EXHIBIT 10.11.2
COMMERCIAL NOTE
Borrower: MAXIMUS, INC.
Loan Amount: Ten Million Dollars and no cents ($10,000,000.00)
Borrower's Address: 1356 Beverly Road, Suite 300
Mc Lean, VA 22101-3625
Officer: John M Cannon _______ (initials) Date: September 30,1997
Account No: 04300022378842 Note No: 4003 Note Type: Renewal Loan
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For Value Received, the undersigned (whether one or more) jointly and severally
promise to pay to the order of Crestar Bank (the "Bank") at any of its offices,
or at such place as the Bank may designate in writing, without offset and in
immediately available funds, the Loan Amount shown above. including or plus
interest, and any other amounts due, upon the terms specified below.
LOAN TYPE AND REPAYMENT TERMS
LOAN TYPE: Revolving Master Borrowing Line
This is an open end revolving line of credit. You may
borrow an aggregate principal amount up to the Loan
Amount shown above outstanding at any one time.
REPAYMENT TERMS: Principal on demand, plus interest, but the
undersigned shall be liable for only so much of the
Loan Amount as shall be equal to the total advanced
to or for the undersigned, or any of them, by the
Bank from time to time, less all payments made by or
for the undersigned and applied by the Bank to
principal, plus interest on each such advance, and
any other amounts due all as shown on the Bank's
books and records, which shall be prima facie
evidence of the amount owed.
This Master Borrowing arrangement will terminate upon
written notice from the Bank to the undersigned, or
if such notice is not sooner given, on 03/31/2001,
unless an alternate termination date is indicated in
the Agreement", as defined below.
THE BANK SHALL HAVE THE RIGHT TO DEMAND PAYMENT AT
ANY TIME EVEN IF AN EVENT OF DEFAULT (AS IDENTIFIED
IN THIS NOTE) HAS NOT OCCURRED.
ADDITIONAL TERMS AND CONDITIONS:
This Note is governed by additional terms and conditions contained in a(n)
Letter Agreement between the undersigned and the Bank dated September 30, 1997,
and any modifications, renewals, extensions or replacements thereof (the
"Agreement"), which is incorporated in this
Note by reference. In the event of a conflict between any term or condition
contained in this Note and in the Agreement, such term or condition of the
Agreement shall control.
INTEREST
Accrued interest will be payable on the first day of each month beginning on
December 1, 1997.
Interest will accrue daily on an actual/360 basis (that is, on the actual
number of days elapsed over a year of 360 days).
Each scheduled payment made on this Note will be applied to accrued interest
before it is applied to principal. Interest will accrue from the date of this
Note on the unpaid balance and will continue to accrue after maturity, whether
by acceleration or otherwise, until this Note is paid in full. If this is a
variable rate transaction, the interest rate is prospectively subject to
increase or decrease without prior notice, and if this is a Term-Variable
Payment loan, adjustments in the payment schedule will be made as necessary. If
this is a variable transaction which uses a Crestar Prime Rate as the Index,
the Index is subject to increase or decrease at the sole option of the Bank.
Subject to the above, interest per annum payable on this Note (the "Rate") will
be the applicable Rate as outlined in Exhibit A, incorporated herein by
reference. Adjustments to the Rate shall be effective in accordance with
Exhibit A.
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
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This Note represents a renewal and refinance of the balance owed on note number
043000223788424003 dated April 10, 1996, in the original principal amount of
$10,000,000.00.
COLLATERAL
Any collateral pledged to the Bank to secure any of the undersigned's existing
or future liabilities to the Bank shall secure this Note. To the extent
permitted by law, each of the undersigned grants to the Bank a security
interest in and a lien upon all deposits or investments maintained by the
undersigned with, and all indebtedness owed to the undersigned by, the Bank or
any of its affiliates.
All of this security is referred to collectively as the "Collateral." The
Collateral is security for the payment of this Note and any other liability
(including overdrafts and future advances) of the undersigned to the Bank,
however evidenced, now existing or hereafter incurred, matured or unmatured,
direct or indirect, absolute or contingent, several, joint, or joint and
several, including any extensions, modifications or renewals. The proceeds of
any Collateral may be applied against the liabilities of the undersigned to the
Bank in any order at the option of the Bank.
