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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 25, 1999
Commission file number 0-28192
Renaissance Worldwide, Inc.
(Exact Name of Registrant as Specified in its Charter)
Massachusetts
(State or other jurisdiction
of incorporation or organization)
04-2920563
(I.R.S. Employer
Identification No.)
52 Second Avenue
Waltham, Massachusetts 02451
(781) 290-3000
(Address, including ZIP Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of each class)
NASDAQ NATIONAL MARKET
(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. [X] YES [_] NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. [X]
Based on the closing sales price of the registrant's Common Stock on the
NASDAQ National Market on March 17, 2000, the aggregate market value of the
Common Stock held by non-affiliates of the registrant was approximately
$232,542,000.
The number of shares of the registrant's Common Stock outstanding on March
17, 2000 was 56,789,488.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR USE IN
CONNECTION WITH ITS ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 25,
2000 ARE INCORPORATED BY REFERENCE INTO PART III.
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PART I
ITEM 1: BUSINESS
Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements. The
important factors discussed in Item 7--"Management's Discussion and Analysis
of Financial Condition and Results of Operations" under the caption "Factors
That May Affect Future Results" among others, could cause actual results to
differ materially from those indicated by forward-looking statements made
herein and presented elsewhere by management from time to time.
Overview
Renaissance Worldwide, Inc. ("Renaissance" or the "Company") is a global
provider of business and technology consulting services. The four business
units in operation during 1999 were the Information Technology Consulting
Services Group, the Enterprise Solutions Group, the Government Solutions Group
and the Business Strategy Group. In February, 2000, the Company announced its
intention to realign its existing business units and transform the
organization to focus more directly on emerging eBusiness opportunities and
increasing client interest and investment in web-based technologies. This
transformation includes the incubation and development of two new business
units--GovConnect.com(TM) and the eSystems Development Group, as well as the
development and implementation of an Internet based recruiting platform.
As part of this refinement of the Company's strategic focus, the Business
Strategy Group was sold on March 10, 2000 for $65.0 million. Proceeds from the
sale were used to pay-down the Company's debt which will provide additional
liquidity to develop further emerging opportunities (see Note 17 of Notes to
Consolidated Financial Statements).
The Company's Business
The Company provides business and technology consulting services primarily
to Global 2000 companies, and to a lesser extent, to other businesses around
the world. The Company maintains offices in North America, Europe, and the
Asia-Pacific region.
Information Technology Consulting Services Group
The Information Technology Consulting Services Group ("ITCS Group") provides
services designed to assist clients in design, implementation and/or support
of IT applications. The ITCS Group focuses principally on 4 service areas: IT
Strategy and eBalanced Scorecard; eTransformation; Custom Application
Development including project management; and IT Staffing services built
around five technology sectors: workgroup/desktop; legacy systems; network and
communications; database design and development; and Internet/www.
Enterprise Solutions Group
The Enterprise Solutions Group provides business and technology solutions
designed to integrate leading edge processes and technologies. In 1999 the
Enterprise Solutions Group divested two non-core entities--the operations of
Neoglyphics Media Corporation as well as the Customer Management Solutions
Vantive Practice ("CMS"). (See Note 4 of Notes to Consolidated Financial
Statements). The Enterprise Solutions Group's principal offerings fall into
three categories: enterprise applications; eWorkplace(TM); and
eValueChain(TM).
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Government Solutions Group
The Government Solutions Group provides technology solutions to the public
sector, primarily in the areas of strategy, systems integration and electronic
solutions. Technology solution competencies are focused around Public
Assistance, Child Support Enforcement, Child Welfare, Managed Care, Employment
and Training, Administration, Tax and Revenue Processing, and Courts and
Judicial Systems Automation.
Business Strategy Group
The Business Strategy Group provided strategy development and implementation
consulting services to large organizations primarily in the global
telecommunications, computing, and energy industries. The group offered
services in three principal categories: strategic destination, strategic
navigation and strategic mobilization consulting. As noted above, this group
was sold in a cash transaction on March 10, 2000. For the year ended December
25, 1999, the Business Strategy Group accounted for approximately 4% of the
Company's total revenue.
ITCS Group
The ITCS Group provides consulting services to assist clients in the design,
implementation, and support of information technology ("IT") applications.
During the fiscal year ended December 25, 1999, the ITCS Group accounted for
approximately 69% of the Company's total revenue.
Service Offerings
. IT Strategy and eBalanced Scorecards. The ITCS Group provides business
management consulting for organizations which need to develop a
competitive business roadmap in the emerging Internet economy. The
Company uses a variety of business management consulting methodologies to
focus, shape, map and transform the organization. The goal is to develop
and validate an eStrategy, which supports both business and IT
initiatives to create profitable and competitive Internet-based products,
services and relationships.
. eTransformation. The ITCS Group provides life-cycle transformation of
legacy platforms, systems integration, and application development
services. These engagements typically require redevelopment of the
(front-end) user interface, adding new middleware, and usually retaining
the existing (back-end) data interface for transaction processing needs,
data warehousing repositories, data mining processes, etc. These services
allow clients to integrate existing business functions and processes
across disparate systems, applications and platforms. This integration is
designed to allow clients enterprise-wide collaboration with customers,
suppliers and service providers, particularly where Internet, intranet
and extranet now provide database transactions, interactive
collaboration, and transactional interfaces to end users. These advanced
applications require expertise in database management systems,
client/server architectures, object-oriented programming languages and
custom software development.
. Custom Application Development. The ITCS Group provides full life-cycle
(Concept-To-Completion(R)) application development services, including
project management. These engagements consist of requirements definition,
analysis, applications and systems architecture, design, prototyping and
programming, implementation and project management of web-based and
client-server application software.
. IT Staffing and Project Management. The ITCS Group provides IT
supplemental staffing and project management services on a contract basis
for application development and software engineering. The ITCS Group's
technology professionals are billed primarily on an hourly basis and
typically work on implementation, integration and development engagements
lasting from six to twelve months under the direction of the client.
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Enterprise Solutions Group
The Enterprise Solutions Group provides management consulting and technology
integration solutions to improve client business performance through strategic
alignment, process innovation technology deployment and organizational
mobilization. The Enterprise Solutions Group's principal offerings fall into
three categories: 1) enterprise application strategic consulting and
deployment, 2) eWorkplace(TM) strategic consulting and application deployment,
3) eValueChain strategic consulting and application deployment. For the year
ended December 25, 1999, the Enterprise Solutions Group accounted for
approximately 22% of the Company"s total revenue.
Service Offerings
. Enterprise Applications. These services include planning, selecting,
implementing, supporting and managing clients' application and process
improvement environments. The Enterprise Solutions Group provides
comprehensive implementation services for complex software packages,
including back office systems for human resources, benefits,
compensation, career development, recruiting, payroll and financial
applications; and student administration systems for higher education
institutions.
. eWorkplace. The Enterprise Solutions Group provides strategic consulting,
planning and application deployment services for employee and manager
self-service applications, service center/call center support
applications, knowledge-base deployments, and enterprise information
portal applications.
. eValueChain. The Enterprise Solutions Group provides strategic
consulting, planning and application deployment services for supply
chain, distribution, logistics, procurement, and order processing to
support the supplier side, and front-office strategic consulting,
planning and application deployment services for customer relationship
management and sales force automation applications.
Government Solutions Group
The Government Solutions Group provides specialized management and IT
consulting services to federal, state and municipal government clients. For
the year ended December 25, 1999, the Government Solutions Group accounted for
approximately 5% of the Company's total revenue.
Service Offerings
The Government Solutions Group's professionals address the requirements
particular to the public sector with management and technology consulting and
systems integration and electronic solutions in the following areas:
. Public Assistance (TANF, Welfare Reform, Medicaid, Child Care)
. Child Support Enforcement
. Child Welfare
. Managed Care (Health Care)
. Employment and Training (Labor)
. Administration (Payroll, Human Resources, Retirement)
. Tax and Revenue Processing
. Courts and Judicial Systems Automation
See Note 12 to the Company's Consolidated Financial Statements for
additional financial information about these business units and geographic
regions.
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Competition
The market for the Company's consulting services is intensely competitive on
local, national, and international levels. The market is fragmented and
subject to rapid change. The market is served by numerous management
consulting companies, technology consultants, temporary personnel agencies and
outsourcing companies, solutions providers, implementers, systems integrators,
diversified technology companies (including hardware and software companies),
and other service companies, some of which have greater financial, technical,
marketing, and other resources and have greater name recognition than the
Company. Some of these competitors have a nationwide and/or worldwide presence
equivalent to, or greater than, that of the Company. Within any given market,
the Company and its competitors frequently compete for the same highly skilled
consultants.
The Enterprise Solutions, Government Solutions and ITCS Groups compete with
many other companies for IT professionals. Primary competitive factors for
recruiting and retaining such professionals include: compensation; quality of
benefits; consistent flow of high quality, varied assignments; schedule
flexibility; and an understanding of consultant skills and work preferences.
These groups also compete for management consultants. Management consultants
often hold advanced degrees and are in high demand across many business
sectors. Primary competitive factors for recruiting and retaining such
professionals include: compensation; quality of benefits; quality, variety and
complexity of assignments; opportunity for advancement; and opportunity for
professional development.
The Company competes for clients with a wide array of service providers. The
Company considers large organizations with complex business and technology
needs to be among its prime clients. Within a given market, there are a
limited number of such potential clients, some of which have designated only
certain companies as approved providers of the type of services provided by
the Company. Primary competitive factors for obtaining and retaining clients
include: comprehensive service offerings; careful matching of consultant
skills with the client's requirements; nationwide and worldwide presence;
organizational expertise and expertise of individual consultants; price of
services; monitoring of client satisfaction during and after an engagement;
and general responsiveness to client needs.
Although the Company believes that it competes favorably in recruiting IT
professionals and management consultants as well as in obtaining clients,
there is no assurance that it will continue to be successful in doing so.
Growth Strategy
The Company believes that it needs to focus on the emerging opportunities of
the Internet economy to achieve internal growth. The Company believes that
many of its current service offerings (including eTransformation, custom
application development, eStrategy, eGovernment, eWorkplace, eValueChain and
IT staffing) are well positioned to benefit from the large client interest and
investment in Internet, intranet and extranet technologies. In addition, the
Company believes that there are significant additional opportunities available
to it through the incubation of strategic new offerings. The Company's growth
strategy consists of the following primary components:
. Focus on Key Service Offerings. In 1999 the Company narrowed its formerly
wide spectrum of services offerings to effectively focus on a few, key
service areas. These include IT strategy and eBalanced Scorecard, IT
transformation, primarily from legacy to Internet or web-based systems,
electronic government and public access, and IT staffing. The Company has
a significant track record in each of these areas, and feels that it has
the capability to successfully grow revenue and margin without the
distraction of service areas that are considered non-core, less
significant or those that have historically performed poorly over time.
. Sales and Management Training. Management believes that it has assembled
a world-class professional staff. A strategic part of growing the
organization is the retention of best-in-class individuals and the
advancement of leadership at all levels through a clearly defined and
executed training program. Ongoing training offers a means of sharing
knowledge, fostering company culture, participating in best practices and
enhancing critical job skills. The expanded organization and history of
continued rapid growth have
4
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provided professional staff with an array of opportunities and challenges,
and management believes that the continuing development of the
professional staff is central to the Company's successful growth and
expansion.
. Leverage Opportunities of the Emerging Digital Economy. Management
believes that the Company is well positioned to benefit from the growing
client interest and investment in Internet and other web-based
technologies. Under its emerging business model, The Company will both
nurture certain existing e-solutions capabilities and incubate new
offerings within its organization to create new independent units focused
on delivering web-based business-to-business e-solutions. In early 2000
the Company announced the launch of two new service units:
GovConnect.com(TM), electronic government and public access; and the
eSystems Development Group, focusing on end-to-end (strategy,
transformation, implementation) eBusiness solutions. The Company plans to
hold a variable ownership position in its new e-businesses, some of which
may be publicly held.
. Leverage Key Strategic Partnerships. The Company understands that
strategic partnerships are key to successful service development and
delivery in the current highly complex and rapidly changing technological
environment. Therefore, it has formed several key partnerships with
industry leading software, systems, communications, computing and
platform companies. The partners often benefit from this relationship
with the Company as well, not only from the perspective of added
opportunities, but for purposes of beta testing and ongoing design of
tools and methodologies. The Company believes it must develop and
maintain successful key partnerships to better serve its clients. The
Company is not a reseller of any major product or service of any of its
partners, and takes pride in its position as an unbiased consultancy.
. Large Account Penetration. The Company seeks to develop long-term
strategic partnerships with industry leading Global 2000 clients. The
Company offers services across the IT spectrum, particularly involving
enterprise applications and Internet or other web-based strategy,
transformation or implementation services. The Company believes that
leveraging additional Company services to its top 100 clients as well as
ongoing client satisfaction will result in a strong recurring revenue
base. In addition, the Company's Government Solutions Group currently
provides services to a majority of state governments. The Company plans
to leverage its track record with that base of government agencies by
offering additional service offerings within each given state to other
agencies or municipalities, particularly in the area of electronic
government and public access.
. Focus on Accountability. Management understands that growth is not enough
to enhance shareholder value. To increase shareholder value, growth must
be managed and controlled to ensure that the growth is responsible
growth. The Company made a significant investment in 1999 to create the
systems and metrics to measure revenue growth and monitor spending. The
Company has also successfully recruited a new Chief Operating Officer,
Chief Financial Officer and Chief Information Officer to help drive
growth while maintaining fiscal responsibility.
Client Base
The Company focuses its sales efforts primarily on large organizations with
complex business and technology needs. In the year ended December 25, 1999,
approximately 20% of the Company's revenue was derived from its top 10
customers, none of which accounted for more than 10% of revenue. The primary
industries served by the Company are communications and computing, financial
services, manufacturing and the public sector.
Employees
As of December 25, 1999, the Company had approximately 4,900 employees,
consisting of 2,200 salaried consultants, 1,800 hourly consultants and 900
branch, corporate and administrative staff. In addition, the Company had
approximately 700 consultants working on an independent contractor basis as of
such date. The
5
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Company is not a party to any collective bargaining agreements and considers
its relationships with its employees to be satisfactory.
Executive Officers of the Registrant
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
G. Drew Conway.......... 42 Chairman, Chief Executive Officer and Director
Edward H. Longo, Jr..... 56 President and Chief Operating Officer
Joseph F. Pesce......... 51 Executive Vice President, Chief Financial Officer and Treasurer
Christopher D. T.
Guiffre................ 31 Vice President, General Counsel and Clerk
</TABLE>
Mr. Conway founded the Company (formerly The Registry, Inc.) in 1986, and
currently serves as Chairman and Chief Executive Officer.
Mr. Longo has served as President and Chief Operating Officer since July,
1999. From 1980 until 1999, Mr. Longo served in various executive roles
including Senior Vice President of Information Services Division at Keane,
Inc., an IT services company. From 1970 until 1980, he served in various
management and technical positions at Honeywell, Inc., a diversified
technology and manufacturing company.
Mr. Pesce has served as Executive Vice President, Chief Financial Officer
and Treasurer since July, 1999. From 1994 until 1999, Mr. Pesce was Vice
President, Chief Financial Officer and Treasurer of Concentra Managed Care
Inc., a provider of field care management and specialized cost containment
services. From 1981 until 1994, he held various financial positions of
increasing responsibility with Computervision Corporation and its predecessor,
Prime Computer, Inc., including Controller, Vice President of Finance,
Treasurer and Chief Financial Officer. Mr. Pesce is a certified public
accountant.
Mr. Guiffre has served as Vice President, General Counsel and Clerk since
March, 2000. From 1998 to 2000, Mr. Guiffre served as Corporate Counsel and
Director of Legal Affairs, and from 1997 to 1998, he served as Counsel to the
Company. Prior to joining Renaissance, he was an Associate at Bingham Dana
LLP, a major Boston law firm. Mr. Guiffre is also a Director of Progressive
Solutions Corporation, a privately-held technology training company. Mr.
Guiffre has been a member of the Massachusetts Bar since 1995.
Each officer serves at the discretion of the Board of Directors. There are
no family relationships among any of the directors and executive officers of
the Company.
ITEM 2. PROPERTIES
The Company's principal executive offices are located in Waltham,
Massachusetts, in approximately 200,000 square feet under a ten-year lease
which will expire in January 2010, unless renewed for one five-year term. The
Company is currently negotiating to sublease approximately 50,000 square feet
and 25,000 square feet of this facility, each for a three-year term. In
November of 1999 the Company moved from its prior Newton, Massachusetts
location in a leased space owned by the 189 Wells Avenue Realty Trust (the
"Trust"), of which G. Drew Conway, Chief Executive Officer, Chairman of the
Board and significant stockholder is sole beneficiary. That building was sold
in March, 2000 and the Company was released from its lease obligation
effective with the sale. The Company's new Waltham headquarters consolidates
the staff of 6 former area locations, all of which have been closed.
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The Company also maintains offices and leases office space in the various
locations throughout the world in which it maintains branch offices. The
Company believes that its facilities are adequate for its current operations,
but there can be no assurance that the Company will be able to lease space on
acceptable terms to accommodate future growth.
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company is involved in litigation relating to claims
arising out of its operations in the normal course of business. The Company is
not currently involved in any legal proceedings the resolution of which, in
management's opinion, would have a material adverse effect on the Company's
business, financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded on the NASDAQ National Market under the
symbol "REGI". The following table sets forth the high and low sales prices of
the Company's common stock for the periods indicated:
<TABLE>
<CAPTION>
Quarter High Low
------- ------ ------
<S> <C> <C>
Fiscal 1999
First Quarter.................................................. $ 8.38 $ 4.00
Second Quarter................................................. 8.19 4.75
Third Quarter.................................................. 8.06 3.69
Fourth Quarter................................................. 7.75 2.69
Fiscal 1998
First Quarter.................................................. 31.75 20.75
Second Quarter................................................. 28.94 16.75
Third Quarter.................................................. 23.06 8.56
Fourth Quarter................................................. 15.06 5.38
</TABLE>
The stock prices shown above have been adjusted to reflect the two-for-one
stock split effected as a stock dividend that was paid on March 24, 1998.
Holders of Record
On March 17, 2000, there were approximately 154 holders of record of the
Company's common stock.
Dividends
The Company currently intends to retain future earnings, if any, to fund the
development and growth of its business and does not anticipate paying any cash
dividends on its common stock in the foreseeable future. In addition, the
Company's revolving line of credit agreements prohibit the payment of cash
dividends without consent of the lender. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
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Common Stock Buy Back
On March 14, 2000, the Company announced that its Board of Directors
authorized the Company to repurchase up to 2 million shares of its common
stock. The stock may be bought from time to time in the open market or through
private transactions. The repurchased shares would be used for employee stock
benefit and stock option plans.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
During the Company's fiscal year ended June 28, 1997 and the six-month
transition period (which resulted from a change to the Company's year-end)
ended December 27, 1997, the Company acquired Application Resources, Inc.
("ARI"), Shamrock Computer Resources, Ltd. ("SCR"), Renaissance Solutions,
Inc. ("RSI") and The Hunter Group, Inc. ("The Hunter Group") in transactions
accounted for as pooling of interests. In the second quarter of fiscal 1998,
the Company acquired Triad Data, Inc. ("Triad") and Neoglyphics Media
Corporation ("Neoglyphics") in transactions also accounted for as pooling of
interests. Each of the acquired companies had a fiscal year that ended in
December. The Statement of Operations Data and Balance Sheet Data for the
Company's fiscal years presented below give effect to these acquisitions by
combining their financial position as of the date shown and their results of
operations for the twelve months ended on that date with those of the Company,
as shown in the following table. For the transition period, the Statement of
Operations Data and Balance Sheet Data reflect the results of operations for
the six months ended December 27, 1997 and the financial position on that date
for all the companies.
<TABLE>
<CAPTION>
Renaissance
(The
Registry) ARI SCR RSI Hunter Triad Neoglyphics
------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fiscal 1995.......... June 24, 1995 Dec. 31, 1995 Dec. 31, 1995 Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1995(1)
Fiscal 1996.......... June 29, 1996 June 30, 1996 June 30, 1996 Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1996
Fiscal 1997.......... June 28, 1997 June 30, 1997 June 30, 1997 June 30, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1997
</TABLE>
(1) Neoglyphics commenced operations as a separate entity in February 1995.
The results of operations for 1995 include the 11 months ended December
31, 1995.
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The following table sets forth, on the basis described above, certain
selected consolidated financial data of the Company. The selected consolidated
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements and Notes thereto.
<TABLE>
<CAPTION>
Year Ended Transition Year Ended
-------------------------- Period Ended -------------------------
June 24, June 29, June 28, December 27, December 26, December 25,
1995 1996(4) 1997(3) 1997 1998 1999
-------- -------- -------- ------------ ------------ ------------
(In thousands except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data(1):
Revenue................. $199,356 $298,278 $444,504 $283,076 $710,156 $742,584
Cost of revenue......... 144,171 212,756 314,074 196,100 482,733 522,462
-------- -------- -------- -------- -------- --------
Gross profit............ 55,185 85,522 130,430 86,976 227,423 220,122
Selling, general and
administrative
expenses............... 45,642 69,186 97,809 71,134 193,355 208,856
Acquisition-related
expenses(2)............ -- 3,524 8,268 6,761 6,904 --
Restructuring charges
and other asset
writedowns(5).......... -- -- -- -- 5,691 6,910
-------- -------- -------- -------- -------- --------
Income from operations.. 9,543 12,812 24,353 9,081 21,473 4,356
-------- -------- -------- -------- -------- --------
Interest and other
(income) expense, net.. 804 773 (3,267) 1,162 5,503 9,336
-------- -------- -------- -------- -------- --------
Income (loss) from
continuing operations
before taxes........... 8,739 12,039 27,620 7,919 15,970 (4,980)
Income tax provision.... 1,544 3,886 14,074 5,009 12,992 362
-------- -------- -------- -------- -------- --------
Income (loss) from
continuing operations.. 7,195 8,153 13,546 2,910 2,978 (5,342)
Income (loss) from
discontinued
operations(6).......... 3,094 3,867 3,628 (7,141) (34,324) 3,419
-------- -------- -------- -------- -------- --------
Income (loss) before
extraordinary items.... 10,289 12,020 17,174 (4,231) (31,346) (1,923)
Extraordinary gain, net
of taxes of $579....... -- -- -- -- -- 833
-------- -------- -------- -------- -------- --------
Net income (loss)....... $ 10,289 $ 12,020 $ 17,174 $ (4,231) $(31,346) $ (1,090)
======== ======== ======== ======== ======== ========
Basic earnings per
share:
Income (loss) from
continuing
operations............ $ 0.18 $ 0.19 $ 0.27 $ 0.05 $ 0.05 $ (0.09)
Discontinued
operations............ 0.07 0.09 0.07 (0.13) (0.62) 0.06
Extraordinary gain..... -- -- -- -- -- 0.01
-------- -------- -------- -------- -------- --------
Net income (loss)...... $ 0.25 $ 0.28 $ 0.34 $ (0.08) $ (0.57) $ (0.02)
======== ======== ======== ======== ======== ========
Diluted earnings per
share:
Income (loss) from
continuing
operations............ $ 0.17 $ 0.18 $ 0.25 $ 0.05 $ 0.05 $ (0.09)
Discontinued
operations............ 0.07 $ 0.08 $ 0.06 (0.12) (0.59) 0.06
Extraordinary gain..... -- -- -- -- -- 0.01
-------- -------- -------- -------- -------- --------
Net income (loss)...... $ 0.24 $ 0.26 $ 0.31 $ (0.07) $ (0.54) $ (0.02)
======== ======== ======== ======== ======== ========
Weighted average common
shares:
Basic.................. 40,776 42,885 50,495 54,537 55,418 56,338
Diluted................ 43,013 46,862 54,607 58,159 57,830 56,338
Distributions........... $ 4,372 $ 2,958 $ 3,465 $ 925 $ -- $ --
Balance Sheet Data:
Cash and cash
equivalents............ $ 8,067 $ 64,507 $ 30,013 $ 19,956 $ 10,957 $ 10,605
Working capital......... 26,958 113,147 134,023 75,411 58,530 95,919
Total assets............ 75,835 168,024 256,921 316,177 372,065 338,644
Total debt, including
current portion........ 25,016 11,198 12,021 49,928 96,899 73,509
Stockholders' equity.... 33,346 123,743 197,092 193,895 179,785 181,357
</TABLE>
- --------
(1) Statement of Operations Data for the years ended June 24, 1995, June 29,
1996, June 28, 1997, December 26, 1998 and December 25, 1999 are for 52,
53, 52, 52 and 52 weeks, respectively.
(2) Represents transaction and other related costs associated with
acquisitions accounted for as pooling of interests.
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(3) In August 1996, ARI received a settlement of $1.6 million from its
insurance company for payment of defense costs and related expenses
associated with certain litigation. This amount, less related expenses,
has been included in interest and other income (expense), net, in the
Statement of Operations Data above.
(4) In conjunction with the renegotiation of the Company's lease with a real
estate trust of which Mr. Conway is the sole beneficiary, the accounts of
the Trust have been consolidated with those of the Company, commencing
September 19, 1995 (see Note 14 of Notes to Consolidated Financial
Statements).
(5) The charge of $5.7 million in 1998 consists primarily of reserves for
redundant facilities and personnel pursuant to a restructuring plan which
the company adopted in the third quarter. The asset writedowns of $6.9
million in 1999 consist of $2.9 million related to the sale of Neoglyphics
and CMS in the second quarter and a $4.0 million goodwill writedown
related to the proposed disposition of Renaissance Worldwide
Professionals, Ltd. (formerly known as James Duncan Associates, Ltd.)
which is expected to close in March of 2000.
(6) In the fourth quarter of fiscal 1999, the Company decided to sell its
management consulting practice, the Business Strategy Group in an
initiative to support the Company's new strategic direction. The cash
transaction of $65.0 million closed on March 10, 2000 and will result in a
gain for the Company estimated at $10 million which will be recorded in
the first quarter of 2000. Accordingly, the Company reported the results
of the Business Strategy Group as discontinued operations in the
accompanying financial statements and related notes for all periods shown.
Income (loss) from discontinued operations for the six months ended
December 27, 1997 include acquisition-related expenses of $11.2 million
associated with the acquisition of RSI, which was accounted for as a
pooling of interests. Income (loss) from discontinued operations for the
year ended December 26, 1998 includes charges of $27.1 million associated
with the writeoff of goodwill associated with the Technomics and COBA-UK
businesses and other restructuring costs of $3.3 million.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Since its initial public offering in June 1996 and through the end of 1998,
the Company executed an aggressive acquisition strategy acquiring twenty-three
companies, significantly expanding the Company's national and international
presence and increasing the number of management consulting and IT service
offerings provided by the Company. With the growth came a reorganization of
the Company's structure into four business segments: Enterprise Solutions
Group, Government Solutions Group (together as the "Solutions Groups") and
Information Technology Consulting Services ("ITCS") Group and the Business
Strategy Group. The Business Strategy Group was sold on March 10, 2000 for
$65.0 million and is now shown as discontinued operations on the Company's
Statement of Operations for all periods presented (see Note 17 of Notes to
Consolidated Financial Statements).
Consulting services performed are billed either on a time and materials
basis, as is the case with the ITCS Group and certain sectors of the Solutions
Groups, or on a fixed price basis for the remainder of the Solutions Groups
and the Business Strategy Group. Revenue for fixed price contracts is
recognized using the percentage of completion method based upon the number of
labor hours incurred compared to the total estimated labor hours at estimated
realizable rates. Under the percentage of completion method, the Company must
estimate the percentage of completion of each project at the end of each
financial reporting period. Estimates are subject to adjustment as a project
progresses to reflect changes in projected completion costs or dates. The
cumulative effect of any revision in estimates of the percentage of
completion, or the effect of identifiable losses on cost over-runs, is
reflected in the financial reporting period in which the change in the
estimate or the loss becomes known. The Company mitigates the risk of losses
for cost over-runs by subdividing its projects into smaller phases. In these
cases, the Company and its clients agree on a fixed price and fixed time frame
before beginning each phase of the project. These agreements may be revised,
by mutual agreement, when a significant change in the scope or cost of a phase
arises that neither the Company nor the client had anticipated. Because the
Company bears the
10
<PAGE>
risk of cost over-runs and inflation associated with fixed-price, fixed-time
frame projects, the Company's operating results may be adversely affected by
inaccurate estimates of contract completion costs and dates.
The Company experiences certain fluctuations in its revenues and operating
results as revenue is recognized only when consultants are working. As such,
quarterly results are adversely affected when client facilities are closed due
to holidays or inclement weather, when there are a number of Company scheduled
holidays falling within the quarter, or when consultants are on vacation
during certain peak vacation periods.
Revenue growth is achieved by increasing the number of projects or
consultants on engagements and, to a lesser extent, by increasing average bill
rates. Gross margin increases are achieved primarily by increasing the
utilization of the salaried consultants, and to a lesser extent, by increasing
the bill rates of hourly consultants and increasing the amount of revenue
generated by the Solutions Groups. The Solutions Groups generally obtain
higher gross margin percentages than the ITCS Group.
As a result of the number of acquisitions and expansion since June 1996, the
Company has increased its IT, human resources, legal, marketing and finance
infrastructure and expanded the number and size of branch facilities to
accommodate growth. These measures have resulted in increased selling, general
and administrative expenses. Delays in integrating the back office operations
of certain acquisitions have resulted in some redundant expenditures,
increasing selling, general and administrative expenses.
The Company continues to convert its enterprise-wide financial and human
resource systems to the PeopleSoft system. The Company expects a significant
benefit by conforming all accounting and human resource systems to PeopleSoft,
allowing for additional capacity without additional headcount, a reduction of
manual input, as well as expanded and more timely reporting of financial
information. The Company is staffing the PeopleSoft project internally. While
using internal resources reduces the overall costs of this project, the
Company will experience some decrease in the billable utilization of its
consultants as a result of using these resources on internal projects.
Acquisitions and Dispositions
In January 1999, the Company acquired substantially all of the assets of
InfoSolutions.edu, L.L.C. ("InfoSolutions") for approximately $5.2 million
including a $2.5 million note payable. InfoSolutions provides software
consulting and implementation to universities and non-profit organizations.
In fiscal 1998, the Company acquired three companies, Exad Galons,
Hackenberg and Partners (Hackenberg) and International Public Access
Technologies ("IPAT") for an aggregate of $12.5 million in cash.
InfoSolutions, Exad Galons, Hackenberg and IPAT were accounted for as
purchases. The purchase price has been allocated to the assets acquired and
liabilities assumed based upon their fair values as of the respective dates of
acquisition. The excess of the consideration paid over the estimated fair
value of net assets acquired has been recorded as goodwill. The results of
operations for these acquisitions have been included in the Company's results
of operations from the respective dates of acquisition. InfoSolutions, Exad
Galons and Hackenberg were added to the Company's Enterprise Solutions Group
whereas IPAT became part of the Company's Government Solutions Group.
In fiscal 1998, the Company also acquired Neoglyphics and Triad for a total
of 4,554,760 shares of the Company's common stock. Neoglyphics was added to
the Company's Enterprise Solutions Group while Triad became part of the
Company's ITCS Group. These transactions have been accounted for as pooling of
interests and, therefore, the financial statements of the Company have been
restated to include the financial condition, results of operations and cash
flows of these two companies for all periods presented. The Company incurred
$6.9 million in acquisition-related expenses in the second quarter of 1998
related to these transactions.
11
<PAGE>
The Company made several dispositions of non-strategic assets in 1999. In
February 1999, the Company sold substantially all of the assets of Renaissance
Technomic, Inc. and Renaissance Technomic Limited (collectively, "Technomic"),
and COBA Consulting Limited ("COBA"). The Company recorded asset impairment
charges of approximately $27.1 million in 1998 associated with these
businesses which were part of the Business Strategy Group and are reported as
discontinued operations. No gain or loss was recognized in connection with the
sale of these businesses. Technomic was a provider of strategic market
research and consulting services. COBA was a provider of management consulting
services.
In May 1999, the Company sold substantially all of the assets of Neoglyphics
and its Customer Management Solutions Vantive practice ("CMS") for $10.0
million in cash, a $2.0 million convertible note receivable and 400,000 shares
of the purchaser's common stock. The note is convertible into common stock at
the time of a qualifying initial public offering by the purchaser at a 20%
discount from the offering price. The purchaser filed a preliminary
registration statement with the Securities and Exchange Commission ("SEC") in
early 2000. In connection with this sale, the Company recognized a net after-
tax gain of $833,000. The gain on the sale has been classified as an
extraordinary item because the pooling of interests method of accounting was
applied to the original acquisition of these assets within the last two years.
In the fourth quarter of fiscal 1999, the Company made a decision to sell
its Business Strategy Group for $65.0 million in cash. Accordingly, the
results of operations of the Business Strategy Group have been classified as
discontinued operations in the accompanying financial statements (see Note 17
of Notes to Consolidated Financial Statements). The transaction closed on
March 10, 2000 and will result in a gain for the Company of approximately $10
million which will be recorded in the first quarter of fiscal 2000. In
February 2000, the Company signed a letter of intent to sell Renaissance
Worldwide Professionals Ltd., formerly known as James Duncan Associates, back
to its management for approximately $1.2 million. This transaction is expected
to close by the end of March 2000 and will not have a material effect upon the
Company's results of operations. The Company recorded a goodwill writedown of
$4.0 million in connection with this business in the fourth quarter of 1999
(see Note 6 of Notes to Consolidated Financial Statements).
Twelve months ended December 25, 1999 and December 26, 1998
Revenue: Total revenue increased by $32.4 million or 4.6% to $742.6 million
in 1999 from $710.2 million in 1998. The Government Solutions Group led the
Company's revenue growth with an 83% increase to $36.4 million in 1999 from
$19.9 million in 1998. The Enterprise Solutions Group's revenue grew 5.1% to
$171.0 million in 1999 from $162.7 million in 1998 and the ITCS Group's
revenue grew 1.4% to $535.2 million in 1999 from $527.6 million in 1998. These
increases are attributable to the full year impact of the IPAT acquisition in
July 1998 for Government Solutions and new service offerings in all business
segments. The Company experienced a slowdown in revenue over the last half of
the year as demand for enterprise resource planning ("ERP") and IT consulting
and staffing services softened significantly. The Company believes that this
softening resulted from its customers and potential customers curtailing
current projects or deferring new project development and spending until 2000
because of concerns about the impact of the Year 2000 (Y2K) issue. The Company
believes that the Y2K issue created a significant slowdown in the industry and
a hesitation in the marketplace as clients shifted their staffing and spending
priorities away from initiating new IT projects.
Gross Profit: Total gross profit decreased by $7.3 million or 3.2% to $220.1
million in 1999 from $227.4 million in 1998. As a percentage of revenue, gross
profit decreased to 29.6% in 1999 from 32.0% in 1998. This decrease in gross
profit percentage was attributable to a reduction in the ITCS Group and
Enterprise Solutions Groups' margins, especially over the last half of the
year due to the reduction in revenue mentioned above.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses increased by $15.5 million or 8% to $208.9 million in
1999 from $193.4 in 1998. As a percentage of revenue, selling, general and
administrative expenses increased to 28.1% of revenue for fiscal 1999 from
27.2% for fiscal 1998. This
12
<PAGE>
increase was attributable primarily to investments in the Company's
information technology, corporate finance and administrative functions and
telecommunications and facilities infrastructure to accommodate the growth of
the past year.
Restructuring Charges and Other Asset Writedowns: The Company recorded asset
writedowns of $6.9 million in fiscal 1999. The Company recorded asset
writedowns of $2.9 million in connection with the sale of Neoglyphics and CMS
in the second quarter of 1999 and a $4.0 million goodwill writeoff in
connection with the proposed disposition of Renaissance Worldwide
Professionals, Ltd. which is expected to close at the end of March 2000. The
restructuring and other asset write-downs of $5.7 million in 1998 related to a
restructuring plan designed to focus the Company on the new corporate strategy
and eliminate redundant facilities, equipment, software and personnel recorded
in the third quarter of 1998. A balance of $2.9 million accrual remained from
this charge at December 26, 1998 and was fully utilized in fiscal 1999. The
Company believes that it fully realized the annual savings that were expected
from actions implemented.
Interest and Other Expense: Interest and other expense increased by $3.8
million to $9.3 million in 1999 from $5.5 million in 1998. This increase is
due to increased borrowings under the Company's line of credit during fiscal
1999.
Income Tax Provision: The Company recorded income tax provisions of $13.0
million and $0.4 million for the twelve months ended December 26, 1998 and
December 25, 1999, respectively. The resulting effective tax rate for these
periods is not meaningful due to the impact of non-deductible expenses for tax
purposes in addition to other book and tax differences (see Note 8 of Notes to
Consolidated Financial Statements).
Income (Loss) from Discontinued Operations: Income (loss) from discontinued
operations includes the operating activities of the Business Strategy Group.
Net income from discontinued operations was $3.4 million in 1999 compared to a
loss of $34.3 million in 1998. Income (loss) from discontinued operations for
the twelve months ended December 26, 1998 includes charges of $27.1 million
associated with the writeoff of goodwill associated with the Technomics and
COBA-UK businesses and other restructuring costs of $3.3 million (see Note 17
of Notes to Consolidated Financial Statements).
Extraordinary Gain, Net of Tax: In connection with the sale of substantially
all of the assets of Neoglyphics and CMS, the Company recognized a net after-
tax gain of $833,000. The gain on the sale has been classified as an
extraordinary item because the pooling of interests method of accounting was
applied to the original acquisition of these assets within the last two years.
Twelve months ended December 26, 1998 and December 27, 1997
In 1997, the Company changed its fiscal year from the last Saturday in June
to the last Saturday in December. The following table sets forth certain
consolidated financial data of the Company for the twelve months ended
December 27, 1997 and December 26, 1998. This data is presented to reflect the
comparative periods discussed in the following analysis.
