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EXHIBIT 10.18
PROMISSORY NOTE
US$2,000,000 June 22, 2000
San Leandro, California
For Value Received, TriNet Employer Group, Inc. a California corporation
("Borrower"), hereby promises to pay to the order of Select Appointments North
America Inc., a Delaware corporation ("Lender"), in lawful money of the United
States of America and in immediately available funds, the principal sum of up to
Two Million Dollars ($2,000,000) (the "Loan") together with accrued and unpaid
interest thereon, each due and payable on the dates and in the manner set forth
below.
1. Drawings. The Loan may be drawn down in increments of Five Hundred
Thousand Dollars ($500,000) on any business day up to the earlier of (a) the
closing of the initial public offering of common stock of Borrower (the "IPO
Closing") or (b) September 30, 2000. Draw downs may be made by Borrower by
written notice to Lender no later than three (3) days prior to each draw down
date. The fees for each draw down shall be as follows: three percent (3%) for
the first draw down; three and one-half percent (3 1/2%) for the second draw
down; four percent (4%) for the third draw down; and four and one-half percent
(4 1/2%) for the fourth draw down. The amount of each draw down shall be paid by
wire transfer to Borrower net of the applicable draw down fee on the draw down
date to the bank account specified in the notice.
2. Principal Repayment. The outstanding principal amount of the Loan
together with accrued and unpaid interest thereon shall be due and payable on
the earlier of (a) the IPO Closing or (b) December 31, 2001.
3. Interest Rate. Borrower further promises to pay interest on any
outstanding principal amount of the Loan from the applicable drawn down date
until payment in full, which interest shall be payable at the rate that is the
lesser of (i) the maximum rate permitted by law or (ii) two percent (2%) over
the prime rate as published by Fleet Bank, Boston, from time to time, per annum
until October 31, 2000 and thereafter at the rate of five percent (5%) over the
prime rate as published by Fleet Bank, Boston, from time to time, with any
excess interest being applied to the principal. Interest on outstanding
principal amounts shall be due and payable in arrears on October 31, 2000 and
thereafter not later than the last day of each calendar month for the preceding
month and shall be calculated on the basis of a 360-day year for the actual
number of days elapsed.
4. Place of Payment. All amounts payable by Borrower hereunder shall be
payable at the direction of Lender.
5. Application of Payments. Payment on this Note shall be applied first
to accrued interest, and thereafter to the outstanding principal balance hereof.
6. Default. Each of the following events shall be an "Event of Default"
hereunder:
1.
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(a) Borrower fails to pay timely any of the principal amount due
under this Note on the date the same becomes due and payable or any accrued
interest or other amounts due under this Note on the date the same becomes due
and payable or within five (5) business days thereafter;
(b) Borrower files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law or any other law for
the relief of, or relating to, debtors, now or hereafter in effect, or makes any
assignment for the benefit of creditors or takes any corporate action in
furtherance of any of the foregoing;
(c) An involuntary petition is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee, assignee
for the benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of Borrower; or
(d) Borrower grants a security interest, pledges its assets or files
a lien after the date of this Note; provided that the foregoing shall exclude:
(i) any security interest, pledge or lien (a "Lien") upon or in (A) any
equipment acquired or held by Borrower or any of its subsidiaries to secure the
purchase price of such equipment or indebtedness incurred solely for the purpose
of financing the acquisition of such equipment, or (B) existing on such
equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of
such equipment; (ii) Liens securing capital lease obligations on assets subject
to such capital leases; (iii) Liens on equipment leased by Borrower pursuant to
an operating lease in the ordinary course of business (including proceeds
thereof and accessions thereto) incurred solely for the purpose of financing the
lease of such equipment (including Liens arising from UCC financing statements
regarding leases permitted by this Note).
Upon the occurrence of an Event of Default hereunder, all unpaid principal,
accrued interest and other amounts owing hereunder shall, at the option of
Lender, and, in the case of an Event of Default pursuant to (b), (c) or (d)
above, automatically, be immediately due, payable and collectible by Lender
pursuant to applicable law and Borrower shall not be permitted to make any
further drawings under this Note.
7. Waiver. Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
8. Governing Law. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
2.
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9. Successors and Assigns. This Note is not assignable by Borrower
without the prior written consent of Lender except in the event that an entity
acquires the capital stock of Borrower or substantially all of the assets of the
Borrower, in which case the provisions of this Note shall inure to the benefit
of and be binding on such entity and shall extend to any holder hereof. The
rights and obligations of this Note shall be assignable by Lender to any
affiliate of Lender.
BORROWER TRINET EMPLOYER GROUP, INC.
By: /s/ Douglas P. Devlin
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Printed Name: Douglas P. Devlin
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Title: Chief Financial Officer
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3.