LOAN PURPOSE AND UPDATED FINANCIAL INFORMATION REQUIRED
The undersigned warrant and represent that the loan evidenced by this Note is
being made solely for the purpose of acquiring or carrying on a business,
professional or commercial activity or acquiring real or personal property as
an investment (other than a personal investment) or for carrying on an
investment activity (other than a personal investment activity). The
undersigned agree to provide to the Bank updated financial information,
including, but not limited to. tax returns, current financial statements in
form satisfactory to the Bank, as well as additional information, reports or
schedules (financial or otherwise), all as the Bank may from time to time
request.
DEFAULT, ACCELERATION AND SETOFF
Any one of the following will constitute an event of default under the terms of
this Note: (1) the failure to make when due any instalment or other payment,
whether of principal, interest, late charges or other authorized charges due
under this Note, or the failure to pay the amount demanded by the Bank if this
Note is payable on demand; (2) the death, dissolution, merger, acquisition,
consolidation or termination of existence of the undersigned, any guarantor of
the indebtedness of any of the undersigned to the Bank, any endorser, or any
other party to this Note (collectively called a "Party"); (3) the insolvency or
inability to pay debts as they mature of any Party, or the application for the
appointment of a receiver for any Party or the filing of a petition under any
provision of the Bankruptcy Code or other insolvency law, statute or proceeding
by or against any Party or any assignment for the benefit of creditors by or
against any Party; (4) the entry of a judgment against any Party or the
issuance or service of any attachment, levy or garnishment against any Party or
the property of any Party, or the repossession or seizure of property of any
Party; (5) a determination by the Bank that it deems itself insecure or that a
material adverse change in the financial condition of any Party or decline
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or depreciation in the value or market value of any Collateral has occurred
since the date of this Note or is reasonably anticipated; (6) the failure of
any Party to perform any other obligation to the Bank under this Note or under
any other agreement with the Bank; (7) the occurrence of an event of default
with respect to any existing or future indebtedness of any Party to the Bank or
any other creditor of the Party; (8) a material change in the ownership,
control or management of any Party that is an entity, unless such change is
approved by the Bank in its sole discretion; (9) if any Party gives notice to
the Bank purporting to terminate its obligations under or with respect to this
Note; (10) the sale or transfer by a Party of all or substantially all of its
assets other than in the ordinary Yourself business; or (11) any Party commits
fraud or makes a material misrepresentation at any time in connection with this
Note. If an event of default occurs, or in the event of non-payment of this
Note in full at maturity, the entire unpaid balance of this Note will, at the
option of the Bank, become immediately due and payable, without notice or
demand. Upon the occurrence of an event of default, the Bank will be entitled
to interest on the unpaid balance at the stated Rate plus 2.00% (the "Default
Rate"), unless otherwise required by law, until paid in full. To the extent
permitted by law, upon default, the Bank will have the right, in addition to
all other remedies permitted by law, to set off the amount due under this Note
or due under any other obligation to the Bank against any and all accounts,
whether checking or savings or otherwise, credits, money, stocks, bonds or
other security or property of any nature on deposit with, held by, owed by, or
in the possession of, the Bank or any of its affiliates to the credit of or for
the account of any Party, without notice to or consent by any Party. The
remedies provided in this Note and any other agreement between the Bank and any
Party are cumulative and not exclusive of any remedies provided by law.
CAPITAL ADEQUACY
Should the Bank, after the date of this Note, determine that the adoption of
any law or regulation regarding capital adequacy, or any change in its
interpretation or administration, has or would have the effect of reducing the
Bank's rate of return under this Note to a level below that which the Bank
could have achieved but for the adoption or change, by an amount which the Bank
considers to be material, then, from time to time, 30 days after written demand
by the Bank, the undersigned shall pay to the Bank such additional amounts as
will compensate the Bank for the reduction. Each demand by the Bank will be
made in good faith and accompanied by a certificate claiming compensation under
this paragraph and stating the amounts to be paid to it and the basis for the
payment.
