surrender or to take up any Letter
of Credit or to send documents apart from drafts as required by the terms of
any Letter of Credit, or the failure of any Person to note the amount of any
instrument on any Letter of Credit, (ii) errors, omissions, interruptions or
delays in transmission or delivery of any messages, (iii) in the absence of
gross negligence or willful misconduct of the Issuing Bank, the validity,
sufficiency or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should
in fact prove to be in any and all respects
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invalid, insufficient, fraudulent or forged or any statement therein is untrue
or inaccurate in any respect, (iv) the payment by the Issuing Bank to the
beneficiary of any Letter of Credit against presentation of any draft or other
document that does not comply with the terms of the Letter of Credit, or (v)
any other circumstance whatsoever in making or failing to make any payment
under a Letter of Credit; provided, however, that, notwithstanding the
foregoing, the account party or parties shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the account party or parties, to
the extent of any direct, but not indirect or consequential, damages suffered
by the account party or parties which it or they prove in a final nonappealable
judgment were caused by (A) the Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of
Credit complied with the terms thereof or (B) the Issuing Bank's willful
failure to pay under any Letter of Credit after presentation to it of documents
strictly complying with the terms and conditions of such Letter of Credit. The
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 2.15 Refinancing of Swing Loans. Upon one Business Day's
prior written notice from Paribas to the Agent, the Swing Loans Borrowers and
the Lenders at any time and from time to time (including, without limitation,
at any time following the occurrence of an Event of Default), each Lender
(including, without limitation, Paribas) agrees, severally and not jointly, as
provided in Section 2.1(a), and notwithstanding (i) anything to the contrary
contained in this Article 2 or elsewhere in this Agreement or (ii) any excess
of Outstanding Credit over the Borrowing Base, the existence of any Event of
Default or the inability of or failure by F.Y.I. or any Subsidiary to comply
with any condition precedent set forth in Article 6 (which conditions precedent
shall not apply to this Section 2.15), to make a Revolving Credit Loan, which
Loan shall be a Prime Rate Loan, in an amount equal to such Lender's pro rata
portion, based upon its Revolving Credit Loans Commitment, of the aggregate
principal amount of the Swing Loans then outstanding (up to but not in excess
of the amount which, when added to such Lender's pro rata portion, based on its
Revolving Credit Loans Commitment, of the then-outstanding Revolving Credit
Loans and Letter of Credit Liabilities, would equal such Lender's Revolving
Credit Loans Commitment), and the proceeds of all such Loans by the Lenders
shall be promptly applied by the Agent to repay principal and accrued and
unpaid interest with respect to the Swing Loans then outstanding.
ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal,
interest, fees and other amounts to be made by the Borrowers under this
Agreement and the other Loan Documents shall be made to the Agent at the
Principal Office for the account of each Lender's Applicable Lending Office in
Dollars and in immediately available funds, without setoff, deduction or
counterclaim, not later than 11:00 a.m. (Chicago, Illinois time) on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). Each Borrower shall, at the time of making any such payment, specify to
the Agent the sums payable by such Borrower under this Agreement and
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the other Loan Documents to which such payment is to be applied (and in the
event that the Borrower fails to so specify, or if an Event of Default has
occurred and is continuing, the Agent may apply such payment to the Obligations
in such order and manner as the Agent may elect, subject to Section 3.2). Upon
the occurrence and during the continuation of an Event of Default, all proceeds
of any Collateral, and all funds from time to time on deposit in any
concentration account or any collection account, if any, referred to in Section
8.13, may be applied by the Agent to the Obligations in such order and manner
as the Agent may elect, subject to Section 3.2. Notwithstanding the foregoing,
however, (a) if an Event of Default has occurred and is continuing, the Agent
and the Lenders agree among themselves that all such payments, proceeds and
funds shall be applied first to the outstanding principal balance and accrued
and unpaid interest on the Swing Loans and then pro rata to the outstanding
principal amount of the Loans and Letter of Credit Liabilities (based upon (a)
the outstanding principal amount of the Revolving Credit Loans and the
outstanding Letter of Credit Liabilities and (b) the outstanding principal
amount of the Term Loans, as a percentage of the sum of the aggregate
outstanding principal amount of all of the Loans plus the aggregate outstanding
Letter of Credit Liabilities). Each payment received by the Agent under this
Agreement or any other Loan Document for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for the account of
such Lender's Applicable Lending Office. Whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest and commitment fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided in this Agreement: (a) each Loan shall be made by the Lenders under
Section 2.1, each payment of commitment fees under Section 2.11(a) shall be
made for the account of the Lenders, and each termination or reduction of the
Commitments under Section 2.13 shall be applied to the appropriate Commitments
of the Lenders, pro rata according to the respective unused Commitments; (b)
the making, Conversion and Continuation of Loans of a particular Type (other
than Conversions provided for by Section 4.4) shall be made pro rata among the
Lenders holding Loans of such Type according to the amounts of their respective
appropriate Commitments; (c) each payment and prepayment by the applicable
Borrower or Borrowers of principal of or interest on Loans of a particular Type
shall be made to the Agent for the account of the Lenders holding Loans of such
Type pro rata in accordance with the respective unpaid principal amounts of
such Loans held by such Lenders; (d) Interest Periods for Loans of a particular
Type shall be allocated among the Lenders holding Loans of such Type pro rata
according to the respective principal amounts held by such Lenders; and (e) the
Lenders (other than the Issuing Bank) shall purchase participations in the
Letters of Credit pro rata in accordance with their Commitment Percentages of
the aggregate Revolving Credit Loans Commitments.
Section 3.3 Sharing of Payments, Etc. If a Lender shall obtain
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders
in such amounts, and make such adjustments from time to time as shall be
equitable to the end that all the Lenders shall share pro rata in accordance
with the unpaid principal and
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interest on the Obligations then due to each of them. To such end, all of the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if all or any portion of such excess payment
is thereafter rescinded or must otherwise be restored. Each Borrower agrees,
to the fullest extent it may effectively do so under applicable law, that any
Lender, so purchasing a participation in the Obligations by the other Lenders
may exercise all rights of setoff, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness, liability or
obligation of any Borrower.
Section 3.4 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the applicable Borrower or Borrowers
(the "Payor") prior to the date on which such Lender is to make payment to the
Agent of the proceeds of a Loan to be made by it hereunder or the applicable
Borrower or Borrowers are to make a payment to the Agent for the account of one
or more of the Lenders, as the case may be (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
pay to the Agent the amount made available to it together with interest thereon
in respect of the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such period.
Section 3.5 Withholding Taxes. All payments by any Borrower of
principal of and interest on the Loans and of all fees and other amounts
payable under the Loan Documents shall be made free and clear of, and without
deduction by reason of, any present or future taxes, duties, imposts,
assessments or other charges levied or imposed by any Governmental Authority
(other than taxes on the overall net income of any Lender). If any such taxes,
duties, imposts, assessments or other charges are so levied or imposed, each
appropriate Borrower (as applicable depending upon which Borrower was obligated
with respect to the original payment) will (a) make additional payments in such
amounts so that every net payment of principal of and interest on the Loans and
of all other amounts payable by it under the Loan Documents, after withholding
or deduction for or on account of any such present or future taxes, duties,
imposts, assessments or other charges (including any tax imposed on or measured
by net income of a Lender attributable to payments made to or on behalf of a
Lender pursuant to this Section 3.5 and any penalties or interest attributable
to such payments), will not be less than the amount provided for herein or
therein absent such withholding or deduction (provided that no Borrower shall
have any obligation to pay such additional amounts to any Lender to the extent
that such taxes, duties, imposts, assessments or other charges are levied or
imposed by reason of the failure of such Lender to comply with the provisions
of Section 3.6), (b) make such withholding or deduction and (c) remit the full
amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law. Without limiting the generality of the
foregoing, each Borrower
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will, upon written request of any Lender, reimburse each such Lender for the
amount of (i) such taxes, duties, imports, assessments or other charges so
levied or imposed by any Governmental Authority and paid by such Lender as a
result of payments made by such Borrower under or with respect to the Loans and
Letter of Credit Liabilities other than such taxes, duties, imports,
assessments and other charges previously withheld or deducted by such Borrower
which have previously resulted in the payment of the required additional amount
to the Lender, and (ii) such taxes, duties, assessments and other charges so
levied or imposed with respect to any Lender reimbursement under the foregoing
clause (i), so that the net amount received by such Lender (net of payments
made under or with respect to the Loans and Letter of Credit Liabilities) after
such reimbursement will not be less than the net amount the Lender would have
received if such taxes, duties, assessments and other charges on such
reimbursement had not been levied or imposed. Each Borrower shall furnish
promptly to the Agent for distribution to each affected Lender, as the case may
be, upon request of such Lender, official receipts evidencing any such payment,
withholding or reduction.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Closing Date or the date upon
which it becomes a party to this Agreement and if it is legally able to do so,
deliver to F.Y.I., for and on behalf of the Borrowers, and the Agent two duly
completed copies of U.S. Internal Revenue Service Form 1001, 4224 or W-8, as
appropriate, certifying in any case that such Lender is entitled to receive
payments from the Borrowers under any Loan Document without deduction or
withholding of any U.S. federal income taxes. Each Lender which so delivers a
Form 1001, 4224 or W-8 further undertakes to deliver to F.Y.I., for and on
behalf of the Borrowers, and the Agent two additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by any Borrower or the Agent, in each case
certifying that such Lender is entitled to receive payments from the Borrowers
under any Loan Document without deduction or withholding of any U.S. federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises F.Y.I., for and on behalf of
the Borrowers, and the Agent that it is not capable of receiving such payments
without any deduction or withholding of U.S. federal income tax.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) The applicable Borrower or Borrowers shall pay directly to
each Lender from time to time, promptly upon the request of such Lender, the
costs actually incurred by such Lender which such Lender determines are
directly attributable to its making or maintaining of any
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Eurodollar Loans to such applicable Borrower or Borrowers or its obligation to
make or create any of such Loans hereunder to such applicable Borrower or
Borrowers, or any reduction in any amount receivable by such Lender hereunder
from such applicable Borrower or Borrowers in respect of any such Loans or
obligations (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or its Notes in respect of any of
such Loans (other than taxes imposed on the overall net income of such
Lender or its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (including any of such
Loans or any deposits referred to in the definition of "Eurodollar
Rate" in Section 1.1 hereof, but excluding the Reserve Requirement to
the extent it is included in the calculation of the Adjusted
Eurodollar Rate); or
(iii) imposes any other condition affecting this Agreement
or the Notes or any of such extensions of credit or liabilities or
commitments.
Each Lender will notify F.Y.I. (with a copy to the Agent) of any event
occurring after the Closing Date which will entitle such Lender to compensation
pursuant to this Section 4.1(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation, and (if so
requested by F.Y.I.) will designate a different Applicable Lending Office for
the Eurodollar Loans of such Lender if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, violate any law, rule or regulation or be in any way
disadvantageous to such Lender, provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the U.S.
Each Lender will furnish F.Y.I. with a certificate setting forth the basis,
amount and computation of each request of such Lender for compensation under
this Section 4.1(a). If any Lender requests compensation from a Borrower under
this Section 4.1(a), F.Y.I. may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make or Continue making, or
Convert Prime Rate Loans into, Eurodollar Loans until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of Section 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 4.1, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Lender which
includes Eurodollar Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then, if such
Lender so elects by notice to F.Y.I. (with a copy to the Agent), the obligation
of such Lender
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to make or Continue making, or Convert Prime Rate Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 4.4 hereof shall be
applicable).
(c) Determinations and allocations by any Lender for purposes of
this Section 4.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or of making or maintaining Loans or
on amounts receivable by it in respect of Loans and of the additional amounts
required to compensate such Lender in respect of any Additional Costs, shall be
conclusive in the absence of manifest error, provided that such determinations
and allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) The Agent reasonably determines (which determination
shall be conclusive absent manifest error) that quotations of interest
rates for the relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.1 hereof are not being provided in the
relative amounts or for the relative maturities for purposes of
determining the rate of interest for such Loans as provided in this
Agreement; or
(b) Required Lenders reasonably determine (which
determination shall be conclusive absent manifest error) and notify
the Agent that the relevant rates of interest referred to in the
definition of "Eurodollar Rate" or "Adjusted Eurodollar Rate" in
Section 1.1 hereof on the basis of which the rate of interest for
such Loans for such Interest Period is to be determined do not
accurately reflect the cost to the Lenders of making or maintaining
such Loans for such Interest Period;
then the Agent shall give F.Y.I. prompt notice thereof and, so long as such
condition remains in effect, the Lenders shall be under no obligation to make
Eurodollar Loans or to Convert Prime Rate Loans into Eurodollar Loans and the
applicable Borrower or Borrowers shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or Convert such Loans into Prime Rate Loans in accordance with the terms
of this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
hereunder or (b) maintain Eurodollar Loans hereunder, then such Lender shall
promptly notify F.Y.I. for and on behalf of the Revolving Loans Borrowers and
the Term Loans Borrowers, respectively (with a copy to the Agent) thereof and
such Lender's obligation to make or maintain Eurodollar Loans and to Convert
Prime Rate Loans into Eurodollar Loans hereunder shall be suspended until such
time as such Lender may again make and maintain Eurodollar Loans (in which case
the provisions of Section 4.4 hereof shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of
any Lender to make or
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Continue, or to Convert Prime Rate Loans into, Eurodollar Loans is suspended
pursuant to Section 4.1 or 4.3 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Prime Rate Loans on the last day(s) of the then
current Interest Period(s) for the Eurodollar Loans (or, in the case of a
Conversion required by Section 4.1(b) or 4.3 hereof, on such earlier date as
such Lender may specify to F.Y.I., with a copy to the Agent) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 4.1 or 4.3 hereof which gave rise to such Conversion no
longer exist:
(a) To the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of principal
which would otherwise be applied to such Lender's Eurodollar Loans
shall be applied instead to its Prime Rate Loans; and
(b) All Loans which would otherwise be made or Continued
by such Lender as Eurodollar Loans shall be made as or Converted into
Prime Rate Loans and all Loans of such Lender which would otherwise
be Converted into Eurodollar Loans shall be Converted instead into
(or shall remain as) Prime Rate Loans.
If such Lender gives notice to F.Y.I. (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof which gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans are outstanding, such
Lender's Prime Rate Loans shall be automatically Converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Eurodollar Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitments.
Section 4.5 Compensation. The applicable Borrower or Borrowers
shall pay to the Agent for the account of each Lender, promptly upon the
request of such Lender through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration
of the outstanding Loans pursuant to
Section 11.2) on a date other than the
last day of an Interest Period for such Loan; or
(b) Any failure by any Borrower for any reason
(including, without limitation, the failure of any conditions
precedent specified in Article 6 to be satisfied) to borrow, Convert
or prepay a Eurodollar Loan on the date for such borrowing, Conversion
or prepayment specified in the relevant notice of borrowing, prepayment
or Conversion under this Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any
Lender shall have determined that the adoption or implementation of any
applicable law, rule or regulation regarding capital adequacy (including,
without limitation, any law, rule or regulation implementing the Basle
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Accord), or any change therein, or any change in the interpretation or
administration thereof by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or compliance by
such Lender (or its parent) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any central bank
or other Governmental Authority (including, without limitation, any guideline
or other requirement implementing the Basle Accord), has or would have the
effect of reducing the rate of return on such Lender's (or its parent's)
capital as a consequence of its obligations hereunder or the transactions
contemplated hereby to a level below that which such Lender (or its parent)
could have achieved but for such adoption, implementation, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time, within ten Business Days after demand by such Lender (with a copy to the
Agent), the Borrowers shall jointly and severally pay to such Lender such
additional amount or amounts as will compensate such Lender (or its parent) for
such reduction. A certificate of such Lender claiming compensation under this
Section 4.6 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such
amount or amounts, such Lender may use any reasonable averaging and attribution
methods.
Section 4.7 Additional Interest on Eurodollar Loans. The
applicable Borrower or Borrowers shall pay, directly to each Lender from time
to time, additional interest on the unpaid principal amount of each Eurodollar
Loan held by such Lender, from the date of the making of such Eurodollar Loan
until such principal amount is paid in full, at an interest rate per annum
determined by such Lender in good faith equal to the positive remainder (if
any) of (a) the Adjusted Eurodollar Rate applicable to such Eurodollar Loan
minus (b) the Eurodollar Rate applicable to such Eurodollar Loan. Each payment
of additional interest pursuant to this Section 4.7 shall be payable by the
applicable Borrower or Borrowers on each date upon which interest is payable on
such Eurodollar Loan pursuant to Section 2.4(b); provided, however, that the
applicable Borrower or Borrowers shall not be obligated to make any such
payment of additional interest until the first Business Day after the date when
such Borrower or Borrowers have been informed (i) that such Lender is subject
to a Reserve Requirement and (ii) of the amount of such Reserve Requirement
(after which time the applicable Borrower or Borrowers shall be obligated to
make all such payments of additional interest, including, without limitation,
such payment of additional interest that otherwise would have been payable by
such Borrower or Borrowers on or prior to such time had such Borrower or
Borrowers been earlier informed).
ARTICLE 5
Security
Section 5.1 Collateral. To secure the full and complete payment
and performance of the Obligations, each of the Borrowers shall, and shall
cause each of its Subsidiaries to, grant to the Agent for the benefit of the
Agent and the Lenders a perfected, first priority Lien (except for Permitted
Liens, if any, which are expressly permitted by the Loan Documents to have
priority over the Liens in favor of the Agent) on all of its right, title and
interest in and to the following
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Property, whether now owned or hereafter acquired, pursuant to the Security
Documents:
(a) all Capital Stock of each of the Subsidiaries of
F.Y.I. (including, without limitation, Imagent, Researchers, Recordex,
DPAS, Leonard, Deliverex and Permanent) now owned or hereafter
acquired by F.Y.I.. or any Subsidiary of F.Y.I.; and
(b) all other Property of F.Y.I. and each of the
Subsidiaries including, without limitation, the Mortgaged Properties
and all accounts (including, without limitation, Receivables),
inventory (including, without limitation, Inventory), equipment,
contract rights, general intangibles, instruments, investment
property, chattel paper, Permits, Intellectual Property and
intercompany Debt.
Section 5.2 Guaranties. F.Y.I. and each Subsidiary of F.Y.I. in
existence on the Closing Date shall guarantee the payment and performance of
the Obligations pursuant to the applicable Guaranty.
Section 5.3 New Subsidiaries. Contemporaneously with the
creation or acquisition of any Subsidiary of F.Y.I. after the Closing Date,
each of the Borrowers shall, and shall cause F.Y.I. and each of its
Subsidiaries to:
(a) grant or cause to be granted to the Agent, for the
benefit of the Agent and the Lenders, a perfected, first priority
security interest in all Capital Stock or other ownership interests in
or indebtedness of such Subsidiary owned by F.Y.I. or any Subsidiary
of F.Y.I. (to the extent such Capital Stock or other ownership
interests or indebtedness are already not so pledged to the Agent);
(b) cause each such Subsidiary to guarantee the payment
and performance of the Obligations by executing and delivering to the
Agent an appropriate Guaranty, substantially in the form of the
Guaranties delivered by the Borrowers on the Closing Date and which
Guaranty also provides that such Subsidiary agrees to comply with all
of the covenants contained in this Agreement applicable to it;
(c) cause each such Subsidiary to execute and deliver to
the Agent an appropriate Security Agreement, substantially in the form
of the Security Agreements delivered by the Borrowers on the Closing
Date, and such other Security Documents as the Agent may reasonably
request to grant the Agent, for the benefit of the Agent and the
Lenders, a perfected, first priority Lien (except for Permitted Liens,
if any, which are expressly permitted by the Loan Documents to have
priority over the Liens in favor of the Agent) on all Property of such
Subsidiary; and
(d) if such Subsidiary is to be an Acquisition
Subsidiary, cause such Subsidiary to execute a Borrower Addition
Agreement and such other documents, instruments and agreements as the
Agent deems necessary or appropriate, in form and substance
satisfactory to the Agent, to have such Subsidiary become a party to
this Agreement as a Borrower on a basis substantially the same as
existing Borrowers who are Subsidiaries of
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F.Y.I.
Section 5.4 New Mortgaged Properties. Each of the Borrowers
shall, and shall cause F.Y.I. and each of its Subsidiaries to,
contemporaneously with (i) the acquisition of any fee real Property or (ii) the
execution of any lease of real Property where tangible Property of F.Y.I. or
any of its Subsidiaries in excess of $350,000 is or will be located or covering
any plant or storage site, execute, acknowledge and deliver to the Agent a
Mortgage or an amendment or modification to an existing Mortgage covering (A)
all fee real Property acquired by F.Y.I. or any of such Subsidiaries subsequent
to the Closing Date and (B) all of F.Y.I.'s or any of such Subsidiaries' rights
and interests as lessee, in, to and under each such real estate lease entered
into subsequent to the Closing Date, together with evidence reasonably
satisfactory to the Agent and its counsel, including, without limitation, if
requested by the Agent, a commitment for a mortgagee policy of title insurance
in favor of the Agent, in form and substance reasonably satisfactory to the
Agent, that the Mortgage creates a valid, first priority Lien on the fee estate
or leasehold estate, as the case may be, in favor of the Agent for the benefit
of the Agent and the Lenders (except for Permitted Liens, if any, which are
expressly permitted by the Loan Documents to have priority over the Liens in
favor of the Agent), together with appraisals and surveys if requested by the
Agent; provided, however, that, with respect to the acquisition of any fee real
Property having a fair market value of less than $100,000, F.Y.I. and such
Subsidiaries shall not be required to execute, acknowledge or deliver such new
Mortgage or amendment or modification to an existing Mortgage unless or until
fee real Property or Properties having an aggregate fair market value of
$100,000 or more would be covered by any such new Mortgage or amendment or
modification to an existing Mortgage and until such time, shall not be required
to deliver such mortgagee policy of title insurance or such appraisals (unless
required by laws or regulations applicable to any Lender) or surveys with
respect to such Properties or waiver of Landlord liens or landlord agreements
referred to herein. Following the date of each such acquisition of Property,
if requested by the Agent, each of the Borrowers shall, and shall cause each of
its Subsidiaries with an interest in such Properties to, (i) deliver or cause
to be delivered to the Agent, a mortgagee policy of title insurance insuring
the Liens of the Mortgage covering such fee real Property in an amount
reasonably satisfactory to the Agent on standard form policies (except for
Permitted Liens, if any, which are expressly permitted by the Loan Documents to
have priority over the Liens in favor of the Agent) and (ii) provide the Agent
with a current environmental assessment of such Property in form and substance
reasonably satisfactory to the Agent. In addition, with respect to each such
leasehold estate, each of the Borrowers shall, and shall cause F.Y.I. and each
of its Subsidiaries to, use its best reasonable efforts to obtain either (A)
waivers of landlord's Liens from each lessor or (B) landlord agreements from
each lessor, in form and substance reasonably satisfactory to the Agent.
Section 5.5 Release of Collateral. Upon any sale, transfer or
other disposition of Collateral that is expressly permitted under Section 9.8
and upon five Business Days prior written request, by the Borrower that owns
such Collateral, the Agent shall execute at such Borrower's expense such
documents as may be necessary to evidence the release by the Agent of its Liens
on such Collateral; provided, however, that (a) the Agent shall not be required
to release any Lien on any Collateral if a Default shall have occurred and be
continuing, (b) the Agent shall not be required to execute any such document on
terms which, in the Agent's opinion, would expose the
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Agent to liability or create any obligation not reimbursed by the Borrowers or
entail any consequences other than the release of such Lien without recourse or
warranty, and (c) such release shall not in any manner discharge, affect or
impair any of the Obligations or any of the Agent's Liens on any Collateral
retained by F.Y.I. or any of its Subsidiaries, including, without limitation,
its Liens on the proceeds of any such sale, transfer or other disposition.
Section 5.6 Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, without notice to the applicable Borrower or Borrowers or any other
Person (any such notice being hereby expressly waived by the Borrowers), to set
off and apply any and all deposits (general, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the applicable Borrower or Borrowers
against any and all of the Obligations of the applicable Borrower or Borrowers
now or hereafter existing under this Agreement, any of such Lender's Notes or
any other Loan Document, irrespective of whether or not the Agent or such
Lender shall have made any demand under this Agreement, any of such Lender's
Note or any such other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify F.Y.I. for and on behalf of
itself and the Borrowers (with a copy to the Agent) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of each
Lender hereunder are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender may have.
Section 5.7 Landlord and Mortgagee Waivers. Prior to or
concurrently with F.Y.I. or any of its Subsidiaries entering into a lease of
real property, F.Y.I. shall provide to the Agent an agreement of such of the
landlords and their lenders relating to such leased properties as the Agent may
require, in form and substance reasonably satisfactory to the Agent, including,
without limitation, any leased Properties where the Landlord (i) owns any
Capital Stock of F.Y.I., (ii) holds any Seller Subordinated Debt, or (iii) is
the beneficiary of or payee under any Seller Earn Out.
