EXECUTION COPY
TERM LOAN AGREEMENT
DATED AS OF NOVEMBER 5, 1999
AMONG
POLICY MANAGEMENT SYSTEMS CORPORATION,
THE GUARANTORS PARTY HERETO,
BANK OF AMERICA, N.A.
AS AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
TABLE OF CONTENTS
Section Page
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ARTICLE 1
1.1 Definitions 1
1.2 Accounting Terms and Determinations 16
ARTICLE 2
2.1 Commitments to Lend 17
2.2 Procedure for Committed Borrowing 17
2.3 Notes 18
2.4 Conversion and Continuation Elections 19
2.7 Maturity of Loans 21
2.8 Interest Rates 21
2.9 Fees 22
2.10 Optional Termination or Reduction of Commitments 22
2.11 Mandatory Termination of Commitments 22
2.12 Optional Prepayments 22
2.13 General Provisions as to Payments 23
2.14 Funding Losses 24
2.15 Computation of Interest and Fees 24
2.16 Regulation D Compensation 24
ARTICLE 3
3.1 Closing 26
3.2 Borrowings 27
ARTICLE 4
4.1 General Representations 28
4.2 Full Disclosure 28
4.3 Representations of Guarantors 29
ARTICLE 5
5.1 Information 31
5.2 Payment of Obligations 31
5.3 Maintenance of Property; Insurance 31
5.4 Conduct of Business and Maintenance of Existence 31
5.5 Compliance with Laws 31
5.6 Inspection of Property, Books and Records 31
5.7 Mergers and Sales of Assets 31
5.8 Use of Proceeds 31
5.9 Negative Pledge 31
5.10 Limitation on Debt of Subsidiaries 31
5.11 Leverage Ratio 31
5.12 Minimum Consolidated Tangible Net Worth 31
5.13 Restricted Payments 31
5.14 Investments 31
5.15 Transactions with Affiliates 31
5.16 Additional Guarantors 31
5.17 Limitation on Non-Cash Charges 31
ARTICLE 6
6.1 Events of Default 31
6.2 Notice of Default 31
ARTICLE 7
7.1 Appointment and Authorization; "Agent". 31
7.2 Delegation of Duties 31
7.3 Liability of Agent 31
7.4 Reliance by Agent 31
7.5 Notice of Default 31
7.6 Credit Decision 31
7.7 Indemnification of Agent 31
7.8 Agent in Individual Capacity 31
7.9 Successor Agent 31
ARTICLE 8
8.1 Basis for Determining Interest Rate Inadequate or Unfair 31
8.2 Illegality 31
8.3 Increased Cost and Reduced Return 31
8.4 Taxes 31
8.5 Base Rate Loans Substituted for Affected Euro-Dollar Rate Loans 31
ARTICLE 9
9.1 The Guaranty 31
9.2 Guaranty Unconditional 31
9.3 Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances 31
9.4 Waiver by each Guarantor 31
9.5 Subrogation and Contribution 31
9.6 Stay of Acceleration 31
9.7 Limit of Liability 31
ARTICLE 10
10.1 Notices 31
10.2 No Waivers 31
10.3 Costs and Expenses 31
10.4 Sharing of Set-Offs 31
10.5 Amendments and Waivers 31
10.6 Successors and Assigns 31
10.7 Collateral 31
10.8 Governing Law; Submission to Jurisdiction 31
10.9 Counterparts; Integration; Effectiveness 31
10.10 WAIVER OF JURY TRIAL 31
10.11 Confidentiality 31
SCHEDULES
Schedule 5.3 Insurance
Schedule 10.1 Addresses for Notices to Borrower and Agent
EXHIBITS
Exhibit A Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Opinion of Office of General Counsel to Obligors
Exhibit E Form of Compliance Certificate
Exhibit F Form of Auditor's Statement
Exhibit G Form of Assignment and Assumption Agreement
TERM LOAN AGREEMENT
TERM LOAN AGREEMENT dated as of November 5, 1999 among POLICY
MANAGEMENT SYSTEMS CORPORATION, the GUARANTORS party hereto, the BANKS listed on
the signature pages hereof and BANK OF AMERICA, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the
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following meanings:
"Administrative Questionnaire" means, with respect to each Bank, an
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administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly through
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one or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote 25% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
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and any successor agent arising under Section 7.9.
"Agent-Related Persons" means BofA and any successor agent arising
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under Section 7.9, together with their respective affiliates and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
affiliates.
"Agent's Payment Office" means the address for payments set forth in
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the signature pages hereto or such other address as the Agent may from time to
time specify.
"Applicable Lending Office" means, with respect to any Bank, (i) in
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the case of its Base Rate Loans, its Domestic Lending Office and (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Assignee" has the meaning set forth in Section 10.6(c).
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"Attorney Costs" means and includes all fees and disbursements of any
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law firm or other external counsel and the allocated cost of internal legal
services and all disbursements of internal counsel; provided that in determining
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Attorney Costs associated with any matter, there is no duplication of legal
services in respect of such matter by external counsel and internal counsel.
"Bank" means each financial institution listed on the signature pages
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hereof under the caption "Banks", each Assignee which becomes a Bank pursuant to
Section 10.6(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
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of (i) the arithmetic mean of the Prime Rates of each of the Reference Banks
(rounded upward to the nearest 1/16 of 1%) for such day as notified by the
Reference Banks to the Agent on such day or (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"Benefit Arrangement" means at any time an employee benefit plan
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within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BofA" means Bank of America, N.A.
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"Borrower" means Policy Management Systems Corporation, a South
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Carolina corporation, and its successors.
"Borrowing" means a borrowing hereunder consisting of Loans of the
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same Type made to the Borrower on the same day by the Banks under Article 2, and
having the same Interest Period.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City or San Francisco are authorized
or required by law to close and, if the applicable Business Day relates to any
Euro-Dollar Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Expenditures" means, for any period, on a consolidated basis
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for the Borrower and its Consolidated Subsidiaries, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities during that period
and including that portion of capital leases (except any capitalized interest)
which is capi-talized on the consolidated balance sheet of the Borrower and its
Subsidiaries) made by the Borrower or any Consolidated Subsidiary during such
period that, in conformity with generally accepted accounting principles, are
required to be included in or reflected by property, plant or equip-ment,
licenses and permits, or other similar fixed asset accounts as reflected in such
balance sheet (including expenditures for equipment purchased simul-taneously
with the trade-in of existing equipment owned by the Borrower or any such
Subsidiary to the extent the gross amount of such purchase price exceeds the
book value of the equipment being traded in, but excluding expenditures made in
connection with the replacement or restoration of assets, to the extent
▇▇▇▇-bursed or financed from insurance proceeds or condemnation awards).
"Closing Date" means the date on or after the Effective Date on which
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the Agent shall have received the documents specified in or pursuant to Section
3.1.
"Commitment" means, with respect to each Bank, the amount set forth
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opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.8.
"Consolidated Capitalization" means, as at any date of determination,
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the sum of Consolidated Funded Debt at such date and Total Shareholders' Equity
at such date.
"Consolidated Adjusted Cash Flow" means, for any four consecutive
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fiscal quarters of the Borrower, Consolidated Net Income for such period plus,
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to the extent deducted in determining Consolidated Net Income, the aggregate
amount of (i) Consolidated Interest Expense; (ii) income tax expense; and (iii)
the amount of all amortization of intangibles and depreciation that were
deducted in determining Consolidated Net Income for the period.
"Consolidated Funded Debt" means all Debt of the Borrower and the
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Consolidated Subsidiaries for borrowed money.
"Consolidated Interest Expense" means, for any fiscal period, the
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interest expense of the Borrower and its Consolidated Subsidiaries (whether
expensed or capitalized) determined on a consolidated basis for such fiscal
period.