LATE CHARGES AND OTHER AUTHORIZED CHARGES
If any portion of a payment is at least ten (10) days past due, the undersigned
agree to pay a late charge of 5.00% of the amount which is past due. Unless
prohibited by applicable law, the undersigned agree to pay the fee established
by the Bank from time to time for returned checks if a payment is made on this
Note with a check and the check is dishonored for any reason after the second
presentment. In addition, as permitted by applicable law, the undersigned agree
to pay the following: (1) all expenses, including, without limitation, all
court or collection costs, and attorneys' fees of 25% of the unpaid balance of
this Note, or actual attorneys' fees if in excess of such amount, whether suit
be brought or not, incurred in collecting this Note; (2) all costs incurred in
evaluating, preserving or disposing of any Collateral granted as security for
the
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payment of this Note, including the cost of any audits, appraisals, appraisal
updates, reappraisals or environmental inspections which the Bank from time to
time in its sole discretion may deem necessary; (3) any premiums for property
insurance purchased on behalf of the undersigned or on behalf of the owner(s)
of the Collateral pursuant to any security instrument relating to the
Collateral; (4) any expenses or costs incurred in defending any claim arising
out of the execution of this Note or the obligation which it evidences, or
otherwise involving the employment by the Bank of attorneys with respect to
this Note and the obligations it evidences; and (5) any other charges permitted
by applicable law. The undersigned agree to pay these authorized charges on
demand or, at the Bank's option, the charges may be added to the unpaid balance
of the Note and will accrue interest at the stated Rate. Upon the occurrence
of an event of default, interest will accrue at the Default Rate.
WAIVERS
The undersigned and each other Party waive presentment, demand, protest, notice
of protest and notice of dishonor and waive all exemptions, whether homestead
or otherwise, as to the obligations evidenced by this Note. The undersigned and
each other Party waive any rights to require the Bank to proceed against any
other Party or person or any Collateral before proceeding against the
undersigned or any of them, or any other Party, and agree that without notice
to any Party and without affecting any Party's liability, the Bank, at any time
or times, may grant extensions of the time for payment or other indulgences to
any Party or permit the renewal or modification of this Note, or permit the
substitution, exchange or release of any Collateral for this Note and may add
or release any Party primarily or secondarily liable. The undersigned and each
other Party agree that the Bank may apply all monies made available to it from
any part of the proceeds of the disposition of any Collateral or by exercise of
the right of setoff either to the obligations under this Note or to any other
obligations of any Party to the Bank, as the Bank may elect from time to time.
The undersigned also waive any rights afforded to them by Sections 49-25 and
49-26 of the Code of Virginia of 1950 as amended.
TO THE EXTENT LEGALLY PERMISSIBLE, THE UNDERSIGNED WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LITIGATION RELATING TO TRANSACTIONS UNDER THIS NOTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.
JUDGMENT BY CONFESSION
The undersigned hereby duly constitute and appoint Susan M. Banks or C. B.
Bohannon or Brian C. Middleton as the true and lawful attorney-in-fact for them
in any or all of their names, place and stead, and upon the occurrence of an
event of default, to confess judgment against them, or any of them, in the
Circuit Court for the County of Fairfax, Virginia, upon this Note and all
amounts owed hereunder, including all costs of collection, attorneys' fees
equal to 25% of the unpaid principal balance hereof and court costs, hereby
ratifying and confirming the acts of said attorney-in-fact as if done by
themselves, expressly waiving benefit of any homestead or other exemption laws.
SEVERABILITY, AMENDMENTS AND NO WAIVER BY BANK
Any provision of this Note which is prohibited or unenforceable will be
ineffective to the extent
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of the prohibition or unenforceability without invalidating the remaining
provisions of this Note. No amendment, modification, termination or waiver of
any provision of this Note, nor consent to any departure by the undersigned
from any term of this Note, will in any event be effective unless it is in
writing and signed by an authorized employee of the Bank, and then the waiver
or consent will be effective only in the specific instance and for the specific
purpose for which given. If the interest Rate is tied to an external index and
the index becomes unavailable during the term of this loan, the Bank may
designate a substitute index with notice to the Borrower. No failure or delay
on the part of the Bank to exercise any right, power or remedy under this Note
may be construed as a waiver of the right to exercise the same or any other
right at any time.