ARTICLE 6
Conditions Precedent
Section 6.1 Closing Date Conditions. The agreement of the Agent
and the Lenders to enter into this Agreement, and each of the obligations of
each Lender to make its initial Loan under this Agreement and the obligation of
the Issuing Bank to issue the initial Letter of Credit under this Agreement are
subject to the conditions precedent that the Agent shall have received, on or
before the Closing Date, all of the following in form and substance
satisfactory to the Agent and, in the case of actions to be taken, evidence
that the following required actions have been taken to the satisfaction of the
Agent:
(a) Resolutions. Resolutions of the Board of Directors
of each Loan Party certified by its Secretary or an Assistant
Secretary which authorize the execution, delivery and performance by
such Loan Party of the Loan Documents and Related Transactions
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Documents to which it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan
Party certifying the name of each officer or other representative of
such Loan Party (i) who is authorized to sign the Loan Documents to
which such Loan Party is or is to be a party (including any
certificates contemplated therein), together with specimen signatures
of each such officer or other representative, and (ii) who will, until
replaced by other officers or representatives duly authorized for that
purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection
with the Loan Documents and the transactions contemplated thereby;
(c) Articles or Certificates of Incorporation, etc. The
articles or certificates of incorporation, certificate of formation,
certificate of limited partnership, partnership agreement or other
applicable constitutional document of each Loan Party certified by
the Secretary of State or other applicable Governmental Authority of
the state or other jurisdiction of incorporation or organization of
such Loan Party and dated as of a Current Date;
(d) Bylaws. The bylaws of each Loan Party certified by
the Secretary or an Assistant Secretary of such Loan Party;
(e) Governmental Certificates. Certificates of
appropriate officials as to the existence and good standing, status or
compliance, as applicable, of each Loan Party in their respective
jurisdictions of incorporation or organization and any and all
jurisdictions where such Loan Party is qualified to do business as a
foreign corporation or other entity, each such certificate to be dated
as of a Current Date;
(f) Revolving Credit Loans Notes. The Revolving Credit
Loans Notes duly completed and executed by the Revolving Loans
Borrowers;
(g) Term Loans Notes. The Term Loans Notes duly
completed and executed by the Term Loans Borrowers;
(h) Swing Loans Note. The Swing Loans Note duly
completed and executed by the Swing Loans Borrowers;
(i) Guaranties. A Guaranty executed by F.Y.I. and each
of its Subsidiaries;
(j) Security Agreements. A Security Agreement executed
by F.Y.I. and each of its Subsidiaries;
(k) Stock Certificates. The stock certificates
representing all of the issued and outstanding Capital Stock of each
of the Subsidiaries of F.Y.I. accompanied by appropriate stock powers
signed in blank;
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(l) Financing Statements. Financing statements and all
other requisite filing documents executed by the Loan Parties
necessary to perfect the Liens created pursuant to the Security
Documents;
(m) Lien Releases. Releases or assignments of Liens and
UCC-3 financing statements in recordable form, as may be necessary to
reflect that the Liens created by the Security Documents are first
priority Liens (except for Permitted Liens, if any, which are
expressly permitted by the Loan Documents to have priority over the
Liens in favor of the Agent);
(n) Lien Searches. Lien searches in the names of F.Y.I.
and each of its Subsidiaries (and in all names under which each such
Person has done business within the last five years and in all names
of Persons who previously owned any of the Properties constituting
Collateral as the Agent may require) in each state, county, parish or
other jurisdiction where each such Person maintains an office or has
Property, showing no financing statements or other Lien instruments of
record except for Permitted Liens (and Liens released in accordance
with Section 6.1(q));
(o) Leases. Copies of all leases (and all amendments and
supplements thereto) pursuant to which F.Y.I. or any of its
Subsidiaries leases Mortgaged Properties;
(p) Related Transactions Documents. Copies of all
agreements, documents and instruments received or delivered by any of
the Loan Parties in connection with the Related Transactions,
including, without limitation, the F.Y.I. Equity Documents, certified
by a Responsible Officer of F.Y.I. as being true and correct copies of
such documents as of the Closing Date;
(q) Liquidity. Evidence that F.Y.I. and its Subsidiaries
have a minimum of $7,000,000 of Excess Cash on the Closing Date;
(r) Consummation of Related Transactions. The Related
Transactions Documents and all agreements, documents and instruments
executed in connection therewith (i) shall be binding and enforceable
against the parties thereto in accordance with their terms and (ii)
shall be satisfactory in form and substance to the Agent; none of the
terms or conditions of such Related Transactions Documents shall have
been amended or modified without the prior written consent of the
Agent, and all of the terms and conditions of such Related
Transactions Documents shall have been satisfied without waiver;
(s) Consents. Copies of all material consents necessary
for the execution, delivery and performance by each of the Loan
Parties of the Loan Documents to which it is a party, which consents
shall be certified by a Responsible Officer of the applicable Loan
Party as true and correct copies of such consents as of the Closing
Date;
(t) Permits. Copies of all material Permits affecting
F.Y.I. or any of its
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Subsidiaries in connection with its businesses or any of the
Properties owned or leased by it, and evidence satisfactory to the
Agent that F.Y.I. and each of its Subsidiaries are able to conduct
their businesses with the use of such Permits in full force and
effect;
(u) Payment of Fees and Expenses. The applicable
Borrower or Borrowers shall have paid all fees due on or before the
Closing Date as specified in this Agreement or in the Agent's Letter
and all fees and expenses of or incurred by the Agent and its counsel
to the extent billed on or before the Closing Date and payable
pursuant to this Agreement;
(v) Regulatory Approvals. Evidence satisfactory to the
Agent that all filings, consents or approvals with or of Governmental
Authorities necessary to consummate the transactions contemplated by
the Loan Documents and the Related Transactions Documents have been
made and obtained, as applicable, including, without limitation, all
approvals or filings (if any) required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the lapse of all waiting
periods with respect thereto;
(w) Compliance with Laws. As of the Closing Date, each
Person that is a party to this Agreement, any of the other Loan
Documents or any of the Related Transactions Documents shall have
complied with all Governmental Requirements necessary to consummate
the transactions contemplated by this Agreement, the other Loan
Documents and such Related Transactions Documents;
(x) No Prohibitions. No Governmental Requirement shall
prohibit the consummation of the transactions contemplated by this
Agreement, any other Loan Document or any Related Transactions
Document, and no order, judgment or decree of any Governmental
Authority or arbitrator shall, and no litigation or other proceeding
shall be pending or threatened which would, enjoin, prohibit, restrain
or otherwise adversely affect the consummation of the transactions
contemplated by this Agreement, the other Loan Documents and such
Related Transactions Documents or otherwise have a Material Adverse
Effect;
(y) No Material Adverse Change. As of the Closing Date,
no material adverse change shall have occurred with respect to the
financial condition, results of operations, business, operations,
capitalization, liabilities or prospects of F.Y.I. or any of its
Subsidiaries since December 22, 1995, and the Agent shall have
received evidence that the economic performance of F.Y.I. and each of
its Subsidiaries to the Closing Date is not materially different from
the economic projections for F.Y.I. and each of its Subsidiaries for
fiscal year 1995 that were previously submitted to the Agent;
(z) Tax Matters. All tax matters pertaining to the
Related Transactions shall be satisfactory to the Agent; (aa)
Unused Revolving Credit Commitments. As of the Closing Date,
the aggregate amount of unused availability under the Revolving
Credit Loans Commitments after giving effect to the Revolving Credit
Loans made on such date, shall be at least
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$5,000,000;
(ab) Financial Statements. Copies of each of the
financial statements referred to in Section 7.2;
(ac) Opinions of Counsel. Favorable opinions (or comfort
letters with respect to clause (ii) succeeding) of (i) Locke Purnell
Rain Harrell (a professional corporation), counsel for the Loan
Parties, and such other counsel as may be acceptable to the Agent, in
form and substance satisfactory to the Agent with respect to F.Y.I.
and its Subsidiaries with respect to the Loan Documents and (ii) such
other counsel as may be acceptable to the Agent regarding the power
and authority of each of the Subsidiaries of F.Y.I. to execute and
deliver its Guaranty and Security Agreement under the laws of its
jurisdiction of incorporation or organization, as the Agent may
require;
(ad) Opinions of Local Counsel. A favorable opinion or
comfort letter (as the Agent may require) of local counsel to the
Agent in each state or province where Mortgaged Properties or
Inventory owned by F.Y.I. or its Subsidiaries are located in form and
substance satisfactory to the Agent;
(ae) Accountant's Letter. A letter from F.Y.I.
authorizing the independent public accountant of F.Y.I. and its
Subsidiaries to communicate with the Agent and the Lenders and
acknowledging reliance by the Agent and the Lenders on past, present
and future financial statements; and
F.Y.I. shall deliver, or cause to be delivered, to the Agent
sufficient counterparts of each agreement, document or instrument to
be received by the Agent under this Section 6. 1 to permit the Agent
to distribute a copy of the same to each of the Lenders. After the
request of F.Y.I., the Agent shall inform F.Y.I. in writing as to the
status of satisfaction of the conditions precedent set forth in this
Section 6.1.
Section 6.2 Initial Extension of Credit. Each of the obligations
of each Lender to make its initial Loan under this Agreement and the obligation
of the Issuing Bank to issue the initial Letter of Credit under this Agreement
are subject to the condition precedent that the Agent shall have received, on
or before the date of such initial Loan or initial Letter of Credit (whichever
is earlier), all of the following in form and substance satisfactory to the
Agent, and, in the case of action to be taken, evidence that the following
required actions have been taken to the satisfaction of the Agent:
(a) Mortgages. Mortgages covering all of the Mortgaged
Properties owned by F.Y.I. or any of its Subsidiaries listed on
Schedule 1.1(a) hereof executed by F.Y.I. or such Subsidiary (as
applicable);
(b) Surveys. Surveys of the Mortgaged Properties dated
within three months of the Closing Date and certified within a Current
Date to the Agent by registered public surveyors reasonably acceptable
to the Agent, showing (i) a metes and bounds description
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of each such Mortgaged Property, (ii) all recorded or visible
boundary lines, building locations, locations of utilities, easements,
rights-of- way, rights of access, building or set-back lines,
dedications and natural and manufactured objects affecting such
Mortgaged Property, (iii) all encroachments upon or protrusions from
each such Mortgaged Property, (iv) any areas federally designated as a
flood hazards, and (v) such other matters as the Agent may reasonably
require;
(c) Easements, Etc. Copies of all recorded easements,
rights-of-way, restrictive covenants, leases, encumbrances and other
agreements, documents and instruments filed of record that affect the
Mortgaged Properties owned by F.Y.I. or any of its Subsidiaries;
(d) Landlord and Mortgagee Waivers. Agreements of such
of the landlords and their lenders relating to the leased Properties
leased by F.Y.I. and its Subsidiaries as the Agent may require in form
and substance reasonably satisfactory to the Agent, including, without
limitation, for any leased Properties where the Landlord (i) owns any
Capital Stock of F.Y.I., (ii) holds any Seller Subordinated Debt, or
(iii) is the beneficiary of or payee under any Seller Earn Out;
(e) Mortgagee Title Commitments and Title Opinions.
Commitments for mortgagee policies of title insurance (or endorsements
to such policies) issued on behalf of a title insurance company
reasonably acceptable to the Agent in favor of the Agent; committing
that the Mortgages create valid, first priority Liens on the Mortgaged
Properties (except for Permitted Liens, if any, which are expressly
permitted by the Loan Documents to have priority over the Liens in
favor of the Agent) as security for the Obligations; each such
commitment (or endorsement, as applicable) or title opinion shall (i)
have been issued at the expense of F.Y.I. or its Subsidiary, (ii)
contain no exceptions or exclusions except for those approved by the
Agent, (iii) have been issued and, with respect to title insurance,
underwritten by companies acceptable to the Agent, (iv)
with respect to the title insurance, contain such endorsements as may
be required by the Agent, (v) with respect to the title insurance, be
in an amount satisfactory to the Agent, and (vi) be otherwise in form
and substance satisfactory to the Agent;
(f) Zoning. If and to the extent required by the Agent,
evidence that each Mortgaged Property owned by F.Y.I. and its
Subsidiaries is properly zoned for its current use and its intended
use after the Closing Date, which evidence shall consist of a
compliance letter issued by the Governmental Authority responsible for
zoning compliance or other evidence reasonably acceptable to the
Agent, in either case in form and substance reasonably satisfactory to
the Agent;
(g) Environmental Reports. Environmental surveys and
assessments prepared by reputable environmental consultants acceptable
to the Agent, reasonably satisfactory in form and substance to the
Agent, pertaining to the Properties and business of F.Y.I. and its
Subsidiaries, including, without limitation, a report as to Leonard's
fee-owned property in Michigan and Imagent's film developing
locations;
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(h) Appraisals. If and to the extent required by the
Agent or applicable law, appraisal reports (as the Agent may require)
of the fee or leasehold Mortgaged Properties owned by F.Y.I. and its
Subsidiaries, reasonably satisfactory in form and substance to the
Agent, prepared by appraisers acceptable to the Agent;
(i) Wiring Instructions. Written instructions from
F.Y.I., with respect to the Revolving Credit Loans for and on behalf
of itself and the other Revolving Loans Borrowers, and F.Y.I., with
respect to the Term Loans for and on behalf of itself and the other
Term Loans Borrowers, respectively, to the Agent with respect to the
disbursement of the proceeds of the Loans;
(j) Use of Cash. F.Y.I. and its Subsidiaries shall have
expended all Excess Cash;
(k) Insurance Policies. Copies of all insurance policies
required by this Agreement and the other Loan Documents, together with
endorsements naming the Agent as loss payee under all such casualty
insurance policies and the Agent as an additional insured party under
all such liability policies;
(l) Letter of Credit Agreement. With respect to any
issuance of a Letter of Credit, a Letter of Credit Agreement in the
form required by the Issuing Bank with respect thereto executed by the
applicable Borrower or Borrowers;
(m) Solvency Certificate: Contribution Agreement. (i) A
Solvency Certificate; and (ii) contribution agreements between and
among F.Y.I. and its Subsidiaries to evidence applicable rights of
contribution; and
(n) Budget. A copy of the budget of F.Y.I. and its
Subsidiaries for fiscal year 1996 (segregated by entity and quarter or
month, and setting forth all material assumptions).
Section 6.3 All Extensions of Credit. The obligation of each
Lender to make any Loan (including the initial Loan) and the obligation of the
Issuing Bank to issue any Letter of Credit (including the initial Letter of
Credit) under this Agreement are subject to the satisfaction of each of the
conditions precedent set forth in Section 6.1 and 6.2 as of the dates required
by such Sections 6.1 and 6.2 (and, with respect to Sections 6.1(s), (t), (u),
(v), (w), (x) and (z), that the same continue to be satisfied) and each of the
following additional conditions precedent:
(a) No Default or Material Adverse Effect. No Default or
Material Adverse Effect shall have occurred and be continuing, or
would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the
representations and warranties of F.Y.I. and its Subsidiaries and the
other Loan Parties contained in Article 7 hereof and in the other Loan
Documents shall be true and correct on and as of the date of such Loan
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or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties are
expressly by their terms made only as of the Closing Date or another
specified date; and
(c) Term Loan Conditions. If such Loan is to be a Term
Loan, the requirements of Section 6.5 shall have been satisfied with
respect to such Loan; and
(d) Additional Documentation. The Agent shall have
received such additional approvals, opinions, agreement, documents and
instruments as the Agent may reasonably request, including, with
respect to any Term Loans, the items required by Section 6.5 and such
other evidence as the Agent may require that the Acquisition for which
the Term Loan is to be advanced satisfies all of the requirements
contained in the definition of "Permitted Acquisitions".
Each notice of borrowing or request for the issuance of a Letter of Credit by
the applicable Borrower or Borrowers hereunder shall constitute a
representation and warranty by such Borrower or Borrowers that the conditions
precedent set forth in Sections 6.2(a) and (b) have been satisfied (both as of
the date of such notice and, unless F.Y.I., with respect to the Revolving
Credit Loans for and on behalf of itself and the other Revolving Loans
Borrowers or F.Y.I., with respect to the Term Loans for and on behalf of itself
and the other Term Loans Borrowers, respectively, otherwise notify the Agent
prior to the date of such borrowing or Letter of Credit, as of the date of such
borrowing or Letter of Credit).
Section 6.4 Closing Certificates. The agreement of the Agent and
the Lenders to enter into this Agreement is subject to the condition that the
Agent receive, concurrently with the execution and delivery of this Agreement,
a Closing Certificate in form and substance satisfactory to the Agent
certifying as to the satisfaction of each of the conditions precedent set forth
in Section 6.1. The obligations of the Lenders to make the initial Loan and
the obligation of the Issuing Bank to issue the initial Letter of Credit are
subject to the condition that the Agent receive, prior to the date of such
initial Loan or the issuance of such initial Letter of Credit, a Closing
Certificate in form and substance acceptable to the Agent certifying as to the
satisfaction of each of the conditions precedent set forth in Section 6.2.
Section 6.5 Term Loans. The obligation of each Lender to make
any Term Loan under this Agreement is subject to the satisfaction of the
following additional conditions precedent:
(a) the applicable Borrower shall have given the Agent
and the Lenders at least 30 days (or such shorter period as the
Required Lenders may agree) prior written notice of any such Permitted
Acquisition (each such notice, a " Permitted Acquisition Notice"),
which notice shall (i) contain the estimated
date such Permitted Acquisition is scheduled to be consummated, (ii)
attach a true and correct copy of any available draft purchase
agreement, letter of intent, description of material terms or similar
agreement executed by the applicable Borrower and the seller in
connection with such Permitted Acquisition and the intended method of
financing thereof, (iii) contain the estimated amount of Term
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Loans required to effect such Permitted Acquisition, (iv) contain a
description of any Seller Earn-Out to be incurred by F.Y.I. in
connection with such Permitted Acquisition and the maximum potential
liability of F.Y.I. with respect thereto, and (v) contain a
description of the Seller Subordinated Debt to be incurred by F.Y.I.
in connection with such Permitted Acquisition;
(b) the Borrower shall have given the Agent and the
Lenders a certificate setting forth in reasonable detail the manner in
which the conditions contained in the definition of Permitted
Acquisition are satisfied and such other information related to the
Person or business, division or product line being acquired and the
Permitted Acquisition as the Agent shall reasonably request; and
(c) as soon as available but not less than the earlier of
(i) 10 days after the execution thereof or (ii) ten days prior to the
consummation of such Permitted Acquisition, a copy of the executed
purchase agreement and all related agreements, schedules and exhibits
with respect to such Permitted Acquisition, which executed purchase
agreement shall not be materially more adverse to such Borrower than
the draft previously submitted to the Agent and the Lenders.
The Agent shall respond to the Borrower's written notice of a proposed
Permitted Acquisition with ten Business Days after the Agent has received all
required information pertaining to such proposed Permitted Acquisition.
ARTICLE 7
Representations and Warranties
Each of F.Y.I. and each of its Subsidiaries jointly and severally
represents and warrants to the Agent and the Lenders that the following
statements are and, after giving effect to the Related Transactions, will be
true, correct and complete:
Section 7.1 Corporate Existence. Each Loan Party (a) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority to own its Properties and carry on its business
as now being or as proposed to be conducted, and (c) is qualified to do
business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect. Each Loan Party has the power and authority and legal right to
execute, deliver and perform its obligations under the Loan Documents and the
Related Transactions Documents to which it is or may become a party. F.Y.I. is
a holding company and is not an operating company and does not engage in any
material business operations apart from the ownership and management of its
Subsidiaries.
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Section 7.2 Section Financial Statements.
(a) F.Y.I. has delivered to the Agent and the Lenders (i) proforma
audited combined and combining financial statements of F.Y.I. and its
Subsidiaries as of and for the fiscal years ended December 31, 1993 and 1994
and the six-month period ended June 30, 1995 and combined and combining
financial statements for F.Y.I. and its Subsidiaries for the nine-month period
ended September 30, 1995. To the Borrowers' knowledge, such financial
statements are true and correct, have been prepared in accordance with GAAP and
fairly and accurately present, on a combined and combining (where applicable)
basis, the financial condition of F.Y.I. and its combined Subsidiaries, as of
the respective dates indicated therein and the results of operations for the
respective periods indicated therein. There has not been, as of the Closing
Date, any material adverse change in the business, condition (financial or
otherwise), operations or Properties of F.Y.I. or its Subsidiaries or since the
effective dates of the most recent applicable financial statements referred to
in this Section 7.2(a).
(b) The Pro-Formas were prepared on a basis substantially
consistent with the financial statements referred to in Section 7.2(a), with
only such adjustments thereto as would be required in accordance with GAAP.
Neither F.Y.I. nor any of its Subsidiaries has any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or unanticipated losses from any unfavorable commitments except as
referred to or reflected in the Pro-Formas or as otherwise disclosed in writing
to the Agent.
(c) The Projections were prepared by F.Y.I. on a basis
substantially consistent with the financial statements referred to in Section
7.2(a). The Projections represent, as of the Closing Date, the good faith
estimate of the Borrowers and their senior management concerning the probable
financial condition and performance of F.Y.I. and its Subsidiaries based on
assumptions believed to be reasonable at the time made.
Section 7.3 Corporate Action: No Breach. The execution, delivery
and performance by each Loan Party of the Loan Documents and Related
Transactions Documents to which it is or may become a party and compliance with
the terms and provisions hereof and thereof have been duly authorized by all
requisite corporate or other entity action on the part of the Loan Parties and
do not and will not (a) violate or conflict with, or result in a breach of, or
require any consent under (i) the articles or certificates of incorporation or
bylaws of any Loan Party, (ii) any Governmental Requirement applicable to a
Loan Party or any of its Property or any order, writ, injunction or decree of
any Governmental Authority or arbitrator applicable to a Loan Party or any of
its Property, or (iii) any material agreement, document or instrument to which
any Loan Party is a party or by which any Loan Party or any of its Property is
bound or subject, or (b) constitute a default under any such material
agreement, document or instrument, or result in the creation or imposition of
any Lien (except under the Security Documents as provided in Article 5) upon
any of the revenues or Property of any Loan Party.
Section 7.4 Operation of Business. The Loan Parties possess all
material Permits, franchises, licenses and authorizations necessary or
appropriate to conduct their respective businesses substantially as now
conducted. All of such Permits, franchises, licenses and
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authorizations which constitute a Governmental Requirement or which are or are
to be issued by any Governmental Authority are disclosed on Schedule 7.4. None
of such Persons is in material violation of any such Permits, franchises,
licenses or authorizations.
Section 7.5 Intellectual Property. The Loan Parties own or
possess (or will be licensed or have the full right to use) all Intellectual
Property which is necessary for the operation of their respective businesses as
presently conducted and as proposed to be conducted, without any known conflict
with the rights of others. The consummation of the transactions contemplated
by this Agreement, the other Loan Documents and the Related Transactions
Documents will not materially alter or impair, individually or in the
aggregate, any of such rights of such Persons. No product of the Loan Parties
infringes upon any Intellectual Property owned by any other Person, and no
claim or litigation is pending or, to the knowledge of any Borrower, threatened
against any Loan Party or any such Person contesting its right to use any
product or material which could have a Material Adverse Effect. There is no
violation by any Loan Party of any right of such Loan Party with respect to any
material Intellectual Property owned or used by such Loan Party.
Section 7.6 Litigation and Judgments. Each material action,
suit, investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of any Borrower, threatened against or
affecting any Loan Party, or that relates to any of the Related Transactions as
of the Closing Date, is disclosed on Schedule 7.6. None of such actions,
suits, investigations or proceedings could, if adversely determined, have a
Material Adverse Effect. As of the Closing Date, there are no outstanding
judgments against any Loan Party or any of their respective Subsidiaries except
as disclosed on Schedule 7.6.
Section 7.7 Rights in Properties; Liens. Each of the Loan
Parties has good and indefeasible title to or, except as expressly stated to
the contrary on Schedule 1.1(a), valid leasehold interests in its Properties
and assets, real and personal, including the Properties, assets and leasehold
interests reflected in the financial statements described in Section 7.2(a) and
the Pro Formas, and none of the Properties or leasehold interests of any Loan
Party or any of its Subsidiaries is subject to any Lien, except Permitted
Liens. Except as disclosed on Schedule 7.7, neither F.Y.I. nor any of its
Subsidiaries owns any right, title or interest in any real Properties.
Section 7.8 Enforceability. The Loan Documents and the Related
Transactions Documents have been duly and validly executed and delivered by
each of the Loan Parties that is a party thereto and constitute the legal,
valid and binding obligations of the Loan Parties, enforceable against the Loan
Parties in accordance with their respective terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights and general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of,
and no filing or registration with or notice to, any Governmental Authority or
third party is or will be necessary for the execution, delivery or performance
by any Loan Party of any of the Loan Documents or Related Transactions
Documents to which it is a party or for the validity or enforceability thereof,
except for such consents, approvals and filings as have been validly obtained
or made and are in
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full force and effect. The consummation of the Related Transactions does not
require the consent or approval of any other Person, except such consents and
approvals (a) as have been validly obtained and are in full force and effect or
(b) as to which the failure to obtain is not, individually or in the aggregate,
material. None of the Loan Parties has failed to obtain any material
governmental consent, approval, license, Permit, franchise or other
governmental authorization necessary for the ownership of any of its Properties
or the conduct of its business.
Section 7.10 Debt. As of the Closing Date, the Loan Parties and
their Subsidiaries have no Debt except for (a) the Obligations, (b) the Debt
disclosed on Schedule 7.10 hereto and (c) Debt incurred after the Closing Date
which is permitted in accordance with Section 9.1.
Section 7.11 Taxes. The Loan Parties have filed all tax returns
(federal, state and local) required to be filed, including all income,
franchise, employment, Property and sales tax returns, and have paid all of
their respective liabilities for taxes, assessments, governmental charges and
other levies that are due and payable, except such taxes, if any, the payment
of which is currently being contested in good faith by appropriate proceedings
diligently conducted by or on behalf of such Person and as to which, if
required by GAAP, such Person has established adequate reserves. None of the
Borrowers is aware of any pending investigation of any Loan Party or any of
their respective Subsidiaries, by any taxing authority or of any pending but
unassessed tax liability of any Loan Party or any of their respective
Subsidiaries, other than with respect to (a) ad valorem or other real property
taxes not in excess of $10,000 as to any such Person and (b) other taxes in an
aggregate amount as to any such Person which could not, if an adverse
determination is made with respect to such taxes, materially and adversely
affect such Person, which (as to each of clauses (a) and (b) preceding) are
currently being contested in good faith by appropriate proceedings diligently
conducted by or on behalf of such Person and as to which, if required by GAAP,
such Person has established adequate reserves. No tax Liens have been filed
and, except as disclosed on Schedule 7.11, no claims are being asserted against
any Loan Party or any of their respective Subsidiaries, with respect to any
taxes. Except as disclosed on Schedule 7.11 hereto, as of the Closing Date,
none of the U.S. income tax returns of the Loan Parties or any of their
respective Subsidiaries are under audit. The charges, accruals and reserves on
the books of the Loan Parties in respect of taxes or other governmental charges
are in accordance with GAAP.
Section 7.12 Margin Securities. None of the Loan Parties or any
of their respective Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock.
Section 7.13 ERISA; Plans. Neither any Loan Party nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Pension
Plan other than the Pension Plans identified on Schedule 7.13. Each Plan of
each Loan Party is in compliance in all material respects with all applicable
provisions of ERISA and the Code . Neither a Reportable Event nor a Prohibited
Transaction has occurred within the last 60 months with respect to any Plan.
No notice of intent to terminate a Pension Plan has been filed, nor has any
Pension Plan been
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terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Pension Plan, nor has the PBGC instituted any such proceedings. Neither any of
the Loan Parties nor any ERISA Affiliate has completely or partially withdrawn
from a Multiemployer Plan. Each Loan Party and each ERISA Affiliate have met
their minimum funding requirements under ERISA and the Code with respect to all
of their Plans subject to such requirements, and, as of the Closing Date except
as specified on Schedule 7.13, the present value of all vested benefits under
each funded Plan (exclusive of any Multiemployer Plan) does not and will not
exceed the fair market value of all such Plan assets allocable to such
benefits, as determined on the most recent valuation date of such Plan and in
accordance with ERISA. Neither any of the Loan Parties nor any ERISA Affiliate
has incurred any liability to the PBGC under ERISA. No litigation is pending
or threatened concerning or involving any Plan. There are no unfunded or
unreserved liabilities (on either a going-concern basis or a wind-up basis)
relating to any Plan that could, individually or in the aggregate, have a
Material Adverse Effect if such Loan Party were required to fund or reserve
such liability in full. As of the Closing Date, no funding waivers have been
or will have been requested or granted under Section 412 of the Code with
respect to any Plan. No unfunded or unreserved liability for benefits under
any Plan or Plans or (exclusive of any Multiemployer Plans) exceeds $500,000
with respect to any such Plan or $1,000,000 with respect to all such Plans in
the aggregate as of the Closing Date, on either a going-concern basis or a
wind-up basis.