13
<PAGE>
Additional Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Year ended
-------------------------
December 27, December 26,
1997 1998
------------ ------------
(Unaudited)
<S> <C> <C>
Revenue............................................. $531,247 $710,156
Cost of revenue..................................... 370,141 482,733
-------- --------
Gross profit........................................ 161,106 227,423
Selling, general and administrative expenses........ 124,043 193,355
Acquisition-related expenses........................ 6,361 6,904
Restructuring charges and asset writedown........... -- 5,691
-------- --------
Income from continuing operations................... 30,702 21,473
Interest and other (income) expense, net............ 1,583 5,503
-------- --------
Income from continuing operations before taxes...... 29,119 15,970
Income tax provision................................ 13,167 12,992
-------- --------
Net income from continuing operations............... 15,952 2,978
Loss from discontinued operations, net of income
taxes.............................................. (4,664) (34,324)
-------- --------
Net income.......................................... $ 11,288 $(31,346)
======== ========
</TABLE>
Revenue: Total revenue increased by $179.0 million or 33.7% to $710.2
million in 1998 from $531.2 million in the twelve months ended December 27,
1997. The increase is attributable primarily to increases in the revenues of
the ITCS Group; whose revenues comprised 74% of the total revenues for the
twelve months ended December 26, 1998. The ITCS Group's revenues increased by
$108.2 million or 25.1% to $527.6 million in the period due to growth within
existing branch offices. Revenues from the Enterprise Solutions Group
increased $65.3 million or 67.0% to $162.7 million in the period due to an
increase in the overall number of engagements, the acquisition of Exad Galons
and Hackenberg and the creation of additional service offerings during the
year. Revenues from the Company's Government Solutions Group increased 461% to
$19.9 million from $3.5 million in the comparable prior period. These
increases are attributable primarily to the addition of the IPAT acquisition
in July of 1998 and the full year impact of the EMS acquisition acquired in
August of 1997.
Gross Profit: Gross profit increased 41.2% to $227.4 million for fiscal 1998
from $161.1 million in the twelve months ended December 27, 1997. As a
percentage of revenue, gross profit increased to 32.0% in fiscal 1998 from
30.3% in the twelve months ended December 27, 1997. This increase is
attributable to the number of higher margin solutions projects and the
increased utilization and number of salaried consultants as compared with the
prior period.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses increased by 55.9% to $193.4 million in fiscal 1998
from $124.0 million in the twelve months ended December 27, 1997. As a
percentage of revenue, selling, general and administrative expenses increased
to 27.2% of revenue for fiscal 1998 from 23.4% for the comparable prior
period. The increase was attributable to the additional costs necessary to
support the growth in the Company's business and professional staff, increases
in the size and number of facilities, investments in upgrading the Company's
telecommunications networks and systems and additional provisions to the
allowance for doubtful accounts. In addition, the Company experienced
increases in amortization of goodwill due to the acquisitions made during
fiscal 1997 and 1998.
Acquisition-related Expenses: The Company incurred acquisition-related
expenses in fiscal 1998 of $6.9 million as a result of the acquisitions of
Neoglyphics and Triad in the second quarter. Acquisition-related expenses of
$6.4 million in the twelve months ended December 27, 1997 resulted from the
acquisition of the Hunter Group in the fourth quarter. These costs represent
investment banking, accounting, printing, and legal costs.
14
<PAGE>
Restructuring Charges and Other Asset Writedowns: The restructuring and
other asset write-downs of $5.7 million in 1998 related to a restructuring
plan designed to focus the Company on the new corporate strategy and eliminate
redundant facilities, equipment, software and personnel recorded in the third
quarter of 1998. A balance of $2.9 million remained from this accrual as of
December 26, 1998.
Interest and Other Expense: Interest and other expense increased by $3.9
million to $5.5 million in fiscal 1998 from $1.4 million for the twelve months
ended December 27, 1997. This increase is due to increased borrowings under
the Company's line of credit during fiscal 1998 to fund acquisitions, earnout
payments and working capital expenditures. The Company had lower borrowings
under its line of credit in 1997 as a result of cash received in a public
offering of the Company's common stock in February 1997.
Income Tax Provision: The Company recorded income tax provisions of $13.0
million and $13.2 million for the twelve months ended December 27, 1997 and
December 26, 1998, respectively. The resulting effective tax rate for these
periods is not meaningful due to the impact of non-deductible expenses for tax
purposes in addition to other book and tax differences (see Note 8 of Notes to
Consolidated Financial Statements).
Income (Loss) from Discontinued Operations: Income (loss) from discontinued
operations for the twelve months ended December 26, 1998 includes charges of
$27.1 million associated with the writeoff of goodwill associated with the
Technomics and COBA-UK businesses and other restructuring costs of $3.3
million (see Note 17 to Notes to Consolidated Financial Statements).
Quarterly Results
The following tables summarize unaudited quarterly financial data for the
years ended December 25, 1999 and December 26, 1998. This financial data has
been prepared on the same basis as the audited financial statements and, in
the opinion of management, includes all adjustments necessary for the fair
presentation of the information for the periods presented, when read in
conjunction with the Company's Consolidated Financial Statements and related
Notes thereto. Results for any previous fiscal quarter are not necessarily
indicative of results for the full year or for any future quarter.
<TABLE>
<CAPTION>
Three months ended
---------------------------------------
March June September December
1999 1999(2)(3) 1999 1999(4)
-------- ---------- --------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenue...................... $198,171 $202,025 $180,899 $161,489
Gross profit................. 59,405 62,254 54,293 44,170
Income (loss) from continuing
operations before
extraordinary items(1)...... 1,421 2,845 (850) (8,758)
Earnings (loss) per share
from continuing operations
before extraordinary items:
Basic...................... $ 0.03 $ 0.05 $ (0.02) $ (0.15)
Diluted.................... $ 0.03 $ 0.05 $ (0.02) $ (0.15)
Net income (loss) before
extraordinary items(1)...... $ 1,701 $ 3,760 $ 1,142 $ (8,526)
Net earnings (loss) before
extraordinary items per
share:
Basic...................... $ 0.03 $ 0.08 $ 0.02 $ (0.15)
Diluted.................... $ 0.03 $ 0.08 $ 0.02 $ (0.15)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Three months ended
-------------------------------------
March June September December
1998 1998(5) 1998(6) 1998(7)
-------- -------- --------- --------
(In thousands except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenue........................ $157,539 $176,837 $188,998 $186,782
Gross profit................... 50,514 58,853 63,299 54,757
Income (loss) from continuing
operations.................... 4,148 (2,453) 5,885 (4,602)
Earnings (loss) per share from
continuing operations(1):
Basic........................ $ 0.08 $ (0.04) $ 0.11 $ (0.08)
Diluted...................... $ 0.07 $ (0.04) $ 0.10 $ (0.08)
Net income (loss) before
extraordinary items (1)....... $ 5,463 $ (439) $ 5,601 $(41,971)
Net earnings (loss) before
extraordinary items per share:
Basic........................ $ 0.10 $ (0.01) $ 0.10 $ (0.75)
Diluted...................... $ 0.09 $ (0.01) $ 0.10 $ (0.75)
</TABLE>
- --------
(1) In 1999, the Company decided to sell its management consulting practice,
the Business Strategy Group in an initiative to support the Company's new
strategic direction. The cash transaction of $65.0 million closed on March
10, 2000 and will result in a gain for the Company estimated at $10
million which will be recorded in the first quarter of 2000. Accordingly,
the Company reported the results of the Business Strategy Group as
discontinued operations in the accompanying financial statements and
related notes for all periods shown. Therefore, the difference between
"Income (loss) from continuing operations before extraordinary items" for
each quarter as shown above and quarterly results previously shown is due
to discontinued operations, net of taxes.
(2) Includes an asset writedown of $2.9 million related to the sale of
Neoglyphics and CMS in May 1999.
(3) Excludes the extraordinary net after-tax gain of $833,000 in connection
with the sale of Neoglyphics and CMS.
(4) Includes a goodwill writedown of $4.0 million associated with the proposed
disposition of Renaissance Worldwide Professionals, Ltd., formerly known
as James Duncan Associates, which is expected to close at the end of March
2000.
(5) Includes transaction costs of $6.9 million associated with the
acquisitions of Neoglyphics and Triad, which have been accounted for as
pooling of interests and a $2.9 million charge associated with Triad's
conversion from an S corporation to a C corporation.
(6) Includes charges for restructuring and other asset writedowns of $5.7
million, which includes costs for severance, lease closures, and other
write-offs of non-performing assets.
(7) Includes charges of $27.1 million associated with the writeoff of goodwill
associated with the Technomics and COBA-UK businesses and other
restructuring costs of $3.3 million which are included in income (loss)
from discontinued operations as they were associated with the Business
Strategy Group.
During the October to December quarter, the number of holidays and vacation
days marginally reduces revenue. Some clients also close operations completely
during the last week of the year. In 1999, the Company experienced a slowdown
in revenue over the last half of the year as demand for enterprise resource
planning ("ERP") and IT consulting and staffing services softened
significantly. The Company believes that this softening resulted from its
customers and potential customers curtailing current projects or deferring new
project development and spending until 2000 because of concerns about the
impact of the Year 2000 (Y2K) issue. The Company believes that the Y2K issue
created a significant slowdown in the industry and a hesitation in the
marketplace as clients shifted their staffing and spending priorities away
from initiating new IT projects. The Company has historically experienced
lower operating profit margin in the January to March quarter, in part as a
result of higher unemployment tax accruals and, to a lesser extent, FICA taxes
which are expensed as incurred. During this quarter, the unemployment tax,
which is based on the first $7,000-$24,500 of wages for each employee,
depending on the state, is significantly higher than other quarters.
16
<PAGE>
Liquidity and Capital Resources
During 1998, the Company had a line of credit facility which provided a
borrowing base of 85% of eligible accounts receivable as defined, up to a
maximum borrowing of $85 million, payable on demand. Interest was payable
monthly in arrears at the bank's prime rate plus 0.50% (8.25% at December 26,
1998) or the LIBOR rate plus 2.50% (7.71% at December 26, 1998), at the option
of the Company. The line of credit was collateralized by the majority of the
assets of the Company, excluding the assets of the Trust, contained certain
restrictions, and required the maintenance of certain financial covenants.
This line of credit was terminated on March 24, 1999.
In February of 1999, the Company entered into a new line of credit ("Interim
Facility") with a different bank to provide a borrowing base of 85% of
eligible accounts receivable as defined, up to a maximum borrowing of $110
million. Interest was payable monthly in arrears at the LIBOR rate plus 2.00%
or the higher of the bank's prime rate or the Fed Funds rate plus 0.50%, plus
0.75%, at the Company's option. The Interim Facility was collateralized by the
majority of the assets of the Company, contained certain restrictions, and
required maintenance of certain financial covenants. The Interim Facility was
a short-term facility to be used until syndication of a senior term loan
facility committed to by the bank. The Interim Facility was used to repay the
outstanding borrowings on the existing line of credit that was terminated on
March 24, 1999.
On July 15, 1999 the Company entered into a three-year, $150 million
revolving credit and term loan agreement (the "Credit Facility") with a bank
syndicate. The Credit Facility consists of a revolving line of credit of $100
million ("Revolving Credit Facility") and a term loan of $50 million ("Term
Loan"). The Credit Facility bears interest at the higher of the Federal Funds
Rate plus 0.50% or the prime rate plus up to 1.75% or LIBOR plus up to 3.00%,
depending on the Company's level of compliance with certain financial ratios.
The Credit Facility requires the Company to make quarterly principal payments
of $250,000 on the Term Loan beginning September 15, 2000 and each quarter
thereafter until June 15, 2002. The remaining obligations under the Term loan
would be repaid on July 15, 2002 along with any outstanding borrowings under
the Revolving Credit Facility. The Credit Facility is secured by the majority
of the assets of the Company and contains certain restrictions and various
covenants, including the maintenance of defined financial ratios.
On September 15, 1999, the Company announced that it was revising its
revenue and earnings estimates for the third and fourth quarters of 1999 due
to a softening in the demand for services in two of its core business--the
Enterprise Solutions and ITCS Groups. Based upon this revised outlook, the
Company informed the bank syndicate that it would not be in compliance with
certain of its financial covenants for the third quarter of 1999. On November
4, 1999, the Company and the banks signed an amendment to the Credit Facility
amending certain financial covenants for the third quarter of 1999 through the
third quarter of 2000, reverting back to the original financial covenants
established in the Credit Facility thereafter. The Credit Facility, as
amended, now bears interest at the higher of the Federal Funds Rate plus 0.50%
or the prime rate, plus up to 2.25% or LIBOR plus up to 3.50%, depending on
the Company's level of compliance with certain financial ratios. In connection
with this amendment, the Company was required to pay amendment fees to the
banks and related expenses of approximately $500,000, which were recorded in
the third quarter of 1999 as interest, and other expense, net.
As of December 25, 1999, the availability under the Credit Facility was
approximately $19.6 million. The weighted average interest rate on the Credit
Facility at December 25, 1999 was 9.97%.
On February 25, 2000, the Company and the banks signed a second amendment to
the Credit Facility which permitted the Company to complete its sale of the
Business Strategy Group (see Note 17 of Notes to Consolidated Financial
Statements) and amended certain financial covenants to reflect the
dispositions of the Business Strategy Group and Renaissance Worldwide
Professionals, Ltd.
On March 14, 2000, the Company used $60.0 million of the proceeds that it
received from the sale of its Business Strategy Group to repay the $50.0
million Term Loan and $10.0 million of borrowings under the Revolving Credit
Facility.
17
<PAGE>
The Company had cash flows from operations of $48.5 million for the fiscal
year ended December 25, 1999. The operating cash flows were attributable
primarily to a $4.4 million decrease in gross accounts receivable and a $22.7
million decrease in other current assets and other assets primarily attributed
to a reduction of prepaid expenses, security deposits on facilities and a
refund on income taxes.
The Company used $24.6 million of cash flows for investing activities for
the fiscal year ended December 25, 1999. The primary uses of cash for
investing activities for the period were $23.3 million for current year
acquisitions and certain contingent payments related to prior acquisitions and
$16.8 million for fixed asset purchases. This was mitigated by net proceeds
from the sale of Neoglyphics and CMS of $10.0 million.
The Company used $24.0 million of cash flows for financing activities in the
fiscal year ended December 25, 1999, primarily for the repayment of borrowings
on the Company's lines of credit.
The Company anticipates that its primary uses of working capital in future
periods will be for funding growth, either through acquisitions, the internal
development of existing branch offices or the development of new branch
offices and service offerings. The Company also anticipates capital
expenditures of approximately $15 to $20 million over the next twelve months,
primarily related to information systems. In connection with certain of its
acquisitions, the Company is obligated to make certain contingent payments
over the next several years, including approximately $9 million which the
Company currently is required to pay over the next 12 months. The Company does
not believe that such payments would have a material impact on the Company's
liquidity, results of operations or capital requirements. The Company's
principal capital requirement is working capital to support the accounts
receivable associated with its revenue growth. The Company believes that its
financing under the Credit Facility, together with cash flows from operations,
will be sufficient to meet the Company's presently anticipated working capital
needs for at least the next 12 months.
Foreign currency fluctuations and inflation did not have a significant
impact on the Company for any of the periods presented.
Recent Accounting Developments
In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin No. 101 ("SAB 101"), which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. The Company is required to be in conformity with the
provisions of SAB 101 in fiscal 2000 and is currently evaluating the impact
SAB 101 will have on its financial condition or results of operations.
Factors That May Affect Future Results
The following discussion of factors that may affect the future results of
the Company's business are divided between those that relate specifically to
the Company and those that relate to companies in the IT consulting industry
in general.
Risks Specific To The Company
The Company's inability to effectively execute its growth strategy could
adversely affect operating results.
The Company's transformation into an eSolutions provider could adversely
effect the business and financial results. The Company is currently
attempting to transform itself into an eSolutions provider. The majority of
the Company's revenues have historically been derived from its IT staffing
business. In 1999, approximately 69% of total revenue was derived from the
ITCS Group, most of which was from IT staffing engagements. Part of the
transformation effort involves the transition to web-based IT recruiting,
with which the Company has little experience. In addition, changes in the
marketplace may cause revenue growth rates from IT staffing to decrease.
There is no guarantee that the Company will be successful in effectively
executing its transformation either rapidly enough, or in a way that
enhances operating results.
18
<PAGE>
The success of the Company's current business strategy is highly dependent
on the growth of the Internet. The Company's success will be more clearly
linked to increased use of the Internet by businesses. Commercial use of
the Internet is currently at an early stage of development and the future
of the Internet is not clear. Because a significant portion of the
Company's business is derived from providing consulting services to
businesses relating to e-commerce, the Company's business will suffer if
commercial use of the Internet fails to continue to grow rapidly in the
future.
There is an inherent risk of selling assets of, or investments in, the
Company's business units. A portion of the Company's new business strategy
involves developing subsidiaries and potentially selling, in public or
private offerings, such companies, or portions of the companies, that it
has acquired or developed. The Company has no experience in executing this
new strategy and there can be no assurance that it will be able to do so
effectively. In addition, market and other conditions largely beyond the
Company's control affect: the Company's ability to engage in such sales;
the timing of such sales; and the amount of proceeds from such sales.
There is no guarantee that the Company will be able to obtain the funds
necessary to grow the business. The Company generally has financed its
operations from sales of its common stock, its revolving credit line, and
reinvested profits. These sources of funding may not be sufficient in the
future, and the Company may need to obtain funding from other sources.
However, the Company may not be able to obtain funding from other sources.
In addition, even if the Company finds outside funding sources, it may be
required to issue to such outside sources securities with greater rights
than those currently possessed by holders of shares of its common stock.
The Company may also be required to take other actions which may lessen the
value of its common stock, including borrowing money on terms that are not
favorable to the Company.
The Company's inability to manage growth could adversely effect operating
results. The growth of the Company's business in recent years has placed
significant demands on the Company's managerial and other resources. The
Company's ability to manage this growth effectively will require it to
continue to improve the Company's operating, financial and other internal
systems. The Company will also have to improve business development
capabilities and train, motivate and manage an increasing number of
employees. The Company currently relies on several different financial
reporting systems to monitor and manage the Company's financial
performance. The Company has nearly completed the implementation of a new
single financial reporting system, but that system is not yet fully
operational. The failure to successfully implement or transition to this
new system effectively may result in difficulty managing the business,
which could adversely affect the Company's operating results and stock
price.
The Company depends on certain key employees, and the loss of any of those
employees could potentially harm the Company's business.
The Company's performance is substantially dependent on the performance of
its executive officers and other key employees, in particular, G. Drew Conway,
its chairman and chief executive officer, Edward H. Longo, Jr., its president
and chief operating officer, and Joseph F. Pesce, its executive vice
president, chief financial officer and treasurer. In addition, the Company's
success is dependent on its ability to attract, train, retain, and motivate
high quality personnel, especially for its management team. The loss of the
services of any of the Company's executive officers or key employees could
potentially harm its business or financial results.
The Company depends on several key software vendor relationships.
The Hunter Group, the principal business in the Enterprise Solutions
business unit, derives a substantial proportion of its revenue from its
relationships with software providers, particularly PeopleSoft and SAP.
Because the Hunter Group contributes a significant proportion of the Company's
operating profits, it is in part dependent on the continued success of those
software vendors. An adverse change in The Hunter Group's relationship with
these software companies could adversely affect the Company's operating
results. Any changes in sponsored programs or the loss of certifications would
adversely affect the Company's business by reducing the number of client
referrals and engagements.
19
<PAGE>
Doing business internationally involves additional risks unique to foreign
operations.
The Company recruits consultants and generates a portion of the Company's
revenues from outside the United States. Foreign operations are subject,
however, to special risks that can adversely affect revenues and profits.
These risks include:
. currency exchange rate fluctuations . tariff and trade barriers
. labor strikes . immigration laws and regulations
. political and economic disruptions . potentially adverse tax
. changes in government policies and consequences
regulatory requirements . exchange controls
The Company's operating results fluctuate and the Company's business is
slightly seasonal.
The Company's operating results have fluctuated from quarter to quarter as a
result of many different factors, including the number, significance, mix and
timing of client projects, the number of business days in a particular period,
and general economic conditions. As the Company's Enterprise and Government
Solutions Groups, which provide services principally on a project-by-project
basis, grow and contribute a greater percentage of the Company's revenues,
greater variability in quarterly operating results may occur. The Company's
business is also somewhat seasonal. We experience this seasonality in the
Company's fourth quarter because of an increased number of holidays in that
quarter. Investors should not rely on operating results in any one quarter as
an indicator of the Company's future results.
The Company must develop and maintain positive brand name awareness.
The Company believes that establishing and maintaining its brand name is
essential to expanding business and attracting new customers. The Company also
believes that the importance of brand name recognition will increase in the
future because of the growing number of consulting companies that will need to
differentiate themselves. Promotion and enhancement of the Company's brand
name will depend largely on the Company's ability to provide consistently
high-quality services. If the Company is unable to provide high-quality
services, the value of its brand name may suffer.
The value of the Company's business may fluctuate because the value of some
of its assets fluctuates.
In the future, a portion of the Company assets may include the equity
securities of both publicly traded and non-publicly traded companies. The
market price and valuations of the securities that the Company holds in such
companies may fluctuate due to market conditions and other conditions over
which the Company has no control. Fluctuations in the market price and
valuations of the securities that the Company holds in other companies may
result in fluctuations of the market price of the Company's common stock and
may reduce the amount of working capital available to the Company.
The price of the Company's common stock has been volatile.
Recently, the stock market has experienced significant price and volume
fluctuations that have particularly impacted the market prices of equity
securities of many companies providing Internet-related services. Some of
these fluctuations appear to be unrelated or disproportionate to the operating
performance of such companies. Such future market movements could adversely
affect the market price of the Company's common stock, especially if the
Company is successful in implementing its Internet-based strategy.
Two directors control a substantial amount of the Company's common stock.
Approximately 33% of the Company's common stock is held by Mr. Conway
(24.6%) the Company's chairman and chief executive officer, and Mr. Terry
Hunter (8.4%), a former officer and director. As a result, Messrs. Conway and
Hunter would be able to significantly influence any matter requiring
stockholder approval.
20
<PAGE>
This concentration of ownership could also have the effect of making it
difficult for a third party to acquire control of the company and may deter
third parties from attempting to do so. Future sales of substantial amounts of
their common stock, or the potential for such sales, may adversely affect the
prevailing market price of the common stock.
Risks Relating To The Information Technology Consulting Industry
All providers of IT consulting services face similar risks. The following is
a list of the significant risks and how they may affect the Company's
business.
The Company's business depends on attracting and retaining qualified
professionals who are in high demand.
The Company's business and future growth depend upon the Company's ability
to attract and retain experienced and skilled professionals, particularly
management consultants, IT professionals, IT project managers, business
development managers, account managers, and technology recruiters. Competition
for these professionals is intense because the demand for them is greater than
their current availability. Despite the Company's best efforts, not all of the
Company's professionals will always be satisfied with the Company's culture,
compensation and benefits. This problem can be particularly troublesome with
professionals of an acquired business who may have come from a corporate
culture that is different than the Company's. There is great mobility among
the employees that we need to attract. Many of the Company's competitors have
substantially greater financial and other resources. They may offer these
individuals more attractive compensation and benefits packages. If the Company
does not recruit, train and maintain a sufficient number of professional
personnel, it will not be able to satisfy client demands for IT consulting
services and the Company's business will be adversely affected.
IT projects are complex and subject the Company to non-payment and other
financial risks.
Many of the Company's IT projects subject it to financial risks. These
engagements often involve critical business processes and leading-edge
software applications. Despite the Company's best efforts, it may not always
be able to satisfy a customer's expectations because software applications do
not always work as expected. A customer's dissatisfaction could affect its
willingness to pay us for these services, which would result in a financial
loss on that project. Customer dissatisfaction can also damage the Company's
reputation and negatively affect the Company's ability to attract new
business. Even in situations where the scope of a project changes, as a result
of customer demands or otherwise, we may not always be successful in obtaining
a price adjustment as large as the one we seek. To the extent that projects
are extended or enlarged without corresponding changes in fee schedules, the
Company's business would be adversely affected.
Failure to remediate Year 2000 problems could lead to liability claims.
Some clients engaged the Company to evaluate and remedy their Year 2000
problem. Many of these engagements involved projects critical to the client's
operations and business. Despite the Company's best efforts, because the Year
2000 problem was complex and because it was often associated with critical
client systems or processes, the Company may be subject to claims from clients
for failure to properly evaluate or remedy the client's Year 2000 problem. In
addition, the Company has written software code and performed services for the
Company's clients in the past that may still be in use but are not year 2000
compliant. Such past efforts may subject us to claims similar to those
mentioned above despite the fact that we were not engaged to evaluate or
remedy the clients year 2000 problems. Although the Company has not been
notified of any Y2K related problems, any claims with respect to year 2000
problems, whether meritorious or not, may adversely affect the Company's
business.
21
<PAGE>
The Company's business is subject to fluctuations in the general health of
the economy.
Demand for IT consulting services will be affected by the general health of
the domestic and international economies. Some clients may reduce expenditures
for information technology if they suffer slowdowns in their businesses due to
a general slowing of the economy. This reduction in spending may require some
clients to delay or cancel IT projects that it had been engaged to manage or
on which the Company's consultants may have been staffed. Fluctuations in the
general economy that adversely affect the amount of money the Company's
clients are willing to spend on IT consulting or related services may
adversely affect the Company's business.
U.S. government limits on immigration restrict the Company's ability to hire
foreign nationals.
Each year the Company hires IT professionals who are foreign nationals
working in the United Stated under H-1B permits. Under current law, there is a
fixed annual number of H-1B visas available for issuance. Once this limit has
been reached, the Company is unable to hire additional foreign nationals until
additional H-1B visas are made available in the following fiscal year. These
limitations on the Company's ability to hire foreign nationals under H-1B
visas may adversely affect the Company's business.
The market for IT services is competitive.
The market for IT services and management consulting services includes a
large number of competitors and is highly competitive. The Company's
competitors include "Big Five" accounting firms, systems consulting and
integration firms, application software development firms, services divisions
of computer equipment companies and general management consulting companies.
Moreover, the Company often competes with the internal resources of the
Company's clients. The competitive nature of the marketplace creates pricing
pressures that may adversely affect the Company's business.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to a variety of risks, including foreign currency
fluctuations and changes in interest rates on its borrowings. In the normal
course of its business, the Company manages its exposure to these risks as
described below. The Company does not engage in trading market risk sensitive
instruments for speculative purposes.
Foreign Exchange
During 1999, less than 10% of the Company's business was transacted in
currencies other than the U.S. dollar. The Company does not enter into forward
exchange contracts as a hedge against foreign currency exchange risk on
transactions denominated in foreign currencies or for speculative or trading
purposes. The Company has performed a sensitivity analysis assuming a
hypothetical 10% adverse movement in foreign exchange rates. As of December
25, 1999 the analysis demonstrated that such market movements would not have a
material adverse effect on the Company's consolidated financial position,
results of operations or cash flows. Actual gains and losses in the future may
differ materially from this analysis based on changes in the timing and amount
of foreign currency rate movements and the Company's actual exposures. The
Company believes that its exposure to foreign currency exchange rate risk at
December 25, 1999 was not material.
Interest Rates
As of December 25, 1999, the Company's exposure to market risk associated
with changes in interest rates relates primarily to its debt obligations. At
December 25, 1999 the terms of the Company's long-term fixed-rate debt
approximated fair value using quoted market prices where available. Market
risk associated with the Company's long-term debt is the potential increase in
fair value resulting from a decrease in interest rates. As of December 25,
1999, approximately $68.9 million (primarily borrowings under the Company's
Credit Facility) of the Company's total debt of $73.5 million was variable at
an average rate of 9.97%.
22
<PAGE>
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of PricewaterhouseCoopers LLP...................................... 24
Report of Katch Tyson & Company........................................... 25
Report of Goldstein Golub Kessler LLP..................................... 26
Consolidated Balance Sheet as of December 26, 1998 and December 25, 1999.. 27
Consolidated Statement of Operations for the Year Ended June 28, 1997, the
Six Months Ended December 27, 1997 and the Years Ended December 26, 1998
and December 25, 1999.................................................... 28
Consolidated Statement of Changes in Stockholders' Equity for the Year
Ended June 28, 1997,
the Six Months Ended December 27, 1997 and the Years Ended December 26,
1998 and
December 25, 1999........................................................ 29
Consolidated Statement of Cash Flows for the Year Ended June 28, 1997, the
Six Months Ended December 27, 1997 and the Years Ended December 26, 1998
and December 25, 1999.................................................... 32
Notes to Consolidated Financial Statements................................ 33
Financial Statement Schedule:
II--Valuation and Qualifying Accounts.................................... S-1
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements or the
Notes thereto.
See selected unaudited quarterly financial data in Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Renaissance Worldwide, Inc.
In our opinion, based upon our audits and the reports of other auditors, the
consolidated financial statements listed in the index appearing under Item 8
of this Form 10-K present fairly, in all material respects, the financial
position of Renaissance Worldwide, Inc. and its subsidiaries (the "Company")
at December 26, 1998 and December 25, 1999, and the results of their
operations and their cash flows for the year ended June 28, 1997, for the six
months ended December 27, 1997, and for each of the two years in the period
ended December 25, 1999 in conformity with accounting principles generally
accepted in the United States. In addition, in our opinion, the financial
statement schedule listed in the index appearing in Item 8 of this Form 10-K
present fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements and financial statement schedule
based on our audits. We did not audit the results of operations of Neoglyphics
Media Corporation, a wholly-owned subsidiary, for the year ended December 31,
1997, which are included in the accompanying consolidated statement of
operations for the year ended June 28, 1997. We also did not audit the results
of operations of Triad Data, Inc., a wholly-owned subsidiary, for the year
ended December 31, 1997, which are included in the accompanying consolidated
statement of operations for the year ended June 28, 1997. In the aggregate,
these statements reflect total revenues of $61,575,000 in the accompanying
consolidated statement of operations for the year ended June 28, 1997. Those
statements were audited by other auditors whose reports thereon have been
furnished to us, and our opinion expressed herein, insofar as it relates to
the amounts included for Neoglyphics Media Corporation and Triad Data, Inc.
for this period is based solely on the reports of the other auditors. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
/s/ PricewaterhouseCoopers LLP
_____________________________________
Boston, Massachusetts
March 14, 2000
24
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Neoglyphics Media Corporation
We have audited the accompanying statement of financial position of
Neoglyphics Media Corporation as of December 31, 1997, and the related
statements of income and cash flows for the year then ended (not presented
separately herein). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Neoglyphics Media
Corporation at December 31, 1997, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Katch, Tyson & Company
_____________________________________
Northfield, IL
March 12, 1998
25
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholder
Triad Data, Inc.