LIABILITY, SUCCESSORS AND ASSIGNS AND CHOICE OF LAW
Each of the undersigned shall be jointly and severally obligated and liable on
this Note. This Note shall apply to and bind each of the undersigned's heirs,
personal representatives, successors and assigns and shall inure to the benefit
of the Bank, its successors and assigns. The undersigned agree that certain
material events and occurrences relating to this Note bear a reasonable
relationship to the Commonwealth of Virginia. The validity, terms, performance
and enforcement of this Note shall be governed by applicable federal law and
the internal laws of the Commonwealth of Virginia which are applicable to
agreements which are negotiated, executed, delivered and performed solely in
the Commonwealth of Virginia.
By signing below, the undersigned agree to the terms of this Note and
acknowledge receipt of a loan in the Loan Amount shown above.
MAXIMUS, INC.
By: /s/ David V. Mastran (Seal)
----------------------------------------
David V. Mastran, Chief Executive
Officer
By: /s/ Raymond B. Ruddy (Seal)
----------------------------------------
Raymond B. Ruddy, Chairman of
the Board
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EXHIBIT A
INTEREST RATE PROVISIONS
THIS EXHIBIT A is attached to and forms a part of that certain
Commercial Note (as amended. modified, supplemented or replaced from time to
time, the Note), dated September 30, 1997, in the principal amount of
$10,000,000, made by MAXIMUS, INC., a Virginia corporation (the Borrower), and
payable to the order of CRESTAR BANK, a Virginia banking corporation (the
Bank). Terms defined in the Note and not otherwise defined in Paragraph 5 below
shall have the same defined meanings when such terms are used herein.
1. Interest Rate. On the terms and subject to the conditions set
forth below and in the Agreement, any amounts outstanding, or to be disbursed.
under the Note shall bear interest at a per annum rate equal to LIBOR plus the
Applicable Spread (the LIBOR Option). Interest based on the LIBOR Option shall
be adjusted on the first day of each calendar month, beginning on October 1,
1997, to reflect LIBOR then in effect (each. an Interest Period).
Notwithstanding any contrary provision of the Note or this Exhibit A, interest
shall be calculated on the basis of the Prime Rate if (i) the Bank, in good
faith, is unable to ascertain the LIBOR Option by reason of circumstances then
affecting the applicable money market or otherwise, (ii) dollar deposits are
not available in the applicable money market or are not available in sufficient
quantities for the Bank, in its sole discretion. to ascertain the LIBOR Option,
(iii) in the sole judgment of the Bank, it becomes unlawful or impracticable
for the Bank to maintain loans based upon the LIBOR Option for any reason,
including, without limitation, the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by the Bank with any request or directive
(whether or not having the force of law) of any such authority, or (iv) the
Bank, in good faith, determines that it is impracticable to maintain loans
based on the LIBOR Option because of increased taxes, regulatory costs, reserve
requirements, expenses or any other costs or charges that affect such interest
rate option. Upon the occurrence of any of the above events, the outstanding
principal balance of the Note immediately (or at any time thereafter at the
option of the Bank), without further action of the Borrower or the Bank. shall
accrue interest at the Prime Rate, adjusted on the same days on which the Bank
changes its Prime Rate.
2. Advances. The Borrower authorizes the Bank to make advances
under the Note from time to time in amounts sufficient to pay checks drawn on
the Borrower's operating account with the Bank, subject to the limitations set
forth in the paragraph entitled, "Amount," in the Agreement. In addition, the
Borrower may request an advance under the Note (each, a Request) by telephonic
notice to the Bank no later than 10:00 a.m. (Washington, D.C. time) on the
Business Day on which such advance is to be made. If required by the Bank,
Requests made by telephone shall be confirmed in writing and delivered to the
Bank within three Business Days after the date of the Request.