Section 7.14 Disclosure. No written statement, report,
representation or warranty made by any Loan Party in any Loan Document
(excluding any IPO Documents to the extent that the same may be deemed to be
Loan Documents) or furnished to the Agent or any Lender by any Loan Party in
connection with the Loan Documents (excluding any IPO Documents to the extent
that the same may be deemed to be Loan Documents) or the making of the Loans or
issuance of the Letters of Credit as contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading. There is no fact known
to any Borrower which has had a Material Adverse Effect, and there is no fact
known to any Borrower which might in the future have a Material Adverse Effect,
except as may have been disclosed in writing to the Agent and the Lenders.
Section 7.15 Capitalization.
(a) On and as of the Closing Date, the authorized Capital Stock of
F.Y.I. consists of (i) 26,000,000 shares of F.Y.I. Common Stock, par value $.01
per share, of which 5,269,615 shares are issued and outstanding, and (ii)
1,000,000 shares of preferred stock, par value $.01 per share, of which no
shares are issued or outstanding. On and as of the Closing Date, the
stockholders of F.Y.I. and their current legal and beneficial ownership of the
Capital Stock of F.Y.I. are listed on Schedule 7.15.
(b) On and as of the Closing Date, the authorized Capital Stock of
Imagent consists of 3,000 shares of common stock, par value $.01 per share, of
which 10 shares are issued and outstanding. F.Y.I. owns all of the issued and
outstanding Capital Stock of Imagent.
(c) On and as of the Closing Date, the authorized Capital Stock of
Researchers consists
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of 3,000 shares of common stock, par value $.01 per share, of which 10 shares
are issued and outstanding. F.Y.I. owns all of the issued and outstanding
Capital Stock of Researchers.
(d) On and as of the Closing Date, the authorized Capital Stock of
Recordex consists of 3,000 shares of common stock, par value $.01 per share, of
which 10 shares are issued and outstanding. F.Y.I. owns all of the issued and
outstanding Capital Stock of Recordex.
(e) On and as of the Closing Date, the authorized Capital Stock of
DPAS consists of 3,000 shares of common stock, par value $.01 per share, of
which 10 shares are issued and outstanding. F.Y.I. owns all of the issued and
outstanding Capital Stock of DPAS.
(f) On and as of the Closing Date, the authorized Capital Stock of
Leonard consists of 3,000 shares of common stock, par value $.01 per share, of
which 10 shares are issued and outstanding. F.Y.I. owns all of the issued and
outstanding Capital Stock of Leonard.
(g) On and as of the Closing Date, the authorized Capital Stock of
Deliverex consists of 3,000 shares of common stock, par value $.01 per share,
of which 10 shares are issued and outstanding. F.Y.I. owns all of the issued
and outstanding Capital Stock of Deliverex.
(h) On and as of the Closing Date, the authorized Capital Stock of
Permanent consists of 3,000 shares of common stock, par value $.01 per share,
of which 10 shares are issued and outstanding. F.Y.I. owns all of the issued
and outstanding Capital Stock of Permanent.
(i) On and as of the Closing Date, the authorized Capital Stock of
Sacramento consists of 3,000 shares of common stock, par value $.01 per share,
of which 1,000 shares are issued and outstanding. F.Y.I. owns all of the
issued and outstanding Capital Stock of Sacramento.
(j) On and as of the Closing Date, F.Y.I. has no Subsidiaries
other than Imagent, Researchers, Recordex, DPAS, Leonard, Deliverex, Permanent
and Sacramento.
(k) All of the issued and outstanding Capital Stock of F.Y.I. and
its Subsidiaries has been validly issued and is fully paid and nonassessable.
Except as described on Schedule 7.15, there are no outstanding subscriptions,
options, warrants, calls or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into, Capital Stock of
F.Y.I. or any of its Subsidiaries.
Section 7.16 Agreements. None of the Loan Parties is a party to
any indenture, loan, credit agreement, stock purchase agreement or any lease or
other agreement, document or instrument, or subject to any charter or corporate
restriction, that could reasonably be expected to have a Material Adverse
Effect. None of the Loan Parties is in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement, document or instrument binding on it or
its Properties, except for instances of noncompliance that, individually or in
the aggregate, could not have a Material Adverse Effect.
Section 7.17 Compliance with Laws. None of the Loan Parties is in
violation of any
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Governmental Requirement, except for instances of non-compliance that,
individually or in the aggregate, could not have a Material Adverse Effect.
Section 7.18 Investment Company Act. None of the Loan Parties is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 7.19 Public Utility Holding Company Act. None of the Loan
Parties is a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.20 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions to
any of the following representations and warranties that could not have,
individually or in the aggregate, a Material Adverse Effect:
(i) The Loan Parties and all of their respective
Properties and operations are in full compliance with all
Environmental Laws in all material respects. Neither F.Y.I. nor any
of its Subsidiaries is aware of, and neither F.Y.I. nor any of its
Subsidiaries has received written notice of, any past, present or
future conditions, events, activities, practices or incidents which
may interfere with or prevent the compliance or continued compliance
by any Loan Party with all Environmental Laws;
(ii) The Loan Parties have obtained all Permits that are
required under applicable Environmental Laws, and all such Permits are
in good standing and all such Persons are in compliance with all of
the terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within or
have been (to the Borrowers' knowledge) or are being used, generated,
stored, transported, disposed of on or Released from any of the
Properties of the Loan Parties except in compliance with applicable
Environmental Laws in all material respects. The use which the Loan
Parties make and intend to make of their respective Properties will
not result in the use, generation, storage, transportation,
accumulation, disposal or Release of any Hazardous Material on, in or
from any of their Properties except in compliance with applicable
Environmental Laws;
(iv) Neither the Loan Parties nor any of their respective
currently or previously owned or leased Properties or operations is
subject to any outstanding or, to the best of the Borrowers'
knowledge, threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (A) any failure to comply with
Environmental Laws, (B) any Remedial Action, or (C) any Environmental
Liabilities;
(v) There are no conditions or circumstances associated
with the currently or
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previously owned or leased Properties or operations of the Loan
Parties that could reasonably be expected to give rise to any
Environmental Liabilities or claims resulting in any Environmental
Liabilities. None of the Loan Parties is subject to, or has received
written notice of any claim from any Person alleging that any of the
Loan Parties is or will be subject to, any Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a
treatment facility (except for the recycling of Hazardous Materials
generated on-site and the treatment of liquid wastes subject to the
Clean Water Act or other applicable Environmental Law) for temporary
storage of Hazardous Materials generated on-site prior to their
disposal off-site) or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., regulations thereunder or any comparable provision of state law.
The Loan Parties and their Subsidiaries are compliance with all
applicable financial responsibility requirements of all Environmental
Laws; and
(vii) None of the Loan Parties has failed to file any
notice required under applicable Environmental Law reporting a
Release.
(b) No Lien arising under any Environmental Law has attached to
any Property or revenues of any Loan Party.
Section 7.21 Labor Disputes and Acts of God. Neither the business
nor the Properties of any Loan Party are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that is having or could have a Material
Adverse Effect.
Section 7.22 Material Contracts. Attached hereto as Schedule 7.22
is a complete list, as of the Closing Date, of all Material Contracts of the
Loan Parties, other than the Loan Documents. All of the Material Contracts are
in full force and effect and none of the Loan Parties is in default under any
Material Contract and, to the best of the Borrowers' knowledge after due
inquiry, no other Person that is a party thereto is in default under any of the
Material Contracts. None of the Material Contracts prohibit the transactions
contemplated under the Loan Documents or the Related Transactions Documents.
All of the Material Contracts have been transferred or assigned to, or are
currently in the name of, a Loan Party. F.Y.I. has delivered to the Agent a
complete and current copy of each Material Contract (other than purchase orders
entered into in the ordinary course of business) existing on the Closing Date
and, with respect to each Material Contract (other than purchase orders entered
into in the ordinary course of business) entered into after the Closing Date,
will deliver to the Agent a complete and current copy of such Material Contract
in a reasonably prompt fashion after the creation thereof.
Section 7.23 Bank Accounts. As of the Closing Date, Schedule 7.23
sets forth the account numbers and location of all bank accounts (including
lock box and special accounts) of F.Y.I. and its Subsidiaries.
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Section 7.24 Outstanding Securities. As of the Closing Date, all
outstanding securities (as defined in the Securities Act of 1933, as amended,
or any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance with all applicable Governmental Requirements.
Each of the IPO and the IPO Documents were conducted and prepared in accordance
with all applicable Governmental Requirements, including, without limitation,
Rule 10b-5 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
Section 7.25 Related Transactions Documents.
(a) No rights of cancellation or rescission and, to the Borrowers'
knowledge, no defaults or defenses exist with respect to any of the Related
Transactions Documents. F.Y.I. has delivered to the Agent complete and correct
copies of all Related Transactions Documents, including all schedules and
exhibits thereto. The Related Transactions Documents set forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby.
(b) As of the Closing Date, all conditions precedent to the
Related Transactions pursuant to the Related Transactions Documents have been
fulfilled or (with the prior written consent of the Agent) waived, the Related
Transactions Documents have not been amended or otherwise modified (except as
permitted by this Agreement), and there has not been any breach of any material
term or condition contained in the Related Transactions Documents.
Section 7.26 Solvency. Each of F.Y.I. and each of its
Subsidiaries, as a separate entity, is Solvent, both before and after giving
effect to the Loans and the Related Transactions and the consummation of any
Permitted Acquisitions.
Section 7.27 Employee Matters. Except as set forth on Schedule
7.27, as of the Closing Date (a) none of the Loan Parties or any of its
respective Subsidiaries, or any of its respective employees, is subject to any
collective bargaining agreement, and (b) no petition for certification or union
election is pending with respect to the employees of any Loan Party or any of
its respective Subsidiaries, and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
of the Loan Parties or any of its respective Subsidiaries. There are no
strikes, slowdowns, work stoppages or controversies pending or, to the best
knowledge of the Borrowers after due inquiry, threatened against, any of the
Loan Parties or any of its respective Subsidiaries, and its respective
employees, which could have, either individually or in the aggregate, a
Material Adverse Effect. Except as set forth on Schedule 7.27, as of the
Closing Date, none of the Loan Parties or any of its respective Subsidiaries is
subject to an employment contract.
Section 7.28 Insurance. Schedule 7.28 sets forth a complete and
accurate description of all policies of insurance that will be in effect as of
the Closing Date for F.Y.I. and its Subsidiaries. To the extent such policies
have not been replaced, no notice of cancellation has been received for such
policies and F.Y.I. and its Subsidiaries are in compliance with all of the
terms and conditions
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of such policies.
Section 7.29 Common Enterprise. The expertise and efforts of
F.Y.I. and each Subsidiary support and benefit the other members of their
affiliated corporate group. F.Y.I and each Subsidiary expect to derive
substantial benefit (and F.Y.I. and each Subsidiary may reasonably be expected
to derive substantial benefit), directly and indirectly, from the Loans,
Letters of Credit and the other transactions contemplated by this Agreement,
both in their separate capacities and as a member of an affiliated and
integrated corporate group. F.Y.I. and each Subsidiary will receive reasonably
equivalent value in exchange for the collateral and guaranty being provided by
it pursuant to Article 5 as security for the payment and performance of the
Obligations.
Section 7.30 Post-IPO Activities. Since the date of the IPO, no
Borrower has (i) consummated any acquisition which would not qualify as a
Permitted Acquisition under the terms of this Agreement, or (ii) made any
payments of the types prohibited by Section 9.4 or engaged in any transactions
of the types prohibited by Section 9.7.
ARTICLE 8
Affirmative Covenants
Each of F.Y.I. and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 8.1 Reporting Requirements. F.Y.I. will furnish to the
Agent and each Lender:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the end of each fiscal year of
F.Y.I., beginning with the fiscal year ending December 31, 1995, (i) a
copy of the annual audit report of F.Y.I. and its consolidated
Subsidiaries as of the end of and for such fiscal year then ended
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings and cash flow, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in
reasonable detail and audited and certified by independent certified
public accountants of recognized standing acceptable to the Agent and
containing no qualification thereto except as may be reasonably
acceptable to the Agent, to the effect that such report has been
prepared in accordance with GAAP, (ii) a certificate of such
independent certified public accountants to the Agent (A) stating that
to their knowledge no Default has occurred and is continuing or, if in
their opinion a Default has occurred and is continuing, stating the
nature thereof, and (B) confirming the calculations set forth in the
officer's certificate delivered concurrently therewith, and (iii)
unaudited consolidating balance sheets and statements of income,
retained earnings and cash flow, in each case setting forth in
comparative form the figures for the preceding fiscal year;
(b) Quarterly Financial Statements. As soon as
available, and in any event
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within 45 days after the end of each of the quarters of each fiscal
year of F.Y.I., beginning with the fiscal quarter ending March 31,
1996, a copy of (i) an unaudited financial report of F.Y.I. and its
consolidated Subsidiaries as of the end of such fiscal quarter and for
the portion of the fiscal year then ended containing, on a
consolidated and consolidating basis, balance sheets and statements of
income, retained earnings and cash flow, in each case setting forth in
comparative form the figures for the corresponding period of the
preceding fiscal year, all in reasonable detail certified by a
Responsible Officer of F.Y.I. to have been prepared in accordance with
GAAP and to fairly and accurately present (subject to year-end audit
adjustments) the financial condition and results of operations of
F.Y.I. and its consolidated Subsidiaries, on a consolidated and
consolidating basis, at the date and for the periods indicated therein
and (ii) management's financial reports comparing actual financial
results for the period to the current budget for the period;
(c) Monthly Financial Statements. As soon as available,
and in any event within 45 days after the end of each calendar month,
beginning with the calendar month ending March 31, 1996, a copy of (i)
an unaudited financial report of F.Y.I. and its consolidated
Subsidiaries as of the end of such calendar month and for the portion
of the fiscal year then ended containing, on a consolidated basis,
balance sheets and statements of income, retained earnings and cash
flow, and on a consolidating basis, balance sheets and statement of
income, in each case setting forth in comparative form the figures for
the corresponding period of the preceding fiscal year, all in
reasonable detail certified by a Responsible Officer of F.Y.I. to have
been prepared in accordance with GAAP and to fairly and accurately
present (subject to year-end audit adjustments) the financial
condition and results of operations of F.Y.I. and its consolidated
Subsidiaries, on a consolidated and consolidating basis, at the date
and for the periods indicated therein and (ii) management's financial
reports comparing actual financial results for the period to the
current budget for the period;
(d) Certificate of No Default. Concurrently with the
delivery of each of the financial statements referred to in Sections
8.1(a), 8.1(b) and 8.1(c), a certificate of a Responsible Officer of
F.Y.I. (i) stating that, to the best of such officer's knowledge, no
Default has occurred and is continuing or, if a Default has occurred
and is continuing, stating the nature thereof and the action that has
been taken and is proposed to be taken with respect thereto, and (ii)
showing (with respect to each certificate delivered concurrently with
the delivery of each of the financial statements referred to in
Section 8.1(a), 8.1(b) or 8.1(c)) in reasonable detail the
calculations demonstrating compliance with Section 9.5(i) and Article
10.
(e) Borrowing Base Reports and Agings. As soon as
available and in any event within 15 days after the end of each month,
and, in any event from time to time within 7 Business Days after the
request of the Agent, a Borrowing Base Report, duly completed, and,
within 7 Business Days after the request of the Agent, (i) an aged
trial balance of all then-existing Receivables and all then- existing
accounts payable of the Revolving Loans Borrowers (detailed by
Borrower), with respect to the Revolving Credit Loans, and (ii) a
detailed schedule of all Inventory of the Revolving Loans Borrowers
(detailed by Borrower)
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and the locations thereof;
(f) Budget. As soon as available and in any event before
the beginning of each fiscal year of F.Y.I. for each fiscal year after
1996, a copy of the budget of F.Y.I. and its Subsidiaries for such
fiscal year (segregated by entity and quarter or month and setting
forth all material assumptions);
(g) Management Letters. Promptly upon any request
therefor by the Agent, a copy of any management letter or written
report submitted to any Loan Party by independent certified public
accountants with respect to the business, condition (financial or
otherwise), operations, prospects or Properties of any such Person;
(h) Notice of Litigation. Promptly after the
commencement thereof, notice of all actions, suits and proceedings
before any Governmental Authority or arbitrator affecting any Loan
Party which, if determined adversely to any such Person, could have a
Material Adverse Effect;
(i) Notice of Default. As soon as possible and in any
event immediately upon any Borrower's knowledge of the occurrence of
any Default, a written notice setting forth the details of such
Default and the action that such Borrower has taken and proposes to
take with respect thereto, and the Borrowers will also at that time
provide notice of such Default to each holder of Seller Subordinated
Debt;
(j) ERISA Reports. Promptly after the filing or receipt
thereof, copies of all reports, including annual reports, and notices
which any Loan Party or any of its ERISA Affiliates files with or
receives from the PBGC or the U.S. Department of Labor under ERISA;
and as soon as possible and in any event within five days after any
such Person knows or has reason to know that any Pension Plan is
insolvent, or that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC, any Loan Party or
any ERISA Affiliate has instituted or will institute proceedings under
ERISA to terminate or withdraw from or reorganize any Pension Plan, a
certificate of a Responsible Officer of such Loan Party setting forth
the details as to such insolvency, withdrawal, Reportable Event,
Prohibited Transaction, tax or penalty or termination and the action
that such Loan Party has taken and proposes to take with respect
thereto;
(k) Reports to Other Creditors. Promptly after the
furnishing thereof, a copy of any statement or report furnished by any
Loan Party to any other party pursuant to the terms of any indenture,
loan, stock purchase or credit or similar agreement and not otherwise
required to be furnished to the Agent and the Lenders pursuant to any
other subsection of this Section 8.1;
(l) Notice of Material Adverse Effect. Within five
Business Days after any Borrower becomes aware thereof, written notice
of any matter that could have a Material Adverse Effect;
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(m) Proxy Statements, Etc. As soon as available, one
copy of each financial statement, report, notice or proxy statement
sent by any Loan Party to its stockholders generally and one copy of
each regular, periodic or special report, registration statement or
prospectus filed by any Loan Party with any securities exchange or the
Securities and Exchange Commission or any successor agency, and of all
press releases and other statements made by any of the Loan Parties to
the public containing material developments in its business;
(n) Notice of New Properties and Subsidiaries.
Concurrently with the delivery of each of the financial statements
referred to in Sections 8.1(a), 8.1(b) and 8.1(c), notice of (i) any
real Property acquired or any lease of real Property which meets the
criteria set forth in
Section 5.4 entered into by F.Y.I. or any of
its Subsidiaries as lessee, (ii) any additional patents, copyrights
and trademarks, and any other Intellectual Property of which the Agent
should be aware in order to ensure its Lien thereon, acquired by
F.Y.I. or any of its Subsidiaries, and (iii) the creation or
acquisition of any direct or indirect Subsidiary of F.Y.I. after the
Closing Date and subsequent to the last delivery of such information;
(o) Appraisals. From time to time if the Agent
determines that such appraisals are required to comply with applicable
Governmental Requirements or to syndicate the Loans, appraisals of the
Mortgaged Properties reasonably satisfactory in form and substance to
the Agent (such appraisals to be at the expense of the Borrowers);
(p) Insurance. Within 60 days prior to the end of each
fiscal year of F.Y.I., a report in form and substance reasonably
satisfactory to the Agent summarizing all material insurance coverage
maintained by F.Y.I. and its Subsidiaries as of the date of such
report and all material insurance coverage planned to be maintained by
such Persons in the subsequent fiscal year;
(q) Plan Information. From time to time, as reasonably
requested by the Agent or any Lender, such books, records and other
documents relating to the any Pension Plan as the Agent or any Lender
shall specify; prior to any termination, partial termination or merger
of a Pension Plan covering employees of any Borrower or any ERISA
Affiliate, or a transfer of assets of a Pension Plan covering
employees of any Borrower or any ERISA Affiliate, written notification
thereof; promptly upon any Borrower's receipt thereof, a copy of any
determination letter or advisory opinion regarding any Pension Plan
received from any Governmental Authority and any amendment or
modification thereto as may be necessary as a condition to obtaining a
favorable determination letter or advisory opinion; and promptly upon
the occurrence thereof, written notification of any action requested
by any Governmental Authority to be taken as a condition to any such
determination letter or advisory opinion;
(r) Environmental Assessments and Notices. Promptly
after the receipt thereof, a copy of each environmental assessment
(including any analysis relating thereto) prepared with respect to any
real Property of any Loan Party and each notice sent by any
Governmental Authority relating to any failure or alleged failure to
comply with any
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Environmental Law or any liability with respect thereto;
(s) Permitted Holders. Within 30 days after the Closing
Date, a list of the identities of each of the Permitted Holders other
than those which are Permitted Holders on the Closing Date and the
record and beneficial ownership of F.Y.I. Common Stock of all
Permitted Holders.
(t) General Information. Promptly, such other
information concerning the Loan Parties and their respective
Subsidiaries as the Agent or any Lender may from time to time
reasonably request; and
(u) Solvency Certificate. At the time of the making of
the initial Loan or the issuance of the initial Letter of Credit and
at the making of each Term Loan thereafter, a Solvency Certificate.
Section 8.2 Maintenance of Existence, Conduct of Business. Each
of the Borrowers will, and will cause each of its Subsidiaries to, preserve and
maintain its corporate existence and all of its material leases, privileges,
licenses, Permits, franchises, qualifications, Intellectual Property,
intangible Property and rights that are necessary in the ordinary conduct of
its business. Each of the Borrowers will, and will cause each of its
Subsidiaries to, conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 8.3 Maintenance of Properties. Each of the Borrowers
will, and will cause each of its Subsidiaries to, maintain, keep and preserve
all of its Properties necessary or appropriate in the proper conduct of its
business in good repair, working order and condition (ordinary wear and tear
excepted) and make all necessary repairs, renewals, replacements, betterments
and improvements thereof.
Section 8.4 Taxes and Claims. Each of the Borrowers will, and
will cause each of its Subsidiaries to, pay or discharge at or before maturity
or before becoming delinquent (a) all taxes, levies, assessments and
governmental charges imposed on it or its income or profits or any of its
Property and (b) all lawful claims for labor, material and supplies, which, if
unpaid, might become a Lien upon any of its Property; provided, however, that
neither any Borrower nor any of its Subsidiaries shall be required to pay or
discharge any tax, levy, assessment or governmental charge or claim for labor,
material or supplies whose amount, applicability or validity is being contested
in good faith by appropriate proceedings being diligently pursued and for which
adequate reserves have been established under GAAP.
Section 8.5 Insurance. (a) Each of the Borrowers will, and will
cause each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by responsible
corporations engaged in the same or a similar business similarly situated
against loss or damage of the kinds and in the amounts customarily insured
against by such corporations or entities and carry such other insurance as is
usually carried by such corporations or entities, provided that in any event
each of the Borrowers and its Subsidiaries (as appropriate) will maintain:
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(i) Property Insurance -- Insurance against loss or damage
covering substantially all of the tangible real and personal
Property and improvements of such Borrower and each of its
Subsidiaries by reason of any Peril (as defined below) in such
amounts (subject to any deductibles as shall be satisfactory
to the Agent) as shall be reasonable and customary and
sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy, but in any event in
such amounts as are reasonably available as determined by
F.Y.I.'s independent insurance broker reasonably acceptable to
the Agent.
(ii) Automobile Liability Insurance for Bodily Injury and Property
Damage --Insurance in respect of all vehicles (whether owned,
hired or rented by such Borrower or any of its Subsidiaries)
at any time located at, or used in connection with, its
Properties or operations against liabilities for bodily injury
and Property damage in such amounts as are then customary for
vehicles used in connection with similar Properties and
businesses, but in any event to the extent required by
applicable law.
(iii) Comprehensive General Liability Insurance -- Insurance against
claims for bodily injury, death or Property damage occurring
on, in or about the Property (and adjoining streets, sidewalks
and waterways) of such Borrower and its Subsidiaries, in such
amounts as are then customary for Property similar in use in
the jurisdictions where such Properties are located.
(iv) Worker's Compensation Insurance -- Worker's compensation
insurance (including employers' liability insurance) to the
extent required by applicable law, which may be self-insurance
to the extent permitted by applicable law.
(v) Product Liability Insurance -- Insurance against claims for
bodily injury, death or Property damage resulting from the use
of products sold by such Borrower or any of its Subsidiaries
to the extent and in such amounts as then customarily
maintained by responsible Persons engaged in businesses
similar to that of such Borrower and/or any of its
Subsidiaries.
(vi) Business Interruption Insurance -- Insurance against loss of
operating income earned from the operation of the Properties
of such Borrower and its Subsidiaries, by reason of any Peril
(to the extent reasonably available) affecting the operation
thereof, and insurance against any other insurable loss of
operating income by reason of any business interruption
affecting such Borrower or any of its Subsidiaries to the
extent covered by standard business interruption policies in
the applicable states; provided, however, that F.Y.I.,
Researchers, Leonard, and Sacramento are not required to have
such business interruption insurance on the Closing Date, but
shall have it no later than the date of the making of the
initial Loan or the issuance of the initial Letter of Credit.
Such insurance shall be written by financially responsible companies selected
by the Borrowers and having an A.M. Best Rating of "A-" or better and being in
a financial size category of "VI" or
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larger, or by other companies reasonably acceptable to the Required Lenders.
No later than the date of the making of the initial Loan or the issuance of the
initial Letter of Credit, each policy referred to in this Section 8.5 shall
provide that it will not be canceled, amended or reduced except after not less
than 30 days' prior written notice to the Agent and shall also provide that the
interests of the Agent and the Lenders shall not be invalidated by any act or
negligence of any Borrower or any of its Subsidiaries. The Borrowers will
advise the Agent promptly of any policy cancellation, reduction or amendment.
For purposes hereof, the term "Peril" shall mean, collectively, fire,
lightning, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of the Borrowers and their Subsidiaries are
located.
