SUBSIDIARIES GUARANTEE
----------------------
SUBSIDIARIES GUARANTEE, dated as of June 13, 1997, made by each of the
corporations that are signatories hereto (the "Guarantors"), in favor of
NATIONSBANK, N.A., as administrative agent (in such capacity, the
"Administrative Agent"), for the Lenders as holders of the Secured Obligations
and as parties to the Credit Agreement described below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Computer Data Systems, Inc. (the "Borrower") is a party to the
Credit Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among the
Borrower, the banks and other financial institutions from time to time parties
thereto (the "Lenders") and the Administrative Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make
certain extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower owns directly or indirectly all of the issued and
outstanding stock of each Guarantor;
WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective extensions of credit to the Borrower under the Credit
Agreement that the Guarantors shall have executed and delivered this Guarantee
to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, the Borrower hereby agrees with the Administrative Agent, for
the benefit of the Lenders, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein are so used as so defined and the following terms
shall have the following meanings:
"Bankruptcy Event of Default": an Event of Default pursuant
to Section 10(f) of the Credit Agreement.
"Guarantee" shall mean this Subsidiaries Guarantee, as
amended, supplemented or otherwise modified from time to time.
"Secured Obligations" shall be the collective reference to
the unpaid principal of and interest on the Notes and all other
obligations and liabilities (including, without limitation,
interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Loans and interest
accruing at the then applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), of the
Borrower to the Administrative Agent and the Lenders (including,
without limitation, any affiliate of a Lender with respect to any
Letter of Credit issued by such affiliate), whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or
in connection with, the Credit Agreement, this Agreement, the
Notes, the other Loan Documents or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid
by the Borrower pursuant to the terms of the Credit Agreement, this
Agreement or any other Loan
Document);
"Termination Date": the date on which the Commitments and the
Credit Agreement have been terminated; the Letters of Credit for
which there is an L/C Obligation have expired and the Secured
Obligations have been irrevocably paid in full other than
indemnification obligations not then due and payable, including,
without limitation, in subsections 5.15, 5.16, 5.17,11.7 and 12.6
of the Credit Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and section and
paragraph references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guarantee.
(a) Subject to the provisions of paragraph 2(b) each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the benefit of the Lenders, and for
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Secured Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents from time to time shall in no event exceed the amount
which can be guaranteed by such Guarantor under applicable federal and state
laws relating to fraudulent conveyances or transfers or the insolvency of
debtors.
(c) Each Guarantor further agrees to pay any and all reasonable
expenses (including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by the Administrative Agent or any
Lender in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Secured Obligations and/or
enforcing any rights with respect to, or collecting against, such Guarantor
under this Guarantee. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Secured Obligations and would be owed by the Borrower but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Borrower. This Guarantee
shall remain in full force and effect until (and shall terminate on) the
Termination Date, notwithstanding that from time to time prior thereto the
Borrowers may be free from any Secured Obligations. The provisions of the
first and second sentences of this paragraph shall survive the termination of
this Guarantee and the payment in full of the Secured Obligations and the
termination of the Commitments.
(d) Each Guarantor agrees that the Secured Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guarantee or affecting the rights and remedies
of the Administrative Agent or any Lender.
(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected
by the Administrative Agent or any Lender from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Secured Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by such Guarantor in respect of the Secured
Obligations or payments received or collected from such Guarantor in respect of
the Secured Obligations, remain liable for the Secured Obligations up to the
maximum liability of such Guarantor hereunder until the Secured Obligations are
paid in full and the Commitments are terminated.
(f) Each Guarantor agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose;
provided that the failure to give such notice shall not affect the validity of
such payment.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder who has
ot paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 5
hereof. The provisions of this Section shall in no respect limit the
obligations and liabilities of any Guarantor to the Administrative Agent and
the Lenders andeach Guarantor shall remain liable to the Administrative Agent
and any Lender for the full amount guaranteed by such Guarantor hereunder.
4. Right of Set-off. At any time when an Event of Default has
occurred and is continuing each Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to such Guarantor or
any other Guarantor, any such notice being expressly waived by each Guarantor,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of such Guarantor, or
any part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of such Guarantor to such holder
hereunder and claims of every nature and description of such holder against
such Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, or otherwise, as such Lender may elect, although such obligations,
liabilities and claims may be contingent or unmatured. By its acceptance of
the benefits of this Guarantee, each Lender shall be deemed to have agreed that
any amounts received by it pursuant to the exercise of any right of set-off
shall be promptly delivered by such Lender to the Administrative Agent, for
application to the Secured Obligations. The Administrative Agent and each
Lender shall notify such Guarantor promptly of any such set-off; provided that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Administrative Agent and each Lender under
this Section are in addition to other rights and remedies (including, without
limitations other rights of set-off) which the Administrative Agent or such
Lender may have.
5. Subrogation. The Guarantor shall be subrogated to all rights of
the Lenders against the Borrower in respect of any amount paid by the Guarantor
pursuant to the providing of this Guarantee; provided, however, that
notwithstanding any payment or payments made by any of the Guarantors hereunder
or any set-off or application of funds of any of the Guarantors by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of Administrative Agent or any such Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Secured Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing by the Borrower to the Administrative Agent and the Lenders
on account of the Secured Obligations are paid in full and the Commitments
under (and as defined in) the Credit Agreement are terminated. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any
time when all of the Secured Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Administrative Agent
and the Lenders, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Secured Obligations, whether matured or unmatured.