We have audited the accompanying balance sheets of Triad Data, Inc. as of
December 31, 1997 and 1996 and the related statements of income and retained
earnings, and cash flows for the years then ended (not presented separately
herein). These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Triad Data, Inc. as of
December 31, 1997 and 1996 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Goldstein Golub Kessler LLP
New York, New York
February 27, 1998
26
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
December 26, December 25,
1998 1999
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 10,957 $ 10,605
Accounts receivable, net of allowance for doubtful
accounts of $9,616 and $10,344, respectively...... 196,190 155,784
Deferred income taxes.............................. 10,335 12,136
Other current assets............................... 23,918 6,882
Net current assets of discontinued operations...... -- 7,765
-------- --------
Total current assets............................. 241,400 193,172
Fixed Assets:
Land............................................... 360 360
Buildings.......................................... 1,439 1,439
Leasehold and building improvements................ 5,702 9,144
Computer equipment and software.................... 27,789 21,224
Furniture and equipment............................ 10,777 12,136
-------- --------
Total fixed assets............................... 46,067 44,303
Less: Accumulated depreciation and amortization..... (14,910) (14,629)
-------- --------
Fixed assets, net................................... 31,157 29,674
Goodwill and other intangible assets, net of
accumulated amortization of $6,630 and $8,694,
respectively....................................... 84,869 70,868
Other assets........................................ 12,560 9,450
Deferred income taxes............................... 2,079 3,336
Net non-current assets of discontinued operations... -- 32,144
-------- --------
Total assets..................................... $372,065 $338,644
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit.................................... $ 92,476 $ 18,914
Current portion of long-term debt.................. 2,070 1,544
Accounts payable................................... 33,294 28,546
Accrued salaries, wages and related benefit
costs............................................. 34,355 31,754
Other accrued expenses............................. 16,494 13,156
Deferred income taxes.............................. 4,181 3,339
-------- --------
Total current liabilities........................ 182,870 97,253
Deferred income taxes............................... 5,928 6,983
Term loan........................................... -- 50,000
Other long-term debt................................ 2,353 3,051
Other liabilities................................... 1,129 --
-------- --------
Total liabilities................................ 192,280 157,287
-------- --------
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred Stock, $0.10 par value, 1,000,000
authorized:
None issued and outstanding........................ -- --
Common stock, no par value: 99,000,000 authorized:
56,225,943 issued and 56,025,943 outstanding and
56,765,438 issued and 56,565,438 outstanding,
respectively....................................... 4,725 4,725
Additional paid-in-capital.......................... 181,520 184,183
Notes receivable from stockholders.................. (1,476) (722)
Retained deficit.................................... (2,642) (3,732)
Accumulated other comprehensive income (loss)....... 204 (551)
Treasury stock, at cost: 200,000 shares............. (2,546) (2,546)
-------- --------
Total stockholders' equity....................... 179,785 181,357
-------- --------
Total liabilities and stockholders' equity....... $372,065 $338,644
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except per share data)
<TABLE>
<CAPTION>
Six Months
Year Ended Ended Year Ended Year Ended
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue..................... $444,504 $283,076 $710,156 $742,584
Cost of revenue............. 314,074 196,100 482,733 522,462
-------- -------- -------- --------
Gross profit................ 130,430 86,976 227,423 220,122
Selling, general and
administrative expenses.... 97,809 71,134 193,355 208,856
Acquisition-related
expenses................... 8,268 6,761 6,904 --
Restructuring charges and
asset writedowns........... -- -- 5,691 6,910
-------- -------- -------- --------
Income from operations...... 24,353 9,081 21,473 4,356
Interest expense............ 1,446 1,495 6,342 9,498
Interest income and other
(income) expense, net...... (4,713) (333) (839) (162)
-------- -------- -------- --------
Income (loss) before taxes.. 27,620 7,919 15,970 (4,980)
Income tax provision........ 14,074 5,009 12,992 362
-------- -------- -------- --------
Income (loss) from
continuing operations
before extraordinary
items...................... 13,546 2,910 2,978 (5,342)
Income (loss) from
discontinued operations,
net of income taxes........ 3,628 (7,141) (34,324) 3,419
-------- -------- -------- --------
Income (loss) before
extraordinary items........ 17,174 (4,231) (31,346) (1,923)
Extraordinary gain, net of
taxes of $579.............. -- -- -- 833
-------- -------- -------- --------
Net income (loss)........... $ 17,174 $ (4,231) $(31,346) $ (1,090)
======== ======== ======== ========
Basic earnings per share:
Income (loss) from
continuing operations.... $ 0.27 $ 0.05 $ 0.05 $ (0.09)
Discontinued operations... 0.07 (0.13) (0.62) 0.06
Extraordinary gain........ -- -- -- 0.01
-------- -------- -------- --------
Net income (loss)......... $ 0.34 $ (0.08) $ (0.57) $ (0.02)
======== ======== ======== ========
Diluted earnings per share:
Income (loss) from
continuing operations.... $ 0.25 $ 0.05 $ 0.05 $ (0.09)
Discontinued operations... 0.06 (0.12) (0.59) 0.06
Extraordinary gain........ -- -- -- 0.01
-------- -------- -------- --------
Net income (loss)......... $ 0.31 $ (0.07) $ (0.54) $ (0.02)
======== ======== ======== ========
Weighted average common
shares:
Basic..................... 50,495 54,537 55,418 56,338
======== ======== ======== ========
Diluted................... 54,607 58,159 57,830 56,338
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
No Par Value No Par Value Treasury Stock
------------------ ----------------- Warrant ---------------- Notes Deferred
Additional to acquire Receivable Stock
Paid-in Common from Share- Compen- Retained
Shares Value Shares Value Capital Stock Shares Value holders sation Earnings
---------- ------ ---------- ----- ---------- ---------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June
29, 1996........ 2,448,000 $1,916 48,898,148 $ 202 $100,331 $ -- -- $ -- $(476) $(179) $21,702
Repurchase of
stock........... -- -- -- -- -- -- 96,286 (2,000) -- -- --
Proceeds from
issuance of
stock, net of
issuance costs.. 165,000 1,564 2,776,660 1,043 52,916 -- (96,286) 2,000 -- -- (80)
Stock issued
upon sale of
warrants........ -- -- 1,013,760 -- 11,917 (1,600) -- -- -- -- --
Compensation in
connection with
grant of stock
options......... -- -- -- -- 528 -- -- -- -- -- --
Stock issued
upon exercise of
options......... -- -- 1,210,537 -- 3,497 -- -- -- -- -- --
Stock issued for
acquisition..... -- -- 266,528 -- 3,979 -- -- -- -- -- --
Tax benefit
associated with
option
exercises....... -- -- -- -- 3,557 -- -- -- -- -- --
Amortization of
deferred stock
compensation.... -- -- -- -- -- -- -- -- -- 179 --
Conversion of
preferred
stock........... (2,613,000) (3,480) 1,434,160 3,480 -- -- -- -- -- -- --
Stock issued
through stock
purchase plan... -- -- 111,474 -- 1,126 -- -- -- -- -- --
Buy back of
Treasury Stock.. -- -- (15,005) -- -- -- -- -- -- -- --
Distributions... -- -- -- -- -- -- -- -- -- -- (3,465)
Unrealized loss
on marketable
securities...... -- -- -- -- -- -- -- -- -- -- --
Cumulative
translation
adjustment...... -- -- -- -- -- -- -- -- -- -- --
Net income for
the year........ -- -- -- -- -- -- -- -- -- -- 17,174
Comprehensive
income for the
year............ -- -- -- -- -- -- -- -- -- -- --
Elimination of
duplicate
activity for the
six month period
ended December
31, 1996
resulting from
the change in
fiscal year of
entity acquired
in pooling-of-
interests....... -- -- (1,538,184) -- (20,650) 1,600 -- -- -- -- 169
---------- ------ ---------- ----- -------- ------ ------- ------- ----- ----- -------
<CAPTION>
Accumulated
Other Comprehensive
Income (loss)
------------------------
Unrealized Cumulative Total
Gain/loss on Translation Stockholders'
Investments Adjustment Equity
------------ ----------- -------------
<S> <C> <C> <C>
Balance at June
29, 1996........ $(18) $265 $123,743
Repurchase of
stock........... -- -- (2,000)
Proceeds from
issuance of
stock, net of
issuance costs.. -- -- 57,443
Stock issued
upon sale of
warrants........ -- -- 10,317
Compensation in
connection with
grant of stock
options......... -- -- 528
Stock issued
upon exercise of
options......... -- -- 3,497
Stock issued for
acquisition..... -- -- 3,979
Tax benefit
associated with
option
exercises....... -- -- 3,557
Amortization of
deferred stock
compensation.... -- -- 179
Conversion of
preferred
stock........... -- -- --
Stock issued
through stock
purchase plan... -- -- 1,126
Buy back of
Treasury Stock.. -- -- --
Distributions... -- -- (3,465)
Unrealized loss
on marketable
securities...... (15) --
Cumulative
translation
adjustment...... -- 200
Net income for
the year........ -- --
Comprehensive
income for the
year............ -- -- 17,359
Elimination of
duplicate
activity for the
six month period
ended December
31, 1996
resulting from
the change in
fiscal year of
entity acquired
in pooling-of-
interests....... 12 (302) (19,171)
------------ ----------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
No Par Value No Par Value Treasury Stock
----------------- ----------------- Warrant ----------------- Notes Deferred
Additional to acquire Receivable Stock
Paid-in Common from Share- Compen- Retained
Shares Value Shares Value Capital Stock Shares Value holders sation Earnings
-------- ------- ---------- ----- ---------- ---------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June
28, 1997........ -- -- 54,158,078 4,725 157,201 -- -- -- (476) -- 35,500
Compensation
expense in
connection with
grant of stock
options......... -- -- -- -- 750 -- -- -- -- -- --
Stock issued
upon exercise of
options......... -- -- 191,726 -- 1,057 -- -- -- -- -- --
Stock issued for
acquisition..... -- -- 328,578 -- -- -- -- -- -- -- --
Tax benefit
associated with
option
exercises....... -- -- -- -- 302 -- -- -- -- -- --
Stock issued
through stock
purchase plan... -- -- 73,670 -- 1,475 -- -- -- -- -- --
Unrealized gain
on marketable
securities...... -- -- -- -- -- -- -- -- -- -- --
Net loss for the
period.......... -- -- -- -- -- -- -- -- -- -- (4,231)
Cumulative
translation
adjustment...... -- -- -- -- -- -- -- -- -- -- --
Comprehensive
income for the
period.......... -- -- -- -- -- -- -- -- -- -- --
Adjustment to
add back
elimination of
the six month
period ended
June 30, 1997
resulting from
the change in
fiscal year of
entity acquired
in pooling-of
interests....... -- -- -- -- -- -- -- -- -- -- (827)
Elimination of
duplicate
activity for the
six month period
ended December
27, 1997
resulting from
the change in
fiscal year of
entities
acquired in
pooling-of-
interests....... -- -- (86,637) -- (42) -- -- -- -- -- (1,738)
------- ------- ---------- ----- ------- --- ------- ------- ---- --- ------
<CAPTION>
Accumulated
Other Comprehensive
Income (loss)
------------------------
Unrealized Cumulative Total
Gain/loss on Translation Stockholders'
Investments Adjustment Equity
------------ ----------- -------------
<S> <C> <C> <C>
Balance at June
28, 1997........ (21) 163 197,092
Compensation
expense in
connection with
grant of stock
options......... -- -- 750
Stock issued
upon exercise of
options......... -- -- 1,057
Stock issued for
acquisition..... -- -- -
Tax benefit
associated with
option
exercises....... -- -- 302
Stock issued
through stock
purchase plan... -- -- 1,475
Unrealized gain
on marketable
securities...... 43 --
Net loss for the
period.......... -- --
Cumulative
translation
adjustment...... -- 160
Comprehensive
income for the
period.......... -- -- (4,028)
Adjustment to
add back
elimination of
the six month
period ended
June 30, 1997
resulting from
the change in
fiscal year of
entity acquired
in pooling-of
interests....... -- (146) (973)
Elimination of
duplicate
activity for the
six month period
ended December
27, 1997
resulting from
the change in
fiscal year of
entities
acquired in
pooling-of-
interests....... -- -- (1,780)
------------ ----------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
No Par Value No Par Value Treasury Stock
--------------- ----------------- Warrant --------------- Notes Deferred
Additional to acquire Receivable Stock
Paid-in Common from Share- Compen- Retained
Shares Value Shares Value Capital Stock Shares Value holders sation Earnings
--------- -------- ---------- ------ ---------- ---------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 27,
1997............ -- -- 54,665,415 4,725 160,743 -- -- -- (476) -- 28,704
Stock issued
upon exercise of
options......... -- -- 1,301,014 -- 5,861 -- -- -- -- -- --
Repurchase of
stock........... -- -- -- -- -- -- 200,000 (2,546) -- -- --
Stock issued for
acquisition..... -- -- -- -- 129 -- -- -- -- -- --
Tax benefit
associated with
option
exercises....... -- -- -- -- 9,914 -- -- -- -- -- --
Stock issued
through stock
purchase plan... -- -- 259,514 -- 4,873 -- -- -- -- -- --
Issuance of
notes to
stockholders.... -- -- -- -- -- -- -- -- (1,000) -- --
Unrealized gain
on marketable
securities...... -- -- -- -- -- -- -- -- -- -- --
Cumulative
translation
adjustment...... -- -- -- -- -- -- -- -- -- -- --
Net loss for the
year............ -- -- -- -- -- -- -- -- -- -- (31,346)
Comprehensive
income for the
year............ -- -- -- -- -- -- -- -- -- -- --
------- -------- ---------- ------ -------- ---- ------- ------- ------ ---- -------
Balance at
December 26,
1998............ -- -- 56,225,943 4,725 181,520 -- 200,000 (2,546) (1,476) -- (2,642)
Stock issued
upon exercise of
options......... -- -- 160,688 -- 450 -- -- -- -- -- --
Tax benefit
associated with
option
exercises....... -- -- -- -- 249 -- -- -- -- -- --
Stock issued
through stock
purchase plan... -- -- 378,807 -- 1,964 -- -- -- -- -- --
Repayment of
notes from
stockholders.... -- -- -- -- -- -- -- -- 754 -- --
Cumulative
translation
adjustment...... -- -- -- -- -- -- -- -- -- -- --
Net loss for the
year............ -- -- -- -- -- -- -- -- -- -- (1,090)
Comprehensive
income for the
year............ -- -- -- -- -- -- -- -- -- -- --
------- -------- ---------- ------ -------- ---- ------- ------- ------ ---- -------
Balance at
December 25,
1999............ -- $ -- 56,765,438 $4,725 $184,183 $-- 200,000 $(2,546) $ (722) $-- $(3,732)
======= ======== ========== ====== ======== ==== ======= ======= ====== ==== =======
<CAPTION>
Accumulated
Other Comprehensive
Income (loss)
------------------------
Unrealized Cumulative Total
Gain/loss on Translation Stockholders'
Investments Adjustment Equity
------------ ----------- -------------
<S> <C> <C> <C>
Balance at
December 27,
1997............ 22 177 193,895
Stock issued
upon exercise of
options......... -- -- 5,861
Repurchase of
stock........... -- -- (2,546)
Stock issued for
acquisition..... -- -- 129
Tax benefit
associated with
option
exercises....... -- -- 9,914
Stock issued
through stock
purchase plan... -- -- 4,873
Issuance of
notes to
stockholders.... -- -- (1,000)
Unrealized gain
on marketable
securities...... (22) --
Cumulative
translation
adjustment...... -- 27
Net loss for the
year............ -- --
Comprehensive
income for the
year............ -- -- (31,341)
------------ ----------- -------------
Balance at
December 26,
1998............ -- 204 179,785
Stock issued
upon exercise of
options......... -- -- 450
Tax benefit
associated with
option
exercises....... -- -- 249
Stock issued
through stock
purchase plan... -- -- 1,964
Repayment of
notes from
stockholders.... -- -- 754
Cumulative
translation
adjustment...... -- (755)
Net loss for the
year............ --
Comprehensive
income for the
year............ -- -- (1,845)
------------ ----------- -------------
Balance at
December 25,
1999............ $-- $(551) $181,357
============ =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
RENAISSANCE WORLDWIDE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six Months Year Ended
Year Ended Ended -------------------------
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)........... $17,174 $(4,231) $(31,346) $(1,090)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Depreciation and
amortization............... 3,947 5,099 10,748 16,328
Writedown of goodwill....... -- -- 26,409 3,960
Loss on writedown of fixed
assets..................... -- -- 4,159 2,950
Compensation expense on
stock options.............. 494 750 -- --
Provision for losses on
accounts receivable........ 902 1,274 12,703 11,659
Deferred income taxes....... 4,129 (97) (3,624) (2,654)
Extraordinary gain on sale
of assets.................. -- -- -- (833)
Changes in operating assets
and liabilities:
Accounts receivable......... (39,041) (26,677) (50,263) 4,355
Other current assets........ (2,478) (2,708) (6,063) 17,252
Other assets................ (1,093) (3,446) (8,757) 5,464
Accounts payable, accrued
expenses and other
liabilities................ 2,483 11,471 17,989 (8,913)
------- ------- -------- -------
Net cash provided by (used
for) operating
activities............... (13,483) (18,565) (28,045) 48,478
Cash flows from investing
activities:
Cash disbursed for
acquisitions, net of cash
acquired.................... (41,543) (36,987) (24,331) (23,322)
Cash proceeds from the sale
of business................. -- -- -- 10,000
Purchases of fixed assets.... (8,216) (11,841) (14,436) (16,824)
Proceeds from sale of
assets...................... -- -- -- 4,351
Net decrease (increase) in
notes receivable............ (721) 1,271 (1,698) 1,216
Net purchases (sales) of
marketable securities....... (15,100) 22,808 5,845 --
------- ------- -------- -------
Net cash used for
investing activities..... (65,580) (24,749) (34,620) (24,579)
Cash flows from financing
activities:
Net borrowings (repayments)
on revolving credit
facilities................. 3,507 31,234 47,382 (73,562)
Principal payments on long-
term debt.................. (2,564) (3,292) (2,242) 53
Proceeds from issuance of
long-term debt............. 384 4,047 311 50,000
Debt issue costs on new
credit facility............ -- -- -- (3,130)
Net proceeds from the
issuance of common stock... 67,127 -- -- --
Purchase of treasury stock.. (2,000) -- (2,546) --
Proceeds from the issuance
of treasury stock.......... 1,920 -- -- --
Proceeds from exercise of
stock options and purchase
plans...................... 4,633 2,530 10,734 2,663
Distributions............... (3,465) (925) -- --
------- ------- -------- -------
Net cash provided by (used
for) financing
activities............... 69,542 33,594 53,639 (23,976)
Effect of exchange rate
changes on cash and cash
equivalents................ 84 169 27 (275)
Addition of activity for
Hunter for January to June
1997 (Note 3)............... -- 200 -- --
Elimination of duplicate
activity from July to
December (Note 3)........... (25,057) (706) -- --
------- ------- -------- -------
Net decrease in cash and cash
equivalents................. (34,494) (10,057) (8,999) (352)
Cash and cash equivalents,
beginning of period......... 64,507 30,013 19,956 10,957
------- ------- -------- -------
Cash and cash equivalents,
end of period............... $30,013 $19,956 $ 10,957 $10,605
======= ======= ======== =======
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid for interest...... $ 1,311 $ 1,324 $ 5,945 $ 8,662
Cash paid for income taxes.. $10,269 $10,589 $ 12,394 $ 7,291
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS
Renaissance Worldwide, Inc. ("Renaissance" or the "Company") is a global
provider of business and technology consulting services to organizations with
complex information technology ("IT") operations in a broad range of
industries. The Company's offerings are categorized into three business units:
the Enterprise Solutions Group, Government Solutions Group, and Information
Technology Consulting Services Group ("ITCS Group"). The Enterprise Solutions
Group provides IT solutions design and implementation services. The Government
Solutions Group provides specialized management and technology consulting
services to the public sector. The ITCS Group provides consulting services
centered around application design, implementation and support. A fourth
segment, the Business Strategy Group, which provided management consulting and
technology integration services in connection with performance support
systems, was sold for $65.0 million on March 10, 2000, and is reported as
discontinued operations (see Note 17). The Company's primary locations are in
North America with subsidiaries in Europe and Asia/Pacific (see Note 12).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The accompanying financial statements include the accounts of Renaissance
Worldwide, Inc. and its wholly-owned subsidiaries. All material intercompany
balances and transactions have been eliminated.
Fiscal Year
Effective with the period ended December 27, 1997, the Company changed its
fiscal year from the last Saturday in June to the last Saturday in December.
The six month period ended December 27, 1997 (the "Transition Period")
reflects the results of operations and cash flows for the six months then
ended for the Company and all of its subsidiaries. The results of operations
and of cash flows for the years ended June 28, 1997, December 26, 1998 and
December 25, 1999 are for 52 weeks.
Cash Equivalents
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The
Company's cash equivalents consist primarily of short term federal notes and
money market securities bearing interest at a rate of approximately 4.0% at
December 25, 1999. The investments are carried at cost plus accrued interest,
which approximates market value. The Company considers such securities to be
classified as "available-for-sale" under Statements of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
Revenue Recognition
The Company's revenue is primarily comprised of fees for consulting
services. The majority of the Company's revenue is from contracts on a time
and materials basis and is recognized as the services are performed. The
remainder of the Company's contracts are on a fixed-price basis, and revenue
from those contracts is recognized using the percentage of completion method
based upon the number of labor hours incurred compared to the total estimated
hours at estimated realizable rates. Under the percentage of completion
method, the Company must estimate the percentage of completion of each project
at the end of each financial reporting period. Estimates are subject to
adjustment as a project progresses to reflect changes in projected completion
costs or dates. Revenues are reported net of reimbursable expenses which are
typically billed and collected from clients. Losses, if any, are provided for
in the period in which the loss is determined. Amounts received in excess of
revenue recognized are recorded as deferred revenue.
33
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Accounts Receivable, Concentration of Credit Risk and Uncertainties
The Company is subject to credit risk through trade receivables. Credit risk
with respect to trade receivables is mitigated by the diversification of the
Company's operations, as well as its large client base and its geographical
dispersion. The Company performs ongoing evaluations of its receivables and
may obtain retainers at the onset of significant fixed price client
engagements. Collateral is not required for time and material contracts. In
management's opinion, the Company has provided sufficient provisions to
prevent a significant impact of credit losses to the financial statements. The
failure of the Company to complete a fixed price project to the client's
satisfaction within the fixed price exposes the Company to potentially
unrecoverable cost overruns.
Fees on fixed-price contracts are generally billable to clients upon the
achievement of specified milestones. Unbilled revenue was $23.1 million and
$14.9 million at December 26, 1998, and December 25, 1999, respectively.
No single customer accounted for more than 10% of revenues or more than 10%
of accounts receivable for any period presented.
Fixed Assets
Fixed assets are stated at cost. Additions, renewals and betterments of
fixed assets are capitalized. Repair and maintenance expenditures for minor
items are generally expensed as incurred. Depreciation of fixed assets is
provided using the straight-line method over the following estimated useful
lives:
<TABLE>
<S> <C>
Buildings and improvements.................. 31.5 years
Computer equipment.......................... 5 years
Furniture and equipment..................... 5 to 7 years
Motor vehicles.............................. 5 years
Leasehold improvements...................... Lesser of lease term or 20 years
</TABLE>
In March 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Position No. 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 was effective
for fiscal years beginning after December 15, 1998. The Company's existing
accounting policies conform to the requirements of this statement. The Company
has capitalized $3.6 million and $4.1 million in 1998 and 1999 respectively in
relation to its PeopleSoft implementation. These costs primarily include
licensing fees and internal labor costs of employees directly associated with
the implementation project.
Advertising Costs
Advertising costs are recorded as expense when incurred.
Income Taxes
The Company utilizes the asset and liability method of accounting for income
taxes, as set forth in Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes". SFAS No. 109 requires the recognition
of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the financial statement and tax
bases of assets and liabilities, utilizing currently enacted tax rates. The
effect of any future change in tax rates is recognized in the period in which
the change occurs.
Certain of the Company's subsidiaries had previously elected to be treated
as small business corporations for income tax purposes with income or loss and
credits passed through to the stockholders. These elections were
34
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
subsequently terminated prior to or upon acquisition by the Company and the
net deferred tax asset or liability as of the date of acquisition has been
included in the provision for income taxes in the period of termination.
Certain of the Company's subsidiaries had previously utilized the cash
method of accounting for income taxes. Upon acquisition by the Company, these
subsidiaries converted to the accrual method of accounting for income taxes.
Stock-Based Compensation
The Company accounts for employee awards under its stock plans in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees" and related interpretations. The Company adopted SFAS No. 123,
"Accounting for Stock-Based Compensation" for disclosure purposes only.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at December 26, 1998 and December 25, 1999, and
the reported amounts of revenue and expenses for the year ended June 28, 1997,
the six month period ended December 27, 1997 and the years ended December 26,
1998 and December 25, 1999. Actual results could differ from those estimates.
Goodwill and Other Intangible Assets
The Company amortizes goodwill and intangible assets arising from purchase
acquisitions on a straight-line basis over a period of 10 to 30 years.
Goodwill is evaluated for consideration of potential impairment based on the
operating results and forecasted cash flows of the acquired entity. Based on
these evaluations, the Company has written off goodwill of $4.0 million
associated with Renaissance Worldwide Professionals, Ltd. (formerly James
Duncan Associates, based in the United Kingdom) in 1999. The Company also
wrote off goodwill of $21.4 million associated with COBA Consulting Limited
("COBA UK") and $5.7 million associated with of Renaissance Technomic, Inc.
and Renaissance Technomic Limited (collectively, "Technomic"), businesses in
1998 which were part of the Business Strategy Group and are reported in
discontinued operations (See Note 17).
Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform to the current period presentation.
Other Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income" which
requires disclosure of comprehensive income and its components in interim and
annual reports. Comprehensive income includes all changes in stockholders'
equity during a period except those resulting from investments by stockholders
and distributions to stockholders. Accordingly, the components of
comprehensive income include net income, cumulative translation adjustments
and unrealized gains and losses on available-for-sale securities. Deferred
taxes have not been provided on cumulative translation adjustments because
deferred taxes have not been provided on unremitted earnings (see Note 8).
Deferred taxes and any reclassification adjustments related to unrealized
gains/losses on investments are insignificant.
35
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Translation of Foreign Currencies
The functional currency of the Company's subsidiaries is the local currency.
Assets and liabilities of foreign subsidiaries are translated into U.S.
dollars at exchange rates in effect at the balance sheet date; income and
expense items and cash flows are translated at average exchange rates for the
period. Cumulative net translation adjustments are included in stockholders'
equity. Gains and losses resulting from foreign currency transactions, not
significant in amount, are included in the results of operations as other
(income) expense.
Earnings (Loss) Per Share
Earnings (loss) per share--basic is calculated based upon the weighted
average number of common shares actually outstanding, and earnings (loss) per
share--diluted is calculated based upon the weighted average number of common
shares and dilutive potential common stock outstanding. Potential common stock
includes stock options and warrants, calculated using the treasury stock
method, and the assumed conversion of preferred stock (see Note 9). However,
potential common stock has been excluded from the calculation of diluted
earnings per share for the year ended December 25, 1999, as its effect would
be anti-dilutive.
A reconciliation of the weighted average number of common shares outstanding
is as follows:
<TABLE>
<CAPTION>
Year Ended
Year Ended Six Months Ended -------------------------
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
---------- ---------------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C>
Weighted average number
of common shares
outstanding-basic...... 50,495 54,537 55,418 56,338
Assumed exercise of
stock options, using
the treasury stock
method................. 3,553 3,622 2,412 --
Assumed conversion of
preferred stock........ 559 -- -- --
------ ------ ------ ------
Weighted average number
of common and potential
common shares
outstanding--diluted... 54,607 58,159 57,830 56,338
====== ====== ====== ======
</TABLE>
Recent Accounting Developments
In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin No. 101 ("SAB 101"), which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. The Company is required to be in conformity with the
provisions of SAB 101 in fiscal 2000 and is currently evaluating the impact
SAB 101 will have on its financial condition or results of operations.
3. POOLING OF INTERESTS ACQUISITIONS
Fiscal 1998 Pooling of Interests
In fiscal 1998, the Company acquired Neoglyphics Media Corporation
("Neoglyphics") and Triad Data, Inc. ("Triad") for a total of 4,554,760 shares
of the Company's common stock. Neoglyphics was an Internet development and
applications services provider which was added to the Company's Enterprise
Solutions Group. In addition, outstanding stock options to purchase
Neoglyphics common stock were converted into options to purchase 119,940
shares of the Company's common stock. Triad was an information technology
consulting firm which became part of the Company's Services Group. The Company
incurred $6.9 million in acquisition-related expenses in the second quarter of
1998 related to these transactions.
36
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Neoglyphics and Triad each had a calendar year end and the results of
operations for the year ended December 31, 1997 were combined with the results
of operations for the Company's fiscal year ended June 28, 1997. Additionally,
the financial position of Neoglyphics and Triad as of December 31, 1996 has
been combined with the Company's financial position as of June 28, 1997. In
order to conform Neoglyphics' and Triad's year end to the Company's fiscal
year end, the consolidated statement of income for the six months ended
December 27, 1997 includes six months (July to December 1997) for Neoglyphics
and Triad which has also been included in the consolidated statement of income
for the fiscal year ended June 28, 1997. An adjustment has been made to
retained earnings in the transition period ended December 28, 1997 to
eliminate the duplication of net income of Neoglyphics and Triad for such six
month period.
Transition Period Pooling of Interests
In 1997, the Company acquired all of the outstanding stock of Renaissance
Solutions, Inc. ("RSI") and the Hunter Group Inc. ("Hunter Group"). In total,
21,647,012 shares of the Company's common stock were exchanged for all of the
outstanding common stock of RSI and the Hunter Group. In addition, outstanding
stock options to purchase RSI and the Hunter Group common stock were converted
into options to purchase 3,361,088 shares of the Company's common stock.
Fiscal 1997 Pooling of Interests
In 1996, the Company acquired Applications Resources, Inc. ("ARI"), Shamrock
Computer Resources, Ltd. ("SCR") and International Systems Services
Corporation ("ISS") for a total of 6,797,548 shares of the Company's common
stock. ARI and SCR are information technology consulting firms performing
services similar to those of the ITCS Group. ISS is a consulting firm
providing business and management consulting services. In addition,
outstanding stock options to purchase ARI common stock were converted into
options to purchase 435,810 shares of the Company's common stock.
These transactions have been accounted for as pooling of interests and,
therefore, the financial statements of the Company have been restated to
include the financial condition, results of operations and cash flows of these
two companies for all periods presented.
There were no material transactions between the Company, ARI, SCR, ISS, RSI,
the Hunter Group, Neoglyphics or Triad during any of the periods presented. No
material adjustments to net assets or results of operations were necessary to
conform the accounting practices of ARI, SCR, ISS, RSI, the Hunter Group,
Neoglyphics or Triad to that of the Company. Certain reclassifications were
made to the financial statements of ARI, SCR, ISS, RSI, the Hunter Group,
Neoglyphics and Triad to conform with the Company's classifications. All costs
associated with the acquisitions have been expensed as incurred.
4. PURCHASES AND DISPOSITIONS
Fiscal 1999 Purchases
In January 1999, the Company acquired InfoSolutions.edu, L.L.C.
("InfoSolutions") for approximately $5.2 million including a $2.5 million note
payable. InfoSolutions provides software consulting and implementation to
universities and non-profit organizations. In connection with this
acquisition, the Company may be required to pay additional consideration of up
to $500,000 based on personnel retention.
Fiscal 1999 Dispositions
The Company made several dispositions of non-strategic assets in 1999. In
February 1999, the Company sold substantially all of the assets of Renaissance
Technomic, Inc. and Renaissance Technomic Limited
37
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(collectively, "Technomic") and COBA Consulting Limited ("COBA"). The Company
recorded asset impairment charges of approximately $27.1 million in 1998
associated with these businesses which were part of the Business Strategy
Group and are reported in discontinued operations. No gain or loss was
recognized in connection with the sale of these businesses. Technomic was a
provider of strategic market research and consulting services. COBA was a
provider of management consulting services.
In May 1999, the Company sold substantially all of the assets of Neoglyphics
and its Customer Management Solutions Vantive practice ("CMS") for $10.0
million in cash, a $2.0 million convertible note receivable and 400,000 shares
of the purchaser's common stock. The note is convertible into common stock at
the time of a qualifying initial public offering by the purchaser at a 20%
discount from the offering price. The purchaser filed a preliminary
registration statement with the SEC in early 2000. In connection with this
sale, the Company recognized an after tax gain of $833,000. The gain on the
sale has been classified as an extraordinary item because the pooling of
interests method of accounting was applied to the original acquisition of
these assets within the last two years.
In the fourth quarter of fiscal 1999, the Company made a decision to sell
its Business Strategy Group for $65.0 million in cash. Accordingly, the
results of operations of the Business Strategy Group have been classified as
discontinued operations in the accompanying financial statements (see Note
17). The transaction closed on March 10, 2000 and will result in a gain for
the Company of approximately $10 million which will be recorded in the first
quarter of fiscal 2000. In February 2000, the Company signed a letter of
intent to sell Renaissance Worldwide Professionals Ltd., formerly known as
James Duncan Associates, back to its management for approximately $1.2
million. This transaction is expected to close by the end of March 2000 and
will not have a material effect upon the Company's results of operations. The
Company recorded a goodwill writedown of $4.0 million in connection with this
business in the fourth quarter of 1999 (see Note 6).
Fiscal 1998 Purchases
In fiscal 1998, the Company acquired Exad Galons, Hackenberg and Partners
("Hackenberg") and International Public Access Technologies "IPAT" for an
aggregate of $12.5 million in cash. Exad Galons and Hackenberg were added to
the Company's Enterprise Solutions Group whereas IPAT became part of the
Company's Government Solutions Group.
In connection with these acquisitions, the Company may pay or has paid
contingent consideration of $8.3 million based upon certain earnout
arrangements. Such amounts are recorded as additional purchase price when
paid.
Transition Period Purchases
During the transition period ended December 27, 1997, the Company acquired
four companies: McClain Group, Inc., Technomics Consultants International,
Inc., Eligibility Management Systems, Inc., and Cambridge Software Group. The
aggregate purchase price and related costs associated with these acquisitions
was $37.5 million which has been allocated to the assets and liabilities
assumed based upon their fair value on the date of acquisition. The excess of
the purchase price over this fair value of acquired assets and liabilities has
been allocated to goodwill.
In connection with the Transition Period Acquisitions, the Company may pay
or has paid contingent consideration of up to $12.6 million based upon certain
earnout arrangements. Such amounts are recorded as additional purchase price
when paid.
38
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Fiscal 1997 Purchases
During the fiscal year ended June 28, 1997, the Company acquired five
companies: Morris Information Systems, Sun-Tek Consultants, Inc., Sterling
Information Group, James Duncan & Associates ("JDA"), and Connexus Consulting
Group, Inc. In addition, during fiscal 1997, prior to the merger with the
Company, RSI acquired two companies: COBA Consulting Limited ("COBA UK") and
C.M. Management Systems Ltd., Inc. ("COBA-Boston"). These acquisitions are
collectively referred to as the "Fiscal 1997 Acquisitions". The aggregate
purchase price and related costs associated with the Fiscal 1997 Acquisitions
were $38.0 million plus 266,528 shares of the Company's common stock.
In connection with the Fiscal 1997 Acquisitions, the Company was required to
pay contingent consideration of up to $32.3 million based on certain earn-out
arrangements. Such amounts, when paid, were recorded as additional purchase
price. As of December 25, 1999, the Company had accrued contingent
consideration of approximately $4.1 million associated with COBA-Boston which
was paid in the first quarter of 2000.
These transactions were accounted for as purchases. The purchase price has
been allocated to the assets acquired and liabilities assumed based upon their
fair values as of the respective dates of acquisition. The excess of the
consideration paid over the estimated fair value of net assets acquired has
been recorded as goodwill and amortized. The results of operations for these
acquisitions have been included in the Company's results of operations from
their respective dates of acquisition. At December 26, 1998 and December 25,
1999, $7.1 million and $9.0 million, respectively, were accrued for contingent
consideration related to the above acquisitions. These amounts are included in
other accrued expenses.
Assuming the 1999, 1998, Transition Period, and 1997 Acquisitions occurred
at the beginning of each respective period, the pro forma results of
operations would not materially differ from the Company's reported results of
operations.
5. RELATED PARTY NOTES AND ADVANCES
Notes receivable from stockholders of $1,476,000 and $722,000 at December
26, 1998 and at December 25, 1999, respectively, which are included as a
reduction of stockholders' equity in the accompanying balance sheet, include
promissory notes from two of ARI's officers totaling $226,000 for the exercise
of stock options bearing interest at a variable rate based upon federal income
tax requirements (approximately 6% at December 26, 1998 and December 25,
1999), two demand notes from an individual who was the sole stockholder of the
Hunter Group totaling $250,000, which accrue interest at 5%, and notes issued
to various employees to purchase the Company's common stock totaling $246,000
which accrue interest at 7.0%. In addition, the Company has notes receivable
and advances from officers totaling approximately $2.0 million due from
various senior officers of the Company of which approximately $1.0 million is
included in other assets and approximately $1.0 million is included in other
current assets. Notes bear interest at the prime rate.
6. RESTRUCTURING AND OTHER ASSET WRITE-DOWNS
In February 2000, the Company signed a letter of intent to sell Renaissance
Worldwide Professionals, Ltd. (formerly James Duncan & Associates) back to its
management for approximately $1.2 million. In connection with this transaction
which is expected to close in March 2000, the Company recorded a charge in the
fourth quarter of 1999 to write-down goodwill in the amount of $4.0 million.
In the second quarter of 1999, the Company recorded an asset writedown of
$2.9 million in connection with the sale of Neoglyphics and CMS (Note 4).
39
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
In 1998, the Company recorded a charge of $5.7 million related to a
restructuring plan designed to focus the Company on the new corporate strategy
and eliminate redundant facilities, equipment, software, and personnel
recorded in the third quarter of 1998. A balance of $2.9 million accrual
remained from this charge at December 26, 1998 which included $1.7 million of
costs to terminate lease obligations and other activities and $1.2 million
related to severance and other costs. These charges were utilized as planned
in 1999.
7. FINANCING ARRANGEMENTS
During 1998, the Company had a line of credit facility which provided a
borrowing base of 85% of eligible accounts receivable as defined, up to a
maximum borrowing of $85 million, payable on demand. Interest was payable
monthly in arrears at the bank's prime rate plus 0.50% (8.25% at December 26,
1998) or the LIBOR rate plus 2.50% (7.71% at December 26, 1998), at the option
of the Company. The line of credit was collateralized by the majority of the
assets of the Company, excluding the assets of the Wells Avenue Realty Trust
(Note 14), contained certain restrictions, and required the maintenance of
certain financial covenants. This line of credit was terminated on March 24,
1999.
In February of 1999, the Company entered into a new line of credit ("Interim
Facility") with a different bank to provide a borrowing base of 85% of
eligible accounts receivable as defined, up to a maximum borrowing of $110
million. Interest was payable monthly in arrears at the LIBOR rate plus 2.00%
or the higher of the bank's prime rate or the Fed Funds rate plus 0.50%, plus
0.75%, at the Company's option. The Interim Facility was collateralized by the
majority of the assets of the Company, contained certain restrictions, and
required maintenance of certain financial covenants. The Interim Facility was
a short-term facility to be used until syndication of a senior term loan
facility committed to by the bank. The Interim Facility was used to repay the
outstanding borrowings on the existing line of credit that was terminated on
March 24, 1999.
On July 15, 1999 the Company entered into a three-year, $150 million
revolving credit and term loan agreement (the "Credit Facility") with a bank
syndicate. The Credit Facility consists of a revolving line of credit of $100
million ("Revolving Credit Facility") and a term loan of $50 million ("Term
Loan"). The Credit Facility bears interest at the higher of the Federal Funds
Rate plus 0.50% or the prime rate, plus up to 1.75% or LIBOR plus up to 3.0%,
depending on the Company's level of compliance with certain financial ratios.
The Credit Facility requires the Company to pay a commitment fee of 0.375% to
0.50% per annum, depending on certain financial criteria, on the unused
portion of the Credit Facility. The Credit Facility requires the Company to
make quarterly principal payments of $250,000 on the Term Loan beginning
September 15, 2000 and each quarter thereafter until June 15, 2002. The
remaining obligations under the Term Loan would be repaid on July 15, 2002
along with any outstanding borrowings under the Revolving Credit Facility. The
Credit Facility is collateralized by the majority of the assets of the Company
and contains certain restrictions and various covenants, including the
maintenance of defined financial ratios.
On September 15, 1999, the Company announced that it was revising its
revenue and earnings estimates for the third and fourth quarters of 1999 due
to a softening in the demand for services in two of its core businesses--
Enterprise Solutions and ITCS. Based upon this revised outlook, the Company
informed the bank syndicate that it would not be in compliance with certain of
its financial covenants for the third quarter of 1999. On November 4, 1999,
the Company and the banks signed an amendment to the Credit Facility amending
certain financial covenants for the third quarter of 1999 through the third
quarter of 2000, reverting back to the original financial covenants
established in the Credit Facility thereafter. The Credit Facility, as
amended, now bears interest at the higher of the Federal Funds Rate plus 0.50%
or the prime rate, plus up to 2.25% or LIBOR plus up to 3.5%, depending on the
Company's level of compliance with certain financial ratios. In connection
with this amendment, the Company was required to pay amendment fees to the
banks and related expenses of approximately $500,000 which were recorded in
the third quarter of 1999 as interest and other expense, net.
40
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
As of December 25, 1999, the total amount outstanding under the Credit
Facility, including the Term Loan, was $68.0 million at a weighted average
interest rate of 9.97% with a remaining borrowing availability under the
Credit Facility approximately $19.6 million. The Company had additional
outstanding debt, including current portions, of approximately $5.5 million
which was comprised of other local lines of credit and various notes payable
with interest rates ranging from 6.75% to 9.375% and maturities between May
2000 and April 2013.
On February 25, 2000, the Company and the banks signed a second amendment to
the Credit Facility which permitted the Company to complete its sale of the
Business Strategy Group (see Note 17) and Renaissance Worldwide Professionals
Ltd., formerly James Duncan Associates, and amended certain financial
covenants to reflect the sale of these businesses.
On March 14, 2000 the Company used $60.0 million of the proceeds that it
received from the sale of its Business Strategy Group to repay the $50.0
million Term Loan and $10.0 million of borrowings under the Revolving Credit
Facility (see Note 17).
8. INCOME TAXES
Prior to November 27, 1996, January 1, 1997, December 31, 1996 and April 2,
1998, SCR, Neoglyphics, ISS and Triad, respectively, had each elected to be an
S Corporation for federal income tax purposes as provided in Section 1362(a)
of the Internal Revenue Code. As such, the corporate income or loss and
credits were passed through to the stockholders and reported on their personal
tax returns.
Neoglyphics elected to terminate its S Corporation status on January 1,
1997. At the time of this conversion, a net deferred tax liability of $302,000
was recorded through the income tax provision on January 1, 1997. This
deferred tax liability was comprised principally of the effects of Neoglyphics
being a cash basis tax payer.
SCR's, ISS's and Triad's elections to be treated as S Corporations
terminated in conjunction with the acquisition of all of the common stock of
SCR, ISS and Triad by the Company. As a result, the income or loss of SCR
commencing on November 27, 1996, the income or loss of ISS commencing on
December 31, 1996 and the income or loss of Triad commencing on April 2, 1998
is subject to corporate income tax, and is included in the income tax
provision (benefit) described below.
At the time of the conversion of SCR from an S Corporation to a C
Corporation, a net deferred tax asset of $403,000 was recorded through the
income tax provision on November 27, 1996. This deferred tax asset was
comprised principally of certain accrued expenses and allowances which are
recognized in different periods for financial and tax reporting.
At the time of conversion of ISS from an S Corporation to a C Corporation, a
net deferred tax liability of $1,002,000 was recorded through the income tax
provision on December 31, 1996. This deferred tax liability was comprised
principally of the effect of converting from the cash basis to the accrual
basis for tax reporting purposes.
At the time of conversion of Triad from an S Corporation to a C Corporation,
a net deferred tax liability of $2,878,000 was recorded through the income tax
provision on April 2, 1998. This deferred tax liability was comprised
principally of the effect of converting from the cash basis to the accrual
basis for tax reporting purposes.
41
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
From its inception, the Hunter Group reported its financial results for
income tax purposes using the cash method of accounting. Upon acquisition by
the Company, the Hunter Group changed its method of accounting for income tax
reporting purposes from the cash method to the accrual method. As a result,
substantially all of the deferred tax liability related to the Hunter Group
accumulated on the balance sheet will become due and payable over a four-year
period.