(b) The Borrowers will cause each Insurance Recovery (other than
any portion of an Insurance Recovery payable to a landlord to repair or replace
Property leased by any Borrower or any of its Subsidiaries) in excess of
$100,000 to be deposited promptly with the Agent as security for the
Obligations. If no Event of Default or payment Default shall have occurred and
be continuing, the applicable Borrower or Borrowers may use each such Insurance
Recovery to repair, restore or replace the Property that was the subject of
such Insurance Recovery. An Insurance Recovery will only be released to a
Borrower pursuant to this Section 8.5(b) upon delivery by such Borrower to the
Agent of evidence reasonably satisfactory to the Agent of the expenditure of
amounts in repair, restoration or replacement of the Property that was the
subject of the Insurance Recovery or the purchase of other, similar Property
for use in such Borrower's or its Subsidiary's (as applicable) business. The
Borrowers will promptly pay all Excess Insurance Proceeds to the Agent for
application against the Obligations in accordance with Section 2.7(b).
(c) If a Default shall have occurred and be continuing, the
Borrowers will cause all proceeds of insurance paid on account of the loss of
or damage to any Property of a Borrower or any of its Subsidiaries and all
awards of compensation for any Property of such Borrower or any of its
Subsidiaries taken by condemnation or eminent domain to be paid directly to the
Agent to be applied against or held as security for the Obligations, at the
election of the Agent and the Required Lenders.
Section 8.6 Inspection Rights. The Borrowers will, and will
cause F.Y.I. and each of its Subsidiaries to, permit representatives and agents
of the Agent and each Lender, during normal business hours and upon reasonable
notice to F.Y.I., to examine, copy and make extracts from its books and
records, to visit and inspect its Properties and to discuss its business,
operations and financial condition with its officers and independent certified
public accountants. The Borrowers will authorize their accountants in writing
(with a copy to the Agent) to comply with this Section 8.6. The Agent or its
representatives may, at any time and from time to time at the Borrowers'
expense, conduct field exams to verify the Borrowing Base and for such other
purposes as the Agent may reasonably request.
Section 8.7 Keeping Books and Records. Each of the Borrowers
will, and will cause each of its Subsidiaries to, maintain appropriate books of
record and account in accordance with GAAP consistently applied in which true,
full and correct entries will be made of all their
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respective dealings and business affairs. If any Accounting Changes from the
accounting principles used in the preparation of the financial statements
referenced in Section 8.1 are hereafter required or permitted by GAAP and are
adopted by any Borrower or any of its Subsidiaries, the provisions of Section
1.3(a) shall be applicable thereto; provided that, until any necessary
amendments have been made, the certificate required to be delivered under
Section 8.1(d) hereof demonstrating compliance with Article 10 shall include
calculations setting forth the adjustments from the relevant items as shown in
the current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in Section 7.2(a), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 Compliance with Laws. Each of the Borrowers will,
and will cause each of its Subsidiaries to, comply with all applicable
Governmental Requirements, except for instances of noncompliance that could not
have, individually or in the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. Each of the Borrowers
will, and will cause each of its Subsidiaries to, comply with all agreements,
contracts and instruments binding on it or affecting its Properties or
business, except for instances of noncompliance that could not have,
individually or in the aggregate, a Material Adverse Effect.
Section 8.10 Further Assurances. Each of the Borrowers will, and
will cause each of its Subsidiaries to, execute and deliver such further
agreements, documents and instruments and take such further action as may be
reasonably requested by the Agent to carry out the provisions and purposes of
this Agreement and the other Loan Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Agent for the benefit
of itself and the Lenders in and to the Collateral and the required priority of
such Liens.
Section 8.11 ERISA; Plans. Each of the Borrowers will, and will
cause each of its ERISA Affiliates to, comply with all minimum funding
requirements and all other material requirements of ERISA, if applicable, so as
not to give rise to any liability thereunder.
Section 8.12 Trade Accounts Payable. Each of the Borrowers will,
and will cause each of its Subsidiaries to, pay all trade accounts payable
before the same become more than 60 days past due, except (a) trade accounts
payable contested in good faith or (b) trade accounts payable in an aggregate
amount not to exceed at any time outstanding $100,000 and with respect to which
no proceeding to enforce collection has been commenced or, to the knowledge of
any Borrower, threatened.
Section 8.13 Unified Cash Management System. If required by the
Agent at any time in the future after June 30, 1996, within 30 days after
written notice from the Agent, F.Y.I. and each of its Subsidiaries will
maintain a unified cash management system and will ensure, and will cause
F.Y.I. and each of its Subsidiaries to ensure, that all proceeds of all
Collateral are (a) deposited directly, as received, into a collection account
of F.Y.I. or such Subsidiary (as applicable) and (b) on a daily basis after
such deposit, transferred into a concentration account of F.Y.I. or such
Subsidiary (as applicable). If required by the Agent, each of the Borrowers
will maintain
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in effect, and will cause F.Y.I. and each of its Subsidiaries to maintain in
effect, an agreement governing each of its collection accounts and its
concentration account in a form approved by the Agent with a depository bank
satisfactory to the Agent.
Section 8.14 No Consolidation. Each of the Borrowers will, and
will cause each of its Subsidiaries to:
(a) provide, that at all times, at least one (1) member of its
board of directors or at least one (1) of its officers will be
a Person who is not an officer, director or employee of any
Affiliate of any Borrower;
(b) maintain corporate records and books of account separate from
those of any corporation which is an Affiliate of any Borrower
and separate from those of any Subsidiary of any Borrower;
(c) not commingle its funds or assets with those of any
corporation which is an Affiliate of any Borrower or with
those of any Subsidiary of any Borrower, provided, that
compliance with Section 8.13 shall not constitute a
commingling of funds or assets; and
(d) provide that its board of directors will hold all appropriate
meetings to authorize and approve such Person's corporate
actions.
Section 8.15 Permitted Acquisitions. In connection with any
Permitted Acquisition which is not wholly or partially financed by proceeds of
Loans, F.Y.I. will provide to the Agent and the Lenders the notices,
certificate and other information required by Section 6.5.
ARTICLE 9
Negative Covenants
Each of F.Y.I. and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 9.1 Debt. Each of the Borrowers will not, and will not
permit any of its Subsidiaries to, incur, create, assume or permit to exist any
Debt, except:
(a) Debt of F.Y.I.. and its Subsidiaries to the Lenders
pursuant to the Loan Documents;
(b) Existing Debt described on Schedule 7.10 hereto and
renewals, replacements (on terms no more onerous to the borrower than
the existing terms), and extensions of
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such Debt which do not increase the outstanding principal amount of,
such Debt and the terms and provisions of which are not materially
more onerous than the terms and conditions of such Debt on the Closing
Date;
(c) Purchase money Debt secured by purchase money Liens,
which Debt and Liens are permitted under and meet all of the
requirements of clause (g) of the definition of Permitted Liens
contained in Section 1.1;
(d) Seller Subordinated Debt; provided, however, that no
Seller Subordinated Debt may be created or incurred during the
continuance of any Default or Event of Default or if a Default or
Event of Default would result from the creation or incurrence of such
Seller Subordinated Debt;
(e) Intercompany Debt between or among F.Y.I. and any of
its Wholly-Owned Subsidiaries which is a Borrower incurred in the
ordinary course of business, subject to the following requirements:
(i) the aggregate principal amount of all loans made by F.Y.I. to its
Wholly-Owned Subsidiaries which are Borrowers and outstanding at any
time shall not exceed $1,000,000 as to each Subsidiary minus the
amount of any Investments by F.Y.I. in each such Subsidiary (which
investment amount is net of dividends as provided in Section
9.5(g)(ii)) under Section 9.5(g)(ii), excluding Debt owing from
Subsidiaries of F.Y.I. to F.Y.I. which represents amounts loaned by
F.Y.I. to such Subsidiaries to pay all or a portion of the purchase
consideration for a Permitted Acquisition or to fund Permitted Capital
Expenditures, and (ii) any and all of the Debt permitted pursuant to
this Section 9.1(e) shall be unsecured, shall be evidenced by
instruments satisfactory to the Agent which will be pledged to the
Agent for the benefit of the Agent and the Lenders and shall be
subordinated to the Obligations pursuant to a subordination agreement
in form and substance satisfactory to the Agent (the foregoing being
referred to as "Intercompany Debt");
(f) Obligations under Interest Rate Protection Agreements
and Currency Hedge Agreements, provided that each counterparty shall
be Banque Paribas or another counterparty rated in one of the three
highest rating categories of Standard and Poors Corporation or Moody's
Investors Service, Inc., and provided that the maximum amount for
which interest may be fixed or capped under all such Interest Rate
Protection Agreements may not exceed one hundred percent (100%) of the
Debt of F.Y.I. and its Subsidiaries, and provided further, however,
that the maximum amount of currency for which risk may be hedged under
a Currency Hedge Agreement may not exceed one hundred percent (100%)
of the foreign currency at risk in the transactions in which F.Y.I.
and its Subsidiaries are engaged;
(g) Liabilities of a Borrower in respect of unfunded
vested benefits under any Plan if and to the extent that the existence
of such liabilities will not constitute, cause or result in a Default;
and
(h) Indebtedness with respect to either (i) the
$2,400,000 Prince Georges
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County, Maryland Variable Rate Demand/Fixed Rate Revenue Bonds
(B&B Records Center, Inc. Facility) 1989 issue, not to exceed
$2,500,000 in the aggregate; provided, that (A) the assets or Capital
Stock of B&B Information and Image Management,Inc. are acquired by a
Borrower in a Permitted Acquisition, and (B) the Liens securing such
bonds do not attach to any assets other than those which secured the
bonds prior to the date of the Permitted Acquisition, or (ii)
Indebtedness with respect to industrial development bond financings
associated with Permitted Acquisitions by any Borrower that were in
existence prior to, and not made in contemplation of, such Permitted
Acquisitions, not to exceed $1,000,000 in the aggregate; provided, that
the Liens securing the industrial development bonds do not attach to
any assets other than those which secured the industrial development
bonds prior to the date of the Permitted Acquisition (but at no time
may the Borrowers or their respective Subsidiaries taken as a whole
have any Debt of the types described in both clauses h(i) and h(ii)
outstanding at the same time, and if at any time any of the Debt of the
type described in clause (h)(i) is incurred by any Borrower or any
Subsidiary of any Borrower, no Debt of the type described in clause
(h)(ii) will be permitted).
Section 9.2 Limitation on Liens. Each of the Borrowers will not,
and will not permit any of its Subsidiaries to, incur, create, assume or permit
to exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except Permitted Liens.
Section 9.3 Mergers, Etc. Each of the Borrowers will not, and
will not permit its Subsidiaries to, (a) become a party to a merger or
consolidation, (b) wind-up, dissolve or liquidate itself, or (c) purchase or
acquire all or a material or substantial part of the business or Properties of
any Person; provided, however, that (i) Permitted Acquisitions (but no other
Acquisitions) shall be permitted, and (ii) any Borrower may merge with and into
F.Y.I. and any Borrower (other than F.Y.I.) may merge with and into any other
Borrower if no consideration is given by the surviving corporation in such
merger other than Capital Stock of the surviving corporation and such Capital
Stock is pledged to the Agent, on behalf of the Agent and the Lenders, as
security for the Obligations pursuant to Section 9.6. The surviving
corporation in any such merger shall ratify the Security Documents and other
obligations of the non-surviving corporation under the Loan Documents.
Section 9.4 Restricted Payments. Each of the Borrowers will not,
and will not permit any of its Subsidiaries to, make any Restricted Payments,
except:
(a) Subsidiaries of F.Y.I. may declare and pay dividends
to F.Y.I.;
(b) The Subsidiaries of F.Y.I. may make tax payments to
F.Y.I. if and to the extent that all such payments are promptly paid
by F.Y.I. to the appropriate Governmental Authority to whom such
payments are owed; provided that in no event shall such payments be
greater than the amounts actually paid by F.Y.I. in respect of such
taxes;
(c) To the extent required by the terms of any employment
agreement, purchases by F.Y.I. of shares of F.Y.I. Common Stock from
employees of F.Y.I. or its Subsidiaries
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upon the termination of the employment of such employees, provided
that the amount paid therefor shall not exceed the fair market
value of such shares to be purchased and shall not exceed $250,000 in
the aggregate during any fiscal year or a cumulative total of $350,000
in the aggregate during the term of this Agreement and F.Y.I. shall
grant to the Agent, for the benefit of the Agent and the Lenders, a
Lien on all of such shares purchased by F.Y.I. as security for the
Obligations pursuant to a pledge agreement in form and substance
reasonably satisfactory to the Agent;
(d) To the extent permitted under 9.5(g) and (h);
provided, however, that no Restricted Payments may be made pursuant to clauses
(a), (b), (c) or (d) preceding if a Default exists at the time of such
Restricted Payment or would result therefrom.
Section 9.5 Investments. Each of the Borrowers will not, and
will not permit any of its Subsidiaries to, make or permit to remain
outstanding any advance, loan, extension of credit or capital contribution to
or investment in any Person, or purchase or own any stock, bonds, notes,
debentures or other securities of any Person, or be or become a joint venturer
with or partner of any Person (all such transactions being herein called
"Investments"), except:
(a) Investments in obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to a Borrower or any of its Subsidiaries;
(b) Existing Investments identified on Schedule 9.5
hereto;
(c) Investments in securities issued or guaranteed by the
U.S. or any agency thereof with maturities of one year or less from
the date of acquisition;
(d) Investments in certificates of deposit and Eurodollar
time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any Lender or
with any domestic commercial bank having capital and surplus in excess
of $500,000,000;
(e) Investments in repurchase obligations with a term of
not more than seven days for securities of the types described in
clause (c) preceding with any Lender or with any domestic commercial
bank having capital and surplus in excess of $500,000,000;
(f) Investments in commercial paper of a domestic issuer
rated A-1 or better or P-1 or better by Standard & Poor's Corporation
or Moody's Investors Services, Inc., respectively, maturing not more
than six months from the date of acquisition;
(g) (i) Investments (other than Intercompany Debt
referred to in clause (h) below) by F.Y.I. in other Borrowers existing
on the Closing Date, and (ii) additional Investments by F.Y.I. in
other Borrowers made after the Closing Date in an amount as to each
such Borrower not to exceed $1,000,000 at any time outstanding (in
calculating the
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outstanding amount of the Investment by F.Y.I. in any other
Borrower to determine compliance with this provision, the aggregate
Investment by F.Y.I. in the Borrower shall be reduced by the amount of
any dividends paid to F.Y.I. by such Borrower, and the resulting amount
is the amount which will be deemed to be the Investment of F.Y.I. in
said Subsidiary for purpose of determining compliance with this
provision) (minus the amount of any Intercompany Debt owing from each
such Borrower to F.Y.I. as permitted by Section 9.1(e)(i)), plus (iii)
any Investments of F.Y.I. in its Subsidiaries which are Borrowers which
represent amounts invested in such Borrower to enable such Borrower (A)
to pay all or a portion of the purchase consideration for a Permitted
Acquisition, (B) to make Permitted Capital Expenditures, (C) to retire
any Existing Debt, or (D) to retire any Debt assumed in connection with
a Permitted Acquisition, plus (iv) Investments by F.Y.I. in
Wholly-Owned Subsidiaries of F.Y.I. which are not Borrowers, not to
exceed $500,000 in the aggregate as to all such Subsidiaries.
(h) Intercompany Debt permitted pursuant to Section
9.1(e);
(i) up to $1,000,000 in Investments in publicly traded
equity securities of a Person whose material business and properties
are all located in the U.S. or Canada and who is engaged in a business
similar or complementary to the business of a Borrower and which has
generated positive EBITDA during the twelve-month period preceding the
purchase of such securities so long as the aggregate of such equity
securities owned by F.Y.I. or any Subsidiary does not at any time
exceed (a) 3% of the total assets of F.Y.I., or (b) 20% of the total
assets of the Person owning such securities, in each case determined
in accordance with GAAP; and
(j) Investments which constitute Permitted Acquisitions;
provided, however, that no Investments may be made by the Borrower pursuant to
clauses (g) or (h) preceding if a Default exists at the time of such Investment
or would result therefrom.
Section 9.6 Limitation on Issuance of Capital Stock. Each of the
Borrowers (other than F.Y.I.) will not, and each of the Borrowers (including
F.Y.I.) will not permit any of its Subsidiaries to, at any time issue, sell,
assign or otherwise dispose of (a) any of its Capital Stock, (b) any securities
exchangeable for or convertible into or carrying any rights to acquire any of
its Capital Stock, or (c) any option, warrant or other right to acquire any of
its Capital Stock; provided, however, that, if and to the extent not otherwise
prohibited by this Agreement or the other Loan Documents (i) a Subsidiary of
F.Y.I. may issue additional shares of its Capital Stock to F.Y.I. for full and
fair consideration, and (ii) any Borrower may engage in any merger permitted
under clause (ii) of the proviso to Section 9.3; provided, further, however,
that all of such additional shares of Capital Stock referred to in clauses (i)
and (ii) preceding and any shares of Capital Stock issued in any merger
referred to in clause (ii) preceding shall be pledged to the Agent, on behalf
of the Agent and the Lenders, as security for the Obligations pursuant to a
pledge agreement in form and substance reasonably satisfactory to the Agent.
Section 9.7 Transactions With Affiliates. Except for (a) the
payment of salaries, bonus
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and incentive compensation in the ordinary course of business consistent with
prudent business practices, and (b) the furnishing of employment benefits in
the ordinary course of business consistent with prudent business practices,
each of the Borrowers will not, and will not permit any of its Subsidiaries to,
enter into any transaction, including, without limitation, the purchase, sale
or exchange of Property or the rendering of any service, with any Affiliate,
officer or director of such Borrower or such Subsidiary except in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's or
such Subsidiary's business and upon fair and reasonable terms no less favorable
to such Borrower or such Subsidiary, respectively, than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate, officer or
director of such Borrower or such Subsidiary, respectively.
Section 9.8 Disposition of Property. Each of the Borrowers will
not, and will not permit any of its Subsidiaries to, sell, lease, assign,
transfer or otherwise dispose of any of its Property, except:
(a) dispositions of Inventory in the ordinary course of
business,
(b) Asset Dispositions by F.Y.I. and its Subsidiaries to
Persons other than F.Y.I. and its Subsidiaries if each of the
following conditions have been satisfied: (i) the Net Proceeds from
any single Asset Disposition or series of related Asset Dispositions
in any fiscal year of F.Y.I. do not exceed $250,000 and the cumulative
Net Proceeds from all Asset Dispositions do not exceed $500,000, (ii)
the consideration received by F.Y.I. or its Subsidiaries is at least
equal to the fair market value of such assets, (iii) the sole
consideration received is cash payable at the closing, provided,
however, that up to a cumulative total of $125,000 of Property may be
disposed of by F.Y.I. and its Subsidiaries on a combined basis on
terms which defer payment of a portion of the purchase price, (iv) no
Default exists at the time of or will result from such Asset
Disposition, and (v) the applicable Borrower makes any payment
required under Section 2.7(b);
(c) Asset Dispositions by F.Y.I. and its Subsidiaries to
a Borrower if each of the following conditions have been satisfied:
(i) the aggregate fair market value of the assets sold, disposed of or
otherwise transferred by a Borrower and transferred to a Borrower
shall not exceed $150,000 in aggregate amount during fiscal year 1996
and shall not exceed $250,000 in aggregate amount subsequent to fiscal
year 1996, (ii) the assets sold, disposed of or otherwise transferred
to a Borrower shall continue to be subject to a perfected, first
priority Lien (except for Permitted Liens, if any, which are expressly
permitted by the Loan Documents to have priority over the Liens in
favor of the Agent) in favor of the Agent and the Lenders, and (iii)
no Default exists at the time of or will result from such Asset
Disposition;
(d) dispositions of Property no longer used or useful in
the ordinary course of business; and
(e) Asset Dispositions that were contemplated and
disclosed to the Agent at the time of any Permitted Acquisition if the
Asset Disposition occurs, and the Net Proceeds
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thereof are applied, as required or permitted by Section 2.7(b).
Section 9.9 Sale and Leaseback. Each of the Borrowers will not,
and will not permit any of its Subsidiaries to, enter into any arrangement with
any Person pursuant to which it leases from such Person real or personal
Property that has been or is to be sold or transferred, directly or indirectly,
by it to such Person.
Section 9.10 Lines of Business. Each of the Borrowers will not,
and will not permit any of its Subsidiaries to, engage in any line or lines of
business activity other than the businesses in which they are engaged on the
Closing Date and lines of business reasonably related thereto. F.Y.I. will
not, without the prior written consent of the Required Lenders, become an
operating company and will not engage in any business activity except for
business activities relating to its ownership and management of its
Subsidiaries substantially consistent with its current business activities. No
Borrower shall or shall permit any of its Subsidiaries to own Property or
conduct any material business operations outside the U.S., Canada or, to the
extent permitted by the last proviso in the definition of Permitted
Acquisitions, Mexico.
Section 9.11 Environmental Protection. Each of the Borrowers will
not, and will not permit any of its Subsidiaries to, (a) use (or permit any
tenant to use) any of its Properties for the handling, processing, storage,
transportation or disposal of any Hazardous Material except in compliance with
applicable Environmental Laws, (b) generate any Hazardous Material except in
compliance with applicable Environmental Laws, (c) conduct any activity that is
likely to cause a Release or threatened Release of any Hazardous Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or
use any of its Properties in any manner that violates or is likely to violate
any Environmental Law or create any Environmental Liabilities for which such
Borrower or any of its Subsidiaries would be responsible, except for
circumstances or events described in clauses (a) through (d) preceding that
could not have, individually or in the aggregate, a Material Adverse Effect.
Section 9.12 Intercompany Transactions. Except as may be
expressly permitted or required by the Loan Documents, each of the Borrowers
will not, and will not permit any of its Subsidiaries to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary to (a) pay dividends
or make any other distribution to such Borrower or any of its Subsidiaries in
respect of such Subsidiary's Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, (b) pay any
indebtedness owed to a Borrower or any of its Subsidiaries, (c) make any loan
or advance to a Borrower or any of its Subsidiaries, (d) participate in the
Unified Cash Management System if required by the Agent, or (e) sell, lease or
transfer any of its Property to a Borrower or any of its Subsidiaries.
Section 9.13 Management Fees. Each of the Borrowers will not, and
will not permit any of its Subsidiaries to, pay any management, consulting or
similar fees (excluding directors' fees) to any Affiliate of such Borrower or
to any director, officer or employee of such Borrower or any Affiliate of such
Borrower; provided, however, that any Borrower may pay management or similar
fees to F.Y.I. to the extent that the amount of such fees paid in any year does
not exceed 4% of
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the gross revenues of the paying Borrower for that year.
Section 9.14 Modification of Other Agreements. Each of the
Borrowers will not, and will not permit any of its Subsidiaries to, consent to
or implement any termination, amendment, modification, supplement or waiver of
(a) the F.Y.I. Equity Documents, if the same could have a Material Adverse
Effect or otherwise could be materially adverse to the Agent or the Lenders,
(b) the certificate of incorporation or bylaws (or analogous constitutional
documents) of F.Y.I. or any of its Subsidiaries if the same could have a
Material Adverse Effect or otherwise could be materially adverse to the Agent
or the Lenders, or (c) any other Material Contract to which it is a party or
any Permit which it possesses if the same could have a Material Adverse Effect;
provided, however, that F.Y.I. and its Subsidiaries may amend or modify the
agreements, documents and instruments referred to in clause (c) preceding if
and to the extent that such amendment or modification is not substantive or
material and could not have a Material Adverse Effect.
Section 9.15 Bank Accounts. Each of the Borrowers will not, and
will not permit any of its Subsidiaries to, create or maintain any bank
accounts other than those listed on Schedule 7.23 hereto or consented to in
writing by the Agent, which consent shall not be unreasonably withheld.
Section 9.16 ERISA Plans. Each of the Borrowers will not, and
will not permit any of its Subsidiaries to:
(a) allow, or take (or permit any ERISA Affiliate to
take) any action which would cause, any unfunded or unreserved
liability for benefits under any Plan (exclusive of any Multiemployer
Plan) to exist or to be created that exceeds $25,000 with respect to
any such Plan or $50,000 with respect to all such Plans in the
aggregate on either a going concern or a wind-up basis; or
(b) with respect to any Multiemployer Plan, allow, or
take (or permit any ERISA Affiliate to take) any action which would
cause, any unfunded or unreserved liability for benefits under any
Multiemployer Plan to exist or to be created, either individually as
to any such Plan or in the aggregate as to all such Plans, that could,
upon any partial or complete withdrawal from or termination of any
such Multiemployer Plan or Plans, have a Material Adverse Effect.
Section 9.17 Dividend Restrictions. No Borrower will, or will
permit any of its Subsidiaries to, be party to or bound by any agreement,
document, instrument, covenant or other restriction (other than this Agreement)
which restricts the ability of such Subsidiary to pay dividends to, make
distribution to, and make advance to, the Borrowers.
Section 9.18 Second-Tier Subsidiaries. No Borrower other than
F.Y.I. shall have any Subsidiaries, and F.Y.I. shall not have any Subsidiaries
which are Subsidiaries of Subsidiaries of F.Y.I.
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ARTICLE 10
Financial Covenants
Each of F.Y.I. and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 10.1 Consolidated Net Worth. F.Y.I. will at all times
maintain Consolidated Net Worth in an amount not less than the sum of (a)
$19,000,000 plus (b) 75% of cumulative Consolidated Net Income, if positive for
any fiscal quarter, i.e., exclusive of negative Consolidated Net Income for any
fiscal quarter, after the Closing Date, plus (c) all Net Proceeds of each
Equity Issuance after the Closing Date minus the amount of any stock repurchase
consummated under the terms of Section 9.4(c).
Section 10.2 Ratio of Total Senior Debt to EBITDA. F.Y.I. will
not permit the ratio, calculated as of the end of each fiscal quarter of F.Y.I.
commencing with the fiscal quarter ended June 30, 1996, of (i) Total Senior
Debt to (ii) EBITDA for the four fiscal quarters then ended for F.Y.I. and its
Subsidiaries to exceed the ratio set forth below for the period during which
such fiscal quarter end occurs:
Period Ratio
------ -----
From April 1, 1996, through September 30, 1997 2.75 to 1.00
From October 1, 1997, through March 31, 1998 2.50 to 1.00
From April 1, 1998, through March 31, 1999 2.25 to 1.00
From April 1, 1999, through March 31, 2000 1.75 to 1.00
From April 1, 2000 and at all times thereafter 1.25 to 1.00
Section 10.3 Ratio of Total Debt to EBITDA. F.Y.I. will not
permit the ratio, calculated as of the end of each fiscal quarter of F.Y.I.
commencing with the fiscal quarter ended June 30, 1996, of (i) Total Debt to
(ii) EBITDA for the four fiscal quarters then ended for F.Y.I. and its
Subsidiaries to exceed the ratio set forth below for the period during which
such fiscal quarter end occurs:
Period Ratio
------ -----
From April 1, 1996, through September 30, 1997 3.25 to 1.00
From October 1, 1997 through March 31, 1998 3.00 to 1.00
From April 1, 1998, through March 31, 1999 2.75 to 1.00
From April 1, 1999, through March 31, 2000 2.25 to 1.00
From April 1, 2000, and at all times thereafter 1.75 to 1.00
Section 10.4 Consolidated Fixed Charge Coverage Ratio. F.Y.I.
will not permit the
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Consolidated Fixed Charge Coverage Ratio, calculated as of the end of each
fiscal quarter of F.Y.I.. commencing with the fiscal quarter ended March 31,
1996, for the four fiscal quarters of F.Y.I. then ended, to be less than 1.5 to
1.0.