6. Amendments, etc. with respect to the Secured Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any of the
Secured Obligations made by the Administrative Agent or any Lender may be
rescinded by such party and any of the Secured Obligations continued, and
the Secured Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right
of offset with respect thereto, may, from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
agreements and instruments giving rise to the Secured Obligations and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the requisite
holders of the Secured Obligations, (as the case may be) may deem advisable
from time to time, and any collateral security, guarantee or right of offset
at any time held by the Administrative Agent or any Lender for the payment of
the Secured Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for theSecured Obligations or for this Guarantee or any
property subject thereto. When making any demand hereunder against any of
the Guarantors, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the Borrower or any other
Guarantor or guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from the Borrower
or any such other Guarantor or guarantor or any release of the Borrower or
such other Guarantor or guarantor shall not relieve any of the Guarantors
in respect of which a demand or collection is not made or any of the Guarantors
not so released of their several obligations or liabilities hereunder, and
shall not impair or affect the rights and remedies, express or implied, or as
a matter of law, of the Administrative Agent or any Lender against any of the
Guarantors. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Secured Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon this Guarantee or acceptance of this Guarantee; the
Secured Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guarantee; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Secured
Obligations. Each Guarantor understands and agrees that this Guarantee shall
be construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other document, instrument or agreement relating to the Secured
Obligations, any of the Secured Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Secured
Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee
for the Secured Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve such Guarantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent and any Lender
against such Guarantor. This Guarantee shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon each
Guarantor and the successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent and any Lender, and their respective
successors, indorsees, transferees and assigns, until all the Secured
Obligations and the obligations of each Guarantor under this Guarantee shall
have been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Secured Obligations.
8. Reinstatement. To the extent permitted by applicable Requirements
of Law, this Guarantee shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
U.S. Dollars at the office of Administrative Agent located at NationsBank,
N.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
10. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) under the laws of the jurisdiction of its incorporation and
has the corporate power and authority and the legal right to own and operate
its property, to lease the property it operates and to conduct the business in
which it is currently engaged;
(b) it has the corporate power and authority and the legal right
to execute and deliver, and to perform its obligations under, this Guarantee,
and has taken all necessary corporate action to authorize its execution,
delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms, except
as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the enforcement of
creditors' rights generally, general equitable principles and an implied
covenant of good faith and fair dealing;
(d) the execution, delivery and performance of this Guarantee
will not violate any provision of any Requirement of Law or Contractual
Obligation of such Guarantor (except to the extent that any such violation
would not reasonably be expected to have a Material Adverse Effect) and will
not result in or require the creation or imposition of any Lien on any of the
properties or revenues of such Guarantor pursuant to any Requirement of Law or
Contractual Obligation of the Guarantor;
(e) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any stockholder or creditor of
such Guarantor) is required in connection with the execution, delivery,
performance, validity or enforceability of this Guarantee, other than any which
have been obtained or made prior to the date hereof and remain in full force
and effect; and
(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of its
properties or revenues with respect to this Guarantee or any of the
transactions contemplated hereby.
Each Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by such Guarantor on the date of each
borrowing by the Borrower under the Credit Agreement on and as of such date of
borrowing as though made hereunder on and as of such date.
11. Authority of Administrative Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment, or other right or remedy provided for herein or resulting
or arising out of this Guarantee, shall, as between the Administrative Agent
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and such Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and no Guarantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.
12. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Guarantor to be effective shall be in writing
(including by facsimile transmission) and unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (1) when delivered by
hand or (2) if given by mail, three days after being deposited in the mails,
postage prepaid, or (3) if by facsimile or similar electronic transfer, when
sent and receipt has been confirmed, addressed as follows:
(a) if to the Administrative Agent, at its address or
transmission number for notices provided in the Credit Agreement; and
(b) if to any Guarantor, at: c/o Computer Data Systems, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Legal Department
The Administrative Agent and each Guarantor may change its address and
transmission numbers for notices by notice in the manner provided in this
Section.
13. Counterparts. This Guarantee may be executed by one or more of the
Guarantors on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A
set of the counterparts of this Guarantee signed by all the Guarantors shall be
lodged with the Administrative Agent.
14. Severability. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Integration. This Guarantee represents the agreement of each
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in other Loan Documents.
16. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) None of the terms or provisions of this Guarantee may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by each Guarantor and the Administrative Agent, provided
that any provision of this Guarantee may be waived by the Administrative Agent
in a letter or agreement executed by the Administrative Agent or by facsimile
transmission from the Administrative Agent.
(b) Neither the Administrative Agent nor any Lender shall by any
act (except by a written instrument pursuant to paragraph 16(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or any Lender would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights
or remedies provided by law.
17. Section Headings. The section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
18. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.
19. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MARYLAND.
20. Termination. This Agreement and obligations of the Administrative
Agent and the Borrower hererunder shall terminate on the Termination Date.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.
CDSI INTERNATIONAL, INC., a Delaware
corporation
COMPUTER DATA SYSTEMS SALES, INC., a Maryland
corporation
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
CDSI EDUCATION SERVICES, INC., a Maryland
corporation
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
CDSI SOLUTIONS, INC., a Maryland
corporation
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
M/GA FIELDS ROAD LIMITED PARTNERSHIP,
Maryland Limited Liability Partnership
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, on behalf of
Computer Data Systems, Inc., General Partner