"Consolidated Net Income" means, for any four consecutive fiscal
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quarters of the Borrower, the net income of the Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis for such period, minus (i) any
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extraordinary gain (but not extraordinary loss), other than any extraordinary
gain as a result of the receipt of casualty proceeds for a casualty event with
respect to which an extraordinary loss has been realized during such fiscal
period or any prior fiscal period and (ii) to the extent not reflected in any
extraordinary gain, any gain (a) as a result of an asset disposition (including
without limitation any disposition of capital stock and any such disposition
consisting of receipt of casualty proceeds with respect to any asset (except as
a result of the receipt of casualty proceeds for a casualty event with respect
to which a loss has been realized during such period or any prior fiscal
period)), other than dispositions of inventory, marketable securities and
services in the ordinary course of business, (b) as a result of the disposition
of a separate business segment, (c) on restructuring payables or receivables,
(d) on the extinguishment of debt, (e) as a result of a prior period adjustment,
(f) as a result of an accounting change and (g) from discontinued operations
(other than from the discontinuance of the businesses referred to in clause (iv)
of the first proviso to Section 5.4); provided that, with respect to all of the
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foregoing provisions of this definition, if the aggregate of the Borrower's
Investments in Subsidiaries that are not wholly-owned exceeds $15,000,000, then
(x) the net income of any Subsidiary of the Borrower which is not a wholly-owned
Subsidiary and for which the Borrower's Investment therein is accounted for with
the equity method of accounting shall have its net income included in
Consolidated Net Income of the Borrower only to the extent of the amount of cash
dividends or distributions paid by such subsidiary to the Borrower during such
period and (y) the net income of Software Consult Micado AG shall be included in
the calculation of Consolidated Net Income.
"Consolidated Subsidiary" means at any date any Subsidiary or other
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entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Tangible Net Worth" means with respect to the Borrower
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and its Consolidated Subsidiaries at a particular date, an amount equal to (i)
Total Shareholders' Equity, less (ii) the aggregate amount of all items and
assets categorized as intangibles, including but not limited to "goodwill",
customer lists, contract acquisition costs, covenants not to compete and
capitalized software costs, all as on the consolidated balance sheet of the
Borrower as determined in accordance with generally accepted accounting
principals.
"Conversion/Continuation Date" means any date on which, under Section
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2.4, the Borrower (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Debt" of any Person means at any date, without duplication, (i) all
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obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except (x) trade accounts payable arising in the ordinary course of
business and (y) any other accrued expenses incurred in the ordinary course of
business, and (z) payment of amounts pursuant to a "contingent earn-out" or
similar provisions the payment of which amounts is contingent upon the
achievement of good faith performance targets, but only to the extent that such
payment is not, or would not be, reflected as a liability on the balance sheet
of such Person at such date, (iv) all obligations of such Person as lessee which
are capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.9(a), (f) and (k)
and the definitions of Material Debt and Material Financial Obligations, all
contingent obligations) of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit, (vi) all obligations of such
Person with respect to Designated Swaps, but only to the extent that such
obligations are, or would be reflected as a liability on the balance sheet of
such Person at such date, (vii) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such Person and
(viii) all Debt of others Guaranteed by such Person. It is understood that the
payment obligations of the Borrower to a counterparty under any equity swap
(each such swap, a "Designated Swap") to be entered into between the Borrower
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and such counterparty with respect to shares of outstanding common stock of the
Borrower in connection with the Borrower's share repurchase program shall not
constitute "Debt" except as set forth in clause (vi) of the definition of Debt.
"Default" means any condition or event which constitutes an Event of
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Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defeased Debt" means the Loan Notes (the "Loan Notes") of PMSC
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Limited in the aggregate principal amount of 1,271,967 for which, as of the
Closing Date, PMSC Limited has deployed the assets described in Section 5.9(i)
to retire such Loan Notes and all related interest expense; but only so long as
the Loan Notes are not reflected as Debt on the consolidated financial
statements of the Borrower most recently delivered pursuant to Sections 4.4(b),
5.1(a) or (b), as the case may be.
"Derivatives Obligations" of any Person means all obligations of such
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Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Disbursement Date" means November 5, 1999.
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"Domestic Lending Office" means, as to each Bank, its office located
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at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Effective Date" means the date this Agreement becomes effective in
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accordance with Section 10.9.
"Environmental Laws" means any and all federal, state, local and
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foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
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controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
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branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means any Loan that bears interest based on the
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LIBO Rate.
"Euro-Dollar Margin" means a rate per annum equal to 1.00%.
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"Euro-Dollar Reserve Percentage" means for any day that percentage
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(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
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liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by , non-United States office of any Bank to United
States residents).
"Event of Default" has the meaning set forth in Section 6.1.
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"Facility Fee Rate" has the meaning set forth in Section 2.7.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upward, if necessary, to the nearest 1/100th 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 (i) if such day is not a Business Day, the
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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 (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to BofA on
such day on such transactions as determined by the Agent.
"Guarantee" by any Person means any obligation, contingent or
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otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (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 (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
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endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
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"Guarantor" means Cybertek Corporation, PMSC Limited, Policy
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Management Systems Investments, Inc., The Leverage Group, Inc., and Cybertek
Solutions, L.P. and each other Person who has executed this Agreement as a
guarantor.
"Hazardous Substances" means any toxic, radioactive, caustic or
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otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnified Liabilities" means any and all liabilities, obligations,
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losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
and disbursements (including Attorney Costs) of any kind or nature whatsoever
which may at any time (including at any time following repayment of the Loans
and the termination, resignation or replacement of the Agent or replacement of
any Bank) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of this Agreement or any document contemplated by
or referred to herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto.
"Indemnitee" has the meaning set forth in Section 10.3(c)
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"Interest Period" means as to any Euro-Dollar Loan, the period
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commencing on the Disbursement Date or on the Conversion/Continuation Date on
which the Loan is converted into or continued as an Euro-Dollar Loan, and ending
on the date one, two, three or six months thereafter as selected by the Borrower
in its Notice of Borrowing, Notice of Conversion/Continuation as the case may
be;
(a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
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mended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
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share purchase, capital contribution, loan, Guarantee, time deposit or otherwise
(but not including any demand deposit).
"Leverage Ratio" means at any date the ratio of (i) Consolidated
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Funded Debt to (ii) Consolidated Adjusted Cash Flow minus Capital Expenditures.
"LIBO Rate" means, for any Interest Period with respect to a
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Euro-Dollar Loan the rate of interest per annum determined by the Agent to be
the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the rates of
interest per annum notified to the Agent by each Reference Bank as the rate of
interest at which dollar deposits in the approximate amount of the Euro-Dollar
Loan to be made by such Reference Bank, and having a maturity comparable to such
Interest Period, would be offered to major banks in the London interbank market
at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Loan by a Bank to the Borrower under Section 2.1, and
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may be a Euro-Dollar Loan or a Base Rate Loan (each, a "Type" of Loan).
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"Material Debt" means Debt (other than the Notes and any loans solely
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between the Borrower and its Subsidiaries or between its Subsidiaries) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$20,000,000.
"Material Financial Obligations" means a principal or face amount of
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Debt and/or payment or collateralization obligations in respect of Derivatives
Obligations of the Borrower and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, exceeding in the aggregate
$20,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
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Unfunded Liabilities in excess of $3,000,000.