The components of the income tax provision (benefit) from continuing
operations are as follows:
<TABLE>
<CAPTION>
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
(In thousands)
<S> <C> <C> <C> <C>
Current:
Federal............... $ 9,798 $4,527 $ 9,275 $3,428
State................. 2,436 1,162 1,969 167
Foreign............... 51 384 2,013 318
------- ------ ------- ------
12,285 6,073 13,257 3,913
Deferred:
Federal............... 682 (872) (2,531) (3,172)
State................. 171 (192) (612) (379)
------- ------ ------- ------
853 (1,064) (3,143) (3,551)
Change in tax status of
SCR, ISS, Neoglyphics
and Triad.............. 936 -- 2,878 --
------- ------ ------- ------
$14,074 $5,009 $12,992 $ 362
======= ====== ======= ======
</TABLE>
Pretax income (loss) from continuing operations is summarized as follows:
<TABLE>
<CAPTION>
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
(In thousands)
<S> <C> <C> <C> <C>
Domestic... $27,943 $8,277 $11,787 $(2,724)
Foreign.... (323) (358) 4,183 (2,256)
------- ------ ------- -------
Total.... $27,620 $7,919 $15,970 $(4,980)
======= ====== ======= =======
</TABLE>
42
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Deferred income taxes reflect the tax impact of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and such amounts as measured by tax laws and regulations. Under SFAS 109, the
benefit associated with future deductible temporary differences and operating
loss or credit carryforwards is recognized if it is more likely than not that
a benefit will be realized. Deferred tax expense (benefit) represents the
change in the net deferred tax asset or liability balance. Deferred tax assets
and liabilities are comprised of the following at December 26, 1998, and
December 25, 1999:
<TABLE>
<CAPTION>
December 26, December 25,
1998 1999
------------ ------------
(In thousands)
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward.................... $1,282 $1,120
Allowance for doubtful accounts.................... 3,749 1,306
Accounts payable and accrued expenses.............. 4,787 6,126
Other.............................................. 739 2,874
------ ------
Total gross deferred tax assets.................. 10,557 11,426
------ ------
Deferred tax liabilities:
Differences arising due to tax accounting method
changes........................................... 5,676 3,003
Fixed assets....................................... 855 2,420
Other.............................................. 1,721 853
------ ------
Total gross deferred tax liabilities............. 8,252 6,276
------ ------
Net deferred tax asset........................... $2,305 $5,150
====== ======
</TABLE>
As of December 25, 1999, the Company has $0.6 million (federal) and $17.7
million (state) of net operating loss carryforwards which may be used to
offset future federal and state taxable income, respectively. The
carryforwards expire on various dates from 2009 to 2018. An ownership change,
as defined in the Internal Revenue Code, may limit the amount of net operating
loss that can be utilized annually to offset future taxable income.
Income taxes computed using the federal statutory income tax rate differs
from the Company's effective tax rate for continuing operations due to the
following:
<TABLE>
<CAPTION>
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Statutory U.S. federal
tax rate............... 35.0% 35.0% 35.0% (35.0%)
State taxes, net of
federal tax benefit.... 6.2 7.7 6.0 (2.7)
Income (loss) from SCR,
ISS, Triad and
Neoglyphics not taxable
for corporate income
tax purposes........... (4.0) -- 3.7 --
Non-deductible
expenses............... 9.5 15.5 18.4 8.7
Goodwill not deductible
for corporate income
tax purposes........... 0.3 0.6 3.5 36.4
Foreign income (loss)
taxed at different
rates.................. 0.5 6.3 (1.3) --
Change in tax status of
SCR, ISS, Neoglyphics
and Triad.............. 3.4 -- 18.0 --
Other................... 0.1 (1.8) (1.9) (0.1)
---- ---- ---- -----
Effective tax rate...... 51.0% 63.3% 81.4% 7.3%
==== ==== ==== =====
</TABLE>
43
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Non-deductible expenses during the year ended June 28, 1997 and six months
ended December 27, 1997 and the year ended December 26, 1998 primarily relate
to certain costs incurred in connection with the acquisitions of SCR, ISS,
RSI, the Hunter Group, Neoglyphics and Triad.
Undistributed earnings of certain foreign subsidiaries aggregated
approximately $3.0 million on December 25, 1999, which under existing law,
will not be subject to U.S. tax until distributed as dividends. Since the
earnings have been or are intended to be indefinitely reinvested in foreign
operations, no provision has been made for any U.S. taxes that may be
applicable thereto. Furthermore, any taxes paid to foreign governments on
those earnings may be used in whole or in part as credits against the U.S. tax
on any dividends distributed from such earnings. It is not practicable to
estimate the amount of unrecognized deferred U.S. taxes on these undistributed
earnings.
9. STOCKHOLDERS' EQUITY
Preferred Stock, $0.10 par value
On April 10, 1996, Renaissance's then sole stockholder authorized 1,000,000
shares of preferred stock, $0.10 par value. Preferred stock may be issued in
one or more series at the discretion of the Board of Directors of Renaissance
(without shareholder approval) with such designations, rights and preferences
as the Board of Directors may determine. The preferred stock may have
dividend, liquidation, redemption, conversion, voting or other rights which
may be more expansive than the rights of the holders of Renaissance's common
stock.
Preferred Stock, no par value
Renaissance's wholly-owned subsidiary, ARI, was authorized to issue
5,000,000 shares of preferred stock, of which 3,000,000 shares were designated
as Series A Preferred Stock (the "Series A Preferred Stock"). The remaining
preferred stock may have been issued from time to time in one or more
additional series at the discretion of the Board of Directors. Shares of
Series A Preferred Stock were non-redeemable and had a liquidation preference
of $0.79 per share plus any declared but unpaid dividends.
Each share of Series A Preferred Stock was convertible into the number of
shares of common stock that results from dividing the conversion price in
effect at the time of conversion into $0.79 for each share of Series A
Preferred Stock being converted. The conversion price of the Series A
Preferred Stock was initially $.1084 per share, subject to adjustment for
stock splits, dividends, distributions, and combinations. At June 29, 1996,
all shares of Series A Preferred Stock were convertible into .548856 shares of
Renaissance's common stock based on a conversion price of $0.1084 per share.
On November 26, 1996, in conjunction with the acquisition of ARI by
Renaissance (see Note 3), all of the outstanding shares of Series A Preferred
Stock were converted into 1,434,160 shares of common stock.
Stock Split and Authorized Shares
On July 30, 1997, Renaissance's stockholders approved an increase to
99,000,000 in the number of authorized shares of common stock of the Company.
On February 12, 1998, the Company announced a 2-for-1 stock split. All shares
and per share amounts included in the consolidated financial statements have
been adjusted to give retroactive effect to the stock split for all periods
presented.
44
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Sale of Common and Preferred Stock
On November 19, 1996, ARI sold 55,000 units to an unrelated investor for net
proceeds of $2.6 million. Each unit consisted of shares of ARI's series A
Preferred Stock and 1.0978 shares of common stock, for a total of 165,000
shares of Series A Preferred Stock and 60,374 shares of common stock.
Public Offerings of Common Stock
On February 26, 1997, Renaissance completed a secondary public offering for
the sale of 2,468,332 shares of common stock, including the reissuance of the
treasury shares acquired in conjunction with the acquisition of SCR (see Note
3). Renaissance received approximately $48.3 million from the sale of the
shares, net of the underwriting discounts and expenses associated with the
offering. The excess of the cost of the treasury stock over the net reissuance
price has been charged to retained earnings. Net proceeds were used to repay
all outstanding indebtedness under Renaissance's credit facility.
On November 18, 1996, RSI completed an additional offering. The transaction
included 344,240 shares sold by RSI and 1,679,760 shares sold by existing
shareholders, including shares acquired by Gemini upon exercise of the Gemini
Warrants (below). The net proceeds of the offering were $6.5 million, after
deducting offering expenses of $353,000.
Treasury Stock
In September 1998, the Board of Directors authorized the Company to
repurchase up to 200,000 shares of its common stock through the open market.
The Company repurchased 200,000 shares through December 26, 1998 for a total
of $2.5 million.
Gemini Warrants
RSI sold two warrants (together, the "Gemini Warrants") to Gemini upon the
closing of RSI's initial public offering for an aggregate purchase price of
$1.6 million. One warrant was exercisable through April 11, 1998 for up to
501,760 shares of common stock at an exercise price equal to $8.125 per share.
The second warrant was exercisable through November 1, 1999 for up to 512,000
shares of common stock at an exercise price equal to $12.1875 per share. In
November 1996, Gemini exercised the warrants and RSI received proceeds from
the exercise of $10.3 million.
10. STOCK PLANS
Employee Stock Option Plans
1996 Stock Plan
This plan, adopted in March 1996, authorizes the grant of incentive stock
options, non-qualified stock options, stock purchase authorizations or stock
bonus awards to key employees, including officers, employee directors and
consultants.
As of December 27, 1997, the total number of shares of Common Stock
authorized under the 1996 Stock Plan was 7,200,000. In May of 1998, the
shareholders approved an amendment to the 1996 Stock Plan, increasing the
original number of shares of common stock available for awards under the Plan.
The amendment
45
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
provided that for a three-year period, the shares available under the Plan
will be increased each year by a number of shares equal to 4% of the total
outstanding shares at the beginning of each year. For 1998 and 1999, that
increase was 2,233,885 and 2,241,038 respectively.
Incentive stock options cannot be granted to consultants. For incentive
options, the purchase price is equal to the fair market value on the date of
grant (110% of fair market value for stockholders who hold greater than 10% of
the Company's stock at the time of grant). For non-qualified options and stock
purchase authorizations, the purchase price is determined by the Board of
Directors within limits as set forth in the plan, but shall not be less than
85% of the fair market value of common stock on the date of grant. The periods
over which options are exercisable are determined by the Board of Directors.
These options generally vest over one to five years and may expire up to ten
years after the date of grant (five years for incentive options granted to 10%
stockholders). If permitted by the Board of Directors, employees may use
previously acquired shares of the Company's common stock (provided that such
shares tendered have been held for at least six months) or may borrow money
from the Company on a recourse basis (for a period of time not to exceed five
years) to pay the exercise price of shares purchased. The Board of Directors
has the discretion to designate non-qualified options as transferable. The
plan will terminate in March 2006.
1998 Acquisition Plan
In April 1998, the Board of Directors approved the 1998 Acquisition Plan for
use exclusively for non-qualified options to be awarded to employees of
acquired businesses. This plan has the same term and vesting provisions of the
1996 Stock Plan. A total of 1,000,000 shares of common stock were authorized
for issuance under the Plan.
1998 International Plan
In April 1998, the Board of Directors approved the 1998 International Plan
for use exclusively for non-qualified options to be awarded to employees in
foreign jurisdictions. This plan has the same term and vesting provisions of
the 1996 Stock Plan. A total of 1,000,000 shares of Common Stock were
authorized for issuance under the Plan.
1998 Directors Stock Plan
In May of 1998, the stockholders of the Company approved the 1998 Directors
Stock Option Plan (the "1998 Directors Plan") which replaced the existing 1996
Eligible Directors' Stock Plan. Under the 1998 Directors Plan, outside
directors of the Company will receive equity compensation in three ways. Upon
joining the Board, an outside director will receive an option covering 20,000
shares of Common Stock. This option will become exercisable in four annual
installments beginning one year after grant. Outside directors will also
receive an option covering 2,500 shares of common stock after each year of
service. This award, which represents compensation for service during the
previous year, will be immediately exercisable. Each director will be required
to take one-half on the annual retainer (currently $12,000) in options having
an equivalent value and may elect to take all or a portion of the balance in
options as well. Options are granted at fair market value on the date of grant
and expire ten years from the date of grant. A total of 120,000 shares of
Common Stock were authorized for issuance under the Plan.
Other Stock Option Plans
As of December 25, 1999, 147,206 options were outstanding under the 1996
Eligible Director's Stock Plan and the RSI Director Plan which the Company
assumed when it acquired RSI in 1997. The Company also assumed other stock
option plans from RSI, the Hunter Group and Neoglyphics. The Neoglyphics Stock
Option Plan was closed and all outstanding options were canceled in May of
1999, when the assets of this business
46
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
were sold (see Note 4). As of December 25, 1999, 827,980 options were
outstanding under these RSI and the Hunter Group plans. These options
generally vest over one to five years and expire 10 years from the date of
grant.
Option Repricing
In December 1998, the Company offered employees the opportunity to reprice
their stock options at the fair market value of the Company's common stock on
December 15, 1998. Employees electing to take advantage of this repricing
program agreed to a two for one exchange of their options and to a one year
holding period. In connection with this program, the Company repriced
6,159,730 of existing options with a weighted average exercise price of
$21.55.
Transactions under all of the stock plans are summarized as follows:
<TABLE>
<CAPTION>
June 28, 1997 December 27, 1997 December 26, 1998 Decemer 25, 1999
-------------------- -------------------- -------------------- --------------------
Weighted Weighted Weighted Weighted
Number Average Number Average Number Average Number Average
Of Exercise Of Exercise Of Exercise Of Exercise
Options Price Options Price Options Price Options Price
---------- -------- ---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of period.............. 5,640,109 $ 7.13 8,347,962 $14.85 12,221,607 $16.12 9,925,362 $11.28
Elimination of
duplicate activity
from July to
December.............. (376,368) -- -- -- -- -- -- --
Addition of activity
from January to June.. -- -- 248,559 $11.00 -- -- -- --
Granted................ 5,141,809 18.70 4,421,009 22.43 7,546,143 13.44 5,984,504 5.61
Exercised.............. (1,217,193) 3.19 (91,902) 7.99 (1,301,014) 4.44 (160,688) 2.80
Canceled............... (855,213) 9.967 (704,021) 20.26 (8,541,374) 21.15 (4,036,337) 11.99
Conversion of Series A
Preferred Stock
Options to Common
Stock Options......... 14,818 0.66 -- -- -- -- -- --
---------- ------ ---------- ------ ---------- ------ ---------- ------
Outstanding at end of
period................. 8,347,962 $14.85 12,221,607 $16.12 9,925,362 $11.28 11,712,841 $ 8.19
========== ====== ========== ====== ========== ====== ========== ======
Exercisable at end of
year................... 1,185,229 $ 3.14 1,686,430 $ 4.01 1,681,809 $ 9.55 2,945,507 $ 9.12
Weighted average fair
value of options
granted during the
period................. $10.98 $13.42 $ 9.34 $ 5.61
Options available for
future grant........... 6,543,988 4,667,335 8,894,430 8,136,230
</TABLE>
The following table summarizes information about stock options outstanding
at December 25, 1999 under the stock plans:
<TABLE>
<CAPTION>
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
As Of Remaining Average As Of Average
December 25, Contractual Exercise December 25, Exercise
1999 Life Price 1999 Price
Range Of Exercise Prices ------------ ----------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
$ 0.39 - $ 5.00....... 1,740,607 9.10 $ 3.88 212,830 $ 1.95
$ 5.50 - $10.16....... 7,956,503 8.28 6.24 1,988,575 6.06
$11.00 - $19.19....... 977,623 7.76 16.30 365,010 15.89
$21.00 - $29.56....... 1,038,108 7.76 22.78 379,492 22.65
---------- ---- ------ --------- ------
$ 0.39 - $29.56....... 11,712,841 8.31 $ 8.19 2,945,907 $ 9.12
========== ==== ====== ========= ======
</TABLE>
47
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
1996 Employee Stock Purchase Plan
This plan permits eligible employees to purchase a limited number of shares
on a semi-annual basis. The purchase price is 85% of the lower of the fair
market value at the beginning or end of each six month period. Under this
plan, the Company issued 259,514 and 378,807 shares of common stock during
fiscal years 1998 and 1999 at an average price per share of $18.78 and $5.18,
respectively. At December 25, 1999, the Company has 360,406 shares of common
stock available for issuance pursuant to the employee stock purchase plan.
Accounting Treatment
The Company applies Accounting Principles Board Opinion No. 25 and related
Interpretations in accounting for its stock option plans. Compensation is
recognized for the difference between the exercise price of options granted
and the estimated fair value of the related shares on the date of grant, and
is recorded over the vesting period. Amortization of compensation expense was
$494,000 for the fiscal year ended June 28, 1997, $750,000 for the six month
period ended December 27, 1997 and $0 for the fiscal years ended December 26,
1998 and December 25, 1999. The benefit of tax deductions associated with the
exercise of non-qualified stock options in excess of the amount of
compensation recorded for financial reporting purposes is recorded as a credit
to additional paid-in capital.
In October 1995, the FASB issued SFAS No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123"). SFAS No. 123 is effective for periods beginning
after December 15, 1995. SFAS No. 123 requires that companies either recognize
compensation expense for grants of stock options and other equity instruments
based on fair value, or provide pro forma disclosure of net income and
earnings per share in the notes to the financial statements. The Company
adopted the disclosure provisions only of SFAS No. 123. Had compensation cost
of the Company's stock-based compensation plans been determined based on the
fair value at the grant dates as calculated in accordance with SFAS No. 123,
the Company's net income and earnings per share for the year ended June 28,
1997, the six months ended December 27, 1997 and the years ended December 26,
1998 and December 25, 1999 would have been reduced to the pro forma amounts
indicated below:
<TABLE>
<CAPTION>
As Reported
-------------------------------------------------------------------
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
(Dollars in thousands except per share amounts)
<S> <C> <C> <C> <C>
Net income (loss)....... $17,174 $ (4,231) $(31,346) $ (1,090)
Net income (loss) per
share--basic........... $ 0.34 $ (0.08) $ (0.57) $ (0.02)
Net income (loss) per
share--diluted......... $ 0.31 $ (0.07) $ (0.54) $ (0.02)
<CAPTION>
Pro Forma
-------------------------------------------------------------------
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net income (loss)....... $10,737 $(13,970) $(65,595) $(11,508)
Net income (loss) per
share--basic........... $ 0.21 $ (0.26) $ (1.18) $ (0.20)
Net income (loss) per
share--diluted......... $ 0.20 $ (0.24) $ (1.13) $ (0.20)
</TABLE>
Because options vest over several years and this pro forma disclosure only
reflects grants made in the last three fiscal periods, the effects of applying
SFAS No. 123 in this pro forma disclosure are not likely to be representative
of the effects on reported net income for future years.
48
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The fair value of options granted is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used:
<TABLE>
<CAPTION>
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Risk-free interest
rates.................. 6.3% 6.2% 6.0% 4.62%
Expected volatility..... 43.3% to 62.0% 45.0% 79.0% 80.0%
Expected dividend
yield.................. -- -- -- --
Expected life in years.. 3 to 5 5.25 5.5 3
The fair value of the employee's purchase rights under the Employee Stock
Purchase Plan was estimated using the Black-Scholes model with the following
assumptions used:
<CAPTION>
Year Ended Six Months Ended Year Ended Year Ended
June 28, 1997 December 27, 1997 December 26, 1998 December 25, 1999
------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Risk-free interest
rates.................. 5.27% to 6.0% 6.0% 6.0% 4.75%
Expected volatility..... 43.5% to 62.0% 43.5% to 62.0% 79.0% 80.0%
Expected dividend
yield.................. -- -- -- --
Expected life in years.. .5 .5 .5 .5
</TABLE>
11. EMPLOYEE BENEFIT PLANS
The Company provides various employee retirement savings plans under Section
401(k) of the Internal Revenue Code which cover substantially all employees.
Under the terms of the plans, employees may contribute a percentage of their
salary up to a maximum of 10%-20% which is then invested in one or more of
several mutual funds selected by the employee. The Company may make
contributions to the plans at its discretion; such contributions totaled
$605,000, $472,000, $3.0 million and $3.2 million for the year ended June 28,
1997, the six months ended December 27, 1997 and the years ended December 26,
1998 and December 25, 1999, respectively.
12. SEGMENT INFORMATION
The Company adopted SFAS 131 in fiscal 1998. The prior years' segment
information has been restated for discontinued operations to represent the
Company's three primary business segments; Enterprise Solutions, Government
Solutions and ITCS. The accounting policies of the segments are the same as
those described in the Summary of Significant Accounting Policies in Note 1 to
these financial statements.
49
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table presents information about reported segments for the
year ended June 28, 1997, the six months ended December 27, 1997 and the years
ended December 26, 1998 and December 25, 1999:
<TABLE>
<CAPTION>
For the year For the six For the year ended
ended months ended -------------------------
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue:
Enterprise Solutions..... $ 83,087 $ 51,870 $162,722 $171,053
Government Solutions..... -- 3,541 19,876 36,366
IT Consulting Services... 361,417 227,665 527,558 535,165
-------- -------- -------- --------
Total(1)............... $444,504 $283,076 $710,156 $742,584
======== ======== ======== ========
Income from continuing
operations:
Enterprise Solutions..... $ 8,866 $ (561) $ 9,631 $ 8,351
Government Solutions..... -- 643 3,297 4,905
IT Consulting Services... 23,755 20,369 36,883 40,920
-------- -------- -------- --------
Total(1)............... $ 32,621 $ 20,451 $ 49,811 $ 54,176
======== ======== ======== ========
Corporate expenses(2)...... $ -- $ 4,609 $ 15,743 $ 42,910
Acquisition-related
expenses.................. 8,268 6,761 6,904 --
Restructuring charges and
asset writedowns.......... -- -- 5,691 6,910
Interest and other
(income)/expense, net..... (3,267) 1,162 5,503 9,336
-------- -------- -------- --------
Total income from
continuing operations
before taxes.......... $ 27,620 $ 7,919 $ 15,970 $ (4,980)
======== ======== ======== ========
Total assets:
Enterprise Solutions..... $ 35,416 $ 33,022 $ 55,023 $ 68,745
Government Solutions..... -- 20,484 32,998 41,175
IT Consulting Services... 115,348 157,443 232,650 188,815
Assets of discontinued
operations.............. 77,482 99,361 51,394 39,909
Reconciling items(3)..... 28,675 5,867 -- --
-------- -------- -------- --------
Total.................. $256,921 $316,177 $372,065 $338,644
======== ======== ======== ========
</TABLE>
- --------
(1) Intersegment revenues were not material and have been eliminated in the
above presentation.
(2) Beginning in 1998, certain back office operations, functions and expenses
were centralized into corporate office control thereby increasing the
expenses in the corporate area. Historically, the majority of these
expenses could have been included in the IT Consulting Services Group as
these corporate functions did not exist. The Company is not able to
restate its historical results on a comparable basis.
(3) Represents unallocated corporate assets.
50
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
GEOGRAPHIC INFORMATION
The following table presents the revenue and income from continuing
operations by geographic area for the year ended June 28, 1997, the six months
ended December 27, 1997, and the years ended December 26, 1998 and December
25, 1999 and the identifiable assets by geographic area as of these dates:
<TABLE>
<CAPTION>
Six Months Year Ended
Year Ended Ended -------------------------
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
---------- ------------ ------------ ------------
(In thousands)
<S> <C> <C> <C> <C>
Revenue:
North America............. $430,108 $267,364 $665,244 $687,701
Europe.................... 13,716 14,011 42,249 50,424
Other..................... 680 1,701 2,663 4,459
-------- -------- -------- --------
Total................... $444,504 $283,076 $710,156 $742,584
======== ======== ======== ========
Income from continuing
operations:
North America............. $ 32,208 $ 17,159 $ 30,105 $ 10,394
Europe.................... 220 (606) 3,481 819
Other..................... 193 (711) 482 53
-------- -------- -------- --------
Total................... $ 32,621 $ 15,842 $ 34,068 $ 11,266
======== ======== ======== ========
Acquisition-related
expenses................. 8,268 6,761 6,904 --
Restructuring and other
asset writedown.......... -- -- 5,691 6,910
Interest and other
(income) expense, net.... (3,267) 1,162 5,503 9,336
-------- -------- -------- --------
Income from continuing
operations before taxes.... $ 27,620 $ 7,919 $ 15,970 $ (4,980)
======== ======== ======== ========
Identifiable assets:
North America............. $209,891 $290,853 $359,146 $284,734
Europe.................... 18,288 20,176 11,269 13,792
Other..................... 67 (719) 1,650 209
Corporate................. 28,675 5,867 -- --
Discontinued operations... -- -- -- 39,909
-------- -------- -------- --------
Total................... $256,921 $316,177 $372,065 $338,644
======== ======== ======== ========
</TABLE>
Corporate assets represent marketable securities invested for all segments
and regions. All other assets are used in the operations of individual
entities in the different segments and geographical areas.
13. OTHER RELATED PARTY TRANSACTIONS
During the year ended June 28, 1997, the Company entered into a contract
with an entity controlled by the Chief Executive Officer, Chairman of the
Board and significant stockholder of the Company to utilize an airplane for
corporate travel purposes. The Company pays for such usage on a per-flight
basis at a rate which management believes approximates market prices. Total
amounts incurred to this entity during the year ended June 28, 1997, the six
months ended December 27, 1997, and the years ended December 26, 1998 and
December 25, 1999 were $100,000, $267,000, $291,000 and $264,000,
respectively.
51
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
14. CONSOLIDATION OF REAL ESTATE TRUST
As described in Note 15, the Company leases office space from the Wells
Avenue Realty Trust ("Trust"), of which the Chief Executive Officer, Chairman
of the Board, and significant stockholder of the Company is the sole
beneficiary. Effective September 19, 1995, the Company renegotiated its lease
with the Trust in conjunction with a refinancing of the Trust's mortgage. The
modified lease terms expanded the amount of space which the Company occupies,
committed the Company to rent the facility through the maturity date of the
mortgage loan, and granted the Company a right of first refusal to lease any
space in the facility currently occupied by other tenants when the tenants'
leases expire.
Accordingly, as of this date, the Company obtained significant control over
the operations of the Trust and assumed a significant portion of the Trust's
obligations. As a result, the Company has consolidated the accounts of the
Trust as of September 19, 1995 on a prospective basis. This office building
was sold in March, 2000 and the Company will cease to consolidate the accounts
of the Trust effective with the date of sale.
As of December 25, 1999, the Trust reported the following assets and
liabilities (in thousands):
<TABLE>
<S> <C>
Fixed assets, net.................................................. $ 1,566
Other assets....................................................... 337
Mortgage loans payable............................................. (1,939)
-------
$ (36)
=======
</TABLE>
15. COMMITMENTS AND CONTINGENCIES
The Company occupies premises under various non-cancelable operating leases
which include terms requiring it to pay a pro-rata portion of increased
operating expenses and real estate taxes. The leases expire on various dates
through April 2018, and certain of the leases contain options for renewal or
purchase of related equipment.
In January 1993, the Company entered into a three year lease with the Trust,
which required annual rental payments of $120,000, payable in equal monthly
installments of $10,000. This lease continued to be amended upon subsequent
expansions of the leased area and currently requires annual payments of
$531,000 payable in equal monthly installments of $44,000. The amended lease
term expires September 2010. In conjunction with the amendment of the lease in
September 1995, the Company began to consolidate the accounts of the Trust on
a prospective basis (see Note 14). This building was sold in March, 2000 and
the Company was released from its lease obligation effective with the sale.
In June 1998, the Company entered into a ten year agreement to lease 200,000
square feet in Waltham, Massachusetts which is the site of the Company's new
headquarters. In connection with its move in November, 1999, the Company
consolidated six other offices located around Massachusetts. The Company is
currently negotiating to sublease 50,000 square feet and 25,000 square feet of
this facility, each for a three-year term.
In August 1998, the Company entered into a twenty year agreement to lease
30,000 square feet in London, England to consolidate several branch locations
in the city. In September 1999, the Company moved its operations from this
location to another facility of equal size for a term of 15 years at a
substantially lower rent. The vacated facility was assigned to a major
european bank, without cost to the Company, for the entire remaining term. The
rental commitments on this assigned facility have not been included in the
minimum payments under non-cancelable leases below.
52
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Rent expense for the year ended June 28, 1997, the six months ended December
27, 1997 and the years ended December 26, 1998 and December 25, 1999 was $6.8
million, $5.1 million, $10.2 and $14.3 million, respectively. Future minimum
payments under non-cancelable leases at December 25, 1999 are as follows,
excluding amounts payable to the Trust and the assigned London, England lease
mentioned above (in thousands):
<TABLE>
<CAPTION>
Operating
Leases
---------
<S> <C>
2000............................................................... $ 22,781
2001............................................................... 21,766
2002............................................................... 16,383
2003............................................................... 13,965
2004............................................................... 12,878
Thereafter......................................................... 55,225
--------
$142,998
========
</TABLE>
16. FINANCIAL INSTRUMENTS
The Company enters into various types of financial instruments in the normal
course of business. Fair values are estimated based on assumptions concerning
the amount and timing of estimated future cash flows and assumed discount
rates reflecting varying degrees of perceived risk. Accordingly, the fair
values may not represent actual values of the financial instruments that could
have been realized as of year end or that will be realized in the future.
The carrying amounts of the Company's financial instruments, which include
accounts receivable, notes receivable, line of credit, accounts payable,
accrued salaries and wages, other accrued expenses, income taxes payable and
long-term debt approximate their fair values at December 26, 1998 and December
25, 1999.
17. DISCONTINUED OPERATIONS
In the fourth quarter of 1999, the Company decided to sell its management
consulting practice, the Business Strategy Group in an initiative to support
the Company's new strategic direction. The cash transaction of $65.0 million
closed on March 10, 2000 and will result in a gain for the Company estimated
at $10 million which will be recorded in the first quarter of 2000.
Accordingly, the Company reported the results of operations of the Business
Strategy Group as discontinued operations in the accompanying financial
statements and related notes for all periods shown.
53
<PAGE>
RENAISSANCE WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
At December 25, 1999, assets of the Business Strategy Group consisted
primarily of accounts receivable, goodwill and deferred income taxes amounting
to $47.7 million; and liabilities of $7.8 million consisted primarily of
accrued expenses and deferred income taxes.
<TABLE>
<CAPTION>
Six Months
Year Ended Ended Year Ended Year Ended
June 28, December 27, December 26, December 25,
1997 1997 1998 1999
---------- ------------ ------------ ------------
(In thousands)
<S> <C> <C> <C> <C>
Revenue..................... $45,329 $37,043 $ 66,158 $36,096
Cost of revenue............. 28,348 19,595 45,326 21,380
Selling, general and
administrative expenses.... 10,833 10,552 29,643 9,022
Acquisition-related expenses
(1)........................ -- 11,200 -- --
Restructuring charges and
asset writedowns (2)....... -- -- 30,398 --
Interest and other (income)
expense, net............... -- (484) (318) 314
------- ------- -------- -------
Income (loss) from
discontinued operations.... 6,148 (3,820) (38,891) 5,380
Income tax provision
(benefit).................. 2,520 3,321 (4,567) 1,961
------- ------- -------- -------
Net income (loss) from
discontinued operations.... $ 3,628 $(7,141) $(34,324) $ 3,419
======= ======= ======== =======
</TABLE>
- --------
(1) Represents transaction costs associated with the acquisition of RSI, which
was accounted for as a pooling of interests.
(2) Includes charges of $27.1 million associated with the write off of
goodwill and other costs associated with the Technomics and COBA-UK
subsidiaries and $3.3 million in restructuring charges.
54
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS OF THE REGISTRANT
The information required by this Item is included in Item 1 of this report
or will be included under the captions "Election of Class II Director--
Nominee," "Election of Class II Director--Other Directors," "Election of Class
II Director--Board of Directors and Committees," and "Election of Class II
Director--Director Compensation" and "Section 16(a) Beneficial ownership
Reporting Compliance" in the Proxy Statement, and is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be included under the captions
"Executive Compensation--Summary Compensation Table," "Executive
Compensation--Option Grants in Last Fiscal Year," "Executive Compensation--
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values" and "Executive Compensation--Employment Agreements" in the Proxy
Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item will be included under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item will be included under the caption
"Certain Relationships and Related Transactions" in the Proxy Statement and is
incorporated herein by reference.
55
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The financial statements and financial statement schedules filed under
Item 8 as part of this report.
Listed below are all Exhibits filed as part of this Report. Certain Exhibits
are incorporated herein by reference to The Registry's Registration Statement
on Form S-1 (File No. 333-03366), Renaissance's Report on Form 10-K for the
transition period from June 28, 1997 to December 27, 1997 (File No. 0-28192),
and Renaissance's Report on Form 10-K for the fiscal year ended December 26,
1998 (File No. 0-28192).
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S> <C>
2.1 Stock Purchase Agreement among Renaissance Worldwide Strategy
Inc., Registrant, Rome Acquisition Corp., and solely for the
purposes of Section 10.13 of the agreement, Behrman Capital II,
L.P., dated as of February 29, 2000.
3.1(1) Restated Articles of Organization of Registrant, as filed in
Massachusetts on May 13, 1996.
3.2(2) Articles of Amendment to Restated Articles of Organization, as
filed in Massachusetts on July 30, 1997.
3.3(2) Articles of Amendment to Restated Articles of Organization, as
filed in Massachusetts on January 7, 1998.
3.4(2) By-Laws of Registrant, as amended and restated on November 20,
1997.
4.1(1) Articles 3, 4, 5, and 6 of the Articles of Organization of
Registrant (included in Exhibit 3.1).
4.2(3) Specimen Stock Certificate.
10.1 Registrant's 1996 Stock Plan. *
10.2 Registrant's 1996 Employee Stock Purchase Plan. *
10.3(3) 1998 Directors Retainer Plan.*
10.4 Registrant's 1998 Acquisition Stock Plan. *
10.5 Registrant's 1998 International Stock Plan. *
10.6(1) Employment Agreement, dated May 1996 between Registrant and G.
Drew Conway.*
10.7(2) Registration Rights Agreement, dated as of November 26, 1997, by
and among, Registrant, Terry L. Hunter, and William M. Mercer
Incorporated.
10.8(3) Lease Agreement by and between Waltham 60/10 LLC and Registrant,
dated as of June 30, 1998.
10.9 Amended and Restated Credit Agreement among Registrant, Bank of
America, N.A., BNY Factoring LLC and the Lenders which are a
party to the agreement, dated as of July 15, 1999.
10.10 Pledge and Security Agreement, between Registrant, and Bank of
America, N.A., dated as of July 15, 1999.
10.11 First Amendment to Amended and Restated Credit Agreement among
Registrant, each of the Lenders which is a party to the
agreement, and Bank of America, N.A., dated as of September 25,
1999.
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- ----------------------- ---
<C> <S> <C>
10.12 Second Amendment to Amended and Restated Credit Agreement among
Registrant, each of the Lenders which is a party to the
agreement, and Bank of America, N.A., dated as of February 25,
2000.
21 Subsidiaries of Registrant.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Katch Tyson & Company.
23.3 Consent of Goldstein Golub Kessler LLP.
27.1 Financial Data Schedule.
27.2 Restated Financial Data Schedule.
27.3 Restated Financial Data Schedule.
</TABLE>
- --------
* Denotes management contract or compensation arrangements.
(1) Filed as an Exhibit to The Registry's Registration Statement on Form S-1
(File No. 333-03366) and incorporated by reference herein.
(2) Filed as an Exhibit to Renaissance Worldwide Inc.'s Report on Form 10-K for
the transition period from June 28, 1997 to December 27, 1997 (File No. 0-
28192).
(3) Filed as an Exhibit to Renaissance Worldwide, Inc.'s Report on Form 10-K
for the fiscal year ended December 26, 1998 (File No. 0-28192).
(b) No reports on Form 8-K were filed during the last quarter of 1999.
57
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Renaissance Worldwide, Inc.
Date: March 23, 2000
/s/ G. Drew Conway
By: _________________________________
G. Drew Conway
President, Chief Executive
Officer and
Chairman of the Board of
Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated:
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ G. Drew Conway Chief Executive Officer March 24, 2000
______________________________________ and Chairman of the Board
G. Drew Conway of Directors (Principal
Executive Officer)
/s/ Joseph F. Pesce Executive Vice President, March 24, 2000
______________________________________ Chief Financial Officer,
Joseph F. Pesce and Treasurer (Principal
Financial and Accounting
Officer)
/s/ Robert P. Badavas Director March 24, 2000
______________________________________
Robert P. Badavas
/s/ Paul C. O'Brien Director March 24, 2000
______________________________________
Paul C. O'Brien
</TABLE>
58
<PAGE>
SCHEDULE II
RENAISSANCE WORLDWIDE, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
<TABLE>
<CAPTION>
Additions Deductions
Balance at Charged Write-off of Balance
Beginning to Costs and Uncollectible at End of
of Period Expenses Accounts Period
---------- ------------ ------------- ---------
<S> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Year ended June 28, 1997(1).. $ 938 $ 1,336 $ 434 $ 1,840
Six months ended December 27,
1997(2)..................... 2,174 3,090 1,820 3,444
Year ended December 26,
1998........................ 3,444 12,703 6,531 9,616
Year ended December 25,
1999(3)..................... 9,616 11,659 10,002 11,273
</TABLE>
- --------
(1) Beginning balance adjusted to reflect change in fiscal year end of RSI.
(2) Beginning balance adjusted to reflect change in fiscal year end of the
Hunter Group.
(3) The December 25, 1999 allowance for doubtful accounts balance includes
$929,000 related to discontinued operations (see Note 17 of Notes to
Consolidated Financial Statements).
S-1
<PAGE>
EXHIBIT 2.1
- --------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
AMONG
RENAISSANCE WORLDWIDE STRATEGY, INC.,
RENAISSANCE WORLDWIDE, INC.,
ROME ACQUISITION CORP.,
AND SOLELY FOR THE PURPOSES OF SECTION 10.13 HEREOF,
BEHRMAN CAPITAL II, L.P.