Section 10.5 Consolidated Interest Coverage Ratio. F.Y.I. will
not permit the Consolidated Interest Coverage Ratio, calculated as of the end
of each fiscal quarter of F.Y.I. commencing with the fiscal quarter ended March
31, 1996, for the four fiscal quarters of F.Y.I. then ended (if calculated as
of the end of any fiscal quarter ended prior to December 31, 1996, for the
period consisting of the greatest number of fiscal quarters commencing after
and completed subsequent to the Closing Date in accordance with Section 1.4),
to be less than the ratio set forth below for the period during which such
fiscal quarter end occurs:
Period Ratio
------ -----
From April 1, 1996, through December 31, 1997 3.5 to 1.00
From January 1, 1998, through December 31, 1998 4.0 to 1.00
From January 1, 1999, and at all times thereafter 5.0 to 1.00
Section 10.6 Capital Expenditures. F.Y.I. will not permit the
aggregate Capital Expenditures of F.Y.I. and its Subsidiaries during any fiscal
year of F.Y.I. to exceed an amount equal to the corresponding amount for such
fiscal year indicated below (each such sum being "Permitted Capital
Expenditures" for such fiscal year):
<TABLE>
<CAPTION>
Ending on December 31 Amount
--------------------- ------
<S> <C>
1996 $1,500,000
1997 $1,650,000
1998 $1,800,000
1999 $2,000,000
2000 and thereafter $2,200,000
</TABLE>
; plus an amount equal to 110% of the annual depreciation of any entity
acquired in a Permitted Acquisition (i) for the fiscal year in which such
Permitted Acquisition is made, for the twelve-month period preceding the date
of the Permitted Acquisition multiplied by a fraction the numerator of which is
the number of calendar days remaining in the fiscal year in which such
Permitted Acquisition is consummated after the date of consummation of such
Permitted Acquisition and the denominator of which is 365, and (ii) for each
subsequent fiscal year, increasing at a rate of three percent (3%). The
Permitted Capital Expenditures amount for fiscal year 1996 shall be increased
by any Capital Expenditures (up to $600,000 in the aggregate) made by F.Y.I.
and its Subsidiaries to implement a contract between Deliverex and the United
States Veterans Administration of California.
If any Permitted Capital Expenditures consist of the purchase of all
or substantially all of the assets of any Person, F.Y.I. shall, at least 30
days prior to such purchase, provide evidence
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satisfactory to the Agent that the contingent liabilities to be assumed by the
purchaser with respect to such assets (including, without limitation,
contingent liabilities relating to ERISA, environmental matters and litigation)
do not exceed ten percent of the purchase price paid for such assets.
Section 10.7 Minimum EBITDA. F.Y.I. will not permit the
consolidated EBITDA of F.Y.I. and its Subsidiaries to be less than the amount
shown below next to such date:
<TABLE>
<CAPTION>
Date
----
Amount
------
<S> <C>
June 30, 1996 $4,700,000
September 30, 1996 $4,950,000
December 31, 1996 $5,250,000
March 31, 1997 $5,500,000
June 30, 1997 $5,750,000
September 30, 1997 $6,000,000
December 31, 1997 $6,250,000
March 31, 1998 $6,500,000
June 30, 1998 $6,750,000
September 30, 1998 $7,000,000
December 31, 1998 $7,300,000
March 31, 1999 $7,600,000
June 30, 1999 $7,900,000
September 30, 1999 $8,200,000
December 31, 1999 $8,500,000
March 31, 2000 $8,800,000
June 30, 2000 $9,100,000
September 30, 2000 $9,400,000
December 31, 2000 and thereafter $9,700,000
</TABLE>
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be
deemed an "Event of Default":
(a) Any Borrower shall fail to pay, repay or prepay when
due any amount of principal owing to the Agent or any Lender pursuant
to this Agreement or any other Loan Document, or shall fail to pay
within two days after the due date thereof any interest, fee or other
amount or other Obligation owing to the Agent or any Lender pursuant
to this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by
F.Y.I. or any of
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its Subsidiaries or by any Loan Party in any Loan Document or in any
certificate, report, notice or financial statement furnished at any
time in connection with this Agreement or any other Loan Document
shall be false, misleading or erroneous in any material respect when
made or deemed to have been made.
(c) F.Y.I. or any of its Subsidiaries shall fail to
perform, observe or comply with any covenant, agreement or term
contained in Sections 5.1, 5.2, 8.1(e), 8.1(i), 8.1(l), 8.2 (other than
the last sentence of Section 8.2), 8.6, or 8.7, Article 9 (other than
Section 9.7, 9.11 and 9.15) or Article 10 of this Agreement; F.Y.I. or
any of its Subsidiaries shall fail to perform, observe or comply with
any covenant, agreement or term contained in Sections 5.3, 8.1 (other
than Sections 8.1(e), 8.1(i), or 8.1(l)), 8.4, 8.5, 8.8, 8.9, 8.10,
8.12, 8.13 9.7, 9.11 or 9.15 and such failure is not remedied or waived
within ten days after such failure commenced; F.Y.I. or any of its
Subsidiaries shall fail to perform, observe or comply with any
covenant, agreement or term contained in any Security Agreement other
than in Section 4.05, 4.08, 4.11(b), 4.11(c), 4.12 or 4.16 thereof;
F.Y.I. or any of its Subsidiaries shall fail to perform, observe or
comply with any covenant, agreement or term contained in any Mortgage
executed by it and such failure shall continue beyond any grace or cure
period specified in such Mortgage; any Guarantor shall fail to perform,
observe or comply with any covenant, agreement or term contained in its
Guaranty, subject to any grace period applicable to such covenant,
agreement or term in this Agreement to the extent this Agreement is
incorporated therein by reference; or any Loan Party shall fail to
perform, observe or comply with any other covenant, agreement or term
contained in this Agreement or any other Loan Document (other than
covenants to pay the Obligations) and such failure is not remedied or
waived within the earlier to occur of 30 days after such failure
commenced or, if a different grace period is expressly made applicable
in such other Loan Documents, such applicable grace period.
(d) F.Y.I. ceases to be Solvent or any other material
Loan Party ceases to be Solvent for a period exceeding 15 days from
the earlier of the date notice of such failure to remain Solvent is
given by the Agent to F.Y.I. or the date the Borrowers are obligated
to give notice of such Default to the Agent under Section 8.1(i), or
any Loan Party shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; provided,
however, that if any Loan Party shall cease to be Solvent more than
once in any twelve-month period, such occurrence shall immediately
become an Event of Default.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of itself or of
all or any substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary
case under the United States Bankruptcy Code as now or hereafter in
effect (the " Bankruptcy Code"), (iv) institute any proceeding or file
a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
winding-up or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary case under the
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Bankruptcy Code, or (vi) take any corporate or other action for the
purpose of effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of any
of the Loan Parties or of all or any substantial part of its Property,
or (iii) similar relief in respect of any of the Loan Parties under
any law relating to bankruptcy, insolvency, reorganization, winding-up
or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order
for relief against any of the Loan Parties shall be entered in an
involuntary case under the Bankruptcy Code.
(g) Any of the Loan Parties shall fail to discharge
within a period of 30 days after the commencement thereof any
attachment, sequestration, forfeiture or similar proceeding or
proceedings involving an aggregate amount in excess of $200,000
against any of its Properties.
(h) A final judgment or judgments for the payment of
money in excess of $100,000 in the aggregate shall be rendered by a
court or courts against the Loan Parties or any of them on claims not
covered by insurance or as to which the insurance carrier has denied
responsibility and the same shall not be discharged, or a stay of
execution thereof shall not be procured, within 30 days from the date
of entry thereof and the Loan Parties shall not, within said period of
30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal.
(i) Any of the Loan Parties shall fail to pay when due
any principal of or interest on any Debt (other than the Obligations)
having (either individually or in the aggregate) a principal amount of
at least $250,000, or the maturity of any such Debt shall have been
accelerated, or any such Debt shall have been required to be prepaid
prior to the stated maturity thereof, or any event shall have occurred
(and shall not have been waived or otherwise cured) that permits (or,
with the giving of notice or lapse of time or both, would permit) any
holder or holders of such Debt or any Person acting on behalf of such
holder or holders to accelerate the maturity thereof or require any
such prepayment.
(j) This Agreement or any other Loan Document shall cease
to be in full force and effect or shall be declared null and void or
the validity or enforceability thereof shall be contested or
challenged by any Permitted Holder, any Loan Party, or any of its
Affiliates, or any Loan Party shall deny that it has any further
liability or obligation under any of the Loan Documents, or any Lien
created by the Loan Documents shall for any reason cease to be a
valid, first priority perfected Lien (except for Permitted Liens, if
any,
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which are expressly permitted by the Loan Documents to have priority
over the Liens in favor of the Agent) upon any of the Collateral
purported to be covered thereby.
(k) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Pension Plan; (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Pension Plan or the termination of
any Pension Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee
to administer, any Pension Plan, or the institution by the PBGC of any
such proceedings; (v) any "accumulated funding deficiency" (as defined
in Section 406 of ERISA or Section 412 of the Code), whether or not
waived, shall exist with respect to any Plan; or (vi) complete or
partial withdrawal under Section 4201 or 4204 of ERISA from a Plan or
the reorganization, insolvency or termination of any Pension Plan; and
in each case above, such event or condition, together with all other
events or conditions, if any, have subjected or could in the
reasonable opinion of Required Banks subject any Loan Party or any
ERISA Affiliate to any tax, penalty or other liability to a Plan, a
Multiemployer Plan, the PBGC or otherwise (or any combination thereof)
which in the aggregate exceed or could reasonably be expected to
exceed $50,000.
(l) The occurrence of a Change of Control.
(m) If, at any time, the subordination provisions of any
of the Seller Subordinated Debt shall be invalidated or shall
otherwise cease to be in full force and effect.
(n) The occurrence of any Material Adverse Effect;
provided, however, that, for purposes of this Section 11.1(n),
no Material Adverse Effect shall be deemed to have occurred under
clause (a) of the definition of Material Adverse Effect in Section 1.1
unless, based upon the financial condition or financial performance of
the Borrowers, it is not reasonable to expect that the Borrowers will
be able to comply with all their financial covenants set forth in
Article 10.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (subject to Section 13.11 with respect to clauses (a)
and (b) below) and, if directed by the Required Lenders, the Agent shall do any
one or more of the following:
(a) Acceleration. Declare all outstanding principal of
and accrued and unpaid interest on the Loans and all other amounts
payable by any Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly
waived by the Borrowers;
(b) Termination of Commitments. Terminate the
Commitments (including,
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without limitation, the obligation of the Issuing Bank to issue
Letters of Credit) without notice to the Borrowers;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of the Agent and the Lenders to
secure payment and performance of the Obligations in accordance with
the terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies
afforded by the laws of the State of Texas or any other jurisdiction,
by any of the Loan Documents, by equity or otherwise, including,
without limitation, the right of setoff provided by Section 5.6 of
this Agreement;
provided, however, that upon the occurrence of an Event of Default under
Section 11.1(e) or Section 11.1(f), the Commitments of all of the Lenders
(including, without limitation, the obligation of the Issuing Bank to issue
Letters of Credit) shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrowers under the Loan Documents shall thereupon
become immediately and automatically due and payable, all without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest or other formalities of any kind, all of which
are hereby expressly waived by the Borrowers.
Section 11.3 Cash Collateral. If an Event of Default shall have
occurred and be continuing the Revolving Loans Borrowers shall, if requested by
the Agent or the Required Lenders, pledge to the Agent as security for the
Obligations an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account satisfactory to the Agent without any right of withdrawal by
any Borrower.
Section 11.4 Performance by the Agent. If any Loan Party shall
fail to perform any covenant or agreement in accordance with the terms of the
Loan Documents, the Agent may, at the direction of the Required Lenders,
perform or attempt to perform such covenant or agreement on behalf of such Loan
Party. In such event, the Borrowers shall, at the request of the Agent,
promptly pay any amount expended by the Agent or the Lenders in connection with
such performance or attempted performance to the Agent at the Principal Office,
together with interest thereon at the applicable Default Rate from and
including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agent nor any Lender shall have any liability or
responsibility for the performance of any obligation of the Borrowers or any
other Loan Party under this Agreement or any of the other Loan Documents.
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ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither the Agent nor any of its Affiliates, officers,
directors, employees, attorneys or agents shall be liable to any Lender for any
action taken or omitted to be taken by any of them hereunder or otherwise in
connection with this Agreement or any of the other Loan Documents except for
its or their own gross negligence or willful misconduct. Without limiting the
generality of the preceding sentence, the Agent (a) may treat the payee of any
Note as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Agent, (b) shall have no duties or responsibilities except those expressly
set forth in this Agreement and the other Loan Documents, and shall not by
reason of this Agreement or any other Loan Document be a trustee or fiduciary
for any Lender, (c) shall not be required to initiate any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Lenders, (d) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained
in this Agreement or any other Loan Document, or any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Loan Document, or for the value, validity,
effectiveness, enforceability or sufficiency of this Agreement or any other
Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Person to perform any of its obligations
hereunder or thereunder, (e) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable to any Lender for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, and (f) shall incur no liability under or in respect of
any Loan Document to any Lender by acting upon any notice, consent, certificate
or other instrument or writing reasonably believed by it to be genuine and
signed or sent by the proper party or parties. As to any matters not expressly
provided for by this Agreement, the Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Lenders, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to liability or which is
contrary to this Agreement or any other Loan Document or applicable law.
Section 12.2 Rights of Agent as a Lender. With respect to its
Commitments, the Loans made by it and the Notes issued to it, Banque Paribas
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant
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banking services to, own securities of, and generally engage in any kind of
banking, trust or other business with, the Loan Parties or any of their
Affiliates and any other Person who may do business with or own securities of
the Loan Parties or any of their Affiliates, all as if it were not acting as
the Agent and without any duty to account therefor to the Lenders. Each Lender
acknowledges the potential conflict of interest between Banque Paribas (i) as a
Lender holding disproportionate interests in the various Commitments and Loans
and (ii) as the Agent under this Agreement and each Lender expressly consents
to, and waives any claim based upon, such potential conflicts of interest.
Section 12.3 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on the Loans or of commitment fees) unless the
Agent has received notice from a Lender or a Borrower specifying such Default
and stating that such notice is a "notice of default". In the event that the
Agent receives such a notice of the occurrence of a Default, the Agent shall
give prompt notice thereof to the Lenders (and shall give each Lender prompt
notice of each such non- payment). The Agent shall (subject to Section 12.1)
take such action with respect to such Default as shall be directed by the
Required Lenders, provided that unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default as it
shall seem advisable and in the best interest of the Lenders.
SECTION 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO
INDEMNIFY THE AGENT FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT
REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE OBLIGATIONS
OF THE BORROWERS UNDER SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE WITH ITS
PRO RATA SHARE (CALCULATED ON THE BASIS OF THE AGGREGATE COMMITMENT
PERCENTAGES), ANY AND ALL LIABILITIES (INCLUDING, WITHOUT LIMITATION,
ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE
AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT
NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED
BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF
THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS THAT THE AGENT SHALL
BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS,
EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF THE AGENT (EXCEPT TO THE EXTENT THE SAME ARE CAUSED
BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
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MISCONDUCT). WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION 12.4, EACH
LENDER AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA
SHARE (CALCULATED ON THE BASIS OF THE AGGREGATE COMMITMENT PERCENTAGES) OF ANY
AND ALL OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
REASONABLY INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT
THAT THE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE BORROWERS.
Section 12.5 Independent Credit Decisions. Each Lender agrees that it
has independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of F.Y.I. and its Subsidiaries and the other Loan Parties
and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by any Loan Party of this Agreement or any other Loan Document or to
inspect the Properties or books of any Loan Party. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other financial information concerning the affairs, financial condition or
business of any Loan Party (or any of their Affiliates) which may come into the
possession of the Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other obligations
of the Lenders under this Agreement are several. The default by any Lender in
making a Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under this Agreement. In the event of any default
by any Lender in making any Loan, each nondefaulting Lender shall be obligated
to make its Loan but shall not be obligated to advance the amount which the
defaulting Lender was required to advance hereunder. In no event shall any
Lender be required to advance an amount or amounts with respect to any of the
Loans which would in the aggregate exceed such Lender's Commitment with respect
to such Loans. No Lender shall be responsible for any act or omission of any
other Lender.
Section 12.7 Successor Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent may resign at any time by
giving notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders will have the right to appoint another Lender
as a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be
a commercial bank organized under the laws
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of the U.S. or any state thereof or of a foreign country if acting through its
U.S. branch and having combined capital and surplus of at least $100,000,000.
F.Y.I. shall have the right to approve any successor Agent appointed under this
Section 10.7, which approval shall not unreasonably be withheld. Upon the
acceptance of its appointment as successor Agent, such successor Agent shall
thereupon succeed to and become vested with all rights, powers, privileges,
immunities and duties of the resigning Agent, and the resigning Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any Agent's resignation as Agent, the provisions of this
Article 12 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was the Agent.
ARTICLE 13
Miscellaneous
Section 13.1 Expenses. Whether or not the transactions contemplated
hereby are consummated, each of the Borrowers hereby jointly and severally
agrees, on demand, to pay or reimburse the Agent and each of the Lenders for
paying: (a) all reasonable out-of-pocket costs and expenses of the Agent in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, and any and all waivers, amendments,
modifications, renewals, extensions and supplements thereof and thereto, and
the syndication of the Commitments and the Loans, including, without
limitation, the reasonable fees and expenses of legal counsel for the Agent,
(b) all reasonable out-of-pocket costs and expenses of the Agent and the
Lenders in connection with any Default, the exercise of any right or remedy and
the enforcement of this Agreement or any other Loan Document or any term or
provision hereof or thereof, including, without limitation, the reasonable fees
and expenses of legal counsel for the Agent and the Lenders, (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any Lien
contemplated by this Agreement or any other Loan Document, and (e) all
reasonable out-of-pocket costs and expenses incurred by the Agent in connection
with due diligence, computer services, copying, appraisals, environmental
audits, collateral audits, field exams, insurance, consultants and search
reports.
SECTION 13.2 INDEMNIFICATION. EACH OF THE BORROWERS HEREBY JOINTLY AND
SEVERALLY AGREES TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH AFFILIATE
THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND
AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) THE RELATED TRANSACTIONS, (D) ANY BREACH BY
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ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (E) THE USE OR PROPOSED USE OF ANY LOAN
OR LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES, DEDUCTIONS AND CHARGES
IMPOSED ON THE AGENT, THE ISSUING BANK OR ANY LENDER IN RESPECT OF ANY LETTER
OF CREDIT, (G) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF
THE PROPERTIES OF ANY LOAN PARTY, EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE OR
CLAIM IS THE DIRECT RESULT OF AN INTENTIONAL AND AFFIRMATIVE ACT BY THE PERSON
TO BE INDEMNIFIED THAT CONSTITUTES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH PERSON, OR (H) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING ANY OF THE
FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PERSON TO BE INDEMNIFIED. THE OBLIGATIONS OF THE BORROWERS UNDER THIS
SECTION 13.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS AND LETTER OF CREDIT
LIABILITIES AND TERMINATION OF THE COMMITMENTS.
Section 13.3 Limitation of Liability. None of the Agent, any Lender or
any Affiliate, officer, director, employee, attorney or agent thereof shall be
liable for any error of judgment or act done in good faith, or be otherwise
liable or responsible under any circumstances whatsoever (including such
Person's negligence), except for such Person's gross negligence or willful
misconduct. None of the Agent, any Lender or any Affiliate, officer, director,
employee, attorney or agent thereof shall have any liability with respect to,
and each of the Borrowers hereby waives, releases and agrees not to sue any of
them upon, any claim for any special, indirect, incidental or consequential
damages suffered or incurred by any Borrower or any other Loan Party in
connection with, arising out of or in any way related to this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. Each of the Borrowers hereby
waives, releases and agrees not to sue the Agent or any Lender or any of their
respective Affiliates, officers, directors, employees, attorneys or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of or in any way related to this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by the Agent and the Lenders
shall have the right to act exclusively in the interest of the Agent and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care or
other duty or obligation of any type or nature whatsoever to F.Y.I. or any of
its Subsidiaries or any of their shareholders or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship between each
Borrower and each Lender is solely that of debtor and creditor, and neither the
Agent nor any Lender has any fiduciary or other special relationship with any
Borrower or any other Loan Party, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship
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between any Borrower and any Lender, or any other Loan Party and any Lender, to
be other than that of debtor and creditor. No joint venture or partnership is
created by this Agreement among the Lenders or among any Borrower or any other
Loan Party and the Lenders.
Section 13.6 Equitable Relief. Each of the Borrowers recognizes that,
in the event it fails to pay, perform, observe or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the Agent
and the Lenders. Each of the Borrowers therefore agrees that the Agent and the
Lenders, if the Agent or the Lenders so request, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under this Agreement
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither any
Borrower nor any other Loan Party may assign or transfer any of its rights or
obligations under this Agreement or any other Loan Document without the prior
written consent of the Agent. Any Lender may sell participations in all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its Commitments
and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitments) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the Borrowers for the performance of such
obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (v) such
Lender shall not sell a participation that conveys to the participant the right
to vote or give or withhold consents under this Agreement or any other Loan
Document, other than (if and to the extent that such Lender so agrees) the
right to vote upon or consent to (A) any increase of such Lender's Commitments
(other than an increase resulting from an assignment to or in favor of such
Lender from another Lender in accordance with this Agreement), (B) any
reduction of the principal amount of, or interest to be paid on, the Loans of
such Lender, (C) any reduction of any commitment fee or other amount payable to
such Lender under any Loan Document if and to the extent that such reduction
would decrease the fee or other amount payable to the participant, (D) any
postponement of any date for the payment of any amount payable in respect of
the Loans of such Lender, (E) any release of a material portion of the
Collateral from the Liens created by the Security Documents and not otherwise
expressly authorized by the Loan Documents, and (F) any release of any Loan
Party from liability under the Loan Documents.
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(b) Each of the Borrowers and each of the Lenders agree that any
Lender (the "Assigning Lender") may at any time assign to one or more Eligible
Assignees all, or a proportionate part of all, of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Commitments, Loans, Letters of Credit (each an "Assignee");
provided, however, that (i) each such assignment may be of a varying percentage
of the Assigning Lender's rights and obligations under this Agreement and the
other Loan Documents and may relate to some but not all of such rights and/or
obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement and the other Loan Documents, the
amount of the Commitments, Loans and Letters of Credit of the Assigning Lender
being assigned pursuant to each assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than an aggregate amount equal to $5,000,000 calculated based upon the sum
of the Revolving Credit Loans Commitment assigned (or, if such Commitment has
terminated or expired, the aggregate outstanding principal amount of the
Revolving Credit Loans and the Letter of Credit Liabilities assigned), plus the
aggregate outstanding principal amount of the Term Loans, and (iii) the parties
to each such assignment shall execute and deliver to the Agent for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with the Notes subject to such assignment, and a
processing and recordation fee of $2,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof or such other date as may be approved by the
Agent, (1) the Assignee thereunder shall be a party hereto as a "Lender" and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder and under the Loan Documents, and (2) the Assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement and the other
Loan Documents (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of a Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party thereto, provided that such
Lender's rights under Article 4, Section 13.1 and Section 13.2 accrued through
the date of assignment shall continue.
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any other instrument
or document furnished pursuant thereto; (ii) such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition or results of operations of any Loan Party or the
performance or observance by any Loan Party of its obligations under the Loan
Documents; (iii) such Assignee confirms that it has received a copy of the
other Loan Documents, together with copies of the financial statements referred
to in Section 7.2 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
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Assignment and Acceptance; (iv) such Assignee will, independently and without
reliance upon the Agent or such Assigning Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
the other Loan Documents; (v) such Assignee confirms that it is an Eligible
Assignee; (vi) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and exercise such powers under the Loan Documents
as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; and (vii) such Assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender.
(d) The Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lenders and the Commitments
of, and principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes under the Loan Documents. The Register shall
be available for inspection by any Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Notes subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt written
notice thereof to the applicable Borrower or Borrowers. Within five Business
Days after its receipt of such notice the applicable Borrower or Borrowers, at
its or their expense, shall execute and deliver to the Agent in exchange for
each surrendered Note evidencing particular Loans, a new Note evidencing each
such Loans payable to the order of such Eligible Assignee in an amount equal to
such Loans assigned to it and, if the Assigning Lender has retained any Loans,
a new Note evidencing each such Loans payable to the order of the Assigning
Lender in the amount of such Loans retained by it (each such promissory note
shall constitute a "Note" for purposes of the Loan Documents). Such new Notes
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibits C and D hereto, as
applicable.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 13.8, disclose to
the Assignee or participant or proposed Assignee or participant any information
relating to F.Y.I. or any of its Subsidiaries or any other Loan Party furnished
to such Lender by or on behalf of F.Y.I. or any of its Subsidiaries or any
other Loan Party provided that F.Y.I. shall have no liability for the accuracy
of any such information except (i) to the Agent and the Lenders to the extent
expressly provided herein or (ii) as of the date it was furnished by F.Y.I.;
provided that each such actual or proposed Assignee or participant shall agree
to be bound by the provisions of Section 13.20.
(g) Any Lender may assign and pledge all or any of the Notes held by it
to any Federal Reserve Bank or the U.S. Treasury as collateral security
pursuant to Regulation A of the Board
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of Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve System and/or Federal Reserve Bank; provided, that, any
payment made by a Borrower for the benefit of such assigning and/or pledging
Lender in accordance with the terms of the Loan Documents shall satisfy such
Borrower's obligations under the Loan Documents in respect thereof to the
extent of such payment. No such assignment and/or pledge shall release the
assigning and/or pledging Lender from its obligations hereunder.