"Material Subsidiary" means, at any date, (i) any Subsidiary of the
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Borrower whose total assets, total revenue or net income (or, in the case of a
Subsidiary which has subsidiaries, consolidated total assets, total revenue or
net income of such Subsidiary with its subsidiaries) are at least 5% of the
consolidated total assets, total revenue or net income, respectively, of the
Borrower and its Consolidated Subsidiaries (as shown on the consolidated
financial statements of Borrower then most recently delivered) at or, as
relevant, for the four consecutive fiscal quarters ended on or most recently
prior to such date, (ii) any Subsidiary whose outstanding balance of Debt owed
to the Borrower or any other Subsidiary (net of the aggregate amount of Debt
owed to such Subsidiary by the Borrower or any other Subsidiary) exceeds
$10,000,000 (as shown in the certificate of the Borrower listing its Material
Subsidiaries then most recently delivered or (iii) any Subsidiary whose
outstanding balance of Debt from the Borrower or any other Subsidiary (net of
the aggregate amount of Debt owed by such Subsidiary by the Borrower or any
other Subsidiary) exceeds $10,000,000 (as shown in the certificate of the
Borrower listing its Material Subsidiaries then most recently delivered);
provided that no foreign Subsidiary of the Borrower or of PMSC Limited shall be
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deemed to be a Material Subsidiary.
"Multiemployer Plan" means at any time an employee pension benefit
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plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Note" means a promissory note of the Borrower in substantially the
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form of Exhibit A hereto.
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"Notice of Borrowing" means a notice in substantially the form of
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Exhibit B hereto.
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"Notice of Conversion/Continuation" means a notice in substantially
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the form of Exhibit C hereto.
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"Obligor" means the Borrower and each Guarantor.
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"Parent" means, with respect to any Bank, any Person controlling such
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Bank.
"Participant" has the meaning set forth in Section 10.6(b)
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
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succeeding to any or all of its functions under ERISA.
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"Person" means an individual, a corporation, a limited liability
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company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
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instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
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a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest in effect for such day as
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publicly announced from time to time by the Banks as their "prime rate." (The
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"prime rate" is a rate set by each Bank based upon various factors including its
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.)
"Pro Rata Share" means, as to any Bank at any time, the percentage
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equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of all Banks.
"Reference Banks" means Bank of America, N.A., First Union National
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Bank and Wachovia Bank, N.A.
"Regulation U" means Regulation U of the Board of Governors of the
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Federal Reserve System, as in effect from time to time.
"Responsible Officer" means the chief executive officer or the
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president of the Borrower, any other officer having substantially the same
authority and responsibility, or the general counsel of the Borrower; or, with
respect to compliance with financial covenants, the chief financial officer or
the treasurer of the Borrower, or any other officer having substantially the
same authority and responsibility.
"Restricted Payment" means (i) any dividend or other distribution on
------------------
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of the
Borrower's capital stock (but not including payments of principal, premium (if
any) or interest made pursuant to the terms of convertible debt securities prior
to conversion).
"Senior Bank Facility" means the Credit Agreement dated as of August 8,
--------------------
1997 among the Borrower, the financial institutions parties to such Credit
Agreement and Bank of America, N.A. as agent, as amended by a First Amendment
dated as of November 5, 1999.
"Subsidiary" means, as to any Person, any corporation or other entity
----------
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person or any
other entity the management of which is directly or indirectly controlled by
such Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the
----------
Borrower.
"Temporary Cash Investment" means any Investment in (i) direct
-------------------------
obligations of the United States or any agency thereof or the Commonwealth of
Australia, or obligations guaranteed by the United States or any agency thereof
or the Commonwealth of Australia, (ii) commercial paper rated at least A-1 by
Standard & Poor's Rating Group and P-l by ▇▇▇▇▇'▇ Investors Service, Inc., (iii)
time deposits with, including certificates of deposit issued by, any office
located in the United States of (x) any Bank or (y) any bank or trust company
which is organized under the laws of the United States or any state thereof or
the United Kingdom and has capital, surplus and undivided profits aggregating at
least $750,000,000, (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iii) above or (v) municipal
bonds issued by municipalities located in the United States rated at least A or
the equivalent thereof by Standard & Poor's Rating Group or A2 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and, if such bonds are rated by both
such agencies, then at least A or the equivalent thereof by Standard & Poor's
Rating Group and A2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service,
Inc.; and (vi) Debt securities of any Person which are rated at least A or the
equivalent thereof by Standard & Poor's Rating Group or A2 or the equivalent
--
thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and, if such Debt securities are
rated by both such agencies, then at least A or the equivalent thereof by
Standard & Poor's Rating Group and A2 or the equivalent thereof by ▇▇▇▇▇'▇
---
Investors Service, Inc.; provided that any Investment described in clauses (i),
--------
(ii), (iii) or (iv) matures within one year from the date of acquisition thereof
by the Borrower or a Subsidiary and any Investment described in clause (vi)
matures within 90 days from the date of acquisition thereof by the Borrower or a
Subsidiary.
"Termination Date" means July 15, 2000.
----------------
"Total Shareholders' Equity" means, as of any date of determination,
--------------------------
the shareholders' equity at such date of the Borrower and its Consolidated
Subsidiaries, as determined in accordance with generally accepted accounting
principles.
"Type" has the meaning specified in the definition of Loan.
----
"Unfunded Liabilities" means, with respect to any Plan at any time,
--------------------
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the
-------------
States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Agent that the
-------- ----
Borrower wishes to amend any covenant in Article 5 to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article 5 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Banks.
ARTICLE 2
THE CREDIT
SECTION 2.1 Commitments to Lend. Each Bank severally agrees, on the terms
-------------------
and conditions set forth in this Agreement, to make loans to the Borrower on the
Disbursement Date pursuant to this Section 2.1 in amounts such that (a) the
aggregate principal amount of Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment and (b) after giving effect to the
Borrowing, the aggregate amount of all outstanding Loans shall not exceed the
combined Commitments of all the Banks. The Loans made by the Banks hereunder
are not revolving and any amounts borrowed hereunder which are repaid or prepaid
by the Borrower may not be reborrowed.
SECTION 2.2 Procedure for Borrowing.
-----------------------
(a) The Borrower shall give the Agent notice (a "Notice of
---------
Borrowing") not later than 7:30 a.m. (San Francisco time) on (x) the
--
Disbursement Date with respect to Base Rate Loans, (y) the third Business Day
--
before the Disbursement Date with respect to Euro-Dollar Loans, specifying:
(i) the requested Disbursement Date, which shall be a Business Day
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to be, Base
Rate Loans or Euro-Dollar Loans; and
(iv) in the case of a Borrowing with respect to Euro-Dollar Loans,
the duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt of the Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower, except pursuant to an election made by the Borrower
as expressly permitted by the last sentence of Section 8.1.
(c) Not later than 9:00 a.m. (San Francisco time) on the
Disbursement Date, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available, to the Agent at its address referred to in Section
10.1. Unless the Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Agent will make the funds so received from
the Banks available to the Borrower at the Agent's aforesaid address.
(d) Unless the Agent shall have received notice from a Bank prior
to the Disbursement Date that such Bank will not make available to the Agent
such Bank's share of the Borrowing, the Agent may assume that such Bank has made
such share available to the Agent on the date of such Borrowing in accordance
with subsections (c) of this Section and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Agent, such Bank and the Borrower severally agree to repay to the Agent
within three Business Days of demand therefor such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate or the interest rate applicable thereto pursuant to Section 2.6 or (ii) in
the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.3 Notes.
-----
(a) The Loans of each Bank shall be evidenced by one or more notes
(the Notes) payable to the order of such Bank for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount of
such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
---------
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to the "Note" of such Bank shall be
----
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(a),
the Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount, type and maturity of each Loan made by it and the date and amount
of each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
-------- ----
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Note. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.4 Conversion and Continuation Elections.
-------------------------------------
(a) The Borrower may, upon irrevocable written notice to the Agent in
accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case of
any other Type of Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring on such day (or
any part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Euro-Dollar Loans is
--------
reduced, by payment, prepayment, or conversion of part thereof to be less than
-----
$5,000,000, such Euro-Dollar Loans shall automatically convert into Base Rate
Loans, and on and after such date the right of the Borrower to continue such
Loans as, and convert such Loans into, Euro-Dollar Loans shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation
to be received by the Agent not later than 7:30 a.m. (San Francisco time) at
least (i) three Business Days in advance of the Conversion/Continuation Date, if
the Loans are to be converted into or continued as Euro-Dollar Loans; and (ii)
on the Conversion/Continuation Date, if the Loans are to be converted into Base
Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be continued or
converted;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Euro-Dollar Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Euro-Dollar Loans, or if any Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such Euro-Dollar Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Banks otherwise consent, during the existence of a
Default or Event of Default, the Borrower may not elect to have a Loan converted
into or continued as an Euro-Dollar Loan.