February 29, 2000
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
1. PURCHASE AND SALE OF THE SHARES. 1
1.1. The Shares 1
1.2. Consideration 1
1.3. Advance Repayment. 1
1.4. The Closing 1
2. REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY. 2
2.1. Organization and Qualification; Subsidiaries. 2
2.2. Certificate of Incorporation and By-Laws. 2
2.3. Capitalization. 2
2.4. Authority Relative to this Agreement. 3
2.5. Title to Shares. 3
2.6. No Conflict; Required Filings and Consents. 3
2.7. Compliance. 5
2.8. Financial Statements. 5
2.9. Absence of Certain Changes or Events. 5
2.10. No Undisclosed Liabilities. 6
2.11. Absence of Litigation. 6
2.12. Employee Benefit Plans, Employment Agreements. 6
2.13. Labor Matters. 8
2.14. All Assets Necessary to Conduct Business 8
2.15. Title to Property. 8
2.16. Taxes. 9
2.17. Environmental Matters. 10
2.18. Intellectual Property. 11
2.19. Immigration Compliance. 12
2.20. Transactions with Affiliates. 12
2.21. Brokers. 12
2.22. Change in Control Payments. 13
2.23. Accounts Receivable; Accounts Payable 13
2.24. Warranty and Related Matters. 13
2.25. Corporate Records; Copies of Documents 14
2.26. Customers 14
2.27. Customer Intentions 14
2.28. Year 2000 14
2.29. Employees of the Business Strategy Group 15
2.30. Full Disclosure. 15
3. REPRESENTATIONS AND WARRANTIES OF BUYER 15
3.1. Organization and Qualification. 15
i
<PAGE>
3.2. Authority Relative to this Agreement. 15
3.3. No Conflict, Required Filings and Consents. 15
3.4. Brokers. 16
3.5. Investment Intent. 16
4. COVENANTS OF THE PARTIES 17
4.1. Conduct of Business Prior to Closing 17
4.2. Exclusivity 18
4.3. HSR Act. 18
4.4. Access to Information; Confidentiality. 19
4.5. Consents; Approvals. 19
4.6. Public Announcements. 19
4.7. Non-Competition, Non-Solicitation. 19
4.8. Business Records. 21
4.9. Tax Matters 21
4.10. Use of Names. 24
4.11. Assignment of Intellectual Property. 24
4.12. Leases. 25
4.13. Bonus Repayment 26
4.14. Notice of Default. 26
4.15. Provision of Employees 26
4.16. Equipment Leases 26
4.17. Dissolutions and Distributions 27
4.18. Indebtedness between Seller and Company 27
4.19. Transfer of Litigation. 27
4.20. Payment. 27
4.21. Certain Accounts. 27
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY. 27
5.1. HSR Act 27
5.2. No Injunctions or Restraints; Illegality. 27
6. ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. 28
6.1. Representations and Warranties 28
6.2. Agreements and Covenants 28
6.3. Consents Obtained 28
6.4. Liens. 28
6.5. Guaranty. 29
6.6. Delivery of Shares. 29
6.7. Opinion of Seller's Counsel. 29
6.8. No Material Adverse Change 29
6.9. Earnout Payments 29
6.10. Indebtedness of the Company and the Subsidiaries 29
ii
<PAGE>
6.11. [Reserved] 29
6.12. Transition Services 29
6.13. Dissolutions and Distributions 29
6.14. Licensing Agreement. 30
6.15. Transferred Litigation. 30
7. ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER 30
7.1. Representations and Warranties 30
7.2. Agreements and Covenants 30
7.3. Consents Obtained 30
7.4. Payment of Purchase Price. 30
7.5. Advance Repayment 30
7.6. Opinion of Buyer's Counsel. 30
8. INDEMNIFICATION 30
8.1. Survival of Representations and Warranties 31
8.2. Indemnity by the Seller 31
8.3. Limitations on Indemnity by the Seller 32
8.4. Additional Indemnity by the Seller. 32
8.5. Matters Involving Third Parties 33
9. DEFINITIONS. 34
10. MISCELLANEOUS 38
10.1. Knowledge. 38
10.2. Notices. 38
10.3. Expenses of Transaction 40
10.4. Entire Agreement. 40
10.5. Assignment 40
10.6. Governing Law, etc. 41
10.7. Waiver of Jury Trial. 41
10.8. Counterparts. 41
10.9. Headings. 41
10.10. Termination. 41
10.11. Effect of Termination. 43
10.13. The Guarantor. 43
Disclosure Schedule
Section 2.1 Subsidiaries
Section 2.3 Capitalization
Section 2.5 Title to Shares
iii
<PAGE>
Section 2.6 Conflicts
Section 2.7 Compliance
Section 2.8 Financial Statements
Section 2.9 Absence of Changes
Section 2.10 Undisclosed Liabilities
Section 2.11 Litigation
Section 2.12 Benefit Plans
Section 2.13 Labor Matters
Section 2.14 Assets
Section 2.15 Title to Property
Section 2.16 Taxes
Section 2.17 Environmental Matters
Section 2.18 Intellectual Property
Section 2.19 Immigration Compliance
Section 2.20 Transactions with Affiliates
Section 2.21 Brokers
Section 2.22 Change in Control Payments
Section 2.23 Accounts Receivable; Accounts Payable
Section 2.24 Warranty and Related Matters
Section 2.25 Corporate Records; Copies of Documents
Section 2.26 Customers
Section 2.27 Year 2000
Section 2.28 Disclosure
Section 2.29 Employees of the Business Strategy Group
Section 3.3 Conflicts
Section 3.4 Brokers
Section 4.2 Exclusivity
Section 4.10 Allocation of Purchase Price
Section 4.11 Agreements
Section 4.12 Leases
Section 4.15 Provision of Employees
Section 4.17 Dissolutions and Distributions
List of Exhibits
Exhibit A-1 Assignment of Rights in Trademarks, Service Marks and Trade Names
Exhibit A-2 Assignment of Rights in Trademarks, Service Marks and Trade Names
Exhibit B Assignment Agreement
Exhibit C Consents
Exhibit D Opinion of Lovell White Durrant
Exhibit E Transition Services Agreement
iv
<PAGE>
Exhibit F License Agreement
v
<PAGE>
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of February 29, 2000 among Rome Acquisition
Corp., a Delaware corporation (the "Buyer"), and solely for the purposes of
Section 10.13 hereof, Behrman Capital II, L.P., a Delaware limited partnership
(the "Guarantor"), Renaissance Worldwide Strategy, Inc., a Delaware corporation
(the "Company"), and Renaissance Worldwide, Inc., a Massachusetts corporation
and the holder of all of the outstanding capital stock of the Company (the
"Seller").
WHEREAS, the Seller owns all of the outstanding shares of capital stock of
the Company (the "Shares"); and
WHEREAS, this Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell to the Buyer, all of the
Shares in exchange for the Purchase Price (as defined below).
NOW, THEREFORE, in consideration of these premises, the respective
covenants of the Buyer, the Company and the Seller set forth below and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. PURCHASE AND SALE OF THE SHARES.
1.1. The Shares. Subject to compliance with all the terms and conditions
of this Agreement and in reliance on the representations and warranties set
forth in this Agreement, the Seller agrees to sell to the Buyer, and the Buyer
agrees to purchase from the Seller, at the Closing all of the Shares for the
Purchase Price.
1.2. Consideration. The consideration to be paid by the Buyer to the
Seller for the Shares shall be cash in an aggregate amount equal to $65,000,000
in cash payable by wire transfer to the Seller (the "Purchase Price").
1.3. Advance Repayment. The Buyer shall pay to Seller at the Closing
$1,115,950 in cash to repay the Seller for advances by Seller to the Company for
payment by the Company of amounts to employees of the Company (plus applicable
social security, unemployment and Medicare payments) as shown on Section 1.3 of
the Disclosure Schedule.
1.4. The Closing. The closing (the "Closing") shall be held at the offices
of Ropes & Gray, One International Place, Boston, Massachusetts, at 10:00 a.m.
as promptly as practicable (and in any event within two business days) after
satisfaction or waiver of the conditions set forth in Sections 5, 6 and 7, but
in any event no later than March 10, 2000, subject to the satisfaction or waiver
of the conditions set forth in Sections 5, 6 and 7 by such date (the "Closing
Date"). At the Closing: (a) the Seller will deliver to the Buyer stock
certificates representing all of the Shares, together with separate stock powers
executed in blank; (b) the Buyer will deliver to the
<PAGE>
Seller the Purchase Price in immediately available funds; and (c) each party
will deliver to the other such certificates, opinions and other documents as are
contemplated hereby.
2. REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY.
The Seller and the Company hereby jointly and severally represent and
warrant to Buyer that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by the Seller and the Company to Buyer
that is arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Section 2 (the "Disclosure Schedule"):
2.1. Organization and Qualification, Subsidiaries. Each of the Company,
the Subsidiaries and the Seller is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority necessary to
own, lease and operate its properties and to carry on its business as it is now
being conducted. Each of the Company and Subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not reasonably be expected to have a
Material Adverse Effect. A true and complete list of the jurisdiction of
incorporation and authorized capitalization of the Subsidiaries is set forth in
Section 2.1 of the Disclosure Schedule. Other than the Subsidiaries, the Company
does not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity, excluding securities in any publicly traded
company held for investment by the Company and comprising less than one percent
of the outstanding stock of such company.
2.2. Certificate of Incorporation and By-Laws. The Seller has heretofore
furnished to Buyer a complete and correct copy of the Company's Certificate of
Incorporation and By-Laws as most recently restated and subsequently amended to
the date hereof and has furnished to Buyer the Certificate of Incorporation and
By-Laws (or equivalent organizational documents) of each of the Subsidiaries (as
to each Subsidiary, the "Subsidiary Documents"). Such Certificate of
Incorporation, By-Laws and Subsidiary Documents are in full force and effect and
neither the Company nor Subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or By-Laws or Subsidiary Documents.
2.3. Capitalization. The authorized capital stock of the Company consists
of 3,000 shares of common stock, $0.01 par value. As of the date hereof, 1,000
shares of common stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable. There are no options, warrants or other
rights, agreements, arrangements or commitments of any character existing on the
date hereof to which the Company or Subsidiaries are a party relating to the
issued or unissued capital stock of the Company or Subsidiaries or obligating
the Company or Subsidiaries to issue or sell any shares of capital stock of, or
other equity interests in, the
<PAGE>
Company or Subsidiaries. There are no obligations, contingent or otherwise, of
the Company or Subsidiaries to repurchase, redeem or otherwise acquire any
shares of common stock or the capital stock of any subsidiary or to provide
funds to or make any investment (in the form of a loan, capital contribution,
guaranty or otherwise) in any such subsidiary or any other entity. All of the
outstanding shares of capital stock of Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable, and all such shares are owned by the
Company, free and clear of all security interests, liens, claims, pledges,
agreements, limitations in respect of voting rights, charges or other
encumbrances of any nature whatsoever (collectively, the "Liens").
2.4. Authority Relative to this Agreement. Each of the Seller and the Coin
an has all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each of the Seller and the Company and the consummation by each of the Seller
and the Company of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of each of the
Seller and the Company, respectively. This Agreement has been duly and validly
executed and delivered by each of the Seller and the Company, and assuming the
due authorization, execution and delivery by Buyer, constitutes a legal, valid
and binding obligation of each of the Seller and the Company, enforceable
against each of them in accordance with its terms.
2.5. Title to Shares. The Seller is the sole record and beneficial owner
of, and has good and marketable title to, the Shares free and clear of any Lien,
except for restrictions on transfer imposed by applicable securities laws.
Neither the Seller nor the Company is a party to any option, warrant, purchase
right or other contract or commitment that requires the Seller or the Company to
sell, transfer or otherwise dispose of any capital stock of the Company, except
for this Agreement. Upon endorsement by the Seller of the certificate
representing the Shares and delivery of such certificate by the Seller to the
Buyer at the Closing, the Shares will have been duly transferred to the Buyer
free and clear of any Lien (other than any Lien created by Buyer), except for
restrictions on transfer imposed by the applicable securities laws.
2.6. No Conflict; Required Filings and Consents.
(a) Section 2.6(a) of the Disclosure Schedule includes a list of (i)
all loan agreements, indentures, mortgages, pledges, conditional sale or
title retention agreements, security agreements, guaranties and standby
letters of credit, equipment leases or lease purchase agreements to which
the Company or Subsidiaries are a party or by which they or any of their
properties or assets, or any BSG Properties or BSG Assets, are bound and
(ii) all contracts, agreements, commitments or other understandings or
arrangements to which the Company or Subsidiaries are a party or by which
they, any of their properties or assets, or any BSG Properties or BSG
Assets, are bound or affected, but excluding any contract, agreement,
commitment or other understanding or arrangement entered into in the
ordinary course of business and involving, in the case of each of clauses
(i) and (ii) above, payments or receipts by the Seller, the Company , the
Business Strategy Group or
<PAGE>
any of the Subsidiaries of less than $75,000 in any single instance
(collectively, the "Contracts").
(b) (i) Neither the Seller, the Company nor Subsidiaries has
materially breached, is in material default under, or has received written
notice of any material breach of or material default under, any of the
Contracts, (ii) to the best knowledge of the Seller, no other party to any
of the Contracts has materially breached or is in material default of any
of its obligations thereunder, and (iii) to the best knowledge of the
Seller, each of the Contracts is in full force and effect.
(c) The execution and delivery of this Agreement by each of the
Seller and the Company does not, and the performance of this Agreement by
each of the Seller and the Company and the consummation of the
transactions contemplated hereby will not, (i) conflict with or violate
the Certificate of Incorporation (or Articles of Organization) or By-Laws
of the Seller or the Company, (ii) conflict with or violate any federal,
foreign, state or provincial law, rule, regulation, order, judgment or
decree (collectively, "Laws") applicable to the Company or Subsidiaries or
the Seller, by which its or any of their respective properties or by which
any of the BSG Properties is bound or affected, or (iii) conflict with,
result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair
the rights of the Subsidiaries, the Company or the Seller or alter the
rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a Lien on any of the properties or assets of the
Company, Subsidiaries or Seller or on any of the BSG Properties or BSG
Assets pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company, Subsidiaries or Seller is a party or by
which the Company, Subsidiaries or Seller, any of their respective
properties or any of the BSG Properties is bound or affected, except as to
clause (iii) above for any such conflicts, violations, breaches, defaults,
impairments, alterations or other occurrences that would not reasonably be
expected to have a Material Adverse Effect.
(d) The execution and delivery of this Agreement by each of the
Seller and the Company does not, and the performance of this Agreement by
each of the Seller and the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to,
any federal, foreign, state or provincial governmental or regulatory
authority to be obtained or made by the Seller, the Company or any of the
Subsidiaries except for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(the "Exchange Act"), the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act").
<PAGE>
2.7. Compliance. The Company and the Subsidiaries each has all Approvals
necessary to permit it to own its property and to conduct the business of the
Business Strategy Group as it is presently conducted or proposed to be conducted
and all such Approvals are valid and in full force and effect, except for any
such Approvals, the absence of which would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor Subsidiaries is in conflict
with, or in default or violation of any Law or Approval applicable to the
Company or Subsidiaries or by which its or any of their respective properties,
or any of the BSG Properties or BSG Assets, is bound or affected except for any
such conflicts, defaults or violations which would not reasonably be expected to
have a Material Adverse Effect. Neither the Company nor Subsidiaries is subject
to any judgment, consent decree, compliance order or administrative order with
respect to any aspect of the business, properties or assets of the Company or
the Subsidiaries or of the Business Strategy Group business, BSG Properties or
the BSG Assets, except where such judgment, consent decree, compliance order or
administrative order would not reasonably be expected to have a Material Adverse
Effect.
2.8. Financial Statements. The Seller has furnished the Buyer with copies
of the following financial statements of the Business Strategy Group: (a) the
audited consolidated balance sheet as of December 26, 1998; (b) the audited
consolidated balance sheet as of October 30, 1999 (the "Audit Date") and the
related statement of income for the ten (10) months ended October 30, 1999; and
(c) the unaudited consolidated balance sheet as of November 30, 1999 (the "Most
Recent Balance Sheet") and the statement of income for the eleven (11) months
ended November 30, 1999 ((a), (b) and (c) collectively, the "Financial
Statements"). Except as described in Section 2.8 of the Disclosure Schedule, the
Financial Statements (i) present fairly the financial position of the Company
and Subsidiaries and the results of operations of the Company and Subsidiaries
as of the respective dates thereof and for the periods covered thereby and (ii)
were prepared in accordance with generally accepted accounting principles
("GAAP"), applied on a consistent basis throughout the periods covered thereby;
provided, however, that the Financial Statements described in clause (c) above
lack notes and the Financial Statements described in clause (c) above may be
subject to normal, recurring adjustments that would be made in the course of an
audit and that would not be material. To the knowledge of the Seller, there is
no contingent liability material to the Company, Subsidiaries or the Business
Strategy Group that, as of the date thereof, should be reflected on the Most
Recent Balance Sheet that is not so reflected or disclosed.
2.9. Absence of Certain Changes or Events. Since the Audit Date, the
Company, the Subsidiaries and the Business Strategy Group, taken as a whole,
have conducted their business in the ordinary course consistent with past
practice and there has not occurred: (a) any Material Adverse Effect; (b) any
amendments or changes in (i) the Certificate of Incorporation or By-laws of the
Company or (ii) the Subsidiary Documents; (c) any damage to, destruction or loss
of any material asset of the Company or the Subsidiaries or any material BSG
Asset (whether or not covered by insurance); (d) any change by the Company, the
Business Strategy Group or the Subsidiaries in their accounting methods,
principles or practices, collection policies, pricing policies or payment
policies; (e) any material revaluation by the Company, the Seller or any of
<PAGE>
the Subsidiaries of any of their respective assets or any BSG Asset; (f) any
other action or event that would have required the consent of Buyer pursuant to
Section 4.1 had such action or event occurred after the date of this Agreement;
(g) any amendment or termination of any Contract; (h) any obligation or
liability incurred by the Company or the Subsidiaries to any of their officers,
directors, stockholders or employees, or any loans or advances made by the
Company or the Subsidiaries to any of their officers, directors, stockholders or
employees, except normal compensation and expense allowances payable to
employees; (i) any resignation, termination or removal of the officers of the
Company or the Subsidiaries or loss of key personnel of the Company or the
Subsidiaries or the Business Strategy Group or change in the terms and
conditions of the employment of the officers or key personnel of the Business
Strategy Group; (j) any written claim of unfair labor or employment practices
involving the Company or the Subsidiaries; (k) any establishment or creation of
any employment, deferred compensation or severance arrangement or employee
benefit plan by the Company or the Subsidiaries or the amendment by the Company
or the Subsidiaries of any of the foregoing; or (1) any sale of a material
amount of property of the Company, the Business Strategy Group or the
Subsidiaries taken as a whole.
2.10. No Undisclosed Liabilities. Except as disclosed in the Financial
Statements, neither the Company, the Subsidiaries nor the Business Strategy
Group has any liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in the Most Recent
Balance Sheet, (b) incurred in the ordinary course of the Business Strategy
Group's business and not required under GAAP to be reflected on the Most Recent
Balance Sheet, (c) incurred since the date of the Most Recent Balance Sheet in
the ordinary course of the Business Strategy Group's business consistent with
past practice or (d) incurred in connection with this Agreement.
2.11. Absence of Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Seller,
threatened against the Company or the Subsidiaries, or involving the BSG Assets,
the BSG Properties or any properties or rights of the Company or the
Subsidiaries (or, as to matters related to the Company, the Subsidiaries or the
Business Strategy Group business, with respect to which the Seller has received
written notice, against any officers, directors, shareholders or key employees
of the Business Strategy Group), before any federal, foreign, state or
provincial court, arbitrator or administrative, governmental or regulatory
authority or body that would reasonably be expected to have a Material Adverse
Effect.
2.12. Employee Benefit Plans, Employment Agreements.
(a) Section 2.12(a) of the Disclosure Schedule lists as of the date
hereof all employee pension plans (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
all material employee welfare plans (as defined in Section 3(1) of ERISA),
and all other material bonus, stock option, stock purchase, incentive,
deferred compensation, supplemental retirement, severance and other
<PAGE>
similar fringe or employee benefit plans, programs or arrangements,
written or otherwise, which the Company or the Subsidiaries maintain or to
which the Company or the Subsidiaries contribute for the benefit of any
group of current or former employees of or consultants to the Company, the
Subsidiaries or the Business Strategy Group (all such plans, practices and
programs are referred to as the "Employee Plans"). To the extent requested
by Buyer, there have been made available to Buyer copies of (i) each such
written Employee Plan (other than those referred to in Section 4(b)(4) of
ERISA) (ii) the most recent annual report on Form 5500 series, with
accompanying schedules and attachments, filed with respect to each
Employee Plan required to make such a filing, and (iii) copies of summary
plan descriptions for each such written Employee Plan (other than those
referred to in Section 4(b)(4) of ERISA). For purposes of this Section
2.12(a), the term "material," used with respect to any Employee Plan,
shall mean that the Company or an ERISA Affiliate has incurred or may
reasonably be expected to incur obligations in an annual amount exceeding
$50,000 with respect to such Employee Plan.
(b) (i) None of the Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person (other than health
care continuation coverage as required by COBRA), and none of the Company
Employee Plans is a "multiemployer plan" as such term is defined in
Section 3(37) of ERISA; (ii) there has been no non-exempt "prohibited
transaction," as such term is defined in Section 406 of ERISA and Section
4975 of the Code, with respect to any Employee Plan, which could result in
any liability of the Company or any of the Subsidiaries; (iii) all
Employee Plans are in compliance in all respects with the requirements
prescribed by any and all Laws (including ERISA and the Code), currently
in effect with respect thereto; (iv) neither the Company nor any ERISA
Affiliate maintains, or within the preceding six years has maintained, an
Employee Plan subject to Title IV of ERISA or Section 412 of the Code; (v)
to the knowledge of the Seller, each Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code so qualifies; (vi) all contributions required
to be made to any Employee Plan pursuant to the terms of the Employee Plan
or any collective bargaining agreement, have been made or accrued on the
financial statements of the Company in accordance with GAAP, except where
the failure of any of the foregoing subparagraphs (i) through (vi) to be
true would not have a Material Adverse Effect.
(c) Section 2.12(c) of the Disclosure Schedule sets forth as of the
date hereof a true and complete list of: (i) all written employment
agreements with officers or employees of the Company, the Subsidiaries or
the Business Strategy Group that provide for annual base salaries in
excess of $120,000; (ii) all agreements with consultants who are
individuals, independent contractors or advisors obligating the Company or
the Subsidiaries to make annual cash payments in an amount exceeding
$120,000; and (iii) all severance agreements, programs and policies of the
Company or the Subsidiaries with or relating to its employees or employees
of the Business Strategy Group, in each case
<PAGE>
with outstanding commitments exceeding $120,000, excluding programs and
policies required to be maintained by law.
2.13. Labor Matters.
(a) There are no claims or proceedings pending or, to the knowledge
of Seller, threatened, between the Company or Subsidiaries and any of
their respective employees, asserting that the Company or the Subsidiaries
have committed employment discrimination or an unfair labor practice which
claims or proceedings are currently having or would reasonably be expected
to have a Material Adverse Effect;
(b) neither the Company nor the Subsidiaries nor the Seller is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or the Subsidiaries;
(c) the Seller has no knowledge of any strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any
employees of the Company or Subsidiaries, which would reasonably be
expected to have a Material Adverse Effect;
(d) neither the Company nor the Subsidiaries is delinquent in
payments to any of its employees or consultants for any wages, salaries,
commissions, bonuses, fees or other compensation for services; and
(e) each of the Company and the Subsidiaries is, and has heretofore
been, in compliance in all material respects with all applicable Laws
respecting labor, employment, fair employment practices, terms and
conditions of employment and wages and hours.
2.14. All Assets Necessary to Conduct Business. The Company or the
Subsidiaries own all of the assets, properties and rights necessary to conduct
the Business Strategy Group business as currently conducted by the Company, the
Subsidiaries and the Seller, as a whole.
2.15. Title to Property. Each of the Company and the Subsidiaries has good
and marketable title to all of the BSG Properties and BSG Assets, free and clear
of all Liens, except for Liens for taxes not yet due and payable and such Liens
or other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby or
which would not have a Material Adverse Effect. All leases pursuant to which the
Seller, the Seller, the Company or the Subsidiaries lease from others BSG
Properties or BSG Assets are, to the knowledge of the Seller, in good standing,
valid and effective in accordance with their respective terms, and there is not
under any of such leases, any existing material default or event of default (or
event which with notice or lapse of time, or both, would constitute a material
default) by either the Company or the Subsidiaries, or, to the knowledge of
<PAGE>
the Seller, any other party thereto. Neither the Company nor the Subsidiaries
owns any real property.
2.16. Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean
taxes and assessments payable to any federal, state, local or foreign
taxing authority, including (without limitation) (i) income, franchise,
profits, gross receipts, ad valorem, net worth, value added, sales, use,
service, real or personal property, special assessments, capital stock,
license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production,
excise, stamp, occupation, premiums, windfall profits, transfer and gains
taxes, and (ii) interest, penalties, additional taxes and additions to tax
imposed with respect thereto; and "Tax Returns" shall mean returns,
reports, and information statements with respect to Taxes required to be
filed with the Internal Revenue Service (the "IRS") or any other federal,
foreign, state or provincial taxing authority, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax
returns.
(b) All Tax Returns required to be filed by, or which include, the
Company or any of the Subsidiaries have been timely filed (giving effect
to extensions), other than those Tax Returns as to which the failure to
file would not reasonably be expected to have a Material Adverse Effect.
Each of the Company and the Subsidiaries has paid (or had paid on its
behalf) all material Taxes required to be paid by it.
(c) There are no outstanding liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Company or
Subsidiaries which would reasonably be expected to have a Material Adverse
Effect.
(d) There is no outstanding dispute or claim concerning any Tax for
which the Company or Subsidiaries could be liable which would reasonably
be expected to have a Material Adverse Effect.
(e) The Financial Statements contain adequate provision through the
dates thereof for all unpaid Taxes of the Company and Subsidiaries
determined in accordance with GAAP.
(f) Neither the Company nor any of the Subsidiaries has any
liability for any Taxes (or any Losses related to Taxes) of any other
Person (other than members of the consolidated group of which Seller is
the common parent) under Treasury Regulations ss.1.1502.6, any similar
provision of foreign, state or local law, by contract, or otherwise. The
consolidated group of which Seller is common parent has paid all Taxes
required to be paid by any of its members for which any of the Company or
the Subsidiaries has or
<PAGE>
would have any liability for each taxable period during which the Company
or either of the Subsidiaries was a member of such group.
(g) Excluding payments pursuant to new employment agreements defined
as New Agreements in Section 2.12 of the Disclosure Schedule, and payments
pursuant to any other arrangements put in place by the Company after the
Closing, the Company has not made and is not obligated to make any
material payments that are not deductible under IRC Section 280G. The
Company has not filed a consent under IRC Section 341(f).
(h) None of the Company or the Subsidiaries is a party to a tax
allocation or sharing agreement that is not described in Section 4.9(g).
(i) The Seller and the Company are members of a "selling
consolidated group" within the meaning of Treasury Regulations ss.
1.338(h)(l0)-l(d).
(j) Each Subsidiary has been resident for tax purposes and for the
purposes of the U.K./U.S. Double Tax Treaty in the United Kingdom and
nowhere else at all times since its incorporation and will be so resident
at the Closing.
(k) Each Subsidiary has properly operated the PAYE and National
Insurance contributions systems by making such deductions as are required
by law from all payments made or deemed to be or treated as made by it or
on its behalf, and by duly accounting to the relevant taxing authority for
all sums so deducted.
2.17. Environmental Matters. Except in all cases as, in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect, the Company, the Business Strategy Group and the Subsidiaries: (i) have
obtained all Approvals which are required to be obtained under all applicable
federal, state, foreign or local laws or any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic materials or wastes
into 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 or hazardous or toxic
materials or wastes by the Business Strategy Group, the Company or Subsidiaries
or their respective agents ("Environmental Laws"); (ii) are in compliance with
all terms and conditions of such required Approvals, and also are in compliance
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in applicable
Environmental Laws; (iii) have not received notice of any past or present
violations of Environmental Laws or any event, condition, circumstance,
activity, practice, incident, action or plan which is reasonably likely to
interfere with or prevent continued compliance with or which would give rise to
any common law or statutory liability, or otherwise form the basis of any claim,
action, suit or proceeding, against the Company or Subsidiaries based on or
resulting
<PAGE>
from the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant or hazardous or toxic material or
waste; and (iv) have taken all actions necessary under applicable Environmental
Laws to register any products or materials required to be registered by the
Business Strategy Group, the Company or the Subsidiaries (or any of their
respective agents) thereunder.
2.18. Intellectual Property.
(a) The Company, directly or indirectly, owns, or is licensed or
otherwise possesses legally enforceable rights to use, all trademarks,
trade names, service marks, copyrights, and any applications therefor,
know-how, computer software programs or applications, and tangible or
intangible proprietary information or material that are used in and
material to the Business Strategy Group business as currently conducted
(the "Intellectual Property Rights").
(b) No claims are pending, have been asserted to the Seller, the
Company or the Subsidiaries in writing or, to the knowledge of the Seller,
are threatened by any person nor to the knowledge of the Seller has there
occurred any event nor does there exist any condition on the basis of
which any valid claim may be asserted (i) against the use by the Business
Strategy Group, the Company or Subsidiaries of the Intellectual Property
Rights, or (ii) challenging the ownership by the Business Strategy Group,
the Company or Subsidiaries, or the validity or effectiveness of any of
the Intellectual Property Rights, except for such claims that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(c) To the knowledge of the Seller, the Business Strategy Group
business as presently conducted and the production, marketing, licensing,
use and servicing of any products or services of the Company or the
Subsidiaries do not infringe or conflict with any existing patent,
trademark, copyright, trade secret or any other intellectual property
rights of any third party.
(d) All licenses or other agreements under which the Company or the
Subsidiaries are granted Intellectual Property Rights (excluding licenses
to use "off the shelf' software which is generally commercially available)
are, to the knowledge of the Seller, in full force and effect and there is
no material default by the Company or the Subsidiaries. All licenses or
other agreements under which the Company or the Subsidiaries have granted
Intellectual Property Rights to others are, to the knowledge of the
Seller, in full force and effect and there is no material default by the
Company or the Subsidiaries with respect to such licenses and other
agreements.
<PAGE>
2.19. Immigration Compliance.
(a) The Company is in compliance in all material respects with all
applicable foreign, federal, state and local laws, rules, directives and
regulations relating to the employment authorization of its employees
(including, without limitation, the Immigration Reform and Control Act of
1986, as amended and supplemented, and Section 212(n) and 274A of the
Immigration and Nationality Act, as amended and supplemented, and all
implementing regulations relating thereto), and, to the knowledge of the
Seller, neither the Company nor the Seller (to the extent relating to
employees of the Business Strategy Group) has employed or is it currently
employing any unauthorized aliens (as such term is defined under 8 CFR
274a.1(a)).
(b) Neither the Seller nor the Company has received any notice from
the Immigration and Naturalization Service (the "INS") or the United
States Department of Labor (the "DOL") of the disapproval or denial of any
visa petition pending before the INS or labor certification pending before
the DOL on behalf of any employee or prospective employee of the Company
or the Seller (to the extent relating to employees of the Business
Strategy Group).
(c) Section 2.19(c) of the Disclosure Schedule contains a true,
complete and accurate list of all non-immigrant or immigrant visa
petitions pending before the INS and labor certifications pending before
the DOL on behalf of any of the employees or prospective employees of the
Company or the Seller (to the extent relating to employees of the Business
Strategy Group).
(d) Since the approval of each of their respective visa petitions,
there has been no material change in the terms and conditions of
employment of any employees of the Company or the Seller (to the extent
relating to employees of the Business Strategy Group), provided that it is
acknowledged that certain employees from time to time unilaterally breach
the terms of their employment with the Company or the Seller.
2.20. Transactions with Affiliates. Except as set forth in Section 2.20 of
the Disclosure Schedule, neither the Seller nor any other Affiliate of the
Company or the Subsidiaries has any Indebtedness to or from the Company or the
Subsidiaries. Since January 1, 1999, no transaction has occurred or was
continuing that would require disclosure under Item 404 of Regulation S-K of the
federal securities laws by the Company, if the Company were subject to such
item.
2.21. Brokers. No broker, finder or investment banker (other than SG Cowen
Securities Corporation, the fees and expenses of whom will be paid by the
Seller) is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company, the Business Strategy Group or
the Subsidiaries, the Seller or their Affiliates. Notwithstanding the foregoing,
at the Closing, and only in the event of the consummation of the Closing by the
parties hereto, the Company will make a cash payment to the Buyer equal to the
<PAGE>
reasonable fees and expenses incurred by the Buyer, its Affiliates and their
advisors, including legal counsel, which fees and expenses shall include a
transaction fee equal to $1,860,853 to Behrman Capital; provided, that in no
event shall Seller have any liability with respect to such payment to Buyer or
Behrman Capital, and if the Closing is not consummated for any reason
whatsoever, neither the Seller nor the Company shall have any liability with
respect to such payments to Buyer and Behrman Capital.
2.22. Change in Control Payments. Neither the Company nor Subsidiaries nor
the Seller have any plans, programs or agreements to which they are parties, or
to which they are subject, pursuant to which payments by the Company or
Subsidiaries may be required, or acceleration of benefits to be paid by the
Company or Subsidiaries may be required upon consummation of the sale of all of
the Shares.
2.23. Accounts Receivable; Accounts Payable.
(a) All of the accounts receivable of the Company, the Business
Strategy Group and the Subsidiaries are reflected properly on their books
and records in accordance with GAAP, are valid receivables, arose from
bona fide transactions in the ordinary course of business and, except as
reflected in accounts payable on the Most Recent Balance Sheet, are
subject to no known set off or counterclaim except as set forth in the
allowance for doubtful accounts stated in the Most Recent Balance Sheet in
accordance with GAAP, which allowance, is a reasonable estimate, in
accordance with GAAP, of the uncollectible accounts of the Company, the
Business Strategy Group and the Subsidiaries. Since the date of the Most
Recent Balance Sheet, each of the Company, the Business Strategy Group and
the Subsidiaries has collected its accounts receivable in the ordinary
course of business and in a manner which is consistent with past
practices. Neither the Company nor the Subsidiaries has any accounts
receivable or loans receivable from the Seller or any of Seller's
subsidiaries (other than the Company or its Subsidiaries).
(b) Except as set forth in Section 2.23(b) of the Disclosure
Schedule, all accounts payable and notes payable of the Company, the
Business Strategy Group and the Subsidiaries arose in bona fide
transactions in the ordinary course of business and no such account
payable or note payable is delinquent by more than 60 days in its payment
as of the date hereof. Since the date of the Most Recent Balance Sheet,
each of the Company, the Business Strategy Group and the Subsidiaries has
paid its accounts payable in the ordinary course of business and in a
manner which is consistent with past practices. Except as set forth on
Section 2.23(b) of the Disclosure Schedule, neither the Company nor the
Subsidiaries has any account payable to Seller or any of Seller's
subsidiaries (other than the Company or its Subsidiaries).
2.24. Warranty and Related Matters. Section 2.24 of the Disclosure
Schedule sets forth a complete list of all outstanding contractual product and
service warranties, rights of return, guarantees on any of the products or
services provided by the Business Strategy Group that either of the Seller, the
Company or the Subsidiaries distribute, services, markets, sells or produces for
itself, a customer or a third party, other than implied warranties that the
Seller, the
<PAGE>
Company or Subsidiaries will perform services specified (each such product or
service shall be referred to herein as a "Company Product"). Except as set forth
in Section 2.24 of the Disclosure Schedule, there are no existing or, to the
knowledge of the Seller, threatened in writing, product liability, warranty or
other similar claims against the Seller, the Company or the Subsidiaries
alleging that any Company Product fails to meet any such product or service
warranties except as set forth in Section 2.24 of the Disclosure Schedule.
Except as set forth in Section 2.24 of the Disclosure Schedule, neither the
Seller, the Company nor the Subsidiaries is obligated to return, credit or
reduce any portion of any consideration paid with respect to any Company
Product.
2.25. Corporate Records; Copies of Documents. The corporate record books
of each of the Company and the Subsidiaries and the statutory books of the
Subsidiaries accurately reflect all corporate action taken by their stockholders
and board of directors and committees. The copies of the corporate records of
the Company and the Subsidiaries and the statutory books of the Subsidiaries, as
made available to the Buyer for review, are true and complete copies of the
originals of such documents. The Seller has made available for inspection and
copying by the Buyer and its counsel true and correct copies of all documents
referred to in this Agreement or in the Disclosure Schedule delivered to the
Buyer pursuant to this Agreement. All material accounts, documents and returns
required by Law to be delivered or made to the Registrar of Companies in the
United Kingdom or any other authority in connection with the Subsidiaries have
been duly and correctly delivered and made.
2.26. Customers. Section 2.26 of the Disclosure Schedule sets forth the
name of each customer of the Business Strategy Group which accounts for more
than $250,000 in sales of the Business Strategy Group on a consolidated basis
for the eleven (11) months ended November 30, 1999 (each, a "Customer"). Since
January 1, 1999, no Customer has given the Company written notice terminating,
or that it intends to terminate, its relationship with the Company as a result
of such Customer's dissatisfaction with the Company's performance of its
obligations.
2.27. Customer Intentions. No Customer has, to the knowledge of Seller
(including based on the letter dated January 27, 2000 from Mark Bruneau to the
Seller), any plan or intention to terminate, cancel or otherwise materially and
adversely modify its relationship with the Company, the Subsidiaries or the
Business Strategy Group or to decrease materially or materially limit its usage,
purchase or distribution of any product delivered by the Company.
2.28. Year 2000. The Seller, the Company and the Subsidiaries have taken
all commercially reasonable efforts to ensure that all computer products that
are owned by either the Company or the Subsidiaries, exclusively licensed to
either the Company or the Subsidiaries, licensed, sold or otherwise distributed
to others by the Company or the Subsidiaries or are otherwise required for the
conduct of the Business Strategy Group, including, without limitation,
microprocessors ("Software"), are Year 2000 Compliant. No claims have been
asserted or threatened to the Seller, the Company or the Subsidiaries in
writing, that the Software is not Year 2000 Compliant. As used herein, "Year
2000 Compliant" shall mean with respect to any such Software, the ability of
such Software to perform the following date-related functions, as
<PAGE>
applicable: (i) consistently and properly interpret date information before,
during and after January 1, 2000, including, but not limited to, accepting date
input, providing date output and performing calculations on dates or portions of
dates; (ii) function accurately in accordance with the documentation relating to
the applicable software and without interruption before, during and after
January 1, 2000, without any change in operations associated with the advent of
the new century; (iii) respond to two-digit date input in a way that resolves
any ambiguity as to the century; and (iv) store and provide output of date
information in ways that are unambiguous as to century.
2.29. Employees of the Business Strategy Group. Section 2.29 of the
Disclosure Schedule lists all employees of the Business Strategy Group.
2.30. Full Disclosure. No representation or warranty made by the Seller or
the Company contained in this Agreement and no statement contained in any
certificate or schedule furnished or to be furnished by Seller or the Company to
Buyer in, or pursuant to the provisions of, this Agreement, including without
limitation the Disclosure Schedule, when considered with all such
representations, warranties and statements contains or shall contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary, in the light of the circumstances under which it was made, in order
to make statements herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Seller that:
3.1. Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
3.2 Authority Relative to this Agreement. Buyer has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of Buyer,
and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions contemplated thereby.