3. Prepayments. The Borrower may prepay amounts owing under the
Note at any time and from time to time, without premium or penalty.
4. Indemnity. The Borrower agrees to indemnify the Bank and to
hold the Bank harmless from, and to reimburse the Bank on demand for, any loss,
cost, liability or expense
that the Bank may sustain or incur as a result of (a) any failure by the
Borrower to make a borrowing or prepayment after the Borrower has given notice
thereof, if applicable, including, without limitation, any loss incurred in
liquidating or employing deposits from third parties and loss of profit for the
period after failure to borrow or prepay, or (b) any domestic or foreign taxes,
regulatory costs, reserve requirements, assessments, expenses or other costs or
charges that increase the cost to the Bank of making available to the Borrower
funds at the LIBOR Option. A written statement of the Bank to the Borrower of
such loss or expense shall be conclusive and binding, absent manifest error,
for all purposes. Notwithstanding the foregoing, the Bank may require by notice
to the Borrower that the Borrower pay directly to the appropriate governmental
authority any tax, levy, impost or any other charge of any nature whatsoever as
set forth herein in lieu of reimbursing the Bank for said costs and expenses.
This covenant shall survive repayment of the Note and payment by the Borrower
of all obligations arising under this Exhibit A.
5. Defined Terms. The following terms as used in this Exhibit A
shall have the following meanings:
Agreement means the letter agreement dated September 30, 1997
between the Borrower and the Bank, as the same may be amended, modified or
supplemented from time to time.
Applicable Spread means as of the date of the Agreement,
0.65%. Based on the Leverage Ratio in effect on the last day of each fiscal
quarter of the Borrower, beginning on September 30, 1997, the Applicable Spread
shall be adjusted to the percentage corresponding to the applicable Leverage
Ratio:
Leverage Ratio Applicable Spread
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Less than 0.8 to 1 0.65%
Greater than or equal to 0.8 to 1 and less
than or equal to 1.25:1 0.95%
Greater than 1.25:1 1.25 %
The Applicable Spread shall be adjusted as of the first day of the
calendar month following receipt by the Bank of the Borrower's quarterly
financial statements. If such statements are not received within the required
time limits, the Applicable Spread shall be equal to the highest percentage
until the next adjustment date at the option of the Bank.
Business Day shall mean a day on which commercial banks are
open for business and dealing in deposits in Washington, D.C., Richmond,
Virginia, and New York, New York.
LIBOR shall mean, for each calendar month, the per annum rate
of interest at which dollar deposits with a one month maturity are offered to
lending banks in the London interbank market at 11:00 a.m. (London time) on the
first Business Day of such calendar month (with such determination to become
effective as of the first day of such calendar month if not a Business Day),
based on quotations provided by the British Bankers Association and published
by an interest rate reporting service selected by the Bank as adjusted for
Federal Reserve Board reserve requirements and similar assessments, if any,
imposed upon the Bank. LIBOR shall be
set and adjusted on a monthly basis as of the first day of each calendar month
hereafter, based on the LIBOR Rate in effect as of the first Business Day of
each calendar month.
Prime Rate shall have the meaning ascribed to it in the Note.
6. Funding. The Bank shall be entitled, but not obligated, to
fund all or any portion of the Note in any manner it may determine in its sole
discretion, including, without limitation, in the Grand Cayman inter-bank
market, the Nassau inter-bank market, the London inter-bank market and within
the United States, but all calculations and transactions hereunder shall be
conducted as though the Bank actually funds all such amounts through the
purchase in London or Nassau, as the case may be, of one-month offshore dollar
deposits in the relevant principal amount.
IN WITNESS WHEREOF, the Borrower has caused this Exhibit A to be
executed by its duly authorized representatives as of September 30, 1997.
MAXIMUS, INC., a Virginia corporation
By: /s/ David V. Mastran
---------------------------------------
David V. Mastran, Chief Executive
Officer
By: /s/ Raymond B. Ruddy
---------------------------------------
Raymond B. Ruddy
Chairman of the Board