SECTION 2.5 Maturity of Loans. The Borrower shall repay to the Banks on
-----------------
the Termination Date the aggregate principal amount of Loans outstanding on such
date.
SECTION 2.6 Interest Rates.
--------------
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day. Such
interest shall be payable on the last day of each calendar quarter. Any overdue
principal of or interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the LIBO Rate applicable to such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
(c) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for
such day plus the LIBO Rate applicable to the Interest Period for such Loan or
(ii) the sum of 2% plus the Euro-Dollar Margin for such day plus the LIBO Rate
(or, if the circumstances described in clause (a) or (b) of Section 8.1 shall
exist, at a rate per annum equal to the sum of 2% plus the rate applicable to
Base Rate Loans for such day).
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of error.
SECTION 2.7 Fees. On the Closing Date, the Borrower shall pay to the
----
Agent for the account of the Banks ratably a one-time fee on the aggregate
amount of the Commitments equal to 0.15%.
SECTION 2.8 Optional Termination or Reduction of Commitments. Prior to
------------------------------------------------
the Disbursement Date, the Borrower may, upon at least three Business Days'
notice to the Agent, (i) terminate the Commitments at any time, if no Loans are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $5,000,000 or a larger multiple of $1,000,000, the aggregate
amount of the Commitments in excess of the aggregate outstanding principal
amount of the Loans.
SECTION 2.9 Mandatory Termination of Commitments and Mandatory
--------------------------------------------------
Prepayments.
-
(a) The Commitments shall automatically terminate at the close of
business on the Disbursement Date.
(b) The Company shall repay the Loans on the Termination Date.
(c) If the Borrower shall issue for cash any additional equity
(other than in connection with the exercise of options, or the issuance of
equity in connection with employee benefit plans, or a contribution to the
Borrower in connection with a vendor agreement to fund a specific development
and marketing effort or to fund one or more specific acquisitions set forth in
the vendor agreement or a technology transfer agreement) or incur Debt for cash,
the Borrower shall promptly notify the Agent of the estimated net proceeds of
such issuance to be received by the Borrower. Promptly upon, and in no event
later than three Business Days after receipt by the Borrower of the net cash
proceeds of such issuance, the Borrower shall prepay the Term Loan in an
aggregate amount equal to the amount of net proceeds until the Term Loan shall
be repaid in full.
SECTION 2.10 Optional Prepayments.
--------------------
(a) Subject in the case of any Euro-Dollar Borrowing to Section 2.12,
the Borrower may, upon at least one Business Day's notice to the Agent, prepay
any Base Rate Loan or upon at least three Business Days' notice to the Agent,
prepay any Euro-Dollar Loan, in each case in whole at any time, or from time to
time in part in amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.11 General Provisions as to Payments.
---------------------------------
(a) Borrower shall make such payment of principal of, and interest
on, the Loans and of fees hereunder, not later than 9:00 a.m. (San Francisco
time) on the date when due, in Federal or other funds immediately available, to
the Agent at its address referred to in Section 10.1. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. If any payment of principal of, or interest
on, the Loans (other than Euro-Dollar Loans) or of fees shall be due on a day
which is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day. If any payment of principal of, or interest
on, a Euro-Dollar Loan shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.12 Funding Losses. If the Borrower makes any payment of
--------------
principal with respect to any Euro-Dollar Loan (pursuant to Article 2, 6 or 8 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or if the Borrower fails to borrow, prepay, convert or continue any
Euro-Dollar Loans after notice has been given to any Bank in accordance with
Section 2.2(b) or 2.4, the Borrower shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an existing
or prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow or prepay, provided that such Bank shall have delivered to the
-------- ----
Borrower a certificate detailing the calculation by such Bank as to the amount
of such loss or expense, which certificate shall be conclusive in the absence of
error.
SECTION 2.13 Computation of Interest and Fees. Interest based on the
--------------------------------
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.14 Regulation D Compensation. Each Bank may require the
-------------------------
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of such
Bank at a rate per annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable LIBO Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable LIBO Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Business Days after the giving of such notice and with respect to
which Interest Period the Borrower has not delivered a Notice of
Conversion/Continuation prior to receipt by the Borrower of such notice by such
Bank and (y) shall notify the Borrower at least five Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans of the amount then
due it under this Section.
ARTICLE 3
CONDITIONS
SECTION 3.1 Closing. The obligation of each Bank to make its Loan
-------
hereunder is subject to the condition 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 each Bank, and in sufficient copies for each Bank:
(a) This Agreement and the Notes, if requested by any Bank, executed
by each party thereto;
(b) an opinion of the office of the General Counsel of the
Obligors, substantially in the form of Exhibit D hereto;
---------
(c) evidence of payment by the Borrower of all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of BofA to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of Attorney Costs as shall constitute
BofA's reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
-------- ----
thereafter preclude final settling of accounts between the Borrower and BofA).
(d) all documents the Agent may reasonably request relating to the
existence of the Obligors, the corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent;
(e) Certificate. A certificate signed by a Responsible Officer,
-----------
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article 4
are true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing; and
(iii) there has occurred since December 31, 1998, no event or
circumstance that has resulted or could reasonably be expected to result in a
material adverse effect on the consolidated business, financial condition,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole; and
The Agent shall promptly notify the Borrower and the Banks of the Closing
Date, and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.2 Borrowings. The obligation of each Bank to make the Loan to
----------
be made by it, is subject to the satisfaction of the following conditions
precedent on the Disbursement Date:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.2;
(b) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate amount
of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Obligors contained in this Agreement shall be true in all material respects on
and as of the date of such Borrowing.
The Notice of Borrowing hereunder shall be deemed to be a representation
and warranty on the date of such Borrowing by the Borrower as to the facts
specified in clauses (b), (c) and (d) of this Section and by each other Obligor,
with respect to itself only, as to the facts specified in clause (d) of this
Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 General Representations. The Borrower represents and warrants
-----------------------
that each of the representations and warranties of the Borrower contained in
Sections 4.1 through 4.10 of the Senior Bank Facility is true and correct in all
material respects, and the related definitions, schedules and exhibits contained
therein are incorporated herein by reference, mutatis mutandis, and made a part
------- --------
hereof, with the same force and effect as if the same had been herein set forth
in their entirety for the benefit of the Banks irrespective of whether the
Senior Bank Facility remains in effect, but including and giving effect to any
amendment or modification of such provisions or any waiver of compliance
therewith, it being understood that no such amendment, modification or waiver
shall in any manner constitute an amendment, modification or waiver of the
provisions thereof incorporated herein unless the Banks continue to be a party
to the Senior Bank Facility; provided, however, that said provisions for the
-------- -------
purpose of the incorporation herein shall be amended in the following respects:
(a) the dates "December 31, 1996" and "March 31, 1997" contained
in Sections 4.4 and 4.5 of the Senior Bank Facility shall be read as December
31, 1998 and June 30, 1999 respectively;
(b) the definition "Borrower's 1996 Form 10K" shall be read as
"Borrower's 1998 Form 10K" and the date contained in the definition "Borrower's
Latest Form 10Q" shall be read as "June 30, 1999."