(h) The Borrowers shall maintain, or cause to be maintained, a register
(the "Registered Note Register") (which, at the request of the Borrowers, shall
be kept by the Agent on behalf of the Borrowers at no extra charge to the
Borrowers at the address to which notices to the Agent are to be sent
hereunder) on which it enters the name of the registered owner of each of the
Loans evidenced by a Registered Note. Notwithstanding anything to the contrary
contained in this Section 13.8, a Registered Note and the Loans evidenced
thereby may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer of such Registered Note and the
Loans evidenced thereby on the Registered Note Register (and each Registered
Note shall expressly so provide). Any assignment or transfer of all or part of
such Loans and the Registered Note evidencing the same shall be registered on
the Registered Note Register only upon surrender for registration of assignment
or transfer of the Registered Note evidencing such Loans, duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the registered noteholder thereof, and thereupon one or more new Registered
Notes in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the due presentment for registration of
transfer of any Registered Note, the applicable Borrower or Borrowers and the
Agent shall treat the Person in whose name such Loans and the Registered
Note(s) evidencing the same are registered as the owner thereof for the purpose
of receiving all payments thereon and for all other purposes, notwithstanding
any notice to the contrary. The Registered Note Register shall be available
for inspection by any Borrower and any Lender at any reasonable time upon
reasonable prior notice.
Section 13.9 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of any Borrower hereunder, the obligations of
such Borrower under Article 4 and Sections 13.1 and 13.2 shall survive
repayment of the Loans and the Letter of Credit Liabilities, but shall not
survive the expiration of any applicable statute of limitations.
SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, TERM SHEETS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
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OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
Section 13.11 Amendments. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document to which any Borrower is a
party, nor any consent to any departure by such Borrower therefrom, shall in
any event be effective unless the same shall be agreed or consented to by the
Required Lenders and the Borrowers in writing, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no amendment, waiver or consent shall, unless
in writing and signed by all of the Lenders and the Borrowers, do any of the
following: (a) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations; (b) reduce the principal of, or interest on, the
Loans, Letter of Credit Liabilities or any fees or other amounts payable
hereunder; (c) postpone any date fixed for any payment (including, without
limitation, any mandatory prepayment) of principal of, or interest on, the
Loans, Letter of Credit Liabilities or any fees or other amounts payable
hereunder; (d) change the Commitment Percentages or the aggregate unpaid
principal amount of the Loans, Letter of Credit Liabilities or the number or
interests of the Lenders which shall be required for the Lenders or any of them
to take any action under this Agreement; (e) change any provision contained in
this Section 13.11 or modify the definition of "Required Lenders" contained in
Section 1.1; or (f) except as expressly authorized by this Agreement, release
any Collateral from any of the Liens created by the Security Documents, except
for Collateral which, in the aggregate for all such Collateral released, has a
value of $500,000 or less, or release any guaranty of all or any portion of the
Obligations. The Agent shall not terminate a Payment Blockage Period under any
Subordination Agreement without the consent of the Required Lenders.
Notwithstanding anything to the contrary contained in this Section 13.11, no
amendment, waiver or consent shall be made with respect to Article 12 hereof
without the prior written consent of the Agent. If at any time a Lender
becomes a Nonconsenting Lender (as identified in this Section 13.11), the
Borrowers shall have the right to replace such Lender with another Person;
provided that (i) such new Person shall be an Eligible Assignee acceptable to
the Agent and such new Person shall execute an Assignment and Acceptance, (ii)
the Borrowers shall have no right to replace Banque Paribas, (iii) neither the
Agent nor any Lender shall have any obligation to the Borrowers to find such
other Person, and (iv) in the event of a replacement of a Nonconsenting Lender,
in order for the Borrowers to be entitled to replace such a Lender, such
replacement must take place no later than 180 days after the date the
Nonconsenting Lender shall notify the Borrowers and the Agent of its failure to
agree to any requested consent, waiver or other modification. Each Lender
(other than Banque Paribas) agrees to its replacement at the option of the
Borrower pursuant to this Section 13.11 and in accordance with Section 13.8;
provided that the successor Lender shall purchase without recourse such
Lender's interest in the Obligations of the Borrowers to such Lender for cash
in an aggregate amount equal to the aggregate unpaid principal thereof, all
unpaid interest accrued thereon, all unpaid commitment fees accrued for the
account of such Lender, any breakage costs incurred by the selling Lender
because of the prepayment of any Eurodollar Loans, all other fees (if any)
applicable thereto and all other amounts (including any amounts under Article
4) then owing to such Lender hereunder or under any other Loan Document and the
Loan Parties shall execute a release addressed to such Lender releasing such
Lender from all claims arising in connection with the Loan Documents. In the
event that (x) the Borrower or the Agent has requested the Lenders to consent
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to a departure or waiver of any provisions of the Loan Documents or to agree to
any other modification thereto, (y) the consent, waiver or other modification
in question requires the agreement of all Lenders in accordance with the terms
of this Section 13.11 and (z) Required Lenders have agreed to such consent,
waiver or other modification, then any Lender who does not agree to such
consent, waiver or other modification shall be deemed a "Nonconsenting Lender".
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the
interest rate (the "Contract Rate") for any Obligation shall exceed the Maximum
Rate, thereby causing the interest accruing on such Obligation to be limited to
the Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Agent nor any Lender shall ever charge, receive, take, collect,
reserve or apply, as interest on the Obligations, any amount in excess of the
Maximum Rate. The parties hereto agree that any interest, charge, fee, expense
or other obligation provided for in this Agreement or in the other Loan
Documents which constitutes interest under applicable law shall be, ipso facto
and under any and all circumstances, limited or reduced to an amount equal to
the lesser of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section 13.12(b) or
(ii) an amount, which when added to all other interest payable under this
Agreement and the other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, the Agent or any Lender ever contracts for,
charges, receives, takes, collects, reserves or applies as interest any amount
in excess of the Maximum Rate, such amount which would be deemed excessive
interest shall be deemed a partial payment or prepayment of principal of the
Obligations and treated hereunder as such; and if the Obligations, or
applicable portions thereof, are paid in full, any remaining excess shall
promptly be paid to the applicable Borrower or Borrowers (as appropriate). In
determining whether the interest paid or payable, under any specific
contingency, exceeds the Maximum Rate, the Borrowers, the Agent and the Lenders
shall, to the maximum extent permitted by applicable law, (i) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate and spread in equal or unequal parts the total amount of
interest throughout the entire contemplated term of the Obligations, or
applicable portions thereof, so that the interest rate does not exceed the
Maximum Rate at any time during the term of the Obligations; provided that, if
the unpaid principal balance is paid and performed in full prior to the end of
the full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds the Maximum Rate, the Agent and/or the
Lenders, as appropriate, shall refund to the applicable Borrower or Borrowers
(as appropriate) the amount of such excess and, in such event,
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the Agent and the Lenders shall not be subject to any penalties provided by any
laws for contracting for, charging, receiving, taking, collecting, reserving or
applying interest in excess of the Maximum Rate.
(c) Pursuant to Article 15. 1 0(b) of Chapter 15, Subtitle 79, Revised
Civil Statutes of Texas 1925, as amended, each of the Borrowers agrees that
such Chapter 15 (which regulates certain revolving credit loan accounts and
revolving tri-party accounts) shall not govern or in any manner apply to the
Obligations.
(d) Without limiting the generality of the foregoing, if and to the
extent necessary to ensure compliance with this Section 13.12, what would
otherwise be the joint and several liability of a Borrower with respect to any
Loans and any Notes shall instead be deemed to be the liability of such
Borrower as a guarantor of payment of such Loans under the Guaranty executed by
such Borrower and not as a co-borrower of such Loans or as a co-maker of such
Notes.
Section 13.13 Notices. All notices and other communications provided for
in this Agreement and the other Loan Documents to which F.Y.I. or any of its
Subsidiaries is a party shall be given or made by telecopy or in writing and
telecopied, mailed by certified mail return receipt requested or delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof (or, with respect to a Lender that becomes a party
to this Agreement pursuant to an assignment made in accordance with Section
13.8, in the Assignment and Acceptance executed by it); or, as to any party, at
such other address as shall be designated by such party in a notice to each
other party given in accordance with this Section 13.13. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have
been duly given when transmitted by telecopy or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid; provided, however, that notices to the Agent shall be deemed given
when received by the Agent.
SECTION 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND APPLICABLE LAWS OF THE
U.S.; PROVIDED, HOWEVER, THAT THE LAWS (WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES) OF THE STATE OF ILLINOIS SHALL GOVERN ISSUES RELATING TO THE
MAXIMUM AMOUNT OF INTEREST (OR CONSIDERATION DEEMED TO BE INTEREST) WHICH MAY
BE CONTRACTED FOR, CHARGED, RECEIVED, TAKEN, COLLECTED, RESERVED OR APPLIED
WITH RESPECT TO THE OBLIGATIONS. F.Y.I. AND EACH OF ITS SUBSIDIARIES HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF (1) THE U.S. DISTRICT
COURT FOR THE NORTHERN DISTRICT OF TEXAS OR THE NORTHERN DISTRICT OF ILLINOIS,
(2) ANY TEXAS STATE COURT SITTING IN DALLAS COUNTY, TEXAS, (3) ANY ILLINOIS
STATE COURT SITTING IN COOK COUNTY, ILLINOIS FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE
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TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF F.Y.I. AND EACH OF ITS
SUBSIDIARIES HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO
SUCH PERSON AT ITS ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. EACH OF
F.Y.I. AND EACH OF ITS SUBSIDIARIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
Section 13.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.18 Construction. Each of F.Y.I. and each of its Subsidiaries,
the Agent and each Lender acknowledges that it has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly drafted
by the parties hereto.
Section 13.19 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 13.20 Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by any Loan Party
to it which is clearly indicated to be confidential information, confidential
from anyone other than Persons employed or retained by such Lender who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Lender
from disclosing such information (a) to any other Lender, (b) to any Person if
reasonably incidental to the administration of the Loans, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Lender, (e) which
has been publicly disclosed, (f) in connection with any litigation to which the
Agent, any Lender or their respective Affiliates may be a party, (g) to the
extent reasonably required in connection with the exercise of any remedy under
the Loan Documents, (h) to such Lender's legal
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counsel, independent auditors and affiliates, and (i) to any actual or proposed
participant or Assignee of all or part of its rights hereunder, so long as such
actual or proposed participant or Assignee agrees to be bound by the provisions
of this Section 13.20.
SECTION 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF ANY LOAN PARTY, THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be expressly provided
to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement or the other Loan Documents
where the approval, consent or exercise of judgment of the Agent or any Lender
is requested or required, (a) the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion
of the Agent and such Lender, and the Agent and such Lender shall not, for any
reason or to any extent, be required to grant such approval or consent or to
exercise such judgment in any particular manner, regardless of the
reasonableness of the request or the action or judgment of the Agent or such
Lender, and (b) no approval or consent of the Agent or any Lender shall in any
event be effective unless the same shall be in writing and the same shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 13.23 Agent for Services of Process. Each of F.Y.I. and each of
its Subsidiaries hereby irrevocably designates Thomas Walker, David Lowenstein,
or any other officer of F.Y.I., at the offices of F.Y.I. at 3232 McKinney
Avenue, Suite 900, Dallas, Texas 75204, to receive, for and on behalf of such
Person, service of process in the State of Texas and the State of Illinois,
such service being hereby acknowledged by such Person to be effective and
binding service in every respect. Each of F.Y.I. and each of its Subsidiaries
agrees that the failure of its agent for service of process to give any notice
of any such service of process to such Person shall not impair or affect the
validity of such service or of any judgment based thereon. If, despite the
foregoing, there is for any reason no agent for service of process of such
Person available to be served, then such Person further irrevocably consents to
the service of process by the mailing thereof by the Agent or the Required
Lenders by registered or certified mail, postage prepaid, to such Person at its
address listed on the signature pages hereof. Nothing in this Section 13.23
shall affect the right of the Agent or the Lenders to serve legal process in
any other manner permitted by law or affect the right of the Agent or any
Lender to bring any action or proceeding against F.Y.I. or any of its
Subsidiaries or its Property in the court of any jurisdiction.
Section 13.24 Joint and Several Obligations. Each and every
representation, warranty, covenant or agreement of F.Y.I. and its Subsidiaries
contained herein shall be, and shall be deemed to be, the joint and several
representation, warranty, covenant and agreement of each of F.Y.I. and each of
its Subsidiaries and of all such Persons. In addition, (a) the indebtedness,
liabilities and obligations of the Revolving Loans Borrowers shall be, and
shall be deemed to be, the joint and several indebtedness, liabilities and
obligations of each of the Revolving Loans Borrowers and of all such Borrowers,
(b) the indebtedness,
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liabilities and obligations of the Swing Loans Borrowers shall be, and shall be
deemed to be, the joint and several indebtedness, liabilities and obligations
of each of the Swing Loans Borrowers and of all such Borrowers, and (c) the
indebtedness, liabilities and obligations of the Term Loans Borrowers shall be,
and shall be deemed to be, the joint and several indebtedness, liabilities and
obligations of each of the Term Loans Borrowers and of all such Borrowers.
Notwithstanding the foregoing, if and to the extent that the joint and several
liability of a Borrower with respect to any Loan or Loans made to another
Borrower is determined by a court of competent jurisdiction to cause the
obligations of such Borrower to repay such Loan or Loans to be subject to
avoidance under Sections 544, 548 or 550 of the Bankruptcy Code or subject to
being set aside or annulled under any applicable state law relating to fraud on
creditors, the amount of such joint and several or co-maker liability of such
Borrower shall, without any further action by any Borrower, the Agent or any
Lender, be automatically limited to the greatest amount which is valid and
enforceable as determined in such proceeding; provided, however, that for
purposes of this sentence it shall be presumed that the joint and several
liabilities of the Borrowers under this Agreement and the Notes do not equal or
exceed an aggregate amount which would render any such Borrower's obligations
under this Agreement or any Note subject to being avoided, set aside or
annulled, and the burden of proof to the contrary shall be on the party
asserting to the contrary.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
107
<PAGE> 114
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
F.Y.I. INCORPORATED
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
3232 McKinney Avenue, Suite 900
Dallas, Texas 75204
Telecopy No.: (214) 953-7556
Telephone No.: (214) 953-7555
Attention: Ed H. Bowman, Jr.
President
IMAGENT ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
4003 Seven Mile Lane
Baltimore, Maryland 21208
Telecopy No.: (410) 485-1751
Telephone No.: (410) 358-2556
Attention: Jonathan Shaw
S - 1
<PAGE> 115
RESEARCHERS ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
130 Townsend Street
San Francisco, California 94107
Telecopy No.: (415) 974-6119
Telephone No.: (415) 543-9555
Attention: Greg Melanson
RECORDEX ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
18 Great Valley Parkway, Suite 190
Malvern, Pennsylvania 19355
Telecopy No.: (610) 640-3844
Telephone No.: (610) 640-0608
Attention: Michael Bellerghi
S - 2
<PAGE> 116
DPAS ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
625 Third Street
San Francisco, California 94107
Telecopy No.: (415) 536-3700
Telephone No.: (415) 536-3727
Attention: Bob Tessler
LEONARD ARCHIVES ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
2939 E. Grand Boulevard
Detroit, Michigan 48202
Telecopy No.: (313) 872-8307
Telephone No.: (313) 872-8300
Attention: Jerry Leonard
S - 3
<PAGE> 117
DELIVEREX ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
2054 Zanker Road
San Jose, California 95131
Telecopy No.: (408) 436-1625
Telephone No.: (408) 436-1701
Attention: Andrea Bushnell
PERMANENT RECORDS ACQUISITION CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
7231 Baker Boulevard
Fort Worth, Texas 76118
Telecopy No.: (817) 284-0315
Telephone No.: (817) 284-1811
Attention: Neil Patterson
S - 4
<PAGE> 118
DELIVEREX SACRAMENTO ACQUISITION
CORP.
By:
Name: David Lowenstein
Title: Vice President
Address for Notices:
2054 Zanker Road
San Jose, California 95131
Telecopy No.: (408) 436-1625
Telephone No.: (408) 436-1701
Attention: Andrea Bushnell
AGENT:
BANQUE PARIBAS, as Agent
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
-------------------
Banque Paribas
227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Telecopy No.: 312-853-6020
Telephone No.: 312-853-6000
Attention: Corporate Banking Group
S - 5
<PAGE> 119
LENDERS:
BANQUE PARIBAS
Revolving Credit Loans Commitment: By:
Name:
$2,142,857.14 Title:
Swing Loans Commitment: By:
Name:
$1,000,000.00 Title:
Term Loans Commitment: Address for Notices:
Banque Paribas
$12,857,142.86 227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Telecopy No.: 312-853-6020
Telephone No.: 312-853-6000
Attention: Corporate Banking Group
Lending Office for Prime Rate Loans:
Banque Paribas
227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Attention: Judy Wu
Administration
Lending Office for Eurodollar Loans:
Banque Paribas
227 West Monroe Street, Suite 3300
Chicago, Illinois 60606
Attention: Judy Wu
Administration
S - 6
<PAGE> 120
FIRST SOURCE FINANCIAL LLP
Revolving Credit Loans Commitment: By:
Name:
$1,428,571.43 Title:
Term Loans Commitment:
$8,571,428.57
Address for Notices:
First Source Financial LLP
c/o First Source Financial, Inc.
2850 W. Golf Road, 5th Floor
Rolling Meadows, Illinois 60102
Telecopy No.: 847-734-7910
Telephone No.: 847-734-2000
Attention: John Walding
Lending Office for Prime Rate Loans:
First Source Financial LLP
c/o First Source Financial, Inc.
2850 W. Golf Road, 5th Floor
Rolling Meadows, Illinois 60102
Telecopy No.: 847-734-7911
Telephone No.: 847-734-2000
Attention: Maria C. Mudra
Lending Office for Eurodollar Loans:
First Source Financial LLP
c/o First Source Financial, Inc.
2850 W. Golf Road, 5th Floor
Rolling Meadows, Illinois 60102
Telecopy No.: 847-734-7911
Telephone No.: 847-734-2000
Attention: Maria C. Mudra
S - 7
<PAGE> 121
IBJ SCHRODER BANK & TRUST COMPANY
Revolving Credit Loans Commitment: By:
Name:
$1,428,571.43 Title:
Term Loans Commitment:
$8,571,428.57
Address for Notices:
One State Street
New York, New York 10004
Telecopy No.: (212) 858-2768
Telephone No.: (212) 858-2269
Attention: Allan Pagnotta
Lending Office for Prime Rate Loans:
One State Street
New York, New York 10004
Telecopy No.: (212) 858-2768
Telephone No.: (212) 858-2872
Attention: Gary Conza
Lending Office for Eurodollar Loans:
Cayman Islands Branch
c/o IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Telecopy No.: (212) 858-2768
Telephone No.: (212) 858-2872
Attention: Gary Conza
S - 8
<PAGE> 122
SCHEDULE 1.1(a)
MORTGAGED PROPERTIES
Leonard Archives Acquisition Corp.
1. Land situated in the City of Detroit, Wayne County, State of Michigan,
described as follows:
PARCEL I:
Lots 253, 254 and East 12.80 feet of Lot 255, except the North 40 feet
of said Lots taken for road, and including the North 8 feet of the
vacated public alley at the rear thereof, Frisbie and Foxen's
Subdivision, as recorded in Liber 6, Page 78 of Plats, Wayne County
Records.
Tax Item No. 1921 - Ward 01
a/k/a 2937 East Grand Boulevard, a/k/a General Motors Boulevard
PARCEL II:
Lots 62 through 78 inclusive, and private alley lying North of Lots 71
and 72 and 73, and all of vacated public alley adjoining the East line
of Lots 67 to 70 inclusive, and adjoining the West line of Lots 73 to
78 inclusive, Woodbridges' Subdivision, as recorded in Liber 9, Page
93 of Plats, Wayne County Records.
Tax Item No. 5767-86 - Ward 8
a/k/a 5357 Trumbull
<PAGE> 123
SCHEDULE 1.1(b)
PERMITTED HOLDERS
<TABLE>
<CAPTION>
Name of Shareholder Number of Shares
---------------------------------------------------------------- ----------------
<S> <C> <C>
1. G. Michael Bellenghi 66,196
2. Andrea V. Bushnell 18,615
3. William M. Dearman 27,128
4. The Environmental Private Equity Fund II LP 99,469
5. Jerral W. Jones Family Limited Partnership 301,420
6. Jerry F. Leonard, Trustee of the Jerry F. Leonard Trust 15,384
7. Michael J. Bradley 66,197
8. John E. Drury 27,128
9. Fairfield Management LLC 21,099
10. John Brown 41,605
11. Jack B. Dane 12,057
12. David Lowenstein 265,250
13. Ted Montouri 66,299
14. Kent Lee Patterson 63,015
15. Gerald E. Pierson 66,196
16. Jonathan Shaw 265,198
17. Roger Mansfield 68,140
18. Donald Moorehead Jr. 60,284
19. Neil Dean Patterson 63,015
20. Steven H. Rowen 167,532
21. Robert Tessler 75,463
22. Greg Melanson 613,260
23. Pacini Family Trust 12,057
24. Don A. Sanders 27,128
25. Thomas C. Walker 337,590
26. Jerry F. Leonard, Jr., Trustee of the Jerry F. Leonard, Jr.
Trust as amended 237,890
</TABLE>
<PAGE> 124
SCHEDULE 1.1(c)
PERMITTED LIENS
LEONARD ARCHIVES ACQUISITION CORP.
Leonard Archives has the following automobile leases:
<TABLE>
<CAPTION>
Vehicle Year VIN Leasor Lease # Amount
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
International 1989 2569 Comer 516.65
S10 Pickup 1993 3003 Corp F E3713 359.79
Dodge Dakota 1993 7305 Corp F G4403 332.88
Jeep Cherokee 1993 0156 Corp F 14953 477.11
Ford E-350 1994 8492 Corp F A1344 513.92
Ford E-350 1994 1693 Corp F A2034 535.13
Ford E-250 1994 8432 Atlas 16284 380.18
Ford E-350 1994 0609 Corp F A2074 531.12
Plymouth Voyager 1996 2950 NBD 906A 399.72
Chrysler Concor 1996 8438 Chry C935C 492.14
Chevy Kodiak 1994 2014 Atlas 16465 730.82
Chevy Kodiak 1995 0600 Atlas 16534 841.54
Ford E-350 1996 2358 Atlas 16980 583.31
Plymouth Grand Voyager 1996 2431 NBD 459.91
Ford E-350 1996 4873 Corp F A0646 592.11
Freightliner 1995 3432 Atlas 16785 834.45
</TABLE>
<PAGE> 125
RECORDEX ACQUISITION CORP.
Liens filed under d/b/a names:
1. Paragon Management Group, Inc.
2. Recordex Services, Inc.
Jurisdiction: Pennsylvania Secretary of State
<TABLE>
<CAPTION>
Type of
Secured Party File No. File Date Collateral Filing
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sanwa Leasing Corp. 21710013 03/02/93 Office Equipment Lease
Keystone Financial Leasing Corp. 23051660 04/25/94 Office Equipment Lease
Keystone Financial Leasing Corp. 23051662 04/25/94 Office Equipment Lease
Keystone Financial Leasing Corp. 23281359 07/01/94 Office Equipment Lease
Yardley Holdings Co. 23290838 07/05/94 Office Equipment Lease
First National Bank of West Chester 23400874 08/04/94 Computers Lease
First National Bank of West Chester 23951041 01/31/95 Computers Lease
First National Bank of West Chester 24200353 04/18/95 Computers Lease
AT&T Capital Leasing Services 24201167 04/19/95 Phone System Lease
AT&T Capital Leasing Services 24230778 04/28/95 Phone System Lease
Bell & Howell Acceptance Corp. 24270891 05/11/95 Phone System Lease
</TABLE>
<PAGE> 126
SCHEDULE 7.4
PERMITS, FRANCHISES, LICENSES AND AUTHORIZATIONS
F.Y.I. Incorporated
None
D.P.A.S. Acquisition Corp.
1. Certificate of Business Tax Registration for DPAS Acquisition Corp.
issued by City and County of San Francisco
2. Seller's Permit for DPAS Acquisition Corp. issued by California State
Board of Equalization
Deliverex Acquisition Corp.
1. City of San Jose Business Certificate No. 048980496
2. Seller's Permit issued by California Board of Equalization No. SR
GH26-708793
3. City of Hayward Business Tax Registration No. 99-G 113608
Deliverex Sacramento Acquisition Corp.
1. Alarm System Permit issued by City of Sacramento No. 013614
2. Sales Tax Permit issued by California Board of Equalization No. SR KH
28-849737
3. City of Sacramento Business Operations Tax Certificate No. 6364
Imagent Acquisition Corp.
1. Maryland Sales and Use Tax License (under prior name of Mobile
Microfilming Corp.)
2. Virginia Certificate of Registration for the Collection of the
Virginia Sales Tax
3. West Virginia Business Registration Certificate
4. Pennsylvania Sales and Use Tax License
5. Delaware Business License (under prior name of Mobile Microfilming
Corp.)
<PAGE> 127
6. City of Falls Church building permit
Leonard Archives Acquisition Corp.
1. City of Detroit Certificate of Electrical Inspection No. 30488A
2. City of Detroit Sign License No. 089607B
3. City of Detroit Fire Inspection Certificate No. 9405751
4. City of Detroit Refrigeration License No. 010426
5. City of Detroit Certificate of Annual Inspection No. 356966
6. City of Detroit Elevator License No. 362712
7. City of Detroit Fire Inspection Certificate No. 9501070
8. City of Detroit Elevator License No. 362713
9. Ohio Department of Industrial Relations Certificate of Operation,
Division of Elevator Inspections No. 01372C
10. Building Approval for New and Existing Structures; Certificate of Use
and Occupancy issued by City of Toledo dated 5/5/94 (No certificate
number)
11. City of Farmington Hills, Michigan Building Permit No. 9304888
Permanent Records Acquisition Corp.
1. Texas Water Commission Registration No. 68501
Recordex Acquisition Corp.
1. State of Pennsylvania Business Permit No. 23379311
2. State of New York Business Permit No. 23 2411976
3. State of Ohio Business Permit No. 99-024883
4. State of Delaware Business Permit No. 96 50081 71
5. State of North Carolina Business Permit No. 901910149150
6. State of South Carolina Business Permit No. 16642870002
<PAGE> 128
7. City of Columbia Business Permit No. 004650-0
8. State of Georgia Business Permit No. 175-99-35225-5
9. State of Maine Business Permit No. 23-2411976
10. State of West Virginia Business Permit No. 51-037-0082 0019 Q
11. State of Virginia Business Permit No. 010016613207
Researchers Acquisition Corp.