This Agreement has been duly and validly executed and delivered by Buyer and,
assuming the due authorization, execution and delivery by the Seller,
constitutes a legal, valid and binding obligation of Buyer enforceable against
it in accordance with its terms.
3.3 No Conflict, Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer does not,
and the performance of this Agreement by Buyer will not, and the
consummation of the
<PAGE>
transactions contemplated hereby will not, (i) conflict with or violate
the Articles of Organization (or Certificate of Incorporation) or By-Laws
of Buyer, (ii) conflict with or violate any Laws applicable to Buyer or by
which its properties are bound or affected, or (iii) result in any breach
of or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or impair Buyer's rights or alter
the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a Lien on any of the properties or assets of
Buyer pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Buyer is a party or by which Buyer or its properties
are bound or affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that would not
reasonably be likely to materially delay or prevent the consummation of
the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by Buyer does not,
and the performance of this Agreement by Buyer will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any federal, foreign, state or provincial governmental or
regulatory authority to be obtained or made by Buyer, except (i) for the
pre-merger notification requirements of the HSR Act, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not reasonably be likely to
materially delay or prevent the consummation of the transactions
contemplated hereby.
3.4. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Buyer or its Affiliates. Notwithstanding the foregoing, at the
Closing, and only in the event of the consummation of the Closing by the parties
hereto, the Company will make a cash payment to the Buyer equal to the
reasonable fees and expenses incurred by the Buyer, its Affiliates and their
advisors, including legal counsel, which fees and expenses shall include a
transaction fee equal to $1,860,853 payable to Behrman Capital; provided, that
in no event shall Seller have any liability with respect to such payment to
Buyer or Behrman Capital, and if the Closing is not consummated for any reason
whatsoever, neither the Seller nor the Company shall have any liability with
respect to such payments to Buyer and Behrman Capital.
3.5. Investment Intent. Buyer is acquiring the Shares for its own account
and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act. Buyer confirms that Seller has made available to Buyer and
its representatives and agents the opportunity to ask questions of the officers
and other management employees of the Company and Subsidiaries and to acquire
such additional information about the business and financial condition of the
Company and Subsidiaries as Buyer has requested, and all such information has
been received; provided, however, that nothing contained in the foregoing
confirmation by Buyer
<PAGE>
shall affect the liability of the Seller or the Company for any breach of the
representations and warranties made by them in Section 2 hereof.
4. COVENANTS OF THE PARTIES.
4.1. Conduct of Business Prior to Closing. Each of the Seller and the
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing Date, unless Buyer shall otherwise agree and except as otherwise
contemplated by this Agreement or the Disclosure Schedule, the Company shall and
shall cause the Subsidiaries to and Seller and the Company shall cause the
Business Strategy Group to:
(i) conduct its business and the businesses of Subsidiaries, taken
as a whole, in the ordinary course of business consistent with past
practice and
(ii) use reasonable commercial efforts to preserve substantially
intact the business organization of the Company and Subsidiaries
taken as a whole or the Business Strategy Group, to keep available
the services of the present key officers, employees and consultants
of the Company and Subsidiaries taken as a whole or the Business
Strategy Group and to preserve the present relationships of the
Company, the Subsidiaries and the Business Strategy Group with
customers, partners, suppliers and other persons with which the
Company, the Subsidiaries or the Business Strategy Group have
significant business relations. By way of amplification and not
limitation, except as contemplated by this Agreement or the
Disclosure Schedule, neither the Seller, the Company, the Business
Strategy Group nor the Subsidiaries shall, during the period from
the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing Date, directly or
indirectly do, or propose to do, any of the following without the
prior written consent of Buyer:
(a) increase the compensation (including bonuses) payable on or
after the date hereof, or to become payable on or after the Closing, to
any employee, consultant or independent contractor of the Company, the
Business Strategy Group or Subsidiaries;
(b) enter into or perform any transactions with their Affiliates or
other transactions other than on an arms length basis and in the ordinary
course of business;
(c) declare or pay any dividends, issue, purchase or redeem any
shares of its capital stock or any convertible securities into or
exchangeable for any of its capital stock, or make any other distributions
to its shareholders;
(d) grant any options or other rights to purchase or obtain
(including upon conversion, exchange or exercise) any of its capital
stock;
<PAGE>
(e) incur, assume, or guaranty any liabilities or Indebtedness of
any kind other than Indebtedness which is incurred in the ordinary course
of business;
(f) amend the Company's Certificate of Incorporation or By-Laws or
the Subsidiary Documents;
(g) make any purchase, sale or disposition of any asset or property
other than in the ordinary course of business, purchase any capital assets
costing more than $50,000 and mortgage, pledge, subject to a Lien or
otherwise encumber any of its assets other than in the ordinary course of
business;
(h) change any of its accounting methods, principles or practices,
collection policies, pricing policies; or
(i) amend, modify or terminate any Contract or waive any of its
rights thereunder.
4.2. Exclusivity. Except as described in Section 4.2 of the Disclosure
Schedule, the Company, Subsidiaries and the Seller will not:
(a) directly or indirectly, through any officer, director, employee,
agent (including financial advisors), partner or otherwise, continue,
solicit, participate in, initiate, or encourage discussions or
negotiations with, or the submission of bids, offers or proposals by any
Person with respect to an acquisition of the Company, any of the
Subsidiaries, the Business Strategy Group, any interest therein, any of
its material assets, or a sale of any of its outstanding stock, other than
Behrman Capital; or
(b) directly or indirectly, through any officer, director, employee,
agent (including financial advisors), partner or otherwise, participate in
any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner,
any effort or attempt by any Person to do or seek any of the foregoing.
4.3. HSR Act. Each of the Seller and the Buyer represents to the other
that it has filed notifications under and in accordance with the HSR Act in
connection with the transactions contemplated hereby on or before December 27,
1999. Each of the Seller and Buyer agrees to respond as promptly as practicable
to any inquiries received from the Federal Trade Commission and the Antitrust
Division of the Department of Justice for additional information or
documentation and respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other governmental
authority in connection with antitrust matters.
<PAGE>
4.4. Access to Information; Confidentiality. Upon reasonable notice and
subject to restrictions contained in confidentiality agreements to which such
party is subject (from which such party shall use reasonable efforts to be
released), the Seller shall (and shall cause the Company and Subsidiaries to)
afford to the officers, employees, accountants, counsel and other
representatives of the Buyer, reasonable access, during the period prior to the
Closing Date, to all of the properties, books, contracts, commitments and
records of the Company and the Subsidiaries and, during such period, the Seller
shall (and shall cause the Company and Subsidiaries to) furnish promptly to the
Buyer all information concerning the business, properties and personnel of the
Company and the Subsidiaries as the Buyer may reasonably request, and shall make
available to the Buyer the appropriate individuals (including attorneys,
accountants and other professionals) for discussion of the business, properties
and personnel of the Company and the Subsidiaries as the Buyer may reasonably
request. Buyer shall keep such information confidential in accordance with the
terms of the non-disclosure letter, dated September 30, 1999 (the
"Confidentiality Letter"), between the Buyer and the Seller.
The Seller and the Company shall, and the Company shall cause the
Subsidiaries and their respective officers, directors, agents and
representatives, to keep any confidential information or proprietary data or
information obtained from the Buyer or any of its Affiliates with respect to
their business or financial condition in accordance with the Confidentiality
Letter. The Seller's obligation set forth in the preceding sentence shall
survive the Closing.
4.5. Consents; Approvals. The Buyer, the Seller and the Company shall each
use reasonable efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States and
foreign governmental and regulatory rulings and approvals), and the Buyer, the
Seller and the Company shall make all filings (including, without limitation,
all filings with United States and foreign governmental or regulatory agencies)
required in connection with the authorization, execution and delivery of this
Agreement by the Buyer, the Seller and the Company and the consummation by them
of the transactions contemplated hereby, in each case as promptly as
practicable. The Buyer, the Seller and the Company shall furnish promptly all
information required for any application or other filing to be made pursuant to
the rules and regulations of any United States or foreign governmental body in
connection with the transactions contemplated by this Agreement.
4.6. Public Announcements. The Buyer and the Seller shall consult with
each other before issuing any press release with respect to this Agreement and
shall not issue any such press release or make any such public statement without
the prior consent of the other party, which shall not be unreasonably withheld;
provided, however, that a party may, without the prior consent of the other
party, issue such press release or make such public statement as may upon the
advice of counsel be required by law or the rules and regulations of the Nasdaq
National Market System, if it has used all reasonable efforts to consult with
the other party prior thereto.
4.7. Non-Competition; Non-Solicitation. For a period of eighteen (18)
months after the Closing Date, (the "Non-Compete Period"), neither Seller nor
any of its direct or indirect
<PAGE>
subsidiaries shall provide Business Strategy Services (as defined below) to any
customer. For the purposes of this Section 4.7, "Business Strategy Services"
shall mean business strategy development and implementation consulting services
in the telecommunications and computing sectors at the senior executive or board
level, which are substantially similar to those which have been provided by the
Business Strategy Group at any time prior to the Closing Date. Notwithstanding
the previous sentence, "Business Strategy Services" shall not include (i) any
services relating to information system design, information system analysis,
information technology strategy, or consulting services relating to use of
information technology in e-commerce applications or the use of Internet-based
applications in business operations, or (ii) services with respect to the
Renaissance Balanced Scorecard or a derivative thereof, Knowledge Management or
any other consulting services which are technology specific, in each case, which
have been provided or proposed by Seller or its direct or indirect subsidiaries
(other than the Company, the Subsidiaries or the Business Strategy Group) prior
to the Closing Date. For a period of one year after the Closing Date, the Seller
shall not, and shall cause its direct or indirect subsidiaries not to, either
directly or indirectly as a stockholder, investor, partner, director, officer,
employee or otherwise, solicit or attempt to induce any person employed or
engaged as an independent contractor by the Company, the Subsidiaries or the
Business Strategy Group as of the Closing Date to terminate his or her
employment or engagement as an independent contractor with the Buyer, the
Company, the Subsidiaries or the Business Strategy Group. For a period of one
year after the Closing Date, the Company and the Subsidiaries shall not, either
directly or indirectly as a stockholder, investor, partner, director, officer,
employee or otherwise, solicit or attempt to induce any person employed or
engaged as an independent contractor by the Seller or its direct and indirect
subsidiaries (other than the Company) as of the Closing Date to terminate his or
her employment or engagement as an independent contractor with the Seller or any
Affiliate of Seller.
<PAGE>
4.8. Business Records. The Buyer acknowledges that the Seller may from
time to time from and after the Closing require access to copies of certain of
the Company's books and records when reasonably required, and agrees that, for
two years following the Closing Date, upon reasonable prior notice from the
Seller, it will, and will ensure that the Company and Subsidiaries will, during
normal business hours, provide the Seller with either access to or copies of
their books and records. The Buyer agrees that it, for two years following the
Closing Date, will ensure that the Company does not discard or destroy any of
its books and records prepared prior to the Closing Date except in the ordinary
course of business and after reasonable notice to the Seller. In such
circumstances, Seller shall have the right, at its expense, to remove and retain
any of such books and records as Seller may select. The Seller acknowledges that
the Buyer may from time to time from and after the Closing require access to
copies of certain of the Seller's books and records and access to certain
employees of the Seller when reasonably required for information with respect to
the Company or the Subsidiaries, including any financial information, and agrees
that for two years following the Closing Date upon reasonable prior notice from
the Buyer, it will, during normal business hours, provide the Buyer with access
to or copies of such books and records and will use commercially reasonable
efforts to make available certain employees of the Seller.
4.9. Tax Matters.
(a) Tax Returns. The Seller shall be responsible for preparing and
filing the Tax Returns of, or which include, the Company or Subsidiaries
for taxable periods ending on or before the Closing Date and shall be
responsible for the payment of any Tax due thereon. Seller will include
the income of the Company on its consolidated Federal Income Tax Return
for all periods through the Closing Date.
The Buyer shall be responsible for preparing and filing the Tax
Returns of, or which include, the Company or Subsidiaries for any taxable
period covering days before and after the Closing Date and shall be
responsible for the payment of any Tax due thereon. The Seller shall have
the right to review and comment on all such Tax Returns, which Tax Returns
shall be prepared in a manner consistent with past practice. The Seller
shall promptly reimburse the Buyer for the amount of Tax due with such Tax
Returns attributable to the Company and Subsidiaries for the period
through and including the date of the Closing.
The Buyer shall be responsible for preparing and filing the Tax
Returns of, or which include, the Company or Subsidiaries for all taxable
periods beginning after the Closing Date and shall be responsible for the
payment of all Taxes due thereon.
(b) Tax Refunds. The Seller shall be entitled to all refunds of Tax
of the Company and Subsidiaries for periods (including portions thereof)
through the Closing Date except for refunds attributable to carrybacks
from periods (including portions thereof) beginning after the Closing Date
and required by law. If the Buyer, the
<PAGE>
Company or Subsidiaries receive any refund to which the Seller is
entitled, the Buyer shall promptly pay (or cause the Company or relevant
Subsidiaries to pay) the entire amount of such refund (including interest)
to the Seller.
(c) Tax Indemnities. The Seller shall indemnify and hold the Buyer,
the Company and Subsidiaries harmless from any loss or liability that
Buyer, the Company or the Subsidiaries suffer arising out of any liability
(primary or secondary) for Taxes of any of the Company or Subsidiaries
attributable to periods through and including the date of the Closing. The
Seller shall also indemnify and hold the Buyer, the Company and
Subsidiaries harmless against all liability for Taxes of any affiliated or
connected group of which the Company or the Subsidiaries were members at
any time prior to the Closing Date imposed on the Company or Subsidiaries
by Section 1.1502-6 of the Treasury Regulations or any state, local or
foreign law, by contract or otherwise (other than Taxes of the Company or
the Subsidiaries for periods after the Closing Date).
The Buyer shall indemnify and hold the Seller harmless from all
deficiencies in Tax of the Company or Subsidiaries attributable to all
periods or portions thereof beginning on or after the day after the date
of the Closing and for all Taxes resulting from any action taken outside
the ordinary course of business without the Seller's written consent by
the Buyer, the Company or Subsidiaries on the Closing Date after the
Closing (unless contemplated by this Agreement).
For purposes of this Section 4.9, the Taxes attributable to the
period through the Date of the Closing and to the period beginning on the
following day shall be determined (i) as if those periods were separate
taxable years, and (ii) except as otherwise required by law, by using the
Tax accounting methods and Tax elections used by the Company or relevant
Subsidiaries before the Closing Date.
(d) Section 338(h)(l0) Election. If requested by the Buyer, the
Buyer and Seller shall join in an election under Section 338(h)(10) of the
Code (and any similar elections under state or local law) with respect to
the Company. In connection with such an election:
(A) The Seller shall prepare and file the income Tax Returns
for, be responsible for the payment of, indemnify and hold the Buyer
and each corporation which is subject to the election harmless from,
and be entitled to any refund of any federal, state or local income
Taxes resulting from the election (and any corresponding election
under state or local law), including Taxes in any jurisdiction that
does not have an election similar to Code Section 338(h)(10).
(B) The Buyer and the Seller shall cooperate in determining
the deemed sales price of the assets of the Company and the
allocation of the deemed sales price among the assets of the Company
for purposes of Section 338(h)(10)
<PAGE>
of the Code in accordance with all applicable Treasury Regulations
promulgated under Section 338 of the Code.
(C) The Buyer and the Seller shall timely execute and file
Form 8023 (or any successor form) and any documents that may be
required under any applicable law, rule or regulation for such
election (or any corresponding election under state law, rule or
regulation) to be effective for federal and state income tax
purposes.
(e) Transfer Taxes. The Buyer and the Seller each agree to pay
one-half of any sales, use, transfer, stock transfer or withholding or
like Taxes related to the transfer of the Shares and the deemed sale of
assets resulting from any Section 33 8(h)(10) election.
(f) Cooperation and Control of Tax Disputes. The Buyer agrees to
cooperate and to cause the Company and Subsidiaries to cooperate with the
Seller to the extent reasonably required after the Closing Date in
connection with (i) the filing, amendment, preparation and execution of
all Tax Returns with respect to any taxable period of the Company or
Subsidiaries ending on or before the Closing Date, (ii) contests
concerning Taxes due for any such period and (iii) audits and other
proceedings conducted by Tax authorities with respect to any such period.
Within a reasonable time (but not more than 10 business days) after the
Buyer, the Company or Subsidiaries receives official notice of any such
contest, audit or other proceeding, the Buyer shall notify or cause the
Company to notify the Seller in writing of such contest, audit or other
proceeding. In any case where the Company or Subsidiaries is responsible
under applicable law for the defense of such contest, audit or other
proceeding, the Seller shall have the right to conduct the defense at its
expense, whether such contest, audit or other proceeding commenced before
or commences after the Closing, provided that the Seller conducts such
defense in good faith and in a diligent manner. Notwithstanding the
Seller's obligations under the preceding provisions of this Section 4.9,
the Seller shall have no obligation to pay or to indemnify or hold the
Buyer, the Company or Subsidiaries harmless from any tax imposed or
assessed as a result of (i) the failure of the Buyer or the Company to
notify the Seller as required by this paragraph, if such failure adversely
affects the Seller's ability to respond adequately in a timely manner to
the notice of contest, audit or other proceeding, or (ii) any action taken
by the Buyer, the Company or Subsidiaries with respect to any such
contest, audit or other proceeding without the Seller's written consent
(which shall not be unreasonably withheld).
No loss, credit or other item of the Company or Subsidiaries may be
carried back without the Seller's written consent, which the Seller may
withhold in its sole and absolute discretion, to a taxable period for
which the Seller or any Subsidiaries of the Seller filed a consolidated,
unitary or combined Tax Return with the Company or Subsidiaries unless
such carryback is required by law. The Seller shall promptly pay
<PAGE>
over to the Buyer the amount of any refund (including interest) received
as a result of such a permitted carryback but may retain any refund
(including interest) resulting from a carryback not so permitted.
The Seller agrees to cooperate with the Buyer, and the Buyer agrees
to cooperate (and cause the Company and Subsidiaries to cooperate) with
the Seller, to the extent necessary in connection with the filing of any
information return or similar document relating to the Buyer's acquisition
of the Company. The parties agree to cooperate with each other to the
extent reasonably required in connection with the preparation of Tax
Returns of the Company or the Subsidiaries following the Closing.
(g) Termination of Tax-Sharing Agreement. After the Closing, this
Section 4.9 shall supersede any and all tax-sharing or similar agreements
to which (i) the Company or Subsidiaries, and (ii) the Seller or any of
its subsidiaries are parties and the Company, Subsidiaries, the Seller and
its subsidiaries shall thereafter have no obligations or rights under any
such prior agreement. Seller will cause any such agreements to be
terminated on or before the Closing Date.
(h) Dispute Resolution. If the Seller and the Buyer do not agree as
to any question which arises under this Section 4.9, either of them, after
giving written notice to the other, may refer the question to
PricewaterhouseCoopers LLP ("PWC") for resolution. After giving each party
an opportunity to present its position, PWC shall within 45 days after
such referral decide the question. The decision of PWC shall be final and
shall bind both parties. PWC's fees shall be borne equally by the Seller
and the Buyer.
4.10. Use of Names. The Buyer and the Company will not, and will cause
their affiliates not to, use the trade names or marks "Renaissance,"
"Renaissance Worldwide" or "COBA Consulting" or any trade names or marks that
include, or are confusingly similar to, any such marks in connection with
providing services that are substantially similar to those provided by the
Company or Seller on the date hereof. Notwithstanding the foregoing, Seller
shall license to the Company, pursuant to a license agreement substantially in
the form of Exhibit F, the right to use the names "Renaissance Worldwide
Strategy," "Renaissance Strategy," "Renaissance Strategy Worldwide" and
"Business Strategy Group" for the periods set forth in such license agreement.
In each case the foregoing names shall be used solely in connection with the
provision of strategic consulting services substantially similar to those
provided by the Company and the Subsidiaries on the date hereof.
4.11. Assignment of Intellectual Property.
(a) The Company shall transfer and assign to the Seller certain
intellectual property pursuant to an Assignment of Rights in Trademarks,
Service Marks and Trade Names in substantially the form attached hereto as
Exhibit A-1. COBA Consulting Ltd. shall transfer and assign to the Seller
or a subsidiary of the Seller certain intellectual
<PAGE>
property pursuant to an Assignment of Rights in Trademarks, Service Marks
and Trade Names in substantially the form attached hereto as Exhibit A-2.
(b) The Seller shall use commercially reasonable efforts to assign
to the Company or the Subsidiaries the rights, subject to the obligations,
under agreements listed in Section 4.11 of the Disclosure Schedule to the
extent relating to the operation of the business of the Company and the
Subsidiaries and the Business Strategy Group.
(c) The Seller hereby agrees and acknowledges that it shall have no
right or interest in any (i) press quotes in global business press
attributable solely to the Business Strategy Group and/or one of its
executives, (ii) newsletters or articles related solely to the Business
Strategy Group business and authored solely by employees of the Business
Strategy Group, (iii) product/methodology brochures or pamphlets related
solely to the Business Strategy Group business (collectively, the "BSG
Documents"); provided, that the term BSG Documents does not include (A)
any documents relating to information system design, information system
analysis, information technology strategy, or consulting services relating
to use of information technology in e-commerce applications or the use of
Internet-based applications in business operations, or (B) documents with
respect to the Renaissance Balanced Scorecard or a derivative thereof,
Knowledge Management or any other consulting services which are technology
specific, in each case, which have been provided or proposed by Seller or
its direct or indirect subsidiaries (other than the Company, the
Subsidiaries or the Business Strategy Group) prior to the Closing Date;
and (iv) client or customer reports or other documents related to the
Business Strategy Group business authored solely by employees of the
Business Strategy Group for clients or customers of the Business Strategy
Group in the conduct of the Business Strategy Group business. In
connection with the foregoing, the Seller, as of the Closing, hereby
transfers and assigns to the Company all of its right, title and interest
in the BSG documents.
4.12. Leases.
(a) The Company and the Subsidiaries or their respective Affiliates
are currently parties to or may have certain residual liabilities or other
obligations (including as a sub-lessor, guarantor, assignor or an
indemnifying party) with respect to the leases set forth in Section
4.12(a) of the Disclosure Schedule (collectively, the "Non-BSG Leases").
The parties hereto acknowledge and agree that the Seller will use
commercially reasonable efforts to transfer any obligations of the Company
and the Subsidiaries with respect to the Non-BSG Leases, or use
commercially reasonable efforts to cause such obligations to be
transferred, from the Company and the Subsidiaries.
(b) The Company and the Seller will cooperate to arrange for the
assignment of the lease listed in Section 4.12(b) of the Disclosure
Schedule at (i) current prices and (ii) on terms and conditions set forth
in the current lease. Seller will use commercially reasonable efforts to
obtain any landlord consents necessary in connection with this Section
4.12(b). Buyer agrees to indemnify Seller for any costs associated with
the lease pursuant to this Section 4.12(b) after the Closing; provided
that in the event that (i) the
<PAGE>
landlord does not consent to the assignment of the lease listed in Section
4.12(b) and (ii) the Buyer is not able to continue to use the property
subject to such lease (the date that Buyer is no longer able to use the
property, the "Eviction Date"), Buyer shall not indemnify Seller for any
of such costs arising after the Eviction Date.
(c) Seller will use commercially reasonable efforts to allow Buyer
to continue to use, consistent with past practice until December 31, 2000
or, if earlier, the expiration of the lease term, the space it currently
occupies in connection with the leases listed in Section 4.12(c) of the
Disclosure Schedule, and Buyer will pay Seller for such use in the amounts
indicated in Section 4.12(c) of the Disclosure Schedule.
4.13. Bonus Repayment. In addition to amounts payable pursuant to Section
1.3 hereof, on or before March 15, 2000, the Company shall, and the Buyer shall
cause the Company to, pay to Seller $1,809,450.24 to reimburse the Seller for
amounts advanced by Seller (plus applicable social security, unemployment and
Medicare payments) to the employees of the Company listed in Section 4.13 of the
Disclosure Schedule during December 1999 and February 2000 to fund the payment
of performance bonuses with respect to 1999.
4.14. Notice of Default.
(a) Promptly upon the Seller becoming aware prior to the Closing of
any event which constitutes a breach or default, or would have caused or
constituted a breach or default had such event occurred or been known to
the Seller or the Company prior to the date hereof, of any of the
representations, warranties or covenants of the Seller or the Company
contained in or referred to in this Agreement, the Disclosure Schedule or
in any Exhibit referred to in the Agreement, the Seller or the Company
shall give detailed written notice thereof to the Buyer and the Seller.
(b) Promptly upon the Buyer becoming aware prior to the Closing of
any event which constitutes a breach or default, or would have caused or
constituted a breach or default had such event occurred or been known to
the Buyer prior to the date hereof, of any of the representations,
warranties or covenants of the Buyer contained in or referred to in this
Agreement, the Disclosure Schedule or in any Exhibit referred to in the
Agreement, the Buyer shall give detailed written notice thereof to the
Seller and the Company.
4.15. Provision of Employees. For one year after Closing, the Seller shall
continue to make employees and independent contractors available to the Company
consistent with past practice of charging market rates, to the extent available.
The Seller shall use commercially reasonable efforts to make the employees
and/or independent contractors of the Seller or its subsidiaries set forth in
Section 4.15 of the Disclosure Schedule available to the Company through the
dates set forth on such schedule and at historical costs.
4.16. Equipment Leases. Pursuant to the Transition Services Agreement
substantially in the form of Exhibit E hereto, the Company and the Seller will
cooperate to arrange for the assignment or buy-out of the leases used by the
Business Strategy Group and listed in
<PAGE>
Section 2.14 of the Disclosure Schedule (the "BSG Equipment Leases") at current
prices reflected in the existing leases. Seller will use commercially reasonable
efforts to obtain any lessor consents necessary in connection with this Section
4.16. Buyer agrees to indemnify Seller for any costs associated with the leases
to the extent listed in Section 2.14 of the Disclosure Schedule pursuant to this
Section 4.16 after the Closing Date. In the event that the BSG Equipment Leases
cannot be assigned to the Buyer, the Buyer will use commercially reasonable
efforts to buy-out the BSG Equipment Leases.
4.17. Dissolutions and Distributions. The parties hereto acknowledge that
the Seller, the Company and the Subsidiaries have dissolved or liquidated or are
in the process of dissolving or liquidating the entities set forth on Section
4.17(a) of the Disclosure Schedule or have distributed or are distributing any
interest of the Company or the Subsidiaries in the entities set forth on Section
4.17(b) of the Disclosure Schedule (such entities set forth under Sections
4.17(a) and 4.17(b) of the Disclosure Schedule are collectively referred to as
the "Distributed Entities").
4.18. Indebtedness between Seller and Company. The Seller and the Company
shall cancel any intercompany debt on or prior to the Closing, other than any
debt created by Sections 1.3 or 4.13 hereof; by the covenants of the parties
hereto or the Transition Services Agreement attached hereto as Exhibit E.
4.19. Transfer of Litigation. The parties hereby acknowledge and agree
that by March 10, 2000, the Company shall transfer and assign all of its rights
with respect to the litigation referenced in Section 2.11 of the Disclosure
Schedule (the "Transferred Litigation") pursuant to the Assignment Agreement.
4.20. Payment. Seller shall make the payments in the aggregate amount of
$975,000 called for by the letter dated February 4, 2000 from Seller to Mark
Bruneau when such payments are due pursuant to such letter.
4.21. Certain Accounts. The Seller shall use commercially reasonable
efforts to cause its lender to enter into arrangements with the Buyer's senior
lender for this transaction clarifying the Buyer's senior lender's priority with
respect to any cash received by the Seller's lender for the account of the
Business Strategy Group, the Company or the Subsidiaries.
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY. The respective
obligations of each party to consummate the transactions contemplated hereby are
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions:
5.1. HSR Act. The waiting period applicable to the consummation of the
purchase and sale of the Shares under the HSR Act shall have expired or been
terminated.
5.2. No Injunctions or Restraints, illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the purchase and sale of the Shares or any of the other
transactions contemplated by this Agreement shall be in effect, nor
<PAGE>
shall any proceeding brought by any administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; and there shall not be any action taken, or any Law
enacted, entered, enforced or deemed applicable to the purchase and sale of the
Shares or any other aspect of this Agreement, which makes the consummation of
the transactions contemplated herein illegal.
6. ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. The
obligations of the Buyer to purchase the Shares and to consummate the other
transactions contemplated hereby is subject to the satisfaction on or prior to
the Closing Date of each of the following conditions:
6.1. Representations and Warranties. The representations and warranties of
the Seller and the Company contained in this Agreement shall be true and correct
(i) in all material respects, in the case of those representations and
warranties which are not by their express terms qualified by reference to
materiality, and (ii) in all respects, in the case of those representations and
warranties which are by their express terms qualified by materiality, as of the
date hereof and as of the Closing Date as if made on and as of the Closing Date,
except for (a) changes contemplated or permitted by this Agreement or the
Disclosure Schedule, and (b) those representations and warranties which address
matters only as of a particular date (which shall have been true and correct as
of such date, subject to clauses (i) and (ii)), with the same force and effect
as if made at and as of the Closing Date, and Buyer shall have received a
certificate to such effect signed on behalf of the Seller by the President and
the Chief Financial Officer of the Seller.
6.2. Agreements and Covenants. The Seller and the Company shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or prior to
the Closing Date, and Buyer shall have received a certificate to such effect
signed on behalf of the Seller by the President and the Chief Financial Officer
of the Seller.
6.3. Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by the
Seller, the Company, the Business Strategy Group or the Subsidiaries for the due
authorization, execution and delivery of this Agreement and the consummation by
it of the transactions contemplated hereby shall have been obtained and made by
the appropriate party, except where the failure to receive such consents, etc.
would not reasonably be expected to have a Material Adverse Effect.
Notwithstanding the foregoing, all of the consents, waivers, approvals,
authorizations or orders set forth on Exhibit C shall have been obtained or made
by the Seller, the Company, the Business Strategy Group or the Subsidiaries.
6.4. Liens. All Liens on the Shares and on or over the securities of any
of the Subsidiaries pursuant to the Financing Arrangements shall be released,
effective upon the transfer of the Shares to Buyer.
<PAGE>
6.5. Guaranty. The Subsidiary Guaranty in connection with the Financing
Arrangements dated February 24, 1999 shall be released, effective upon the
transfer of the Shares to Buyer.
6.6. Delivery of Shares. The Seller shall have delivered the Shares to
Buyer.
6.7. Opinion of Seller's Counsel. The Buyer shall have received an opinion
of Ropes & Gray, reasonably satisfactory to Buyer, and an opinion of Lovell
White Durrant, substantially in the form of Exhibit D hereto.
6.8. No Material Adverse Change. Since the Audit Date, there shall have
been no Material Adverse Effect.
6.9. Earnout Payments. The Seller shall have paid in full any earnout
payments to Mark Bruneau pursuant to the CM Management Trust Agreement dated as
of February 14, 1997 in the amount of $4,125,000 and Mark Bruneau shall not be
entitled to any additional amounts under any Employee Plan not listed in Section
2.12 of the Disclosure Schedule, other than immaterial fringe benefits; provided
that Mark Bruneau shall have been paid all amounts due and payable as of the
Closing Date pursuant to the Employee Plans listed in Section 2.12 of the
Disclosure Schedule.
6.10. Indebtedness of the Company and the Subsidiaries. On the Closing
Date, neither the Company nor the Subsidiaries shall have (a) any obligations
for borrowed money or interest-bearing obligations evidenced by a bond, note,
debenture or similar instrument, (b) any other indebtedness including any
intercompany accounts due to the Seller or any of its direct or indirect
subsidiaries (other than the Company or the Subsidiaries) whether or not
interest-bearing, in each case, other than indebtedness created by Sections 1.3
or 4.13 hereof, by the covenants of the parties hereto or the Transition
Services Agreement attached hereto as Exhibit E.
6.11. [Reserved]
6.12. Transition Services. The Buyer and the Seller shall have executed a
Transition Services Agreement substantially in the form of Exhibit E hereto.
6.13. Dissolutions and Distributions. Except as set forth on Section 6.13
of the Disclosure Schedule, the Seller, the Company and the Subsidiaries (a)
shall have completed the dissolution or liquidation of the Distributed Entities
set forth on Section 4.17(a) of the Disclosure Schedule and (b) shall have
distributed any interest of the Company or the Subsidiaries in the Distributed
Entities set forth on Section 4.17(b) of the Disclosure Schedule.
<PAGE>
6.14. Licensing Agreement. The Company and the Seller shall have entered
into a Licensing Agreement with respect to the tradenames "Renaissance Worldwide
Strategy," "Business Strategy Group," "Renaissance Strategy Worldwide" and
"Renaissance Strategy" substantially in the form of Exhibit F hereto.
6.15. Transferred Litigation. The Company and the Seller shall have
entered into the Assignment Agreement and completed the assignment and transfer
of the Transferred Litigation in accordance with the terms thereof.
7. ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER. The obligations
of the Seller to effect the sale of the Shares and to consummate the other
transactions contemplated hereby is subject to the satisfaction on or prior to
the Closing Date of each of the following conditions:
7.1. Representations and Warranties. The representations and warranties of
Buyer contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date as if made on and as
of the Closing Date, and the Seller shall have received a certificate to such
effect signed on behalf of Buyer by the President and the Chief Financial
Officer of Buyer.
7.2. Agreements and Covenants. Buyer shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date, and the Seller shall have received a certificate to such effect signed on
behalf of Buyer by the President and the Chief Financial Officer of Buyer.
7.3. Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by Buyer
for the authorization, execution and delivery of this Agreement and the
consummation by them of the transactions contemplated hereby shall have been
obtained and made by Buyer, except where the failure to receive such consents,
etc. would not reasonably be expected to have a Material Adverse Effect.
7.4. Payment of Purchase Price. The Buyer shall have delivered the
Purchase Price to Seller.
7.5. Advance Repayment. The Buyer shall have paid to Seller the amount
called for in Section 1.3 hereof.
7.6. Opinion of Buyer's Counsel. The Seller shall have received an opinion
of Buyer's counsel, reasonably satisfactory to Seller.
8. INDEMNIFICATION.
<PAGE>
8.1. Survival of Representations and Warranties of the Seller and the
Company. All of the representations and warranties of the Seller and the Company
contained herein or in any document, certificate or other instrument required to
be delivered hereunder shall survive the Closing and continue in full force and
effect until May 1, 2001; provided, that the representations and warranties of
the Seller and the Company (i)(A) contained in the first sentence of Section
2.1, (B) the first three sentences of Section 2.3 and (C) Section 2.4 shall
survive the Closing and continue in full force and effect without limit as to
time, (ii) contained in Sections 2.12 (but only to the extent related to
liability pursuant to ERISA), 2.16 and 2.17 shall survive the Closing and
continue in full force and effect subject to the expiration of the applicable
statute of limitations, and (iii) with respect to fraud shall survive the
Closing and continue in full force and effect without limit as to time. The
termination of any such representation and warranty, however, shall not affect
any claim for any breach of any representation or warranty if written notice
thereof is given to the breaching party or parties prior to such termination
date; provided, however, that any such written claim by any Indemnified Party
(as defined below) with respect to a breach of the representations and
warranties of the Seller and the Company may (a) with respect to a breach of the
representations and warranties described in clauses (i) and (iii) above be given
at any time and (b) with respect to a breach of the representation and
warranties described in clause (ii) above be given at any time prior to the
expiration of the applicable statute of limitations.
8.2. Indemnity by the Seller. Subject to Section 8.3, the Seller hereby
agrees to indemnify, defend and hold harmless the Buyer and each of its
directors, officers, shareholders and Affiliates, including, without limitation,
any of the investment partnerships or funds affiliated with Behrman Capital and
any of their general partners and Affiliates (collectively, the "Indemnified
Parties", and each an "Indemnified Party"), against and in respect of all Losses
(whether or not arising out of third-party claims) after the Closing resulting
from, based upon or incident to:
(a) any breach of any representation or warranty made by the Seller
or the Company herein or in any certificate or other document delivered in
connection herewith (as each such representation or warranty, other than
those made in Section 2.27, would read if all materiality and knowledge
provisions were not contained therein) and any misrepresentation made by
the Seller in connection with this Agreement or the transactions
contemplated hereby; and
(b) any breach or nonfulfillment by the Seller or the Company of,
and any noncompliance by the Company or the Seller with, any covenant,
agreement or obligation contained herein or in any certificate or other
document delivered in connection herewith.
The applicable Indemnified Party shall provide the Seller with prompt written
notice for any claim made in respect of the indemnification provided in this
Section 8.2, whether or not arising out of a claim by a third party, provided,
however, that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
<PAGE>
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
8.3. Limitations on Indemnity by the Seller. The Indemnified Parties shall
not assert any claim for indemnification against the Seller under Section 8.2
until such time as the aggregate of all claims which the Buyer Indemnified
Parties may have against the Seller under Section 8.2 shall exceed .75% of the
Purchase Price, in which case the Seller shall be liable for all Losses arising
under Section 8.2; provided, however, the aggregate liability of the Seller for
indemnification claims under Section 8.2 shall not exceed ten percent (10%) of
the Purchase Price. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Parties shall not be subject to any limitation pursuant to this
Section 8.3, and shall be entitled to full recovery from the Seller in respect
of claims for indemnification from the Seller for Losses described in Section
8.4 or in connection with (i) fraud, (ii) the breach by the Seller or the
Company of any of the representations and warranties contained in (A) the first
sentence of Section 2.1, (B) the first three sentences of Section 2.3 and
Section 2.4 or (C) Section 2.16 or (iii) Section 4.9. This Section 8 shall be
the sole and exclusive remedy for any and all Losses sustained or incurred by
Buyer or the Company or their respective successors and assigns (whether for
claims based in contract, tort or otherwise) resulting from or relating to any
misrepresentation, breach of warranty or failure to perform any covenant or
agreement contained in this Agreement or otherwise relating to this Agreement;
provided that this Section 8.3 shall not limit Buyer's rights under Section 8.4;
and provided further that this Section 8 shall not limit Buyer's rights under
Section 4.9.