SECTION 4.2 Full Disclosure. All information (other than financial
---------------
projections) heretofore furnished by the Borrower to the Agent or any Bank for
purposes of or in connection with this Agreement or any transaction contemplated
hereby, taken as a whole, is, and all such written information (other than
financial projections) hereafter furnished by the Borrower to the Agent or any
Bank, taken as a whole, will be, true and accurate in all material respects on
the date as of which such information is stated or certified. All financial
projections delivered or to be delivered to the Banks have been or will be
prepared on the basis of the assumptions stated therein. Such projections
represent the Borrower's reasonable good faith estimate of the Borrower's future
financial performance and such assumptions are believed by the Borrower to be
fair in light of current business conditions. The Borrower cannot give any
assurances that any projections will be realized. The Borrower has disclosed to
the Banks in writing any and all facts, known trends or uncertainties the
Borrower reasonably expects will have a material and adverse effect on or may
affect (to the extent the Borrower can now reasonably foresee), the business,
operations or financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Obligors to perform their
obligations under this Agreement.
SECTION 4.3 Representations of Guarantors.
-----------------------------
(a) Each corporate Guarantor is a corporation duly incorporated,
validly existing and in good standing (if such concept is applicable in the
relevant jurisdiction of incorporation) under the laws of the jurisdiction of
its incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The execution, delivery and performance by each
corporate Guarantor of this Agreement are within such Guarantor's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Guarantor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon such Guarantor or result in the creation or
imposition of any Lien on any asset of such Guarantor.
(b) Each Guarantor which is a limited partnership is a limited
partnership duly formed pursuant to applicable laws and is validly existing and
in good standing (if such concept is applicable in the relevant jurisdiction of
formation) under the laws of the jurisdiction of its formation, and has all
partnership powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted. The
execution, delivery and performance by each Guarantor which is a limited
partnership of this Agreement are within such Guarantor's partnership powers,
have been duly authorized by all necessary action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the partnership agreement of such Guarantor or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
such Guarantor or result in the creation or imposition of any Lien on any asset
of such Guarantor.
(c) This Agreement constitutes a valid and binding agreement of
each Guarantor in each case enforceable in accordance with its terms.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid:
SECTION 5.1 Information. The Borrower will deliver to each of the Banks:
-----------
(a) within 2 Business Days after the filing of each Form 10-K by
the Borrower with the Securities and Exchange Commission (and in any event no
later than 120 days after the end of each fiscal year of the Borrower), a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and the related consolidated statements of income
and cash flows and changes in stockholders' equity for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on in a manner acceptable to the Securities and Exchange Commission
and accompanied by a report of independent public accountants or nationally
recognized standing in scope and manner acceptable to the Securities and
Exchange Commission;
(b) within 2 Business Days after the filing of each Form 10-Q by
the Borrower with the Securities and Exchange Commission (and in any event no
later than 90 days after the end of each of the first three quarters of each
fiscal year of the Borrower), a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter, setting
forth in the case of such statements of income and cash flows, in comparative
form the figures for the corresponding quarter and the corresponding portion of
the Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower substantially
in the form of Exhibit E hereto (i) setting forth in reasonable detail the
---------
calculations required to establish whether the Borrower was in compliance with
the requirements of Sections 5.7 to 5.14, inclusive, on the date of such
financial statements, (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto and (iii) listing all Material Subsidiaries on the date of such
financial statements;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements substantially
in the form of Exhibit F hereto (i) whether anything has come to their attention
---------
to cause them to believe that any Default existed on the date of such statements
and (ii) confirming the calculations set forth in the officer's certificate
delivered simultaneously with the annual financial statements in accordance with
clause (c) above;
(e) within five Business Days after the chief financial officer,
the controller, the general counsel or any other officer of the Borrower who is
directly responsible for the administration by the Borrower of this Agreement
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the controller of the Borrower
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(C) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take; and
(i) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
SECTION 5.2 Payment of Obligations. The Borrower will pay and discharge,
----------------------
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities (including, without
limitation, tax liabilities and claims of materialmen, warehousemen and the like
which if unpaid might by law give rise to a Lien, but excluding any intercompany
loans), except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.
SECTION 5.3 Maintenance of Property; Insurance.
----------------------------------
(a) The Borrower will keep, and will cause each Material Subsidiary
to keep, all property useful and necessary in its business in good working order
and condition or covered by adequate insurance in accordance with Section
5.3(b), ordinary wear and tear excepted.
(b) The Borrower will maintain, and will cause each Material
Subsidiary to maintain, or be covered under, (i) physical damage insurance on
all real and personal property on an all risks basis (including the perils of
flood and quake), covering the repair and replacement cost of all such property
and consequential loss coverage for extra expense and (ii) public liability
insurance (including products/completed operations liability coverage) all on
terms and conditions and in scope substantially commensurate with that which is
currently maintained as described on Schedule 5.3 hereto and evidenced by the
------------
certificate contemplated by clause (w) of the second following sentence and with
risk retention thereunder up to an amount which in the good faith business
judgement of the Borrower's or such Material Subsidiary's management could not
reasonably be expected to expose the Borrower or such Material Subsidiary to a
materially adverse noninsured loss. All such insurance shall be provided by
insurers having an A.M. Best policyholders rating of not less than B+ or such
other insurers as the Banks may approve in writing. The Borrower will deliver
to the Agent for distribution to each of the Banks (w) on the date of the first
Borrowing hereunder, a certificate dated such date showing the amount of
coverage as of such date, (x) upon request of any Bank through the Agent from
time to time full information as to the insurance carried, (y) within seven
Business Days of receipt of notice from any insurer a copy of any notice of
cancellation or material change in coverage from that existing on the date of
this Agreement and (z) forthwith upon receipt thereof, notice of any
cancellation or nonrenewal of coverage by the Borrower.
SECTION 5.4 Conduct of Business and Maintenance of Existence. The
------------------------------------------------
Borrower will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective corporate existence and their respective rights, privileges and
franchises necessary in the normal conduct of business; provided that nothing in
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this Section 5.4 shall prohibit (i) the merger or consolidation of a Subsidiary
into the Borrower or the merger or consolidation of a Subsidiary with or into
another Person if the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect thereto, no Default shall
have occurred and be continuing, (ii) the transfer of assets by a Subsidiary to
the Borrower or to another Subsidiary if, after giving effect thereto, no
Default shall have occurred and be continuing, (iii) the dissolution or
termination of the corporate existence of any Subsidiary if the Borrower in good
faith determines that such termination is in the best interest of the Borrower
and is not materially disadvantageous to the Banks (provided that if such
-------- ----
Subsidiary is a Guarantor, it shall have transferred all of its assets and
liabilities to the Borrower or another Guarantor as part of such dissolution or
termination); and provided further that nothing in this Section 5.4 shall be
-------- -------
construed to prohibit a sale, lease or other transfer of assets expressly
permitted by Section 5.7.
SECTION 5.5 Compliance with Laws. The Borrower will comply, and cause
--------------------
each Subsidiary to comply, in all material respects with all material laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.6 Inspection of Property, Books and Records. The Borrower will
-----------------------------------------
keep, and will cause each Material Subsidiary to keep, proper books of record
and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Material Subsidiary to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their executive officers and independent public accountants, all at such
reasonable times during normal business hours and as often as may reasonably be
desired without disrupting the normal conduct of business of the Borrower and
its Subsidiaries.
SECTION 5.7 Mergers and Sales of Assets.
---------------------------
(a) The Borrower will not consolidate or merge with or into any other
Person; provided that the Borrower may merge with another Person if (i) the
-------- ----
Borrower is the corporation surviving such merger and (ii) after giving effect
to such merger, no Default shall have occurred and be continuing; and provided
--------
further that nothing in this Section 5.7 shall prohibit any transaction
------
expressly permitted by proviso (i) of Section 5.4.
------
(b) the Borrower will not, directly or indirectly, sell, assign,
lease, convey or otherwise dispose of whether in one or a series of transactions
any property (including accounts and notes receivable, with or without recourse
except for dispositions in which (i) at the time of any disposition, no Event of
Default shall exist or shall result from such disposition, and (ii) the
aggregate book value of all assets so sold by the Borrower and its Subsidiaries,
together, shall not exceed in the aggregate 5% of Total Shareholders' Equity,
provided that nothing in this Section 5.7 shall prohibit (x) the licensing by
------ ----
the Borrower of software in the ordinary course of its business or in connection
with any acquisition or divestiture or (y) any transaction expressly permitted
by clause (ii) or (iii) of the first proviso to Section 5.4.