1. California Seller's Permit No. SYBH 99-844478.
2. City and County of San Francisco Business Tax Registration Certificate
No. 163158
3. City of San Jose Business Certificate No. 005491296
4. City of Sacramento Business Operations Tax Certificate No. 7724
5. City of Los Angeles Tax Registration Certificate No. 899675-66
6. City and County of San Francisco Business Tax Registration Certificate
No. 165149
7. City of San Jose Business Certificate No. 07917395
8. State of California Department of Toxic Substance Control EPA
Identification No. CAL 000113305 (for Los Angeles office located at
1706 South Figueroa Street, Los Angeles)
9. Los Angeles County Public Health License for hazardous waste
generation ID No. 816219
10. County of Santa Clara Environmental Health Permit No. 8901-G
11. City of San Jose Hazardous Materials Storage Permit No. H499229
12. City and County of San Francisco - Industrial Wastewater Discharger -
Class II Permit - Permit No. 94-0171
13. State of California Department of Toxic Substance Control EPA
Identification Nos. CAL 000113304 (for San Francisco office located at
130 Townsend Street, San Francisco) and CAL 000049245 (for San Jose
office located at 1585 N. Fourth Street, San Jose)
<PAGE> 129
14. Registrations as Professional Photocopiers in the following counties:
a. San Francisco - No. 26
b. Santa Clara - No. 2
c. Sacramento - No. 87-005PC
d. Los Angeles - No. 95 1730686
<PAGE> 130
SCHEDULE 7.6
LITIGATION AND JUDGMENTS
DELIVEREX SACRAMENTO ACQUISITION CORP.
1. Alward v. Nelson/Deliverex, City of Sacramento Municipal Court No.
09-U67154-9
Maximum liability: $25,000
Insurance coverage: California State Automobile
Association Inter-Insurance Bureau,
complete coverage including any
costs of litigation.
Nature of Claim: Automobile accident involving former
Deliverex employee.
Date of Incident: September 25, 1995
Status: The parties have attempted to settle. Alward
offered to settle for $13,000; the insurance
company offered $9,500. The matter has not
been settled.
LEONARD ARCHIVES ACQUISITION CORP.
1. Buckley v. Northwest General Hospital and Leonard Archives, Michigan
3d Cir. No. 93-323355
Maximum liability: $25,000 (as estimated by Company counsel)
Insurance coverage: None.
Nature of Claim: Negligent loss of a mammogram which
might have been evidence in
plaintiff's malpractice claim
against her doctor.
Date of Claim: August 17, 1993
Status: The hospital and the Company agreed to have
the matter resolved through binding
arbitration. Subsequent to this agreement,
the records containing the mammogram were
located (it had presumably been filed out of
order by the hospital prior to the Company's
picking up the records). The records were
reviewed and showed no evidence of breast
cancer. Since the mammograms were delivered
to the plaintiff's attorneys (late in 1995 or
early in 1996), the Company has had no
further communication on the matter.
<PAGE> 131
2. Charge filed with the Michigan Department of Civil Rights by Valsiara Vann
Maximum liability: $25,000 (as estimated by Company counsel)
Insurance coverage: None.
Nature of Claim: Discrimination on the basis of race.
Date of Claim: December 27, 1993
Status: On December 3, 1993, Ms. Vann gave the
Company notice of her intention to quit,
which the Company accepted effective
immediately. Vann did not indicate prior to
her resignation that she had experienced
discrimination. The Company responded to the
charge on March 18, 1994 and participated in
an investigatory interview resolution
conference on September 24, 1994. Further
information was provided to MDCR on September
29, 1994. No further action has been taken
by MDCR. The Company intends to continue to
vigorously dispute any future actions or
claims by Vann.
3. Charge filed with the Michigan Department of Civil Rights by Jerry Wimberly
Maximum liability: $25,000 (as estimated by Company counsel)
Insurance coverage: None.
Nature of Claim: Discrimination on the basis of race in firing
decision.
Date of Claim: May 11, 1995
Status: On May 18, 1995, the Company responded to
Interrogatories forwarded by the MDCR. Since
that date, the MDCR has taken no action on
the matter. The Company intends to continue
to vigorously dispute any future actions or
claims by Wimberly.
<PAGE> 132
RECORDEX ACQUISITION CORP.
1. Deegan & McGarry v. Med-Cor, CCP, Cuyahoga County, Ohio Case No. CV-274292
Maximum liability: Counsel for the Company indicates
that should the plaintiffs succeed
in this case, there are numerous
defendants who must contribute to
any award and each plaintiff, even
if there are thousands, suffered
minimal damages, e.g. $10 or $20.
Insurance coverage: None.
Nature of claim: Excessive fees
Status: This case involves claims on behalf of all
persons in the State of Ohio who requested
copies of their medical records and received
those copies through a record copying
service. The plaintiffs are currently
seeking class certification. A pre-trial
conference was held on January 17, 1996. One
named plaintiff has been deposed; the
depositions of the other named plaintiffs
have yet to be scheduled.
2. Angino & Rovner v. Gettysburg Hospital et al., CCP Dauphin Co.,
No. 3116 S 1994
Maximum liability: Counsel for the Company indicates
that should the plaintiffs succeed
in this case, there are numerous
defendants who must contribute to
any award and each plaintiff, even
if there are thousands, suffered
minimal damages, e.g. $10 or $20.
Insurance coverage: None.
Nature of claim: Excessive fees
Status: This case is similar to the Deegan case
above. In this case, a Harrisburg, PA,
personal injury firm has sued hospitals and
copy services doing business in the Dauphin
County and Allegheny County areas, alleging
violations of the Consumer Protection Law,
Medical Records Act, and state anti-trust
law. The defendants have moved to dismiss
for failure to state a claim upon which
relief can be granted. According to the
Company's counsel, the judge on the case
seems disinclined to render any decision in
this matter and will be swayed based on final
decisions in similar cases. There has been
no activity on the case since August 18, 1995.
<PAGE> 133
3. Rinaldi v. Community Medical Center and Recordex Services, Inc. et al.,
CCP Lackawanna Co. No. 95 Equity-60053
Maximum liability: Less than $1,000
Insurance coverage: None.
Nature of claim: Excessive fees
Status: This case is similar to the Deegan case
above. The case involves charges that the
rates charged violate the state statutes and
regulations. The plaintiff has filed
declaratory judgment action and requests that
she not be required to pay the rates charged.
Defendants filed preliminary objections. A
hearing was held on December 14, 1995, at
which point the judge denied the preliminary
objections, but indicated off the record that
he did not believe the case to be appropriate
for declaratory judgment. Discovery has been
initiated and will continue for the next
several months.
<PAGE> 134
SCHEDULE 7.7
OWNERSHIP OF REAL PROPERTIES
The following property is owned:
Leonard Archives Acquisition Corp.
2937 General Motors Boulevard
Detroit, MI 48202
Attached is a summary of the leased properties.
<PAGE> 135
LEASES
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DELIVEREX ACQUISITION CORP.
1. 2054 Zanker Rd., 07/01/95-09/30/97 -- $14,602 07/01/95-12/31/99 29,204 sq. ft.
San Jose, CA 10/01/97-12/31/99 -- $15,478
(Third Amendment)
2. 361 E. Brokaw Rd., 07/01/95-09/30/97 -- $6,394 07/01/95-12/31/99 17,280 sq. ft.
San Jose, CA 10/01/97-12/31/99 -- $6,739
(Third Amendment)
3. 2688 W. Winton Ave., 06/01/95-06/30/98 -- $12,600 01/01/92-12/31/95 Extended by 1st Amend. 38,280 sq. ft.
Hayward, CA 07/01/98-12/31/99 -- $13,900 to Standard Industrial
Lease through 12/31/99
4. 890 Service St., No. G $3,180 04/13/92-06/30/96 12,720 sq. ft.
San Jose, CA
IMAGENT ACQUISITION CORP.
1. 4003 Seven Mile Ln. Annual rental rate of 04/12/83-06/30/88 Extended by Option to 60 ft. x 110 ft.
Baltimore, MD $38,016 06/30/93, extended by (building)
First Addendum to Lease
Agreement to 06/30/98
2. 8215 Hermitage Rd., Annual rental rate from 04/01/95-03/31/98 3,150 sq. ft.
Henrico County, VA 04/01/95-03/31/96 -- $26,672.78
(Second Addendum to 04/01/96-03/31/97 -- $27,739.69
Lease) 04/01/97-03/31/98 -- $28,849.28
3. 950 Ridge Rd, Unit $540 per month, increased to 04/01/92-03/31/95 Extended to 03/31/98 by 1,440 sq. ft.
D-3, Claymont, DE $573.99 per month by Renewal Renewal Agreement
Agreement
4. 950 Ridge Rd, Unit $350 per month, increased to 07/01/92-03/31/95 Extended to 03/31/97 by 720 sq. ft.
D-2, Claymont, DE $357.35 per month by Renewal Renewal Agreement
Agreement
5. 950 Ridge Rd, Unit $350 12/01/93-03/31/95 Extended to 03/31/97 by 720 sq. ft.
D-20, Claymont, DE Renewal Agreement
6. 900 S. Washington St., $1,462.50 09/14/88-09/13/93 Extended by exercise of 1,800 sq. ft.
Falls Church, VA 5 year option to renew
through 3/31/98.
</TABLE>
<PAGE> 136
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7. 700 Market St., $4,000 09/01/94-11/30/98 8,112 sq. ft.
Philadelphia, PA
8. 2362 Peters Creek Rd., $495.00 05/01/93-04/30/95 Tenant has three options 904 sq. ft.
Ste. B, Roanoke, VA to renew (2 years each)
9. Golden Ring Executive Annual Rate: 06/01/93-05/31/98 15,519 sq. ft.
Park, Baltimore, Md. Year 1 - $65,955.75
Year 2 - $68,593.98
Year 3 - $71,232.21
Year 4 - $74,180.82
Year 5 - $77,129.43
10. 9600 Pulaski Park Dr., Annual Rate: 04/01/96 - 06/30/98 3,000 sq. ft.
Ste. 114, Baltimore, 04/01/96 - 03/31/97 -
Md. 21220 $17,850.00
04/01/97 - 06/30/98 -
$18,750.00
</TABLE>
<PAGE> 137
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DPAS ACQUISITION CORP.
1. 625 Third St., For months 01-30 -- $10,000 04/01/95-03/31/05 10,000 sq. ft.
San Francisco, CA For months 31-60 -- $10,500
For months 61-90 -- $11,000
For months 91-120 - $11,500
2. 282 Second St., $500 03/10/95-03/09/96 1,400 sq. ft.
San Francisco, CA Lease is now month-to-
month
3. 444 Townsend St., 01/01/95-11/30/95 -- $3,375 01/01/95-12/31/01 5,000 sq. ft.
San Francisco, CA 01/01/95-12/31/96 -- $2,200
01/01/97-12/31/97 -- $2,350
01/01/98-12/31/98 -- $2,500
01/01/99-12/31/99 -- $2,575
01/01/00-12/31/00 -- $2,650
01/01/01-12/31/01 -- $2,725
4. San Quentin State $200 01/02/92-02/02/12 May be renewed for 1,500 sq. ft.
Prison, Tamal, CA additional successive
one-year terms, not to
exceed ten years total
RESEARCHERS ACQUISITION CORP.
1. 1585 N. Fourth St., $576 per month, increased to 07/15/87-06/30/88 Extended from 07/07/91- 960 sq. ft.
San Jose, CA $725 per month by letter 06/30/92 by Amendment
dated 06/30/95 dated 05/24/91, extended
by letter from 07/01/95-
06/30/96
2. 1706-1710 S. Figueros $8,000 From completion of Option to extend dated 8,400 sq. ft.
St., Los Angeles, CA improvements, no later 08/26/91 for an
than 10/01/91 for a additional 60 month
period of 60 months period
(signed 09/07/91,
therefore it looks
like the lease is
still in effect).
3. 130 Townsend St., $8,500 08/01/91-07/31/01 9,000 sq. ft.
San Francisco, CA
</TABLE>
<PAGE> 138
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4. 130 Townsend St., $11,500 11/01/95-10/31/04 11,000 sq. ft.
San Francisco, CA
(Second Lease)
5. 1614 19th St., $2,200 11/01/95-10/31/00 2,200 sq. ft.
Sacramento, CA
6. 481 N. First St., $3,500 11/01/95-10/31/00 3,430 sq. ft.
San Jose, CA
7. 35 Stanford St., $6,500 11/01/95-10/31/04 14,000 sq. ft.
San Francisco, CA
RECORDEX ACQUISITION CORP.
1. 701 Lee Rd., County of $11,000 Month to month 5,474 sq. ft.
Chester, PA
2. Great Valley Corporate $7,158.67 3/15/92-3/14/95 Extended by Amendment 6,136 sq. ft.
Center, Malvern, PA through 3/31/98
</TABLE>
<PAGE> 139
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEONARD ARCHIVES ACQUISITION
CORP.
1. 400 Renaissance Ctr., $4,000 per year 02/01/95-01/31/96, by 500 sq. ft.
Detroit, MI Amendment dated
02/27/95
2. 23290 Commerce Dr., $3,555 for month 2; 09/01/93-08/31/96 Extended for three years Not specified;
Farmington Hills, MI $12,521.25 for months 3 through 8/31/96 storage facility
through 24 inclusive; and
$14,310 for remainder of term
3. 5757 Trumbull, $4,000 for year one; Annual 1/1/96-12/31/05 Not specified;
Detroit, MI rental for year 2 equals storage facility
fair market value during
last quarter of year 1;
Annual rental adjusted for
c.p.i. for each year
thereafter
4. 1000 Maple, Detroit, $1,667 for 23 months; $1,659 4/14/95-4/30/97 Options to renew for two 18,000 sq. ft.
MI for last month 1 year periods
5. 324 Chestnut, Toledo, $6,500 for year one; Annual 1/1/96-12/31/05 Not specified;
OH rental for year 2 equals storage facility
fair market value during
last quarter of year 1;
Annual rental adjusted for
c.p.i. for each year
thereafter
6. 5000 Carpenter Rd., $5,172 for year one 1/1/96-12/31/05 Not specified;
Ann Arbor, MI increasing to $12,358.67 storage facility
upon completion of
additional construction;
Annual rental for year 2
equals fair market value
during last quarter of year
1; Annual rental adjusted
for c.p.i. for each year
thereafter
7. 285 Piquette, Detroit, $500 month-to-month Not specified;
MI storage facility
8. 5766 Trumbull, $937.50 month-to-month 9,000 sq. ft.
Detroit, MI
NO LEASES
</TABLE>
<PAGE> 140
<TABLE>
<CAPTION>
LEASE MONTHLY RENTAL RATE (BASE) TERM EXTENSIONS SQ. FEET
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. 302 S. Buyrne, Toledo,
OH
2. 1156 Oak Valley Dr.,
Ann Arbor, MI
DELIVEREX SACRAMENTO
ACQUISITION CORP.
1. 8220 Alpine, Ste. B., $11,010 10/31/94 - 10/30/04 41,200 sq. ft.
Sacramento, CA
(Sixth Amendment)
PERMANENT RECORDS ACQUISITION
CORP.
1. 7301 Baker Blvd. $7,500 7/1/95 - 6/30/10 23,000 sq. ft.
Fort Worth, TX
</TABLE>
<PAGE> 141
SCHEDULE 7.10
EXISTING DEBT
DELIVEREX ACQUISITION CORP.
1. Line of credit with Wells Fargo Bank, for $50,000, no defined
expiration date. Outstanding balance at March 31, 1996:
$49,147.
2. Notes payable - Small Business Administration, for $429,699
(at 9/30/94), maturing 11/17/14, secured by real estate owned
by Steven H. Rowen (shareholder) and the personal guarantees
of Steven H. Rowen. Pursuant to the terms of the merger,
Deliverex is in the process of removing these personal
guarantees and the security interest in Mr. Rowen's real
property and replacing both with a continuing guarantee from
F.Y.I. Incorporated.
3. Notes payable - Wells Fargo Bank, for $14, 101 (at March 31,
1996), maturing April and September 1998, secured by
automobiles.
LEONARD ARCHIVES ACQUISITION CORP.
1. Capital leases of 16 automobiles. Obligations mature from
April, 1996 to November, 2000 for $209,431 as of March 31,
1996.
RECORDEX ACQUISITION CORP.
1. Capital leases of office equipment. Obligations mature from
April 1996 to June 2000 for $163,009 as of March 31, 1996.
<PAGE> 142
SCHEDULE 7.11
TAXES
1. Researchers Acquisition Corp. received notice on April 19, 1996 from
the Internal Revenue Service that its 1994 tax return will be audited.
The Company has scheduled a meeting with the Internal Revenue Service
on May 17, 1996.
<PAGE> 143
SCHEDULE 7.13
PLANS
None.
<PAGE> 144
SCHEDULE 7.15
F.Y.I. COMMON STOCK, OPTIONS, ETC.
1. Stock Options Outstanding: 478,500
2. Stock Warrants Outstanding: 150,000
3. Stockholder information:
<TABLE>
<CAPTION>
Name of Shareholder Number of Shares
---------------------------------------------------------------- ----------------
<S> <C> <C>
1. G. Michael Bellenghi 66,196
2. Andrea V. Bushnell 18,615
3. William M. Dearman 27,128
4. The Environmental Private Equity Fund II LP 99,469
5. Jerral W. Jones Family Limited Partnership 301,420
6. Jerry F. Leonard, Trustee of the Jerry F. Leonard Trust 15,384
7. Michael J. Bradley 66,197
8. John E. Drury 27,128
9. Fairfield Management LLC 21,099
10. John Brown 41,605
11. Jack B. Dane 12,057
12. David Lowenstein 265,250
13. Ted Montouri 66,299
14. Kent Lee Patterson 63,015
15. Gerald E. Pierson 66,196
16. Jonathan Shaw 265,198
17. Roger Mansfield 68,140
18. Donald Moorehead Jr. 60,284
19. Neil Dean Patterson 63,015
20. Steven H. Rowen 167,532
21. Robert Tessler 75,463
22. Greg Melanson 613,260
23. Pacini Family Trust 12,057
24. Don A. Sanders 27,128
25. Thomas C. Walker 337,590
26. Jerry F. Leonard, Jr., Trustee of the Jerry F. Leonard, Jr.
Trust as amended 237,890
27. Cede & Co. 2,183,300
28. Dorothy Gold Kaplan 100
29. J. Kyle Duvall 1,000
</TABLE>
<PAGE> 145
<TABLE>
<CAPTION>
Name of Shareholder Number of Shares
---------------------------------------------------------------- ----------------
<S> <C> <C>
30. Bryan Hathcock 200
31. William R. & Harriet Leathem 100
32. Leslie & Harvey Lowenthal 100
33. Daniel H. & Jane R. Philip 200
</TABLE>
<PAGE> 146
SCHEDULE 7.22
MATERIAL CONTRACTS
None.
<PAGE> 147
SCHEDULE 7.23
BANK ACCOUNTS
F.Y.I. Incorporated
1. Montgomery Securities - F.Y.I. Incorporated - Account No.
107-89414-1-4. Invested only in U.S. Treasuries
2. Compass Bank - Dreyfus Overnight Investments - Account No. 22002810
3. Compass Bank - F.Y.I. Incorporated Operating Account - Account
No. 70835266
D.P.A.S. Acquisition Corp.
1. Bank of San Francisco - C & T Management Services d/b/a DPAS -
Checking Account No. 3945880
2. Sanwa Bank - DPAS Acquisition - Money Market Account No. 0318-08297
3. Sanwa Bank - DPAS Acquisition - Checking Account No. 0313-08568
4. Sanwa Bank - DPAS Acquisition - Checking Account No. 0310-03736
5. Sanwa Bank - DPAS Acquisition - Checking Account No. 0310-03655
6. South Valley National Bank - DPAS Acquisition - Merchant Trust Account
No. 210031139
7. South Valley National Bank - DPAS Acquisition - Merchant Trust Account
No. 210031047
8. South Valley National Bank - DPAS Acquisition - Merchant Trust Account
No. 210030686
9. South Valley National Bank - DPAS Acquisition - Merchant Trust Account
No. 210408616
10. Sanwa Bank - DPAS Acquisition - Safe Deposit Box
11. Mission National Bank - DPAS Acquisition d/b/a Mail House - Checking
Account No. 0199406970
12. Mission National Bank - DPAS Acquisition d/b/a Mail House - Money
Market Account No. 0140187470
13. Mission National Bank - DPAS Acquisition d/b/a Mail House - Trust
Account No. 0101397170
<PAGE> 148
Deliverex Acquisition Corp.
1. Wells Fargo Bank - Peninsula Records Management - Checking Account No.
0035-001155
2. Wells Fargo Bank - Peninsula Records Management - Money Rate Account
No. 6035-215821
3. Wells Fargo Bank - Ask Records Management - Checking Account No.
0466-070588
4. Wells Fargo Bank - Ask Records Management - Market Rate Account No.
6035-215904
5. Wells Fargo Bank - Deliverex, Inc. - Checking Account No. 0035-001072
6. Wells Fargo Bank - Deliverex, Inc. - Business Savings Account No.
6029-205762
Deliverex Sacramento Acquisition Corp.
1. Wells Fargo Bank - Deliverex Sacramento Acquisition Corp. - Account
No. 0029-113537
Imagent Acquisition Corp.
1. First National Bank of Maryland - Account No. 185-8688-0
2. Nationsbank - Account No. 00-0160-0470
3. Mercantile Safe Deposit and Trust Company - Certificate No. 9217027
4. Nationsbank - Account No. 20-0791-2082
Leonard Archives Acquisition Corp.
1. Comerica Bank - Checking Account No. 1840119513
2. Comerica Bank - Payroll Checking Account No. 1840119505
3. Comerica Bank - Savings Account No. 9302989516
4. Comerica Bank - Health Plan Account No. 1840120420
5. Comerica Bank - Money Market Savings Account No. 1850041466
<PAGE> 149
Permanent Records Acquisition Corp.
1. Liberty Bank - Main Account No. 1008523
2. Liberty Bank - Copy Account No. 1010412
3. Liberty Bank - Inv. Account No. 4000717
4. Liberty Bank - Line of Credit Account No. 0009633903
Recordex Acquisition Corp.
1. First Executive Bank - Paragon Management Group - Checking Account
No. 1008544
2. Midlantic Bank - Recordex Services, Inc. - Operating Account/Checking
Account No. 9692120
3. Midlantic Bank - Recordex Services, Inc. - Payroll Accounting/Checking
Account No. 9691478
Researchers Acquisition Corp.
1. Wells Fargo Bank - Researchers Acquisition Corp. - General
Account/Checking Account No. 4029-112-547
2. Wells Fargo Bank - Researchers Acquisition Corp. - Payroll Account No.
4029-112-554
3. Wells Fargo Bank - Researchers Acquisition Corp. - Witness Fee Account
No. 4029-112-562
4. Wells Fargo Bank(1) - Melanson & Associates, Inc. - General
Account/Checking Account No. 4043-108-000
5. Wells Fargo Bank(1) - Melanson & Associates, Inc. - Sweep Account
No. 4417-801-784
6. Wells Fargo Bank(1) - Melanson & Associates, Inc. - Witness Fee Account
No. 4043-108-380
7. Wells Fargo Bank(1) - Melanson & Associates, Inc. - Payroll Account
No. 4029-100-096
__________________________________
(1) This account will be closed as soon as all checks clear.
<PAGE> 150
SCHEDULE 7.27
EMPLOYEE MATTERS
1. EMPLOYMENT CONTRACTS
F.Y.I. Incorporated
The Company has the following employment contracts*:
1. Ed H. Bowman, Jr. - $200,000 per year, commencing November,
1995
2. Thomas C. Walker - $150,000 per year, commencing December,
1994
3. David Lowenstein - $120,000 per year, commencing February,
1995
4. G. Michael Bellenghi - $150,000, commencing January, 1996
5. Greg Melanson - $150,000, commencing January, 1996
6. Jonathan B. Shaw - $140,000, commencing January, 1996
7. Jerry F. Leonard, Jr. - $100,000, commencing January, 1996
2. UNION MATTERS
Recordex Acquisition Corp.
The Company provides record management services to a hospital
which is a member of the League of Voluntary Hospitals and Homes of
New York (the "League"). The League has entered into a contract with
Local 1199, National Health and Human Service Employees Union ("Local
1199"). At the request of both the hospital and Local 1199, the
Company has signed an agreement with Local 1199, pursuant to which the
Company agrees to abide by union policies with respect to the
Company's employees who work with the hospital; essentially, these
employees are paid union wages and participate in all union benefits
plans. Recordex has less than ten employees covered by this
agreement.
* Each contract is for a term of three years and automatically renews at
the end of the initial term.