8.4. Additional Indemnity by the Seller. Notwithstanding anything in this
Agreement or the Disclosure Schedule or any other document in connection
herewith to the contrary, including, without limitation Sections 8.2 and 8.3,
the Seller hereby agrees to indemnify, defend and hold harmless the Indemnified
Parties against and in respect of all Losses (whether or not arising out of
third-party claims) resulting from, based upon or incident to:
(a) events arising prior to or after the Closing in connection with
the redemption (the "Redemption") by COBA Consulting Limited of interests
from its shareholders pursuant to the Option Agreement dated February 3,
1997; provided that Seller shall not be obligated to indemnify Buyer for
any amounts paid prior to the Closing by the Company or the Subsidiaries
in connection with the Redemption;
(b) the dissolution, liquidation or divestiture of the Distributed
Entities, whether arising prior to or after the Closing;
(c) the Assignment dated as of March 1, 2000 between Coba Consulting
Limited and the Coba Group Limited, to the extent such Losses arise after
the date of such assignment;
<PAGE>
(d) the Non-BSG Leases to the extent arising prior to or after the
Closing; provided that Seller shall not be obligated to indemnify Buyer
for any amounts paid prior to the Closing by Company or the Subsidiaries
in connection with the Non-BSG Leases; and
(e) third-party claims arising from the Transferred Litigation, to
the extent arising prior to or after the Closing; provided that Seller
shall not be obligated to indemnify Buyer for any amounts paid prior to
the Closing by Company or the Subsidiaries in connection with the
Transferred Litigation.
This obligation of the Seller and the rights of the Indemnified Parties
under this Section 8.4 shall not be limited in any way by any other provision of
this Section 8 and shall be in addition to the obligations of the Seller and the
rights of the Indemnified Parties under Section 8.2. If both Section 8.2 and
Section 8.4 shall be applicable to any Losses incurred by the Indemnified
Parties, then the Seller shall indemnify the Indemnified Parties pursuant to
this Section 8.4 and such Losses shall not count against the aggregate liability
of Seller for indemnification claims set forth in Section 8.3.
8.5. Matters Involving Third Parties.
(a) If any third party shall notify any Indemnified Party with
respect to any matter (a "Third Party Claim") which may give rise to a
claim for indemnification against any other party (the "Indemnifying
Party") under this Section 8, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided, however, that
no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
so long as (i) the Indemnifying Party notifies the Indemnified Party in
writing within 30 days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Losses the
Indemnified Party may suffer resulting from, arising out of; relating to,
in the nature of; or caused by the Third Party Claim, (ii) the Third Party
Claim does not seek any material equitable relief, (iii) the Indemnifying
Party shall conduct a good faith and diligent defense at its own expense,
and (iv) the Indemnifying Party keeps the Indemnified Party apprised of
the status of the Third Party Claim and furnishes the Indemnified Party
with all documents and information reasonably requested by the Indemnified
Party; provided, however, that if the named parties to the Third Party
Claim include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be inappropriate
under applicable standards of professional conduct, the reasonable expense
of separate counsel for such Indemnified Party shall be paid by
<PAGE>
the Indemnifying Party provided that such Indemnifying Party shall be
obligated to pay for only one counsel in any jurisdiction.
(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8.5(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim unless written agreement
is obtained releasing the Indemnified Party from all liability thereunder.
(d) In the event any of the conditions in Section 8.5(b) above is or
becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may
deem appropriate (with the prior written consent of the Indemnified Party,
which consent shall not unreasonably be withheld), (ii) the Indemnifying
Parties will reimburse the Indemnified Party promptly and periodically for
the costs of defending against the Third Party Claim (including attorneys'
fees and expenses) and (iii) the Indemnifying Parties will remain
responsible for any Losses the Indemnified Party may suffer resulting
from, arising out of; relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 8.
9. DEFINITIONS. Certain capitalized terms are used in this Agreement with the
specific meanings defined below in this Section 9.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Approval" means any franchise, grant, authorization, license, permit,
easement, consent, certificate, approval or order.
"Audit Date" has the meaning set forth in Section 2.8.
"BSG Assets" means assets currently used by the Business Strategy Group in
the conduct of its business and reflected on the Most Recent Balance Sheet,
which are owned by the Seller directly or through any direct or indirect
subsidiary.
"BSG Documents" has the meaning set forth in Section 4.11.
<PAGE>
"BSG Properties" means properties currently used by the Business Strategy
Group in the conduct of its business and reflected on the Most Recent Balance
Sheet, which are owned by the Seller directly or through any direct or indirect
subsidiary.
"Business Strategy Group" means the operating division of the Seller known
as "Business Strategy Group," "Renaissance Worldwide Strategy" or "the strategy
division" which provides strategy development and implementation consulting
services at the senior executive or board level.
"Buyer" has the meaning set forth in the preamble.
"Closing" has the meaning set forth in Section 1.3.
"Closing Date" has the meaning set forth in Section 1.3.
"Code" means the Internal Revenue Code of 1986, as amended and the
regulations issued thereunder.
"Company" means Renaissance Worldwide Strategy, Inc.
"Confidentiality Letter" has the meaning set forth in Section 4.4.
"Contract" has the meaning set forth in Section 2.6(a).
"Customer" has the meaning set forth in Section 2.26.
"Disclosure Schedule" has the meaning set forth in Section 2.
"Distributed Entities" has the meaning set forth in Section 4.17.
"Employee Plan" has the meaning set forth in Section 2.12(a).
"Environmental Laws" means all applicable federal, state, foreign or local
laws or any regulation, code, plan, order, decree, judgment, notice or demand
letter issued, entered, promulgated or approved thereunder relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, noise, contaminants,
or hazardous or toxic materials or wastes or any other Hazardous Substance into
ambient air, surface water, ground water, or land or otherwise relating to the
manufacture, processing, distribution, use, presence, production, labeling,
testing, treatment, storage, disposal, transport, or handling of pollutants,
contaminants or hazardous or toxic materials or wastes by the Company,
Subsidiaries or their respective agents.
"ERISA" has the meaning set forth in Section 2.12(a).
<PAGE>
"ERISA Affiliate" means any trade or business, whether or not
incorporated, all of which together with the Company would be deemed a "single
employer" within the meaning of Section 4001 of ERISA.
"Exchange Act" has the meaning set forth in Section 2.6(d).
"Financial Statements" has the meaning set forth in Section 2.8.
"Financing Arrangements" means the Amended and Restated Credit Agreement
dated as of July 15, 1999 among Seller, Bank of America, N.A., BNY Factoring LLC
and the Lenders named therein and related documents.
"GAAP" has the meaning set forth in Section 2.8.
"Hazardous Substance" means any hazardous or toxic substance, including
any "hazardous substance" (as defined in 42 U.S.C. ss. 9601(14)), and oil,
gasoline and any other petroleum-based substance.
"HSR Act" has the meaning set forth in Section 2.6(d).
"Indebtedness" means with respect to any Person, all obligations
contingent or otherwise, in respect of: (a) borrowed money; (b) indebtedness
evidenced by notes, debentures or similar instruments; (c) capitalized lease
obligations; (d) the deferred purchase price of assets, services or securities,
including related non-competition, consulting and stock repurchase obligations
(other than ordinary trade accounts payable within six months after the
incurrence thereof in the ordinary course of business); (e) conditional sale or
other title retention agreements; (f) reimbursement obligations, whether
contingent or matured, with respect to letters of credit, bankers' acceptances,
surety bonds, other financial guarantees and interest rate protection agreements
(without duplication of other indebtedness supported or guaranteed thereby); (g)
dividends payable; and (h) interest, premium, penalties and other amounts owing
in respect of the items described in the foregoing clauses (a) through (g).
"Indemnified Party" has the meaning set forth in Section 8.2.
"Indemnifying Party" has the meaning set forth in Section 8.5.
"INS" has the meaning set forth in Section 2.19(b).
"Intellectual Property" means: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
<PAGE>
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (d) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (e) all computer software (including data and related
documentation); (f) all other proprietary rights; and (g) all copies and
tangible embodiments thereof (in whatever form or medium).
"Intellectual Property Rights" has the meaning set forth in Section
2.18(a).
"Laws" has the meaning set forth in Section 2.6(c).
"Lien" has the meaning set forth in Section 2.3.
"Losses" means liabilities, obligations, judgments, Liens, injunctions,
charges, orders, decrees, rulings, damages, dues, assessments, taxes, losses,
fines, penalties, expenses, fees, costs, amounts paid in settlement (including
reasonable attorneys' and expert witness fees and disbursements in connection
with investigating, defending or settling any action or threatened action),
arising out of any condition, claim, damages, complaint, demand, cause of
action, audit, investigation, hearing, action, suit or other proceeding asserted
or initiated or otherwise existing in respect of any matter.
"Material Adverse Effect" means any change, effect or circumstance that,
individually or when taken together with all other such changes, effects or
circumstances that have occurred prior to the date of determination of the
occurrence of the Material Adverse Effect, (a) is or is reasonably likely to be
materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole or the Business Strategy Group business or (b) is or is
reasonably likely to materially delay or prevent the consummation of the
transactions contemplated hereby.
"Most Recent Balance Sheet" has the meaning set forth in Section 2.8.
"Non-BSG Leases" has the meaning set forth in Section 4.12.
"Non-Compete Period" has the meaning set forth in Section 4.7.
"Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
<PAGE>
"Purchase Price" has the meaning set forth in Section 1.2.
"PWC" has the meaning set forth in Section 4.9.
"Section 338(h)(10) Election" has the meaning set forth in Section 4.9.
"Securities Act" means the Securities Act of 1933, as amended and the
regulations issued thereunder.
"Seller" has the meaning set forth in the preamble.
"Shares" has the meaning set forth in the recitals.
"Software" has the meaning set forth in Section 2.28.
"Subsidiaries" means COBA Consulting Ltd. and Renaissance Worldwide
Strategy Limited.
"Subsidiary Documents" has the meaning set forth in Section 2.2.
"Third Party Claim" has the meaning set forth in Section 8.5.
"Welfare Plan" means a welfare benefit plan within the meaning of Section
3(1) of ERISA.
10. MISCELLANEOUS
10.1. Knowledge. References in this Agreement, except in Section 2.27, to
"knowledge of the Seller" shall be deemed to mean the actual knowledge of the
officers of the Company and the executive officers of Seller. References in
Section 2.27 to "knowledge of the Seller" shall be deemed to mean the actual
knowledge of executive officers of the Seller.
10.2. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be sent by facsimile,
overnight courier, registered mail or certified mail. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given, as
applicable, (a) upon confirmation of facsimile, (b) one business day following
the date sent when sent by overnight delivery or (c) five business days
following the date mailed when mailed by registered or certified mail return
receipt requested and postage prepaid at the following address:
<PAGE>
If to Seller, to it at:
Renaissance Worldwide, Inc.
52 Second Avenue
Waltham, MA 02154
Attn: General Counsel
Telephone: (617) 527-6886
Telecopier: (617) 527-6999
With a copy to:
Keith F. Higgins
Ropes & Gray
One International Place
Boston, MA 02110
Telephone: (617) 951-7000
Telecopier: (617) 951-7050
If to the Buyer, to it at:
c/o Behrman Capital
126 East 56th Street
New York, NY 10022
Attn: Dennis G. Sisco
Telephone: (212) 980-6500
Telecopier: (212) 980-7024
With a copy to:
Kevin M. Dennis
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Telephone: (617) 570-1000
Telecopier: (617) 523-1231
<PAGE>
If to Company, to it at:
Renaissance Strategy
200 Berkeley Street, 22nd Floor
Boston, MA 02116
Attn: Mark Bruneau
Telephone: (617) 421-9990
Telecopier: (617) 421-9994
Notwithstanding the foregoing, any party may send any notice, request,
demand, claim, or other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail); provided, however, that no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
10.3. Expenses of Transaction. Whether or not the transactions provided
for herein are consummated, each of the parties hereto will assume and bear all
expenses, costs and fees (including legal and accounting fees and expenses)
incurred by such party in connection with the preparation, negotiation and
execution of this Agreement and the transactions contemplated hereby; provided,
however, that the Seller will assume and bear all expenses, costs and fees
(including legal and accounting fees and expenses) incurred by the Company in
connection with the preparation, negotiation and execution of this Agreement and
the transactions contemplated hereby. Notwithstanding the foregoing, at the
Closing, and only in the event of the consummation of the Closing by the parties
hereto, the Company will make a cash payment to the Buyer equal to the
reasonable fees and expenses incurred by the Buyer, its Affiliates and their
advisors, including legal counsel, which fees and expenses shall include a
transaction fee equal to $1,860,853 to Behrman Capital; provided, that in no
event shall Seller have any liability with respect to such payment to Buyer or
Behrman Capital, and if the Closing is not consummated for any reason
whatsoever, neither the Seller nor the Company shall have any liability with
respect to such payments to Buyer and Behrman Capital. The Seller and the Buyer
shall each pay one-half of the filing fees for any filings made by the parties
under the HSR Act.
10.4. Entire Agreement. The agreement of the parties that is comprised of
this Agreement, the Exhibits and Schedules hereto and the other documents
referred to herein sets forth the entire agreement and understanding between the
parties and supersedes any prior agreement or understanding, whether oral or
written, relating to the subject matter of this Agreement.
10.5. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the successors and permissible assigns of the
Seller and the Buyer. This Agreement and any rights hereunder shall not be
assigned, hypothecated or otherwise transferred by any party hereto without the
prior written consent of the other parties hereto; provided,
<PAGE>
however, that Buyer may assign its right, title and interest in and to, and the
benefits under, this Agreement to any lender financing this transaction or any
lender refinancing such financing and Seller hereby consents to such assignment.
10.6. Governing Law, etc. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts. Each
of the parties hereto hereby irrevocably and unconditionally consents to submit
to the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts
and of the United States of America located in the Commonwealth of Massachusetts
for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby, and each of the parties
hereto agrees not to commence any action, suit or proceeding relating hereto or
thereto except in such courts. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby or thereby, in the courts of the Commonwealth of Massachusetts or the
United States of America located in the Commonwealth of Massachusetts, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. In any action or suit to
enforce any right or remedy under this Agreement or to interpret any provision
of this Agreement, the prevailing party shall be entitled to recover its costs,
including reasonable attorneys' fees.
10.7. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING OUT OF OR PASSED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT
OR CONTRACT OR OTHERWISE.
10.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original for all purposes and all
of which together shall constitute one and the same instrument.
10.9. Headings. The headings contained in this Agreement are inserted only
as a matter of convenience and for reference and in no way define, limit, or
describe the scope or intent of this Agreement.
10.10. Termination. The parties may terminate this Agreement as provided
below:
(a) the parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
<PAGE>
(b) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (i) in the event the Seller
has breached any representation, warranty, or covenant contained in this
Agreement in a manner that would cause the condition in Sections 6.1 and
6.2 not to be satisfied, the Buyer has notified the Seller of the breach,
and the breach cannot be cured or the Seller fails to notify Buyer within
10 days after such notice of its intent to cure such breach or (ii) if the
Closing shall not have occurred on or before March 10, 2000, by reason of
the failure of any condition precedent under Section 6 hereof (unless the
failure results primarily from the Buyer itself materially breaching any
representation, warranty, or covenant contained in this Agreement); and
(c) the Seller may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing (i) in the event the Buyer
has breached any representation, warranty, or covenant contained in this
Agreement in a manner that would cause the condition in Sections 7.1 and
7.2 not to be satisfied, the Seller has notified the Buyer of the breach,
and the breach cannot be cured or the Buyer fails to notify the Seller
within 10 days after such notice of its intent to cure such breach or (ii)
if the Closing shall not have occurred on or before March 10, 2000, by
reason of the failure of any condition precedent under Section 7 hereof
(unless the failure results primarily from the Seller itself materially
breaching any representation, warranty, or covenant contained in this
Agreement).
<PAGE>
10.11. Effect of Termination. If any party terminates this Agreement
pursuant to Section 10.10 above, all rights and obligations of the parties
hereunder shall terminate (other than the rights and obligations of the parties
under Section 10.3) without any liability of any party to any other party
(except for any liability of any party then in breach).
10.12. Certain References. For the purposes of this Agreement, all
references to capital stock, common stock and stockholders insofar as they apply
to the Subsidiaries shall be deemed to be references to the share capital, the
ordinary share capital and the shareholders of the Subsidiaries, respectively.
10.13. The Guarantor. During the period beginning on the date this
Agreement is executed and ending on the Closing Date (the "Guarantee Period"),
the Guarantor hereby unconditionally and irrevocably guarantees to the Seller
the performance of each of the obligations and the undertakings of Buyer under
this Agreement when and to the extent the same are required to be performed
during the Guarantee Period and subject to all of the terms and conditions
hereof. If Buyer shall fail to perform any obligation or undertaking of Buyer
under this Agreement during the Guarantee Period when and to the extent the same
are required to be performed during the Guarantee Period, the Guarantor will
upon written demand from the Seller forthwith perform or cause to be performed
such obligation or undertaking as the case may be; provided that, the Guarantor
shall not have any liability whatsoever under this guaranty after the Closing
Date, whether based upon events occurring prior to or after the Closing Date;
provided, further, however, the aggregate liability of the Guarantor hereunder
shall not exceed $30,000,000.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their respective duly authorized officers as of the day and year
first written above.
ROME ACQUISITION CORP.
By: /s/ Mark Visser
-----------------------------------
Title:
RENAISSANCE WORLDWIDE, INC.
By: /s/ G. Drew Conway
-----------------------------------
Title:
RENAISSANCE WORLDWIDE STRATEGY, INC.
By: /s/ G. Drew Conway
-----------------------------------
Title:
THE UNDERSIGNED IS A PARTY TO THIS AGREEMENT SOLELY FOR THE PURPOSES OF SECTION
10.13 HEREOF AND SHALL NOT BE DEEMED A PARTY TO THIS AGREEMENT FOR PURPOSES OF
ANY OTHER PROVISION HEREOF.
BEHRMAN CAPITAL II, L.P.
By: BEHRMAN BROTHERS, L.L.C.,
its general partner
By: /s/ Grant G. Behrman
-----------------------------------
Name: Grant G. Behrman
Title: Managing Member
<PAGE>
Schedules to the Stock Purchase Agreement
Reference is hereby made to that certain Stock Purchase Agreement dated February
29, 2000 by and among Rome Acquisition Corp., Renaissance Worldwide Strategy,
Inc. and Renaissance Worldwide, Inc. (the "Agreement"). This is the Disclosure
Schedule referred to in the Agreement. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Agreement.
Any item listed or described in any schedule herein shall be deemed to have been
listed in or incorporated by reference into each other schedule herein where
such listing or description would be appropriate. Disclosure of any information
on any of the schedules herein shall not create any implication that such
information was required, under the terms of the agreement (on the basis of
materiality thresholds or otherwise), to be disclosed. Disclosure of any
contract shall be disclosure of the terms thereof.
<PAGE>
Schedule 1.3 - Advance Repayment
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Bonus
EMPL ID Employee Name Hire Date Incentive Oct 10-23-99 Med/ER OASDI/ER FUTA/ER SUI/ER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
100376 Aguirre, Pascal 09/01/94 BNI 150,000.00 2,175.00 - - -
- --------------------------------------------------------------------------------------------------------------
100088 Bruneau, Mark R 01/01/92 BNI 300,000.00 4,350 00 - - -
- --------------------------------------------------------------------------------------------------------------
101393 Cavallari Ford 11/01/96 BNI 200,000.00 2,900.00 - - -
- --------------------------------------------------------------------------------------------------------------
102483 Cole, Andrew 10/06/97 BNI 150,000.00 2,175 00 - - -
- --------------------------------------------------------------------------------------------------------------
100857 Kirby, Marcus B 02/01/96 BNI 150,000.00 2,175.00 - - -
- --------------------------------------------------------------------------------------------------------------
101883 Wery, Roger F 05/01/97 BNI 150,000.00 2,175.00 - - -
- -----------------------------------------------------========================---------------------------------
1,100,000.00 15,950.00
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule 2.1 - Organization and Qualification; Subsidiaries
Subsidiaries
------------
Name Incorp. Auth. Capital
---- ------- -------------
1. Coba Consulting, Ltd. UK (pound)3,090.06
(1 penny per share)
2. Renaissance Worldwide Strategy Limited UK (pound)100,000
(1 pound per share)
Equity Interests
----------------
1. List of companies the Company is dissolving (3): COBA Group, USA, Ltd.
(GA), Technomic Consultants, Inc. (IL), Technomic Research Associates
Limited (UK).
<PAGE>
Schedule 2.3 - Capitalization
1. 65% of the shares of (i) COBA Consulting Ltd. and (ii) Renaissance
Worldwide Strategy Limited are pledged to the Bank of America, N.A.
pursuant to the Pledge and Security Agreement of the subsidiaries of
Renaissance Worldwide, Inc. dated July 15, 1999 in connection with the
Credit Agreement among the lenders party thereto, Bank of America N.A., as
administrative agent for itself and the other lenders and BNY Factoring
LLC as syndication agent dated July 15, 1999.
<PAGE>
Schedule 2.5 - Title to Shares
1. The Company pledged all of the Shares pursuant to the Pledge and Security
Agreement by and between Seller and Bank of America as Administrative
Agent for the Lenders dated July 15, 1999 as amended by the First
Amendment.
<PAGE>
Schedule 2.6 - No Conflict; Required Filings and Consents
(a) (i)
1. Amended and Restated Credit Agreement dated July 15, 1999, among
Renaissance Worldwide, Inc., the lenders party thereto, Bank of
America N.A., as administrative agent for itself and the other
lenders and BNY Factoring LLC as syndication agent, as amended by
the First Amendment to the Credit Agreement (the "Credit
Agreement").
2. Pledge and Security Agreement dated July 15, 1999 in connection with
the Credit Agreement.
3. Subsidiary Guaranty Agreement dated July 15, 1999 in connection with
the Credit Agreement.
4. Credit line with Barclay's Bank for benefit of RWS Ltd. in UK for
approximately (pound)200,000. There is also a wage line with the
bank for up to (pound)400,000 and an expenses line for up
to(pound)65,000 per month. There are currently no amounts
outstanding.
(a) (ii)
A. Client Contracts. The following are in the name of Seller and shall
be assigned to the Company:
1. Electric Lightwave; ELI/110 & ELI/111
2. GM Onstar; GMON/110 & GMON/111 & GMON/112
3. Ontario Hydro; OH/122
4. Century Telephone, Inc.; SHRCO/ 110-01A
5. Telesystem Int. Wireless, Inc.; TIW/112 & TIW/113 &
TIW/114
6. Nortel Networks; NT/12513 & NTL/125 & NTL/125B
7. Dell Computer Co.; DEL/112 & DEL/110-01
8. Citizens Utilities; CZN/110-01A & CZN/115B & CZN/115C &
CZN/121
9. Interactive Media Group; IMG/NOPRG
10. Wisconsin Electric Power Co.; WE/110B & WE/110C
11. Cisco Systems, Inc.; CIS/110 & CIS/110B & CIS/111
12. General Dynamics; GD/110 & GD/111 & GD/111B & GD/112 &
GD/113 & GD/114
13. Nextnet, Inc.; NEXT/111
14. Lucent Technologies, Inc.; LUC/118 & LUC/132
15. Xerox; XRX/110 & XRX/111
16. GTE Government Systems; GD/110
17. Global Ventures/Concert/Concert Management Services;
GV/110 & GV/111 & GV/112 & GV/113 & GV/114 & GY/115 &
GV/116 & GV/117
18. IBM Corp.; IBM/127 & IBM/129
19. Hewlett Packard; HP/111B & HP/115 & HP/117 & HP/120
20. Agilent Technologies; GEO-AGI/110
21. AT&T; ATT/142 & ATT/143
22. Geo-AT&T; GEO-ATT/110
23. GTE; GTE/144
24. Geoworks; GEW/110
<PAGE>
Schedule 2.6 - No Conflict; Required Filings and Consents (cont'd)
A. Client Contracts (cont'd)
25. Nippon Telegraph and Telephone Corp.; NTT/110
26. Sun Microsystems; SUN/125B
27. Northwest Mortgage; NORW/110
28. Sprint Business; SPR/120B & SPR/127-01
29. BCE Mobile Communications, Inc.; BEL/202
B. Strategic Alliance
1. GeoPartners Research, Inc.
C. Personal property tied to equipment lease agreements
1. See Attachment 1 to Schedule 2.14, which identifies all the
leases to which Company is a party as well as those leases to
which Seller is a party but that are currently being used by
the Business Strategy Group.
D. Leaseholds
1. leasehold: Colony Square, Atlanta, GA
tenant: Company
2. leasehold: 44 Montgomery, San Francisco, CA
tenant: Company
3. leasehold: 4 Great James Street, WC1, London, England
tenant: Three individuals and CBA Ltd. One individual (Richard
Peel) and CBA Ltd. are indemnified by Coba Consulting
Ltd.
4. leasehold: 15 Piedmont Center, Suite 1400, 3575 Piedmont Road,
NE, Atlanta, GA
tenant: The Hunter Group, Inc. Company uses merely some 600
sq. ft. out of a 27,066 sq. ft. leasehold.
5. leasehold: One Curzon Street, London, England
tenant: Renaissance Worldwide Strategy, Ltd. assigned this
leasehold to a third party on December 7, 1999.
6. leasehold: Chicago - 200 West Madison
tenant: The Hunter Group, Inc., an affiliate of the Company,
is the tenant on the lease. The Company currently
occupies the location. To assign or sublease requires
the consent of the landlord. See Schedule 2.6 (a).
<PAGE>
Schedule 2.6 - No Conflict; Required Filings and Consents (cont'd)
7. leasehold: 33 Cavendish Square, London, UK
tenant: Renaissance Worldwide Limited. To sublease space to
the Company requires the consent of the landlord.
(b) (i)
1. The Credit Agreement requires that Seller shall have given or shall give
the Lenders notice and shall have obtained or shall obtain consent with
respect to dissolutions/distributions described on Schedule 2.9. The
Credit Agreement requires that the Lenders consent to the sale of the
Shares pursuant to the Agreement.
2. Certain leaseholds
a. Leasehold: Stamford, CT
Action: International Systems Services, Ltd., a former
subsidiary of the Company, assigned this leasehold to
RWITCS, an affiliate. No assignment documentation has
been executed. The landlord was not notified as
required by the lease.
b. Leasehold: London - 4 Great James Street
Action: Coba Consulting Ltd. has taken responsibility for this
lease.
c. Leasehold: Atlanta - Colony Square
Action: Coba Group USA, Ltd., a former subsidiary of the
Company, assigned this lease to the Company. No
assignment documentation has been executed.
d. Leasehold: Chicago - 200 West Madison
Action: The Hunter Group, Inc., an affiliate of the Company,
is the tenant on the lease. The Company currently
occupies the location. To assign or sublease requires
the consent of the landlord. See Schedule 2.6.
e. Leasehold: 33 Cavendish Square, London, UK
Action: Renaissance Worldwide Limited need to obtain consent
from the landlord for a sublease with the Company.
<PAGE>
Schedule 2.6 - No Conflict; Required Filings and Consents (cont'd)
(c)
1. The following contracts may be subject to a restriction on
assignment that could be triggered upon the transaction contemplated
hereby:
Client File Name
------ ---------
1. Hewlett Packard HP/111B, HP/115
2. IBM Corp. IBM/127
3. Nortel Networks NTL/125, NTL/125B
4. Cisco Systems, Inc. CIS/110, CIS/110B, CIS/111
5. Xerox XRX/110, XRX/111
6. Sprint SPR/120B, SPR/132
7. Hughes HUGH/110
8. AT&T ATT/142, ATT/143
2. In addition, the personal property leases identified on Attachment 1
of Schedule 2.14 are subject to a restriction on assignment that
could be triggered upon the transactions contemplated hereby.
3. See the leaseholds listed in this Schedule under (a)(ii)(D).
<PAGE>
Schedule 2.7 - Compliance
See Schedule 2.16.
<PAGE>
Schedule 2.8 - Financial Statements
1. Contingent liability to Company for Amex cards held by 75 employees. The
Company is obligated to indemnify Seller for any liability relating to
Amex cards used by the employees of the Company. No written indemnity
agreement was entered into between Seller and the Company.
2. The Company as the assignor under certain leases has contingent liability
under the leasehold in First Stamford Place, Stamford, CT, Colony Square,
Atlanta, GA, Curzon Street and Great James Place in London if an assignee
fails to fulfill its obligations.
3. Assignment or buy-out of personal property leases.
In connection with this transaction, Renaissance Worldwide Strategy
Limited shall assign to Renaissance Worldwide Limited the personal
property leases specified below:
i. Master lease agreement for computers by and between Dell and
Renaissance Worldwide Strategy Limited dated August 3, 1999.
ii. Master lease agreement for copiers by and between Xerox and
Renaissance Worldwide Strategy Limited.
4. The Company has a contingent obligation to pay The Hunter Group, Inc. a
security deposit in the amount of $11,000 if the landlord refunds such
security deposit to the Company instead of The Hunter Group, Inc. at the
expiration or termination of the lease at 44 Montgomery in San Francisco.
5. The Company is obligated to pay The Hunter Group, Inc. a security deposit
in the amount of $11,311 if the landlord refunds such security deposit to
the Company instead of The Hunter Group, Inc. at the expiration or
termination of the lease at 200 West Madison in Chicago.
<PAGE>
Schedule 2.9 - Absence of Certain Changes or Events
(g) The Company has divested or dissolved certain of its subsidiaries
a. 1045795 Ontario, Inc. (Canada) dissolved effective November
15, 1999.
b. International Systems Services (UK) Ltd. dissolved effective
December 7, 1999.
c. Renaissance Technomic Limited (Hong Kong) distributed
effective 12/99.
d. Renaissance Worldwide Strategy (5) Pte. Ltd. distributed
effective 12/99.
e. Renaissance Worldwide AB (Sweden) distributed effective 01/00.
f. The Management Decisions Group Inc. (IL) distributed effective
02/00.
g. Renaissance Worldwide KK (Japan) distributed effective 02/00.
The Company intends to dissolve or to distribute the entities listed
below:
a. Coba Group USA, Ltd. (GA) to be dissolved.
b. Technomic Consultants, Inc. (IL) to be dissolved.
c. Technomic Research Associates Limited (UK) to be dissolved.
The Company intends to transfer to Seller certain intellectual property
rights pursuant to an Assignment of Rights in Trademarks, Service Marks
and Trade Names in substantially the form attached to the Agreement as
Exhibit A-1. COBA Consulting Ltd. intends to transfer to Renaissance
Worldwide Ltd. certain intellectual property rights pursuant to an
Assignment of Rights in Trademarks, Service Marks and Trade Names in
substantially the form attached to the Agreement as Exhibit A-2. The
Company intends to transfer certain rights with respect to the litigation
referenced on Schedule 2.11 to the Seller pursuant to an Assignment
Agreement in substantially the form attached to the Agreement as Exhibit
B.
(k) Partial payment of performance bonuses to certain employees of Company for
1999 as described on Schedules 1.3 and 4.13.
February 4, 2000 announcement of fiscal year 2000 salary raises effective
January 1, 2000 (of approximately 8%) and promotions.
<PAGE>
Schedule 2.10 - No Undisclosed Liabilities
1. See Schedule 2.8.
<PAGE>
Schedule 2.11 - Absence of Litigation
The rights and obligations of the Company relating to the litigation:
Renaissance Worldwide Strategy, Inc. v. Bridge Strategy, LLC - Stephen E.
Sheridan, Scott R. Hudson, Sean P. O'Neil, Russell J. Pass and John T. Porter
will be assigned pursuant to an Assignment Agreement in the form attached as
Exhibit B to the Agreement to Seller in connection with the transaction
contemplated hereby. The defendants verbally threatened to file a counterclaim
against the Company.
<PAGE>
Schedule 2.12 - Employee Benefit Plans, Employment Agreements
In conjunction with employment agreements entered into in October 1999,
BSG is contingently liable to make payments to six key employees. These
payments are contingent on the achievement of certain performance goals
and the employee's full-time employment at BSG on the dates of the
scheduled payments. Upon the closing of a sale of BSG, these employees
are entitled to a $1,550,000 retention bonus. These agreements also
provide for $2,500,000 to be paid on the anniversary date of the first
and second year after BSG's separation from Seller.
(a)(i) The Company maintains a bonus plan that awards employees
performance-based bonuses calculated as a percentage of their annual
salary. The Company also maintains a commission plan for vice presidents
that awards 3% of the sales generated by each vice president. In
addition, the Company maintains the following Employee Plans:
Benefit Plan Provider
- --------------------------------------------------------------------------------
o Medical Plan - The Guardian & Harvard Pilgrim Health Care
o Dental Plan - The Guardian
o Long Term Disability - Unum
o Short Term Disability - Unum
o COBRA - Sentinel Benefits Group
o FSA - Sentinel Benefits Group
o 401(k) - Charles Schwab & Co., Inc.
o Business Travel - Assist America through Commercial Life
Insurance
o Group Life - The Guardian
o Vacation Plan - 1 to 5 years = 3 weeks accrued monthly
5 to 10 years = 4 weeks accrued monthly
10 or more years = five weeks accrued monthly
o Accidental Death and - Commercial Life Insurance
Dismemberment
o Seller Employee Stock
Purchase Plan
o Seller Stock Option
Program
(a)(ii) Each of the Subsidiaries maintain the following Employee Plans:
Benefit Plan Provider
- --------------------------------------------------------------------------------
o Medical Insurance - Royal and Sun Alliance
o Life Assurance - UNUM
o Long Term Disability - UNUM
o Pension (GPPP) - Scottish Equitable
o Business Travel Insurance - AIG
o Vacation Plan - 5 weeks (not accrued monthly)
<PAGE>
Schedule 2.12 - Employee Benefit Plans, Employment Agreements (cont'd)
(c)(i) Employment agreements.
Name
----------------------
Aguirre, Pascal
Belt, Andrew R
Bruneau, Mark R
Cavallari, Ford
Cela, Miguel O.
Cole, Andrew
Curtis, Lisa
Devegt, Rolf
Elm, Nader
House, Bob
Jones, Jeff
Kaplan, Nancy J
Kirby, Marcus B
McGuire, Hilary
Wery, Roger F
In the event that Buyer does not accept the terms and conditions of the
employment agreements between Lisa Curtis or Hilary McGuire and Seller
(or an affiliate of Seller), Seller will continue to employ Lisa Curtis
and Hilary McGuire. At Buyer's reasonable request, Seller shall use
commercially reasonable efforts to make Lisa Curtis and Hilary McGuire
available to Buyer at market rates.
Employment agreements entered into with the following employees in
February or March 2000 (the "New Agreements"):
Name
----------------------
Aguirre, Pascal
Andrew, James
Belt, Andrew
Bruneau, Mark
Cavallari, Ford
Cole, Andrew
Devegt, Rolf
Gonsalves, John
House, Bob
Kaplan, Nancy
Kirby, B.
VanDissel, Bart
<PAGE>
Schedule 2.12 - Employee Benefit Plans, Employment Agreements (cont'd)
(c)(ii) Consulting agreement.
Name
----------------------
Allnutt, David
(c)(iii) None.
<PAGE>
Schedule 2.14 - All Assets Necessary to Conduct Business
Except as provided in the Transition Services Agreement or in this Agreement:
1. Neither Company, nor Subsidiaries have a right to use any real estate in
U.K.
2. With few exceptions, the laptops and desktops used by the Company or its
Subsidiaries are leased or owned by Seller.
a) See Attachment 1, List A
3. With few exceptions, the printers, servers and network hardware used by
the Company are leased or owned by Seller.
a) See Attachment 1, List B
4. With few exceptions, the copiers and facsimile machines used by the
Company is licensed or owned by Seller.
a) See Attachment 1, List C
5. With few exceptions, the internal phone systems used by the Company or
Subsidiaries are leased or owned by Seller.
a) See Attachment 1, List D
6. With few exceptions, the computer software used by the Company is licensed
or owned by Seller.
a) See Attachment 1, List E
7. With few exceptions, the office furniture used by the Company is leased or
owned by Seller.
a) See Attachment 1, List F
8. Once the sale of the Company is complete, Company and Subsidiaries will
not have access to Renaissance's WAN and will lack a network and e-mail
system.
9. See Schedule 4.11.
<PAGE>
TABLE OF CONTENTS
SCHEDULE NO.____
LIST DESCRIPTION
A Inventory of personal computers
B Inventory of printers, servers, and network hardware
C Inventory of copier and facsimile machines
D Inventory of internal phone systems
E Inventory of software
F Inventory of office furniture and furnishings
G Miscellaneous (i.e. automobiles, etc.)
o Equipment listed in italicized text represents inventory that is currently
leased through a party other than Renaissance Worldwide, Inc.
<PAGE>
LIST A
Inventory of Personal Computers
o Items listed in bold italics are either leased or owned by Renaissance
Worldwide, Inc.
- --------------------------------------------------------------------------------
SERIAL NO. MACHINE LEASE LEASE NO.