SECTION ]5.8 Use of Proceeds. The proceeds of the Loans made under this
---------------
Agreement will be used by the Borrower for general corporate purposes. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U, other than the share repurchases described
in the last sentence of Section 5.12, in which case the relevant Loans will be
made in compliance with Regulation U.
SECTION 5.9 Negative Pledge. Neither the Borrower nor any Subsidiary will
---------------
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except for the following:
(a) Liens existing on the date of this Agreement securing Debt
(other than Defeased Debt) outstanding on the date of this Agreement in an
aggregate principal or face amount not exceeding $500,000;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such asset
(including without limitation pursuant to a sale/leaseback transaction),
provided that such Lien attaches to such asset concurrently with or within 90
- ----
days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Subsidiary and
not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
-------- ----
secured by any additional assets;
(g) (i) inchoate statutory Liens arising in the ordinary
course of its business securing lis pendens, (ii) Liens securing judgments or
orders for the payment of money in an amount up to $15,000,000 and (iii) Liens
securing judgments or orders for the payment of money in an amount in excess of
$15,000,000 but not more than $20,000,000 which are effectively stayed within 30
days of the judgment or order;
(h) Liens (other than Liens described in clause (g)) arising in
the ordinary course of its business which (i) do not secure Debt or Derivatives
Obligations, (ii) do not secure any obligation in an amount exceeding $3,000,000
and (iii) do not in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the operation of its business;
(i) Liens on cash and certificates of deposit in an aggregate
amount not to exceed 1,271,967 issued by Barclays Bank PLC to PMSC Limited to
support such bank's obligations to repay the holders of Defeased Debt; and
(j) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date not
to exceed 5% of Total Shareholders' Equity.
SECTION 5.10 Limitation on Debt of Subsidiaries. The Borrower will not
----------------------------------
permit any of its Subsidiaries to incur or at any time be liable with respect to
any Debt except for the following:
(a) Defeased Debt;
(b) Debt secured by Liens permitted by Section 5.9(c);
(c) Debt (other than Debt described in clause (a) above) of any
wholly-owned Subsidiary (other than a Guarantor) owed to the Borrower or any
wholly-owned Subsidiary;
(d) Debt (other than Debt described in clause (a) above) of any
Guarantor owed to any other Guarantor or to the Borrower;
(e) Debt of any Guarantor consisting of the Guarantee granted by
such Guarantor under Article 9 of this Agreement;
(f) Debt of any Person outstanding at the time such Person becomes
a Subsidiary and not incurred in contemplation of such event; provided that such
-------- ----
Indebtedness is extinguished or refinanced by the Borrower (solely as Debt of
the Borrower) within 90 days after such event;
(g) Guarantees of the Consolidated Subsidiaries granted to the
banks pursuant to the Senior Bank Facility; or
(h) Debt of the Consolidated Subsidiaries not otherwise permitted
by the foregoing clauses of this Section not to exceed in the aggregate 5% of
Total Shareholders' Equity as of the most recent calendar quarter.
SECTION 5.11 Leverage Ratio. The Borrower will not permit at any time the
--------------
Leverage Ratio to exceed 2.5:1.0.
SECTION 5.12 Minimum Consolidated Tangible Net Worth. At any date,
---------------------------------------
Consolidated Tangible Net Worth will not be less than (i) $126,718,000 plus on
----
an annual basis (ii) beginning with the fiscal year beginning January 1, 1999,
50% of Consolidated Net Income, if positive. There shall be excluded from the
calculation of Consolidated Tangible Net Worth all acquisition related charges
of intangibles and any amounts expended to repurchase shares of the Borrower's
common stock in purchases at fair market value up to an amount, in the
aggregate, not to exceed 2.5 million shares in a maximum dollar amount not to
exceed $70,600,000.
SECTION 5.13 Restricted Payments. Neither the Borrower nor any Subsidiary
-------------------
(i) will declare or make any Restricted Payment unless, after giving effect
thereto, no Default shall have occurred and be continuing or (ii) will
optionally prepay, defease or purchase any Debt of the Borrower or any
Subsidiary other than (w) outstandings in the amount of $30,000,000 under a
promissory note in favor of First Union National Bank payable on November 5,
1999, (x) the Loans, (y) Debt under the Senior Bank Facility, or (z) any other
Debt of the Borrower incurred for working capital purposes provided that the
-------- ----
aggregate amount of such Debt prepaid, defeased or purchased is less than
$15,000,000.
SECTION 5.14 Investments. Neither the Borrower nor any Subsidiary will
-----------
hold, make or acquire any Investment in any Person other than:
(a) (i) Investments in Persons which are Subsidiaries on the
date hereof and (ii) Investments in Persons which are Subsidiaries immediately
after any such Investment is made;
(b) Temporary Cash Investments;
(c) Investments in any customer of the Borrower or any of its
Subsidiaries (or in any other Person the accounts of which would be consolidated
with those of such customer in such customer's consolidated financial statements
if such statements were prepared as of the date such Investments are made) which
are characterized as "inducements" and are made in connection with long term
processing contracts entered into by the Borrower or such Subsidiary with such
customer; and
(d) any Investment not otherwise permitted by the foregoing
clauses of this Section if, immediately after such Investment is made or
acquired, the aggregate net book value of all Investments permitted by this
clause (d) in any consecutive four quarter period does not exceed (i) 20% of
Total Shareholders' Equity and (ii) 10% of Total Shareholders' Equity for any
individual Investment.
SECTION 5.15 Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary than could have been obtained from a third party
who was not an Affiliate; provided that the foregoing provisions of this Section
-------- ----
shall not prohibit any such Person from declaring or paying any lawful dividend
or other payment ratably in respect of all of its capital stock of the relevant
class so long as, after giving effect thereto, no Default shall have occurred
and be continuing.
SECTION 5.16 Additional Guarantors. The Borrower shall from time to time
---------------------
cause each Subsidiary of the Borrower or other entity that is not a Material
Subsidiary on the date hereof but becomes a Material Subsidiary after the date
hereof (whether by acquisition of capital stock by the Borrower or otherwise) to
become party hereto as guarantor by executing a supplement hereto in form and
substance satisfactory to the Agent, such supplement to be executed by such
Material Subsidiary within 10 days after the date on which the Borrower acquires
or forms such Material Subsidiary, or a Subsidiary not originally a Guarantor
becomes a Material Subsidiary.
SECTION 5.17 Limitation on Non-Cash Charges. The Borrower will not
------------------------------
incur non-cash charges that would exceed $25,000,000 in the aggregate with
respect to the Borrower and its Consolidated Subsidiaries from and after
November 1, 1999 other than (i) depreciation and amortization expensed in the
ordinary course of business excluding a one-time acceleration of amortization
and depreciation expense determined in accordance with generally accepted
accounting principles; and (ii) any acquisition related charges of intangibles
within one year of the end of the fiscal quarter in which the acquisition
occurred determined in accordance with generally accepted accounting principles.