<PAGE> 151
SCHEDULE 7.28
INSURANCE
F.Y.I. INCORPORATED
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial Union Commercial General Liability CRR511240 03/01/96- Gen. Aggregate 2,000,000
Ins. Co. - Occurrence 03/01/97 Prod.-Comp/Op Agg. 1,000,000
Pers. & Ad. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Commercial Package CRR511240 03/01/96- Contents 70,000
03/01/97 Deductible 250
American Employers Worker's Comp. & Empl. AR(97)H141518 03/14/96- Statutory Limits
Liability 03/14/97 Each Accid. 1,000,000
Disease - Pol. Lim. 1,000,000
Disease - Each Empl. 1,000,000
</TABLE>
DPAS ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
USF & G Commercial General Liability- Binder 12/31/95 Gen. Agg. 2,000,000
Occurrence 12/31/96 Prod. - Comp/Op Agg. 2,000,000
Emp. Benefits Liability Pers. & Adv. Injury 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability Binder 12/31/95 Combined Single Limit 1,000,000
Any Auto 12/31/96
Hired Auto
Non-Owned Autos
Excess Liability Binder 12/31/95 Each Occur. 5,000,000
Umbrella Form 12/31/96 Aggregate 5,000,000
Comm. Application Binder 12/31/95
12/31/96
Property Binder 12/31/95
12/31/96
ITT Hartford Worker's Compensation & 57WECY4875 09/01/95 Statutory Limits
Employers' Liability 09/01/96 Each accid. 1,000,000
Disease - Pol. limit 1,000,000
Disease - Each Empl. 1,000,000
</TABLE>
<PAGE> 152
DELIVEREX ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Golden Eagle Commercial General Liability CCP375086-00 01/01/96 General Agg. 2,000,000
Insurance Company - Occurrence 01/01/97 Prod. Comp/Op Agg. 1,000,000
Pers. & Adv. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability CCP375086-00 01/01/96 Combined Single Limit 1,000,000
Scheduled Autos 01/01/97
Hired Autos
Non-owned autos
Business Personal Property CCP375086-00 01/01/96 Ded: $1,000 653,000
01/01/97
</TABLE>
DELIVEREX SACRAMENTO ACQUISITON CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Golden Eagle Commercial General CCP31137400 06/01/95 General Agg. 2,000,000
Insurance Company Liability - Occurrence 06/01/96 Prod. Comp/Op Agg. 1,000,000
Pers. & Adv. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability CCP31137400 06/01/95 Combined Single Limit 1,000,000
Scheduled Autos 06/01/96
Hired Autos
Non-owned autos
Business Personal Property CCP31137400 06/01/95 Ded: $1,000 325,000
06/01/96
</TABLE>
<PAGE> 153
IMAGENT ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Effective Limits
Number Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Travelers Insurance Commercial General Binder 21552 03/28/96 Gen. Aggr. 1,000,000
Company Liability - Occurrence 03/28/97 Prod. Comp/Op Agg. 2,000,000
Pers. & Adv. Inj. 1,000,000
Owners & Contractors Protection Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability Binder 21646 03/28/96 Combined Single Limit 1,000,000
Any Auto 03/28/97
Excess Liability Binder 21552 03/28/96 Each Occurrence 5,000,000
Umbrella Form 03/28/97
Worker's Compensation & Binder 21648 03/25/96 Statutory Limits
Employers' Liability 03/25/97 Each Accid. 100,000
Disease - Pol. Limit 500,000
Disease - Each Empl. 100,000
</TABLE>
LEONARD ARCHIVES ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Continental Commercial General Liability CBP06188403/47 06/01/95 General Agg. 2,000,000
Insurance Comapny - Occurrence 06/01/96 Prod. Comp/Op 2,000,000
Pers. & Adv. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (Any 1 pers.) 5,000
Automobile Liability CBP06188403/15 06/01/95 Combined Single Limit 1,000,000
Any Auto 06/01/96
Excess Liability CBP06188403/33 06/01/95 Each Occur. 5,000,000
06/01/96 Aggregate 5,000,000
Worker's Compensation & 60W891491595F 06/01/95 Statutory Limits
Empl. Liability 06/01/96 Each Acc. 500,000
Disease - Pol. Limit 500,000
Disease - Each Empl. 500,000
Other CBP06188403/47 06/01/95 $11,756,384 Special Form
Property Blk/Agreed Amt. 06/01/96 Replacement Cost $298,397
$2500 Deduct. Business
Income
</TABLE>
<PAGE> 154
PERMANENT RECORDS ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hanover Insurance Commercial General ZHD487335502 08/10/95 General Agg. 1,000,000
Liability - Occurrence 08/10/96 Prod. Comp/Op Agg. 500,000
Each Occur. 500,000
Fire Damage (any 1 fire) 50,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability AED477173500 08/01/95 Combined Single Limit 500,000
Scheduled Autos 08/10/96
Hired Autos
Non-owned Autos
Association Worker's Comp & Empl. WC0008715 08/10/95 Statutory Limits
Casualty Liability 08/10/96 Each Accid. 500,000
Disease - Policy Limit 500,000
Disease - Each Empl. 500.000
Gulf Underwriters Other GU6105123 08/10/95 Limit 1,000,000
Professional Liability 08/10/96
</TABLE>
RECORDEX ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlantic Mutual Commercial General 488-30-14-52 07/17/95 General Agg. 1,000,000
Ins. Co. Liability - Occurrence 07/17/96 Prod. Comp/op Ag. 1,000,000
Pers. & Adv. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 100,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability 488-30-14-52 07/17/95 Combined Single Limit 1,000,000
Hired/Autos 07/17/96
Non-owned Autos
Excess Liability 488-30-14-52 04/18/96 Each Occur. 1,000,000
07/17/96 Aggreg. 1,000,000
Retain 10,000
Commercial Application 488-30-14-52 07/17/95 Premises 1 Bldg. 1
07/17/96 Contents 100,000*
Property Coins % 80
Valuation AC
Cause of Loss (allrisk)
Deductible 250
Assets Rec. 100,000*
Extra Exp. 25,000*
40/80/100
Power failure 100,000*
Deductible 72 hours
</TABLE>
<PAGE> 155
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equipment Floater 488-30-14-52 07/17/95 Coverage/Deductible
07/17/96 Computer Equip. at ea
location
Hardware $50,000 w/$500 ded.
Date & Media $25,000
While in Transit $25,000
Crime 488-30-14-52 07/17/95 Empl. Dishonesty Blanket 25,000
07/17/96 Forgery or Alteration 25,000
Theft, Disapp. & Dest.
Inside Prem. 10,000
Outside Prem. 10,000
</TABLE>
RESEARCHERS ACQUISITION CORP.
<TABLE>
<CAPTION>
Carrier Type of Coverage Policy Number Effective Limits
Dates
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TIG Insurance Commercial General Liability - T735026975 09/01/95 General Agg. 2,000,000
Company Occurrence 09/01/96 Prod. Comp/Op 2,000,000
Pers. & Adv. Inj. 1,000,000
Each Occur. 1,000,000
Fire Damage (any 1 fire) 100,000
Med. Exp. (any 1 pers.) 5,000
Automobile Liability CA31343930 09/01/95 Combined Single Limit 1,000,000
Any Auto 09/01/96
Hired Autos
Non-owned autos
Other T735026975 09/01/95 $2,177,857 Limit, 1,000 Deductible
Business Personal Property 09/01/96
</TABLE>
<PAGE> 156
SCHEDULE 9.5
INVESTMENTS
D.P.A.S. Acquisition Corp.
1. Wage advance was made to Neil Sullivan (sales manager) on 03/26/96 in
the amount of $3,500.00. The payback schedule is $100 per month for
35 months.
<PAGE> 1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between F.Y.I. Incorporated,
a Delaware corporation (the "Company"), and Margot T. Lebenberg ("Employee") is
hereby entered into and effective as of July 1, 1996. This Agreement hereby
supersedes any other employment agreements or understandings; written or oral,
between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in the
business of providing document management services.
Employee is employed hereunder by the Company in a confidential relationship
wherein Employee, in the course of her employment with the Company, has and
will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the
processes, techniques and trade secrets utilized by the Company, and future
plans with respect thereto, all of which has been and will be established and
maintained at great expense to the Company; this information is a trade secret
and constitutes the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties.
(a) The Company hereby employs Employee as Vice President and
General Counsel. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of a Vice President and General
Counsel and will report directly to the Chief Executive Officer of the Company.
Employee hereby accepts this employment upon the terms and conditions herein
contained and, subject to paragraph 1(b), agrees to devote her working time,
attention and efforts to promote and further the business of the Company.
<PAGE> 2
(b) Employee shall not, during the term of her employment
hereunder, be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage except to the extent that such activity (i) does
not interfere with Employee's duties and responsibilities hereunder and (ii)
does not violate paragraph 3 hereof. The foregoing limitations shall not be
construed as prohibiting Employee from serving on the boards of directors of
other companies or making personal investments in such form or manner as will
require her services, other than to a minimal extent, in the operation or
affairs of the companies or enterprises in which such investments are made nor
violate the terms of paragraph 3 hereof.
2. Compensation. For all services rendered by Employee, the
Company shall compensate Employee as follows:
(a) Base Salary. The base salary payable to Employee shall be
$100,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures but not less than bi-monthly. On at least an
annual basis, the Board of Directors of the Company (the "Board") will review
Employee's performance and may make increases to such base salary if, in its
discretion, any such increase is warranted. Such recommended increase would,
in all likelihood, require approval by the Board or a duly constituted
committee thereof.
(b) Incentive Bonus Plan. For 1996 and subsequent years, it is
the Company's intent to develop a written Incentive Bonus Plan setting forth
the criteria under which Employee and other officers and key employees will be
eligible to receive year-end bonus awards. Employee shall be eligible for a
bonus opportunity of up to 50% of her base salary in accordance with this
Incentive Bonus Plan. The award of any bonus shall be based on the total
performance of the Company, but shall be related to the earnings per share
growth of the Company and shall be payable in various increments based on the
performance of the Company versus targeted goals. The incremental payments and
the Company's targeted performance shall be determined by the Board or the
compensation committee thereof.
(c) Executive Perquisites, Benefits and Other Compensation.
Employee shall be entitled to receive additional benefits and compensation from
the Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee and
her dependent family members under health, hospitalization,
disability, dental, life and other employee benefit plans that the
Company may have in effect from time to time, with benefits provided
to Employee under this clause (i) to be at least comparable to the
benefits afforded to Employee in her current position (and to include
-2-
<PAGE> 3
coverage for all pre-existing conditions) and not less favorable than
the benefits provided to other Company executives.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the
performance of her services pursuant to this Agreement. All
reimbursable expenses shall be appropriately documented in reasonable
detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense
reporting policy.
(iii) Four (4) weeks paid vacation for each year during the
period of employment or such greater amount as may be afforded
officers and key employees generally under the Company's policies in
effect from time to time (pro rated for any year in which Employee is
employed for less than the full year).
(iv) An automobile allowance in the amount of $500 per
month.
(v) The Company shall reimburse Employee up to $200 per
month for club dues actually incurred by Employee, provided that such
club is used at least 50 percent of the time for business purposes.
(vi) The Company shall provide Employee with other
executive perquisites as may be available to or deemed appropriate for
Employee by the Board and participation in all other Company-wide
employee benefits as available from time to time, which will include
participation in the Company's 1995 Long-Term Incentive Compensation
Plan.
(vii) The Company shall provide Employee with reasonable
assistance in personal tax planning from Arthur Andersen.
(viii) The Company shall establish a 401(k) Plan and the
Employee may participate in this 401(k) Plan. The terms of such Plan
shall be approved by the Board or by the compensation committee
thereof.
(ix) The Company shall grant the Employee options (the
"Options") to acquire 40,000 shares of Common Stock of the Company at
the price of the lower of $17 1/4 per share or the lowest price the
shares have traded on the Nasdaq National Market between March 6, 1996
and the date hereof (the "Option Price"). If the shares are not
trading above $20 per share for five consecutive trading days
immediately prior to July 1, 1996, then the Company shall grant
Employee an additional 5,000 shares at the Option Price. The Options
-3-
<PAGE> 4
shall become exercisable as to 20% of the underlying shares of Common
Stock on the 180th day following June 1, 1996 and as to the remainder,
20% of the underlying shares of Common Stock on each of the first four
anniversaries of June 1, 1996 (June 1, 1997, June 1, 1998, June 1,
1999 and June 1, 2000), provided that all of the Options shall become
exercisable upon the occurrence of any of the events set forth in
section 5(e). The Options shall expire on the tenth anniversary of
the date of grant.
(x) The Company shall provide Employee with computer
hardware and software which would in Employee's judgement add to her
productivity, subject to the reasonable approval of the Chief
Executive Officer.
(xi) The Company shall pay for all of Employee's fees
for the American Bar Association and other state and local bar
associations.
(xii) The Company shall pay for Employee's attendance at up to
three continuing education seminars to the extent that Employees'
schedule allows and reimburse Employee for (x) any registration fee
and (y) travel and lodging to the extent such seminars are not
available in Dallas, Texas.
(xiii) The Company shall make funds available for
the purchase of relevant legal publications and other resource
material on an as-needed basis as determined in good faith by the
Employee.
(xiv) The Company shall cover Employee under its Director
and Officer Insurance Policy at the same level of coverage as other
comparably situated executives and will purchase appropriate riders to
such policy to cover malpractice claims.
(xv) The Company shall employ an administrative
assistant/paralegal of the Employee's choosing to assist the Employee,
on terms and conditions of employment similar to those for assistants
to other comparably situated executives.
(xvi) The Company shall provide Employee with such other
compensation as may be determined by the Board or the compensation
committee thereof.
(xvii) The Company shall pay Employee $18,833.33 on or
before July 1, 1996 to cover Employee's relocation expenses.
-4-
<PAGE> 5
3. Non-Competition Agreement.
(a) Subject to Section 5(d), Employee will not, during the period
of her employment by or with the Company, and for a period of two (2) years
immediately following the termination of her employment under this Agreement,
for any reason whatsoever, directly or indirectly, for herself or on behalf of
or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a sales
representative, in any business selling any products or services in
direct competition with the Company, within 100 miles of (i) the
principal executive offices of the Company or (ii) any place to which
the Company provides products or services or in which the Company is
in the process of initiating business operations during the term of
this covenant (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Company (including the subsidiaries
thereof) in a managerial capacity for the purpose or with the intent
of enticing such employee away from or out of the employ of the
Company (including the subsidiaries thereof), provided that Employee
shall be permitted to call upon and hire any member of her immediate
family;
(iii) call upon any person or entity which is, at that time,
or which has been, within one (1) year prior to that time, a customer
of the Company (including the subsidiaries thereof) within the
Territory for the purpose of soliciting or selling products or
services in direct competition with the Company within the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor, which candidate
was either called upon by the Company (including the subsidiaries
thereof) or for which the Company made an acquisition analysis, for
the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed,
of the Company (or the Subsidiaries thereof) to any person, firm,
partnership, corporation or business for any reason or purpose
whatsoever.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Employee from acquiring as an investment not more than three
percent (3%) of the capital stock of a
-5-
<PAGE> 6
competing business, whose stock is traded on a national securities exchange or
over-the-counter.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by the Company in the event of breach by her by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in
this paragraph 3 impose a reasonable restraint on Employee in light of the
activities and business of the Company (including the Company's subsidiaries)
on the date of the execution of this Agreement and the current plans of the
Company (including the Company's subsidiaries); but it is also the intent of
the Company and Employee that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the Company
(including the Company's subsidiaries) throughout the term of this covenant,
whether before or after the date of termination of the employment of Employee,
subject to the following paragraph. For example, if, during the term of this
Agreement, the Company (including the Company's subsidiaries) engages in new
and different activities, enters a new business or established new locations
for its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefore, then Employee will be precluded from
soliciting the customers or employees of such new activities or business or
from such new location and from directly competing with such new business
within 100 miles of its then-established operating location(s) through the term
of this covenant.
It is further agreed by the parties hereto that, in the event
that Employee shall cease to be employed hereunder, and shall enter into a
business or pursue other activities not in competition with the Company
(including the Company's subsidiaries), or similar activities or business in
locations the operation of which, under such circumstances, does not violate
clause (i) of this paragraph 3, and in any event such new business, activities
or location are not in violation of this paragraph 3 or of Employee's
obligations under this paragraph 3, if any, Employee shall not be chargeable
with a violation of this paragraph 3 if the Company (including the Company's
subsidiaries) shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate,
and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in
-6-
<PAGE> 7
the event any court of competent jurisdiction shall determine that the scope,
time or territorial restrictions set forth are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent which the court deems reasonable, and the Agreement shall thereby be
reformed.
(e) All of the covenants in this paragraph 3 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period of two (2) years stated at the beginning of
this paragraph 3, during which the agreements and covenants of Employee made in
this paragraph 3 shall be effective, shall be computed by excluding from such
computation any time during which Employee is in violation of any provision of
this paragraph 3.
4. Place of Performance.
(a) Employee understands that she may be again requested by the
Board to relocate from her present residence to another geographic location in
order to more efficiently carry out her duties and responsibilities under this
Agreement or as part of a promotion or other increase in duties and
responsibilities. In the event that Employee is requested to relocate and
agrees to do so, the Company will pay all relocation costs to move Employee,
her immediate family and their personal property and effects. Such costs may
include, by way of example, but are not limited to, pre-move visits to search
for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for
tax purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use her best efforts to incur only those costs
which are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of the Company and
the personal life of Employee and her family.
(b) Notwithstanding the above, if Employee is requested by the
Board to relocate and Employee refuses, such refusal shall not constitute "good
cause" for termination of this Agreement under the terms of paragraph 5(c).
5. Term; Termination; Rights on Termination. The term of this
Agreement shall begin on the date hereof and continue for
-7-
<PAGE> 8
three (3) years (the "Initial Term"), and, unless terminated sooner as herein
provided, shall continue thereafter on a year-to-year basis on the same terms
and conditions contained herein. This Agreement and Employee's employment may
be terminated in any one of the following ways:
(a) Death. The death of Employee shall immediately
terminate the Agreement with no severance compensation due to
Employee's estate.
(b) Disability. If, as a result of incapacity due to
physical or mental illness or injury, Employee shall have been absent
from her full-time duties hereunder for four (4) consecutive months,
then thirty (30) days after receiving written notice (which notice may
occur before or after the end of such four (4) month period, but which
shall not be effective earlier than the last day of such four (4)
month period), the Company may terminate Employee's employment
hereunder provided Employee is unable to resume her full- time duties
at the conclusion of such notice period. Also, Employee may terminate
her employment hereunder if her health should become impaired to an
extent that makes the continued performance of her duties hereunder
hazardous to her physical or mental health or her life, provided that
Employee shall have furnished the Company with a written statement
from a qualified doctor to such effect and provided, further, that, at
the Company's request made within thirty (30) days of the date of such
written statement, Employee shall submit to an examination by a doctor
selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the
conclusion of Employee's doctor. In the event this Agreement is
terminated as a result of Employee's disability, Employee shall
receive from the Company, in a lump-sum payment due within ten (10)
days of the effective date of termination, the base salary at the rate
then in effect for whatever time period is remaining under the Initial
Term of this Agreement or for one (1) year, whichever amount is
greater.
(c) Good Cause. The Company may terminate the Agreement
ten (10) days after written notice to Employee for good cause, which
shall be: (1) Employee's material and irreparable breach of this
Agreement; (2) Employee's gross negligence in the performance or
intentional nonperformance (continuing for ten (10) days after receipt
of the written notice) of any of Employee's material duties and
responsibilities hereunder; (3) Employee's dishonesty, fraud or
misconduct with respect to the business or affairs of the Company
which materially and adversely affects the operations or reputation of
the Company; (4) Employee's conviction of a felony crime; or (5)
chronic alcohol abuse
-8-
<PAGE> 9
or illegal drug abuse by Employee. In the event of a termination for
good cause, as enumerated above, Employee shall have no right to any
severance compensation.
(d) Without Cause. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement
and Employee's employment, effective thirty (30) days after written
notice is provided to the Company. Should Employee be terminated by
the Company without cause, Employee shall receive from the Company, in
a lump-sum payment due on the effective date of termination, the base
salary at the rate then in effect for whatever time period is
remaining under the Initial Term of this Agreement or for two (2)
years, whichever amount is greater ("Severance Pay"). Further, any
termination without cause by the Company shall operate to shorten the
period set forth in paragraph 3(a) and during which the terms of
paragraph 3 apply to one (1) year from the date of termination of
employment.
(e) Change in Control. Refer to paragraph 12 below.
(f) Termination by Employee for Good Reason. The
Employee may terminate her employment hereunder for "Good Reason." As
used herein, "Good Reason" shall mean the continuance of any of the
following after 10 days' prior written notice by Employee to the
Company, specifying the basis for such Employee's having Good Reason
to terminate this Agreement:
(i) the assignment to Employee of any duties
materially and adversely inconsistent with the Employee's
position as specified in paragraph 1 hereof (or such other
position to which she may be promoted), including status,
offices, responsibilities or persons to whom the Employee
reports as contemplated under paragraph 1 of this Agreement,
or any other action by the Company which results in a material
and adverse change in such position, status, offices, titles
or responsibilities;
(ii) Employee's removal from, or failure to be
reappointed or reelected to, Employee's position under this
Agreement, except as contemplated by paragraphs 5(a), (b), (c)
and (e); or
(iii) any other material breach of this Agreement by
the Company, including the failure to pay Employee on a timely
basis the amounts to which she is entitled under this
Agreement.
-9-
<PAGE> 10
In the event of any termination by the Employee for Good Reason, as determined
by a court of competent jurisdiction or pursuant to the provisions of paragraph
16 below, the Company shall pay all amounts and damages to which Employee may
be entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce her rights hereunder, provided, that Employee need not seek any such
determination prior to terminating her employment for Good Reason and receiving
the Severance Pay set forth in the following sentence. In addition, Employee
shall be entitled to receive Severance Pay for two (2) years. Further, none of
the provisions of paragraph 3 shall apply in the event this Agreement is
terminated by Employee for Good Reason.
(g) Termination by Employee Without Cause. If Employee
resigns or otherwise terminates her employment without Good Reason
pursuant to paragraph 5(f), Employee shall receive no severance
compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation
earned and all benefits vested and reimbursements due through the effective
date of termination. Additional compensation subsequent to termination, if
any, will be due and payable to Employee only to the extent and in the manner
expressly provided above or in paragraph 16. All other rights and obligations
of the Company and Employee under this Agreement shall cease as of the
effective date of termination, except that the Company's obligations under
paragraph 9 herein and Employee's obligations, if any, under paragraphs 3, 6,
7, 8 and 10 herein shall survive such termination in accordance with their
terms.
6. Return of Company Property. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company or
its representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
7. Inventions. Employee shall disclose promptly to the Company
any and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related
-10-
<PAGE> 11
to the business or activities of the Company and which Employee conceives as a
result of her employment by the Company. Employee hereby assigns and agrees to
assign all her interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
8. Trade Secrets. Employee agrees that she will not, during or
after the term of this Agreement with the Company, disclose the specific terms
of the Company's relationships or agreements with its significant vendors or
customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever, except as is disclosed in the
ordinary course of business, unless compelled by court order or upon advice of
counsel.
9. Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that she is or was performing services
under this Agreement or is or was an officer of the Company, then the Company
shall indemnify Employee against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, as actually and reasonably
incurred by Employee in connection therewith to the fullest extent authorized
by Delaware law. In the event that both Employee and the Company are made a
party to the same third-party action, complaint, suit or proceeding, the
Company agrees to engage competent legal representation, and Employee agrees to
use the same representation, provided that if counsel selected by the Company
shall have a conflict of interest that prevents such counsel from representing
Employee, Employee may engage separate counsel and the Company shall pay all
attorneys' fees of such separate counsel. Further, while Employee is expected
at all times to use her best efforts to faithfully discharge her duties under
this Agreement, Employee cannot be held liable to the Company for errors or
omissions made in good faith where Employee has not exhibited gross, willful
and wanton negligence and misconduct or performed criminal and fraudulent acts
which materially damage the business of the Company.
10. No Prior Agreements. Employee hereby represents and warrants
to the Company that the execution of this Agreement by Employee and her
employment by the Company and the performance of her duties hereunder will not
violate or be a breach of any agreement with a former employer, client or any
other person or entity. Further, Employee agrees to indemnify the Company for
-11-
<PAGE> 12
any claim, including, but not limited to, attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Agreement.
11. Assignment; Binding Effect. Employee understands that she has
been selected for employment by the Company on the basis of her personal
qualifications, experience and skills. Employee agrees, therefore, she cannot
assign all or any portion of her performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
12. Change in Control.
(a) Unless she elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) In the event of a pending Change in Control wherein the
Company and Employee have not received written notice at least fifteen (15)
business days prior to the anticipated closing date of the transaction giving
rise to the Change in Control from the successor to all or a substantial
portion of the Company's business and/or assets that such successor is willing
as of the closing to assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
is hereby required to perform, then such Change in Control shall be deemed to
be a termination of this Agreement by the Company without cause and the
applicable portions of paragraph 5(d) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to Employee
shall be triple the amount calculated under the terms of paragraph 5(d) and the
non-competition provisions of paragraph 3 shall not apply whatsoever.
(c) In any Change in Control situation in which Employee has
received written notice from the successor to the Company that such successor
is willing to assume the Company's obligations hereunder, Employee may
nonetheless, at her sole discretion, elect to terminate this Agreement by
providing written notice to the Company at least five (5) business days prior
to the anticipated closing of the transaction giving rise to the Change in
Control. In such case, the applicable provisions of paragraph 5(d) will apply
as though the Company had
-12-
<PAGE> 13
terminated the Agreement without cause; however, under such circumstances, the
amount of the lump-sum severance payment due to Employee shall be 150% the
amount calculated under the terms of paragraph 5(d) and the non-competition
provisions of paragraph 3 shall all apply for a period of one (1) year from the
effective date of termination.
(d) For purposes of applying paragraph 5 under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due Employee must be paid in
full by the Company at or prior to such closing. Further, Employee will be
given sufficient time and opportunity to elect whether to exercise all or any
of her vested options to purchase Common Stock of the Company, including any
options with accelerated vesting under the provisions of the Company's 1995
Stock Option Plan, such that she may convert the options to shares of Common
Stock of the Company at or prior to the closing of the transaction giving rise
to the Change in Control, if she so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee
benefit plan of the Company, acquires directly or indirectly the
Beneficial Ownership (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition such Person is,
directly or indirectly, the Beneficial Owner of voting securities
representing 50% or more of the total voting power of all of the
then-outstanding voting securities of the Company;
(ii) the individuals (A) who, as of the effective date of
the Company's registration statement with respect to its initial
public offering, constitute the Board of Directors of the Company (the
"Original Directors") or (B) who thereafter are elected to the Board
of Directors of the Company and whose election, or nomination for
election, to the Board of Directors of the Company was approved by a
vote of at least two-thirds (2/3) of the Original Directors then still
in office (such directors becoming "Additional Original Directors"
immediately following their election) or (C) who are elected to the
Board of Directors of the Company and whose election, or nomination
for election, to the Board of Directors of the Company was approved by
a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors
also becoming "Additional Original Directors" immediately following
their election), cease for any reason
-13-
<PAGE> 14
to constitute a majority of the members of the Board of Directors of
the Company;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation
of any such transaction if stockholder approval is not sought or
obtained, other than any such transaction which would result in at
least 75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being Beneficially Owned by at least 75% of the holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in
the transaction; or
(iv) the stockholders of the Company shall approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the
Company).
(f) Employee must be notified in writing by the Company at any
time that the Company or any member of its Board anticipates that a Change in
Control may take place.
(g) Employee shall be reimbursed by the Company or its successor
for any excise taxes and/or interest or penalties with respect to such excise
taxes that Employee incurs under Section 4999 of the Internal Revenue Code of
1986, as amended (or any similar tax that may hereafter be imposed), as a
result of any Change in Control. Such amount will be due and payable by the
Company or its successor within ten (10) days after Employee delivers a written
request for reimbursement accompanied by a copy of her tax return(s) showing
the excise tax actually incurred by Employee.
13. Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the
final, complete and exclusive statement and expression of the agreement between
the Company and Employee and of all the terms of this Agreement, and it cannot
be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by writing signed by the party waiving the benefit of such term.
-14-
<PAGE> 15
14. Notice. Whenever any notice is required hereunder, it shall
be given in writing addressed as follows:
To the Company: F.Y.I. Incorporated
2911 Turtle Creek Blvd.
Suite 300
Dallas, Texas 75219
with a copy to: Charles C. Reeder, Esq.
Locke Purnell Rain Harrell
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
To Employee: Margot T. Lebenberg
3 Mountain View Drive
Thiells, New York 10984
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.
15. Severability; Headings. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
16. Arbitration. Any unresolved dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order back-pay,
severance compensation, vesting of options (or cash compensation in lieu of
vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The direct
-15-
<PAGE> 16
expense of any arbitration proceeding shall be borne by the Company.
17. Governing Law. This Agreement shall in all respects be
construed according to the laws of the State of Delaware.
EMPLOYEE:
______________________________
F.Y.I. INCORPORATED
By:___________________________
Title:
-16-
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<PERIOD-START> JAN-01-1996
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<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