ARTICLE 6
DEFAULTS
SECTION 6.1 Events of Default. If one or more of the following events
-----------------
("Events of Default") shall have occurred and be continuing:
----------------
(a) the Borrower shall fail to pay when due any principal of any
Loan, or any interest, any fees or any other amount payable hereunder within 3
Business Days of the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.1 through 5.6;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Borrower by
the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made
by any Obligor in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment
in respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or selecting the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it, or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $3,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $3,000,000;
(j) judgments or orders for the payment of money in excess of
$15,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgments or orders shall remain undischarged for a period of 30 days unless
execution shall have been effectively stayed;
(k) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of common stock of the Borrower having the power to vote for
the election of directors; or, during any period of 12 consecutive calendar
months, individuals who were either (i) directors of the Borrower on the first
day of such period or (ii) elected to fill vacancies caused by the ordinary
course resignation or retirement of any other director and whose nomination or
election was approved by a vote of at least two-thirds of the directors then
still in office who were directors of the Borrower on the first day of such
period, shall cease to constitute a majority of the board of directors of the
Borrower; or
(l) the Guarantee granted by any Guarantor under Article 9 of this
Agreement shall cease at any time to be in full force and effect (except as
expressly permitted by the first proviso of Section 5.4), or the Borrower or any
Guarantor shall so assert in writing;
then, and in every such event, the Agent shall (i) if requested by the
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Banks, by notice to the
Borrower declare the Loans (together with accrued interest thereon) to be, and
the Loans shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any of the Events of
-------- ----
Default specified in clause 6.1(g) or 6.1(h) above with respect to the Borrower,
without any notice to the Borrower or any other act by the Agent or the Banks,
the Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 6.2 Notice of Default. The Agent shall give notice to the
-----------------
Borrower under Section 6.1(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.1 Appointment and Authorization; "Agent". Each Bank hereby
--------------------------------------
irrevocably (subject to Section 7.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
SECTION 7.2 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
SECTION 7.3 Liability of Agent. None of the Agent-Related Persons shall
------------------
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
SECTION 7.4 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Banks as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Banks and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 3.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
SECTION 7.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Banks in accordance with
Article 7; provided, however, that unless and until the Agent has received any
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such request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
SECTION 7.6 Credit Decision. Each Bank acknowledges that none of the
---------------
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and credit worthiness of the
Borrower and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and credit worthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or credit
worthiness of the Borrower which may come into the possession of any of the
Agent-Related Persons.
SECTION 7.7 Indemnification of Agent. Whether or not the transactions
------------------------
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
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that no Bank shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) 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, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking
in this Section shall survive the payment of all obligations hereunder and the
resignation or replacement of the Agent.
SECTION 7.8 Agent in Individual Capacity. BofA and its affiliates may
----------------------------
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
SECTION 7.9 Successor Agent. The Agent may, and at the request of the
---------------
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be approved by the
Borrower. If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the Banks
and the Borrower, a successor agent from among the Banks. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Agent and the term
"Agent" shall mean such successor agent and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 7 and Section
10.3 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Agent hereunder until such time, if any, as the Banks appoint a
successor agent as provided for above.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair. If
--------------------------------------------------------
on or prior to the first day of any Interest Period for any Euro-Dollar Loan the
Banks advise the Agent that the LIBO Rate as determined by the Agent will not
adequately and fairly reflect the cost to the Banks of funding their Euro-Dollar
Loans, as the case may be, for such Interest Period, the Agent shall forthwith
give notice thereof to the Borrower and the Banks, whereupon until the Agent
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the Banks to make Euro-Dollar Loans, shall be
suspended. Unless the Borrower notifies the Agent prior to 10:30 A.M. on the
date of any Euro-Dollar Loan for which a Notice of Conversion/Continuation has
previously been given that it elects not to convert on such date, such
conversion shall instead be made as a Base Rate Borrowing.
SECTION 8.2 Illegality. If, on or after the date of this Agreement, the
----------
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
such Euro-Dollar Loan, together with accrued interest thereon. Concurrently
with prepaying each such Euro-Dollar Rate Loan, the Borrower shall borrow a Base
Rate Loan in an equal principal amount from such Bank (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.3 Increased Cost and Reduced Return.
---------------------------------
(a) If on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London interbank market
any other condition affecting its Euro-Dollar Rate Loans, its Notes or its
obligation to make Euro-Dollar Loans and the result of any of the foregoing is
to increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Notes with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such Bank (with a copy
to the Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, (including any determination by any such authority, central
bank or comparable agency that, for purposes of capital adequacy requirements,
the Commitments hereunder do not constitute commitments with an original
maturity of one year or less) has or would have the effect of reducing the rate
of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of error.
In determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.4 Taxes.
-----
(a) For the purposes of this Section 8.4, the following terms have
the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
-----
imposts, deductions, charges or withholdings with respect to any payment by the
Borrower or any Guarantor, as the case may be, pursuant to this Agreement or
under any Note, and all liabilities with respect thereto, excluding (i) in the
case of each Bank and the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which such Bank
or the Agent (as the case may be) is organized or in which its principal
executive office is located or, in the case of each Bank, in which its
Applicable Lending Office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only at the rate of
United States withholding tax that such Bank is subject to on such payments at
the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
-----------
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note.
(b) Any and all payments by the Borrower or any Guarantor to or
for the account of any Bank or the Agent hereunder or under any Note shall be
made without deduction for any Taxes or Other Taxes; provided that, if the
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Borrower or any Guarantor shall be required by law to deduct any Taxes or Other
Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Bank or the Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower or any Guarantor, as the
case may be, shall make such deductions, (iii) the Borrower or such Guarantor,
as the case may be, shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Agent, at its address referred to in Section 10.1,
the original or a certified copy of a receipt evidencing payment thereof or, in
the case of United States withholding tax, a copy of Form 1042-S as a receipt
evidencing such payments made by the Borrower during the calendar year.
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses, so long as the Agent or
relevant Bank exercised good faith in not having paid the applicable Taxes or
Other Taxes giving rise thereto) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Bank or the Agent
(as the case may be) makes demand therefor. Each Bank and the Agent agrees to
use reasonable good faith efforts to cooperate with any refund claims that the
Borrower may pursue in good faith in order to reduce or eliminate an assessment
for Taxes or Other Taxes subject to the indemnification provisions of this
subsection (c); provided however, that nothing in this subsection (c) shall be
construed to require any Bank or the Agent to institute any administrative or
judicial proceeding that is not made in good faith or that, in the reasonable
judgment of such Bank or the Agent (as the case may be), is disadvantageous to
such Bank or the Agent.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower and the Agent with Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which exempts the Bank from United States
withholding tax or reduces the rate of withholding tax on payments of interest
for the account of such Bank or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade or
business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate form pursuant to Section
8.4(d) (unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form originally was required to
be provided), such Bank shall not be entitled to indemnification under Section
8.4(b) or (c) with respect to Taxes imposed by the United States; provided that
-------- ----
if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes
(f) If the Borrower or any Guarantor is required to pay additional
amounts to or for the account of any Bank pursuant to this Section, then such
Bank will change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
SECTION 8.5 Base Loans Substituted for Affected Euro-Dollar Loans. If (i)
-----------------------------------------------------
the obligation of any Bank to make Euro-Dollar Rate Loans has been suspended
pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower shall, by at
least five Euro-Dollar Business Days' prior notice to such Bank through the
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Rate Loans, shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans, has been repaid, all
payments of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
SECTION 8.6 Substitution of Bank. If (i) the obligation of any Bank to
--------------------
make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3 or 8.4, the Borrower shall have
the right, with the assistance of the Agent, to seek a mutually satisfactory
substitute bank or banks (which may be one or more of the Banks) to purchase the
Note and assume the Commitment of such Bank.
ARTICLE 9
GUARANTY
SECTION 9.1 The Guaranty. Each Guarantor, as primary obligor and not
------------
merely as surety, hereby unconditionally guarantees jointly and severally the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on each Note issued by the Borrower
pursuant to this Agreement, and the full and punctual payment of all other
amounts payable by the Borrower under this Agreement. Upon failure by the
Borrower to pay on the date when due any principal on any Loan, or any interest,
any fees or any other amount payable hereunder within 3 Business Days of the due
date thereof, each Guarantor shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this Agreement.
SECTION 9.2 Guaranty Unconditional. The obligations of each Guarantor
----------------------
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other Guarantor
under this Agreement, or any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower or any other
Guarantor under this Agreement or any Note;
(d) any change in the corporate existence, structure or ownership
of the Borrower or any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any other
Guarantor or their respective assets or any resulting release or discharge of
any obligation of the Borrower or any other Guarantor contained in this
Agreement or any Note;
(e) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, any other Guarantor, the
Agent, any Bank or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the assertion
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of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Borrower or any other Guarantor for any reason of this Agreement or any Note, or
any provision of applicable law or regulation purporting to prohibit the payment
by the Borrower or any other Guarantor of the principal of or interest on any
Note or any other amount payable by the Borrower or any other Guarantor under
this Agreement; or
(g) any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, the Agent, any Bank or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
SECTION 9.3 Discharge Only Upon Payment In Full; Reinstatement In Certain
-------------------------------------------------------------
Circumstances. Each Guarantor's obligations hereunder shall remain in full
-------------
force and effect until the Commitments shall have terminated and the principal
----
of and interest on the Notes and all other amounts payable by the Borrower under
this Agreement shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Borrower
under this Agreement is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or any other
Guarantor or otherwise, each Guarantor's obligations hereunder with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
SECTION 9.4 Waiver by each Guarantor. Each Guarantor irrevocably waives
------------------------
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Guarantor or any other Person.
SECTION 9.5 Subrogation and Contribution. Upon making any payment
----------------------------
hereunder, each Guarantor shall be subrogated to the rights of the payee against
the Borrower with respect to such payment and shall have a right of contribution
with respect to the other Guarantors; provided that such Guarantor shall not
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enforce any payment by way of subrogation and shall not enforce any right to
receive any payment, including any right of contribution or for any other
reason, from any other Guarantor with respect to such payment until all amounts
payable by the Borrower hereunder and under the Notes have been paid in full.
SECTION 9.6 Stay of Acceleration. If acceleration of the time for payment
--------------------
of any amount payable by the Borrower under this Agreement or any Note is stayed
upon insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by each Guarantor hereunder forthwith on demand by the
Agent made at the request of the requisite proportion of the Banks specified in
Article 6 of the Agreement.
SECTION 9.7 Limit of Liability. The obligations of each Guarantor
------------------
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party:
(a) in the case of the Borrower or the Agent, at its address,
facsimile number or telex number set forth on Schedule 10.1 hereto,
-------------
(b) in the case of any Guarantor, in care of the Borrower,
(c) in the case of any Bank, at its address, facsimile number or telex
number set forth in its Administrative Questionnaire or
(d) in the case of any party, such other address, facsimile number
or telex number as such party may hereafter specify for the purpose by notice to
the Agent and the Borrower.
Each such notice, request or other communication shall be effective:
(i) if given by telex, when such telex is transmitted to the
telex number specified in this Section and the appropriate answerback is
received;
(ii) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received;
(iii) if given by overnight courier, 24 hours after such
communication is delivered to such courier with postage prepaid, addressed as
aforesaid, so long as such courier can confirm delivery at such address; or
(iv) if given by any other means, when delivered at the address
specified in this Section; provided that notices to the Agent under Article 2 or
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Article 8 and notices to the Borrower under Section 6.2 shall not be effective
until received.
SECTION 10.2 No Waivers. No failure or delay by the Agent or any Bank in
----------
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.3 Costs and Expenses.
------------------
(a) The Borrower shall reimburse BofA (including in its capacity as
Agent) within five Business Days after demand for all reasonable costs and
expenses incurred by BofA (including in its capacity as Agent) in connection
with the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by BofA (including in its capacity as Agent) with respect
thereto.
(b) The Borrower shall pay or reimburse the Agent, and each Bank
within five Business Days after demand for all reasonable costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or any other Loan Document during the existence of an Event of Default
or after acceleration of the Loans (including in connection with any "workout"
or restructuring regarding the Loans, and including in any insolvency proceeding
or appellate proceeding).
(c) Except for actions by the Borrower against the Agent or the
Banks, the Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
----------
harmless from and against any and all liabilities, losses, damages (excluding
consequential damages), costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans hereunder; provided
--------
that no Indemnitee shall have the right to be indemnified hereunder (including,
----
without limitation, pursuant to Section 8.4(c)) for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 10.4 Sharing of Set-Offs. Each Bank agrees that if it shall, by
-------------------
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
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nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of any Obligor other than its
indebtedness hereunder. Each Obligor agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of such Obligor in the amount of such participation.
SECTION 10.5 Amendments and Waivers. Any provision of this Agreement or
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the Notes may be amended or waived if, but only if such amendment or waiver is
in writing and is signed by the Borrower and all of the Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent).
SECTION 10.6 Successors and Assigns.
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(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
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any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
--------
that such participation agreement may provide that such Bank will not agree to
---
any modification, amendment or waiver of this Agreement described in clause (i),
(ii), or (iii) of Section 10.5 without the consent of the Participant. Subject
to Section 10.6(e), the Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits of
Article 8 with respect to its participating interest. An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
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initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit G hereto executed by such Assignee and such
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transferor Bank, with (and subject to) the subscribed consent of the Borrower,
which shall not be unreasonably withheld or delayed, and the Agent; provided
--------
that if an Assignee is an affiliate of such transferor Bank or was a Bank
-
immediately prior to such assignment, no such consent shall be required and
-
provided further that any such assignment may be for an amount equivalent to an
----- -------
initial Commitment of less than $5,000,000 if consented to by the Borrower.
Upon execution and delivery of such instrument (including a Notice of Assignment
and Assumption substantially in the form of Annex I thereto) and payment by such
-------
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the Assignee. In
connection with any such assignment (other than any such assignment in which the
Assignee is an affiliate of the transferor Bank or was a Bank immediately prior
to such assignment), the transferor Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of any United States federal
income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 10.7 Collateral. Each of the Banks represents to the Agent and
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each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 10.8 Governing Law; Submission to Jurisdiction. This Agreement
-----------------------------------------
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Obligor 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 10.9 Counterparts; Integration; Effectiveness. This Agreement may
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be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent of counterparts
hereof signed by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by the Agent
in form satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).
SECTION 10.10 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND
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THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11 Confidentiality. The Agent and each Bank agrees to keep any
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information delivered or made available by the Obligors to it confidential from
anyone other than persons employed or retained by such Bank who are expected to
become engaged in evaluating, approving, structuring or administering the Loans
and who will use any such information solely for such purposes; provided that
-------- ----
nothing herein shall prevent any Bank from disclosing such information (a) to
any other Bank or to the Agent, (b) to any other 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, (e) which had been publicly disclosed other than as a result of a
disclosure by the Agent or any Bank prohibited by this Agreement, (f) in
connection with any litigation to which the Agent, any Bank or its subsidiaries
or Parent may be a party, (g) to the extent necessary in connection with the
exercise of any remedy hereunder, (h) to such Bank's or Agent's legal counsel
and independent auditors and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed Participant or
Assignee; provided further that each person who receives any such information
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from any Bank or the Agent as permitted by this Section shall be informed by
such Bank or the Agent of the existence and the contents of this Section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
POLICY MANAGEMENT SYSTEMS
CORPORATION
CYBERTEK CORPORATION
PMSC LIMITED
CYBERTEK SOLUTIONS, L.P.
By POLICY MANAGEMENT
SYSTEMS CORPORATION;
its General Partner
THE LEVERAGE GROUP INC.
By: ____________________
____________________
BANK OF AMERICA, N.A.,
as Agent
By: ____________________
____________________
COMMITMENT: BANKS:
$15,000,000 BANK OF AMERICA, N.A.,
as a Bank
By: ____________________
____________________
$15,000,000 WACHOVIA BANK, N.A.
By: ____________________
____________________
$40,000,000 FIRST UNION NATIONAL BANK
By: ____________________
____________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
POLICY MANAGEMENT SYSTEMS
INVESTMENTS, INC.
By: _____________________
_____________________