TYPE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOSTON
- --------------------------------------------------------------------------------
Z9BKG Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z8ZP3 Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z3Q1Z Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z8ZPJ Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z303G Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z3Q3Y Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z3Q1Y Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
GYDNT Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
Z3Q20 Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
GYDNV Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
ZDPZO Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
CS87S Dell/LAPTOP FIFTH THIRD 001-75084-41-
00034
- --------------------------------------------------------------------------------
ZDPWY Dell/LAPTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
GYDNQ Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
Z8ZPT Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z3Q21 Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z303F Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
ZQZ9Z Dell/LAPTOP COMDISCO 01-SL84438-01
- --------------------------------------------------------------------------------
DPF8C Dell/LAPTOP FIFTH THIRD 001-75084-41-
00034
- --------------------------------------------------------------------------------
Z2X48 Dell/LAPTOP BANCBOSTON 007384092-26
- --------------------------------------------------------------------------------
ZNBRT Dell/LAPTOP COMDISCO 01-SL84438-01
- --------------------------------------------------------------------------------
Z8ZPC Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z586D Dell/LAPTOP BANCBOSTON 007384092-26
- --------------------------------------------------------------------------------
Z8ZPF Dell/LAPTOP BANCROSTON 007384092-36
- --------------------------------------------------------------------------------
ZQW4Y Dell/LAPTOP COMDISCO 01-SL84438-01
- --------------------------------------------------------------------------------
CDDC3 Dell/LAPTOP FIFTH THIRD 001-75084-41-
00026
- --------------------------------------------------------------------------------
GYDNW Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
Z303X Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z8ZP5 Dell/LAPTOP BANCBOSTON 007384092-36
- --------------------------------------------------------------------------------
Z2XH7 Dell/LAPTOP BANCBOSTON 007384092-30
- --------------------------------------------------------------------------------
Z3Q1X Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
Z3Q2J Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
ZDPXS Dell/LAPTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
GYDNH Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Z3Q2H Dell/LAPTOP BANCBOSTON 007384092-27
- --------------------------------------------------------------------------------
VDXVQ Dell/LAPTOP COMDISCO 01-SL84438-03
- --------------------------------------------------------------------------------
CDDB3 Dell/LAPTOP FIFTH THIRD 01-75084-41-00026
- --------------------------------------------------------------------------------
Z59HH Dell/LAPTOP BANCBOSTON 007384092-30
- --------------------------------------------------------------------------------
GYDNQ Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
VDWG8 Dell/LAPTOP COMDISCO 01-SL84438-03
- --------------------------------------------------------------------------------
DPF8F Dell/LAPTOP FIFTH THIRD 001-75084-41-0042
- --------------------------------------------------------------------------------
DNNH1 Dell/LAPTOP FIFTH THIRD 001-75084-41-0042
- --------------------------------------------------------------------------------
VDWGT Dell/LAPTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
GYDNN Dell/DESKTOP COMDISCO 01-SL84438-00
- --------------------------------------------------------------------------------
8R62200129 DEC/LAPTOP BANCBOSTON 007384092-25
- --------------------------------------------------------------------------------
VDXPC Dell/LAPTOP COMDISCO 01-SL84438-03
- --------------------------------------------------------------------------------
ZN559 Dell/LAPTOP
- --------------------------------------------------------------------------------
VDFZW Dell/LAPTOP
- --------------------------------------------------------------------------------
ZYF49 Dell/LAPTOP
- --------------------------------------------------------------------------------
ZNXR4 Dell/LAPTOP
- --------------------------------------------------------------------------------
82081041 NEC/LAPTOP
- --------------------------------------------------------------------------------
SC54785D2TK Apple/LAPTOP
- --------------------------------------------------------------------------------
SG6031XB4FY Apple/LAPTOP
- --------------------------------------------------------------------------------
7X082680 NEC LAPTOP
- --------------------------------------------------------------------------------
82081090 NEC/LAPTOP
- --------------------------------------------------------------------------------
7X082681 NEC/LAPTOP
- --------------------------------------------------------------------------------
82081057 NEC/LAPTOP
- --------------------------------------------------------------------------------
US82326130 HP/DESKTOP
- --------------------------------------------------------------------------------
82081037 NEC/LAPTOP
- --------------------------------------------------------------------------------
US80807685 HP/DESKTOP
- --------------------------------------------------------------------------------
US82911962 HP/DESKTOP
- --------------------------------------------------------------------------------
US82909394 HP/DESKTOP
- --------------------------------------------------------------------------------
CN9SX Dell/DESKTOP
- --------------------------------------------------------------------------------
7Z082349 NEC/LAPTOP
- --------------------------------------------------------------------------------
Z9G2R Dell/LAPTOP
- --------------------------------------------------------------------------------
82081038 NEC/LAPTOP
- --------------------------------------------------------------------------------
79080008 NEC/LAPTOP
- --------------------------------------------------------------------------------
US82326128 HP/DESKTOP
- --------------------------------------------------------------------------------
US82326086 HP/DESKTOP
- --------------------------------------------------------------------------------
US61250346 HP/DESKTOP
- --------------------------------------------------------------------------------
82081039 NEC/LAPTOP
- --------------------------------------------------------------------------------
79080007 NEC/LAPTOP
- --------------------------------------------------------------------------------
FRP87WGAA DEC/LAPTOP
- --------------------------------------------------------------------------------
VDY5G Dell/LAPTOP
- --------------------------------------------------------------------------------
79080008 NEC/LAPTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
DELL
- --------------------------------------------------------------------------------
APPLE/
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
LAPTOP
- --------------------------------------------------------------------------------
QUARDA
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
NEC/LAPTOP 7X082765
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
COMPAQ/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/ SG60319D4FV
LAPTOP
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
NEC/LAPTOP 82081038
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
APPLE/ SG605OFUF4V
LAPTOP
- --------------------------------------------------------------------------------
APPLE/ SG6050FW4FV
LAPTOP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SAN FRANCISCO
- --------------------------------------------------------------------------------
DPF84 DELL/LAPTOP FIFTH THIRD 001-75084-41-0042
- --------------------------------------------------------------------------------
Z2XK3 DELL/LAPTOP BANCBOSTON 007384092-28
- --------------------------------------------------------------------------------
VDY13 DELL/LAPTOP COMDISCO 01-SL84438-03
- --------------------------------------------------------------------------------
CDLWN DELL/LAPTOP FIFTH THIRD 01-75084-41-00026
- --------------------------------------------------------------------------------
Z2X5G DELL/LAPTOP BANCBOSTON 007384092-26
- --------------------------------------------------------------------------------
7X082674 NEC/LAPTOP
- --------------------------------------------------------------------------------
7Y081034 NEC/LAPTOP
- --------------------------------------------------------------------------------
REPAIR HP/DESKTOP
- --------------------------------------------------------------------------------
7Y081986 NEC/LAPTOP
- --------------------------------------------------------------------------------
COMPAQ
- --------------------------------------------------------------------------------
7X082662 NEC/LAPTOP
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
7X082672 NEC/LAPTOP
- --------------------------------------------------------------------------------
80706932 HP/ DESKTOP
- --------------------------------------------------------------------------------
81609503 HP/DESKTOP
- --------------------------------------------------------------------------------
82081090 NEC/LAPTOP
- --------------------------------------------------------------------------------
COMPAQ
- --------------------------------------------------------------------------------
7082669 NEC/LAPTOP
- --------------------------------------------------------------------------------
74008363 NEC/LAPTOP
- --------------------------------------------------------------------------------
81609053 HP/DESKTOP
- --------------------------------------------------------------------------------
7Y081034 NEC/LAPTOP
- --------------------------------------------------------------------------------
7X082674 NEC/LAPTOP
- --------------------------------------------------------------------------------
7X082662 NEC/LAPTOP
- --------------------------------------------------------------------------------
7X082669 NEC/LAPTOP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STAMFORD
- --------------------------------------------------------------------------------
ZQW4X DELL/LAPTOP COMDISCO 01-SL84438-01
- --------------------------------------------------------------------------------
HP/DESKTOP
- --------------------------------------------------------------------------------
82081035 NEC/LAPTOP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANHATTAN
- --------------------------------------------------------------------------------
ZNBS6 DELL/LAPTOP COMDISCO 01-SL84457-01
- --------------------------------------------------------------------------------
Z09HB DELL/LAPTOP FIFTH THIRD 001-75084-41-0042
- --------------------------------------------------------------------------------
CRH8O DELL/LAPTOP FIFTH THIRD 001-75084-41-0042
- --------------------------------------------------------------------------------
Z59SK DELL/LAPTOP
- --------------------------------------------------------------------------------
82081035 NEC/LAPTOP
- --------------------------------------------------------------------------------
DP/N-009321C- LAPTOP
12800-86D-0227
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ATLANTA
- --------------------------------------------------------------------------------
Z9F47 DELL/LAPTOP BANCBOSTON 007384092-37
- --------------------------------------------------------------------------------
7X081635 NEC/LAPTOP
- --------------------------------------------------------------------------------
00060888-12800-844- LAPTOP
2620
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LONDON
- --------------------------------------------------------------------------------
7717BB731634 COMPAQ/
LAPTOP
- --------------------------------------------------------------------------------
49 COMPAQ/
LAPTOP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CHICAGO
- --------------------------------------------------------------------------------
D7PRX DELL/LAPTOP FIFTH THIRD 001-75084-41-0034
- --------------------------------------------------------------------------------
7Z082350 NEC/LAPTOP
- --------------------------------------------------------------------------------
9321C128087F2475 LAPTOP
- --------------------------------------------------------------------------------
60888128008440602 LAPTOP
- --------------------------------------------------------------------------------
US80319150 HP/DESKTOP
- --------------------------------------------------------------------------------
608881280083102721 LAPTOP
- --------------------------------------------------------------------------------
7Z082111 NEC/LAPTOP
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
60881280082C1457 LAPTOP
- --------------------------------------------------------------------------------
U574305739 HP/DESKTOP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVENTORY
- --------------------------------------------------------------------------------
12063008 DEC/DESKTOP
- --------------------------------------------------------------------------------
SPARES COMPAQ/
DESKTOP
- --------------------------------------------------------------------------------
8R62100559 DEC
- --------------------------------------------------------------------------------
7Z082353 NEC
- --------------------------------------------------------------------------------
75002168 NEC
- --------------------------------------------------------------------------------
8R62100548 DEC
- --------------------------------------------------------------------------------
SR61900066 DEC
- --------------------------------------------------------------------------------
SR63000502 DEC
- --------------------------------------------------------------------------------
4Z009906 NEC
- --------------------------------------------------------------------------------
5X015746 NEC
- --------------------------------------------------------------------------------
5X001306 NEC
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
81081351 NEC/LAPTOP
- --------------------------------------------------------------------------------
7Z082349 NEC/LAPTOP
- --------------------------------------------------------------------------------
7Y081039 NEC/LAPTOP
- --------------------------------------------------------------------------------
SG6050GH4FV APPLE/
LAPTOP
- --------------------------------------------------------------------------------
SG6050GF4FV APPLE/
LAPTOP
- --------------------------------------------------------------------------------
7Y081039
- --------------------------------------------------------------------------------
82081057
- --------------------------------------------------------------------------------
APPLE/
DESKTOP
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
APPLE/
LAPTOP
- --------------------------------------------------------------------------------
NEC/LAPTOP
- --------------------------------------------------------------------------------
NEC/LAPTOP
- --------------------------------------------------------------------------------
<PAGE>
LIST B
Inventory of printers, servers, and network hardware
o Items listed in bold italics are either owned or leased by Renaissance
Worldwide, Inc.
o All other items listed below are either owned or leased under an Agreement
by Renaissance Worldwide Strategy, Inc.
- --------------------------------------------------------------------------------
TYPE (Location) MODEL NO. SERIAL NO. LEASE
- --------------------------------------------------------------------------------
PRINTERS
- --------------------------------------------------------------------------------
SHARP SF2030 86509311 IKON Office
Supplies
- --------------------------------------------------------------------------------
HP (Chicago) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Chicago) LJ4000 Own
- --------------------------------------------------------------------------------
TEKTRONICS PHASER 340 Own
(Stamford)
- --------------------------------------------------------------------------------
TEKTRONICS PHASER 340 Own
(Stamford)
- --------------------------------------------------------------------------------
HP (Stamford) LJ4000 Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4M+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4000 Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) LJ4+ Own
- --------------------------------------------------------------------------------
HP (Stamford) Desk Jet 710C Own
- --------------------------------------------------------------------------------
HP (Manhattan) LJ4V Own
- --------------------------------------------------------------------------------
HP (Manhattan) LJ5N Own
- --------------------------------------------------------------------------------
TEKTRONICS PHASER 350 Own
(Manhattan)
- --------------------------------------------------------------------------------
TEKTRONICS PHASER 560 Own
(Atlanta)
- --------------------------------------------------------------------------------
HP (Atlanta) LJ5 Own
- --------------------------------------------------------------------------------
HP (Boston) LJ4L USBB111444
- --------------------------------------------------------------------------------
HP (Boston) LJ4000TN USNC153812
- --------------------------------------------------------------------------------
HP (Boston) LJ4M+ JPGF006427
- --------------------------------------------------------------------------------
HP (Boston) LJ5SI USDK137159
- --------------------------------------------------------------------------------
HP (Boston) LJ6MP USCB070860
- --------------------------------------------------------------------------------
HP (Boston) LJ4050 USBB064282
- --------------------------------------------------------------------------------
HP (Boston) LJ4000TN USNC152277
- --------------------------------------------------------------------------------
HP (San Francisco) LJ4500N
- --------------------------------------------------------------------------------
HP (San Francisco) LJ4000N
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
HP (San Francisco) LJ4000N
- --------------------------------------------------------------------------------
HP (San Francisco) LJ4M
- --------------------------------------------------------------------------------
HP (San Francisco) LJ4M
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERVERS
- --------------------------------------------------------------------------------
HP (Chicago) LCII Own
- --------------------------------------------------------------------------------
HP (Atlanta) LCII Own
- --------------------------------------------------------------------------------
DELL (Stamford) PowerEdge 2300 Own
- --------------------------------------------------------------------------------
DELL (Manhattan) PowerEdge 2300 Own
- --------------------------------------------------------------------------------
DELL (London) 2300 Own
- --------------------------------------------------------------------------------
Own
COMPAQ Prosigna 300 6536HPK3D886
(Stamford)
- --------------------------------------------------------------------------------
HP (San Francisco) LD Pro US80600621
- --------------------------------------------------------------------------------
HP (San Francisco) LH Pro US74301339
- --------------------------------------------------------------------------------
IBM (Boston) 2386026
- --------------------------------------------------------------------------------
DELL (Boston) PowerEdge 2300 GHMQZ
- --------------------------------------------------------------------------------
COMPAQ (Boston) Prosigna 500 6549HQM10782
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HUBS
- --------------------------------------------------------------------------------
BAYNETWORKS Baystack 102 Own
(Chicago)
- --------------------------------------------------------------------------------
BAYNETWORKS Baystack 102 Own
(Manhattan)
- --------------------------------------------------------------------------------
BAYNETWORKS AN BEX0132423
(Boston)
- --------------------------------------------------------------------------------
BAYNETWORKS Baystack 102
(San Francisco)
- --------------------------------------------------------------------------------
ACCTON (Boston) EN2041 444019909
- --------------------------------------------------------------------------------
ACCTON (Boston) EN2042 448000315
- --------------------------------------------------------------------------------
ACCTON (Boston) EN2043 444019912
- --------------------------------------------------------------------------------
ACCTON (Boston) EN2044 445000399
- --------------------------------------------------------------------------------
ACCTON (Boston) EN2045 448000263
- --------------------------------------------------------------------------------
ATI (Atlanta) CentreCOM
3024TR
- --------------------------------------------------------------------------------
ATI (Atlanta) CentreCOM F2MX7165E
3024TR
- --------------------------------------------------------------------------------
ATI (Atlanta) CentreCOM S1797295A
3024SL
- --------------------------------------------------------------------------------
ATI (Atlanta) CentreCOM S17F7295A
3024SL
- --------------------------------------------------------------------------------
3COM 3C16950 0100/7ZLV6A2D38
(San Francisco)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SWITCHES
- --------------------------------------------------------------------------------
BAYNETWORKS Baystack 303 Own
(Manhattan)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ROUTERS
- --------------------------------------------------------------------------------
BAYNETWORKS AN Own
(Chicago)
- --------------------------------------------------------------------------------
BAYNETWORKS AN
(San Francisco)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DSU
- --------------------------------------------------------------------------------
KENTROX 658 Own
(Chicago)
- --------------------------------------------------------------------------------
KENTROX(Boston) 658 Own
- --------------------------------------------------------------------------------
KENTROX 658 Own
(Stamford)
- --------------------------------------------------------------------------------
KENTROX 658 Own
(Manhattan)
- --------------------------------------------------------------------------------
KENTROX 658 Own
(Atlanta)
- --------------------------------------------------------------------------------
KENTROX Datasmart 658
(San Francisco)
- --------------------------------------------------------------------------------
<PAGE>
LIST C
Inventory of copier and facsimile machines
o Items listed in bold italics are either leased or owned by Renaissance
Worldwide, Inc.
o All other items listed below are either owned or leased under an Agreement
by Renaissance Worldwide Strategy, Inc.
- --------------------------------------------------------------------------------
TYPE MODEL NO. SERIAL NO. LEASE / OWNED
- --------------------------------------------------------------------------------
COPIERS
- --------------------------------------------------------------------------------
Sharp (Boston) SD-2275 86200511 SHARP
022-1301563-000
- --------------------------------------------------------------------------------
Sharp (Boston) SD-2275 86211935 SHARP
022-1301563-000
- --------------------------------------------------------------------------------
Sharp SD-4085 IOS CAPITAL
(Atlanta) (formerly IKON
Capital)
315343
- --------------------------------------------------------------------------------
Sharp (Chicago) FO-2050 66200775
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACSIMILE
MACHINES
- --------------------------------------------------------------------------------
Sharp (Atlanta) FO-3850 70104882
- --------------------------------------------------------------------------------
Xerox Work Center
- --------------------------------------------------------------------------------
Xerox (Chicago) Work Center 610 AQXKOR-22020-
FA-E
- --------------------------------------------------------------------------------
Sharp (Boston) FO-6550 90100841
- --------------------------------------------------------------------------------
Sharp (Boston) FO-6550 90100281
- --------------------------------------------------------------------------------
Ricoh (Boston) 2500L 41000049
- --------------------------------------------------------------------------------
Ricoh 30
- --------------------------------------------------------------------------------
Omnifax (Boston) L41 L41-00513
- --------------------------------------------------------------------------------
Sharp (Chicago) FO-4500 80105222
- --------------------------------------------------------------------------------
Xerox Document Work 008488
(San Francisco) Center
- --------------------------------------------------------------------------------
<PAGE>
LIST D
Inventory of internal phone systems
o Unless otherwise noted, all items listed below are either owned or leased
under an Agreement by Renaissance Worldwide Strategy, Inc.
- --------------------------------------------------------------------------------
TYPE LOCATION LEASE
- --------------------------------------------------------------------------------
Partner II Colony Square Lucent
Atlanta, GA S415820-Sch. 10, 30, 40, 50, 60
Party to lease - COBA Group USA,
Ltd.*
- --------------------------------------------------------------------------------
Norstar Key System 200 Berkley Street NTFC Corp.
Boston, MA
Party to lease--Renaissance
Solutions, Inc.**
- --------------------------------------------------------------------------------
Meridian Option 51C London, UK Own
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* COBA Group USA, Ltd. was a subsidiary of Renaissance Worldwide Strategy, Inc.
Upon its dissolution, the duties and obligations were assumed by Renaissance
Worldwide Strategy, Inc.
** Renaissance Worldwide Strategy, Inc. f/k/a Renaissance Solutions, Inc.
<PAGE>
LIST E
Inventory of software
o Items listed below are licensed by Renaissance Worldwide, Inc.
- --------------------------------------------------------------------------------
PRODUCT COPIES LICENSE LICENSE
(VERSION) AUTHOR. # AGREEMENT #
- --------------------------------------------------------------------------------
Exchange Client 12 10349223ARS9806 10517981
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 4 10349223ARS9806 10518029
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 10 10349223ARS9806 10518016
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 15 10349223ARS9806 10518007
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 15 10349223ARS9806 105170990
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 10 10349223ARS9806 10517925
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 10 10349223ARS9806 10518052
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 18 10349223ARS9806 10518043
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 18 10349223ARS9806 10517912
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 65 10349223ARS9806 10536784
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Client 15 10454262ARS9809 10594801
Access License (4.0)
- --------------------------------------------------------------------------------
Exchange Server 1 10408117ARS9809 10536742
Enterprise
- --------------------------------------------------------------------------------
Exchange Server 1 10408117ARS9809 10538355
Enterprise
- --------------------------------------------------------------------------------
Exchange Server 4 10667231BRS9903 10863334
Enterprise
- --------------------------------------------------------------------------------
Office Professional 53 160767100390
for Windows 95 and
Windows NT w/
Access (7.0)
- --------------------------------------------------------------------------------
Office Professional 179 160767100390
for Windows 95 and
Windows NT w/
Access (7.0)
- --------------------------------------------------------------------------------
Office Professional 7 160767100441
for Windows 95 and
Windows NT w/
Access (7.0)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Office Professional 5 160767100011
for Windows 95 and
Windows NT w/
Access (7.0)
- --------------------------------------------------------------------------------
Office Professional 2 1607671101897
for 32-bit Win
English NA Sel
- --------------------------------------------------------------------------------
Office Professional 4 1607671111597
for 32-bit Win
English NA Sel
- --------------------------------------------------------------------------------
Office Professional 41 1607671111597
for 32-bit Win
English NA Sel
- --------------------------------------------------------------------------------
Office Professional 5 1607671122397
WIN 32 English NA
Sel
- --------------------------------------------------------------------------------
Office Professional 2 160767132398 1607671
WIN 32 English NA
Sel
- --------------------------------------------------------------------------------
Office Professional 13 160767122198 1607671
WIN 32 English NA
Sel
- --------------------------------------------------------------------------------
Office Professional 144 160767122198 1607671
WIN 32 English NA
Sel
- --------------------------------------------------------------------------------
Office Professional 40 1607671111597
WIN32 English NA
Mnt Sel
- --------------------------------------------------------------------------------
Office Professional 1464 160767122198 1607671
WIN32 English NA
Mnt Sel
- --------------------------------------------------------------------------------
WIN NT Server 2 10349223ARS9806 10518029
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 2 10349223ARS9806 10518007
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10349223ARS9806 10517990
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10349223ARS9806 10517925
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10349223ARS9806 10518052
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10349223ARS9806 10517981
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10349223ARS9806 10517912
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 1 10454262ARS9809 10594801
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server (4.0) 1 10349223ARS9806 10993260
- --------------------------------------------------------------------------------
WIN NT Server 1 10789218BRS9903 10007123
(3.51)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WIN NT Server 12 10349223ARS9806 10517981
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server
Client Access License 4 10349223ARS806 10518029
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 10 10349223ARS9806 10518016
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 15 10349223ARS9806 10518007
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 15 10349223ARS9806 10517990
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 10 10349223ARS9806 10517925
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 10 10349223ARS9806 10518052
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 18 10349223ARS9806 10518043
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 18 10349223ARS9806 10517912
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 65 10349223ARS9806 10536784
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 15 10454262ARS9809 10594801
Client Access License
(3.51)
- --------------------------------------------------------------------------------
WIN NT Server 261 10768581BRS9903 10980943
Client Access License
(4.0)
- --------------------------------------------------------------------------------
WIN 95 Upgrade 21 10573672ASS0003 10028305
form 3.x (95)
- --------------------------------------------------------------------------------
<PAGE>
LIST F
Inventory of office furniture and furnishings
o Items listed in bold italics are leased or owned by Renaissance Worldwide,
Inc.
o All other items listed below are either leased or owned by Renaissance
Worldwide Strategy, Inc.
November 30, 1999 Page
3:29 PM
Strategy - Atlanta
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
200001 Misc Furni 10/31/93 SLHY 01 00 39725.00 0.00 10/99 33813.54 0.00 5911.46 85.1
200002 Misc Furni 11/01/93 SLHY 01 00 4210.18 0.00 10/99 3583.69 0.00 626.49 85.1
200003 Misc Furni 04/27/94 SLHY 01 08 777.00 0.00 10/99 592.00 0.00 185.00 76.2
200004 Misc Furni 05/02/94 SLHY 01 08 3904.45 0.00 10/99 2974.82 0.00 929.63 76.2
200005 Desk and F 09/13/95 SLHY 02 08 997.64 0.00 10/99 617.58 0.00 380.06 61.9
200006 2 Conferen 09/13/95 SLHY 02 08 537.60 0.00 10/99 332.80 0.00 204.80 61.9
200007 Misc Furni 11/01/95 SLHY 02 08 1300.00 0.00 10/99 804.78 0.00 495.22 61.9
200008 Premisys 11/30/95 SLHY 02 08 -5000.00 0.00 10/99 -3095.25 0.00 -1904.75 0.0
200010 2 Conferen 12/05/95 SLHY 02 08 537.60 0.00 10/99 332.80 0.00 204.80 61.9
200011 Misc Furni 12/12/95 SLHY 02 08 716.48 0.00 10/99 443.56 0.00 272.92 61.9
200012 Misc Furni 12/01/95 SLHY 02 08 2933.64 0.00 10/99 1816.06 0.00 1117.58 61.9
200013 Misc Furni 12/01/95 SLHY 02 08 1257.16 0.00 10/99 778.26 0.00 478.90 61.9
200014 Misc Furni 01/25/96 SLHY 03 08 1002.06 0.00 10/99 477.17 0.00 524.89 47.6
200019 Conference 10/21/96 SLHY 03 08 575.76 0.00 10/99 274.17 0.00 301.59 47.6
200025 Misc Furni 01/30/97 SLHY 04 08 1262.67 0.00 10/99 420.88 0.00 841.79 33.3
200038 Misc Furni 08/14/97 SLHY 04 08 1916.87 0.00 10/99 638.96 0.00 1277.91 33.3
200043 Misc Furni 09/30/97 SLHY 04 08 2195.21 0.00 10/99 731.73 0.00 1463.48 33.3
200044 Misc Furni 10/14/97 SLHY 04 08 6994.61 0.00 10/99 2331.54 0.00 4663.07 33.3
200046 Misc Furni 11/03/97 SLHY 04 08 1000.00 0.00 10/99 333.34 0.00 666.66 33.3
200047 Misc Furni 11/11/97 SLHY 04 08 2186.12 0.00 10/99 728.70 0.00 1457.42 33.3
200048 Misc Furni 11/14/97 SLHY 04 08 1821.14 0.00 10/99 607.04 0.00 1214.10 33.3
200049 Misc Furni 11/18/97 SLHY 04 08 1239.15 0.00 10/99 413.04 0.00 826.11 33.3
200050 Misc Furni 11/30/97 SLHY 04 08 1024.33 0.00 10/99 341.44 0.00 682.89 33.3
200056 Misc Furni 12/10/97 SLHY 04 08 3770.68 0.00 10/99 1256.90 0.00 2513.78 33.3
200057 Misc Furni 12/12/97 SLHY 04 08 1736.24 0.00 10/99 578.76 0.00 1157.48 33.3
200058 Misc Furni 12/27/97 SLHY 04 08 3188.12 0.00 10/99 1062.71 0.00 2125.41 33.3
200059 Misc Furni 12/27/97 SLHY 04 08 1424.00 0.00 10/99 474.67 0.00 949.33 33.3
200064 Misc Furni 12/10/97 SLHY 04 08 1453.86 0.00 10/99 484.63 0.00 969.23 33.3
200065 Misc Furni 12/15/97 SLHY 04 08 2189.87 0.00 10/99 729.96 0.00 1459.91 33.3
200067 Misc Furni 01/02/98 SLHY 05 08 928.75 0.00 10/99 176.90 0.00 751.85 19.0
200073 Misc Furni 02/05/98 SLHY 05 08 319.93 0.00 10/99 60.94 0.00 258.99 19.0
200076 Misc Furni 03/25/98 SLHY 05 08 400.00 0.00 10/99 76.18 0.00 323.82 19.0
200077 4 office c 04/15/98 SLHY 05 08 838.96 0.00 10/99 159.80 0.00 679.16 19.0
-------- ---- -------- ---- --------
Location Atlanta Count= 33 89365.08 0.00 55354.10 0.00 34010.98
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 89365.08 0.00 55354.10 0.00 34010.98
======== ==== ======== ==== ========
Grand Total Count= 33 89365.08 0.00 55354.10 0.00 34010.98
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 89365.08 0.00 55354.10 0.00 34010.98
======== ==== ======== ==== ========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
<PAGE>
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Furniture & Fixtures
Include Assets that meet the following conditions:
Class is FF
Sort Assets by:
Location in ascending order and report subtotals
November 30, 1999 Page
3:29 PM
Strategy - Atlanta
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
200009 Telephones 12/04/95 SLHY 00 08 559.25 0.00 10/99 484.68 0.00 74.57 86.7
200051 Telephones 11/10/97 SLHY 02 08 349.46 0.00 10/99 163.08 0.00 186.38 46.7
200063 Telephone 12/10/97 SLHY 02 08 128.38 0.00 10/99 59.92 0.00 68.46 46.7
200070 Digital Te 01/12/98 SLHY 03 08 781.95 0.00 10/99 208.52 0.00 573.43 26.7
200074 Misc Equip 02/17/98 SLHY 03 08 272.85 0.00 10/99 72.76 0.00 200.09 26.7
200075 Misc Equip 03/01/98 SLHY 03 08 1016.23 0.00 10/99 270.99 0.00 745.24 26.7
-------- ---- -------- ---- --------
Location Atlanta Count= 6 3108.12 0.00 1259.95 0.00 1848.17
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 3108.12 0.00 1259.95 0.00 1848.17
======== ==== ======== ==== ========
Grand Total Count= 6 3108.12 0.00 1259.95 0.00 1848.17
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 3108.12 0.00 1259.95 0.00 1848.17
======== ==== ======== ==== ========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Machinery & Equipment
Include Assets that meet the following conditions:
Class is M
Sort Assets by:
Location in ascending order and report subtotals
November 30, 1999 Page
4:19 PM
Renaissance Solutions, Inc.
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000433 Carpeting 03/01/96 SLHY 03 08 23493.48 0.00 10/99 11187.37 0.00 12306.11 47.6
000447 Work Surfa 04/01/96 SLHY 03 08 36944.95 0.00 10/99 17592.83 0.00 19352.12 47.6
000448 4 tables 04/01/96 SLHY 03 08 1813.90 0.00 10/99 863.77 0.00 950.13 47.6
000449 Table & Ch 04/01/96 SLHY 03 08 2892.66 0.00 10/99 1377.46 0.00 1515.20 47.6
000451 Work Surfa 05/01/96 SLHY 03 08 25006.95 0.00 10/99 11908.06 0.00 13098.89 47.6
000461 1" Blinds 05/01/96 SLHY 03 08 1794.38 0.00 10/99 854.46 0.00 939.92 47.6
000469 Work Surfa 05/01/96 SLHY 03 08 2046.46 0.00 10/99 974.50 0.00 1071.96 47.6
000525 Work Surfa 08/09/96 SLHY 03 08 4328.46 0.00 10/99 2061.17 0.00 2267.29 47.6
000526 Work Surfa 08/09/96 SLHY 03 08 -2819.88 0.00 10/99 -1342.80 0.00 -1477.08 0.0
000527 Work Surfa 08/19/96 SLHY 03 08 710.01 0.00 10/99 338.10 0.00 371.91 47.6
000528 Work Surfa 08/08/96 SLHY 03 08 910.35 0.00 10/99 433.50 0.00 476.85 47.6
000787 Table Top, 11/20/97 SLHY 04 08 7777.36 0.00 10/99 2592.45 0.00 5184.91 33.3
000817 Misc. Furn 12/18/97 SLHY 04 08 20487.15 0.00 10/99 6829.06 0.00 13658.09 33.3
000818 Misc Furni 12/30/97 SLHY 04 08 1045.65 0.00 10/99 348.55 0.00 697.10 33.3
000819 Misc Furni 11/03/97 SLHY 04 08 7328.10 0.00 10/99 2442.70 0.00 4885.40 33.3
000820 Misc Furni 10/01/97 SLHY 04 08 36174.81 0.00 10/99 12058.27 0.00 24116.54 33.3
000842 Partitions 12/31/97 SLHY 04 08 5050.00 0.00 10/99 1683.34 0.00 3366.66 33.3
000843 Partitions 01/30/98 SLHY 05 08 2840.00 0.00 10/99 540.96 0.00 2299.04 19.0
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000861 Misc Furni 04/20/98 SLHY 05 08 7850.00 0.00 10/99 1495.24 0.00 6354.76 19.0
000866 Misc Furni 12/03/97 SLHY 04 08 1525.73 0.00 10/99 508.57 0.00 1017.16 33.3
000867 Misc Furni 03/23/98 SLHY 05 08 1447.33 0.00 10/99 275.68 0.00 1171.65 19.0
000868 Misc Furni 12/23/97 SLHY 04 08 1838.46 0.00 10/99 612.82 0.00 1225.64 33.3
000869 Misc Furni 03/09/98 SLHY 05 08 10531.48 0.00 10/99 2006.00 0.00 8525.48 19.0
000870 Misc Furni 03/03/98 SLHY 05 08 1408.68 0.00 10/99 268.32 0.00 1140.36 19.0
000871 Misc Furni 01/23/98 SLHY 05 08 8548.57 0.00 10/99 1628.30 0.00 6920.27 19.0
000872 Misc Furni 02/10/98 SLHY 05 08 12153.18 0.00 10/99 2314.89 0.00 9838.29 19.0
--------- ---- -------- ---- ---------
Location Chicago Count= 26 223128.22 0.00 81853.57 0.00 141274.65
Less disposals 0.00 0.00 0.00 0.00 0.00
--------- ---- -------- ---- ---------
Net 223128.22 0.00 81853.57 0.00 141274.65
--------- ---- -------- ---- ---------
000041 Work surfa 03/01/92 SLHY 00 00 3420.00 0.00 10/99 3420.00 0.00 0.00 100.0
000042 Laterals 04/01/92 SLHY 00 00 2969.67 0.00 10/99 2969.67 0.00 0.00 100.0
000043 Laterals 04/01/92 SLHY 00 00 1014.30 0.00 10/99 1014.30 0.00 0.00 100.0
000044 Laterals 04/01/92 SLHY 00 00 2234.40 0.00 10/99 2234.40 0.00 0.00 100.0
000045 FAX Stand 04/01/92 SLHY 00 00 292.95 0.00 10/99 292.95 0.00 0.00 100.0
000046 Business I 01/01/93 SLHY 00 08 970.90 0.00 10/99 878.43 0.00 92.47 90.5
000047 Resources 01/01/93 SLHY 00 08 6062.15 0.00 10/99 5484.80 0.00 577.35 90.5
000048 Business I 01/01/93 SLHY 00 08 2277.00 0.00 10/99 2060.16 0.00 216.84 90.5
000049 Business I 04/01/93 SLHY 00 08 519.75 0.00 10/99 470.25 0.00 49.50 90.5
000050 Sun Micros 08/01/93 SLHY 00 08 75000.00 0.00 10/99 67857.16 0.00 7142.84 90.5
000051 Osborne Of 10/01/93 SLHY 00 08 13828.20 0.00 10/99 12511.23 0.00 1316.97 90.5
000052 Osborne Of 10/01/93 SLHY 00 08 21335.45 0.00 10/99 19303.49 0.00 2031.96 90.5
000053 Furniture 12/01/93 SLHY 00 08 1770.70 0.00 10/99 1602.08 0.00 168.62 90.5
000054 Furniture 12/01/93 SLHY 00 08 8993.34 0.00 10/99 8136.82 0.00 856.52 90.5
000055 Tel Tables 01/01/94 SLHY 01 08 139.88 0.00 10/99 106.56 0.00 33.32 76.2
000056 Conference 02/01/94 SLHY 01 08 886.20 0.00 10/99 675.20 0.00 211.00 76.2
000057 Desk Acces 02/01/94 SLHY 01 08 275.00 0.00 10/99 209.54 0.00 65.46 76.2
000058 Desk 02/01/94 SLHY 01 08 1770.70 0.00 10/99 1349.12 0.00 421.58 76.2
000059 Chairs 02/01/94 SLHY 01 08 315.00 0.00 10/99 240.00 0.00 75.00 76.2
000060 Chairs 02/01/94 SLHY 01 08 1575.00 0.00 10/99 1200.00 0.00 375.00 76.2
000061 Recpt Stat 03/01/94 SLHY 01 08 1150.45 0.00 10/99 876.53 0.00 273.92 76.2
000062 Desks, Work 04/01/94 SLHY 01 08 6063.25 0.00 10/99 4619.62 0.00 1443.63 76.2
000063 Chairs & T 04/01/94 SLHY 01 08 617.00 0.00 10/99 470.08 0.00 146.92 76.2
000064 Marker Boa 04/01/94 SLHY 01 08 4140.15 0.00 10/99 3154.40 0.00 985.75 76.2
000065 Installati 05/01/94 SLHY 01 08 6400.00 0.00 10/99 4876.20 0.00 1523.80 76.2
000066 Tutor Tabl 06/01/94 SLHY 01 08 7606.25 0.00 10/99 5795.24 0.00 1811.01 76.2
000067 Drawer Ass 07/01/94 SLHY 01 08 12150.43 0.00 10/99 9257.49 0.00 2892.94 76.2
000068 Chrome Bas 09/01/94 SLHY 01 08 840.00 0.00 10/99 640.00 0.00 200.00 76.2
000069 Tutor Tabl 10/01/94 SLHY 01 08 4898.25 0.00 10/99 3732.00 0.00 1166.25 76.2
000070 Cubicals 10/01/94 SLHY 01 08 14987.45 0.00 10/99 11419.03 0.00 3568.42 76.2
000071 Cubicals 10/01/94 SLHY 01 08 41422.25 0.00 10/99 31559.83 0.00 9862.42 76.2
000072 Track MtP 10/01/94 SLHY 01 08 216.10 0.00 10/99 164.64 0.00 51.46 76.2
000073 Cherry Uti 11/01/94 SLHY 01 08 755.35 0.00 10/99 575.51 0.00 179.84 76.2
000074 Phase II C 11/01/94 SLHY 01 08 8105.00 0.00 10/99 6175.25 0.00 1929.75 76.2
000075 Cart & Maho 12/01/94 SLHY 01 08 1442.70 0.00 10/99 1099.20 0.00 343.50 76.2
000076 36 Chairs 12/01/94 SLHY 01 08 18715.62 0.00 10/99 14259.52 0.00 4456.10 76.2
000077 1 Base & C 12/01/94 SLHY 01 08 1303.42 0.00 10/99 993.06 0.00 310.36 76.2
000078 Cubical Fi 02/01/95 SLHY 02 08 5720.19 0.00 10/99 3541.07 0.00 2179.12 61.9
000079 Work Surfa 02/01/95 SLHY 02 08 16429.90 0.00 10/99 10170.90 0.00 6259.00 61.9
000307 Panels, Po 03/01/95 SLHY 02 08 25403.53 0.00 10/99 15726.01 0.00 9677.52 61.9
000349 3 Lateral 09/01/95 SLHY 02 08 1674.75 0.00 10/99 1036.75 0.00 638.00 61.9
000372 Work Surfa 01/01/96 SLHY 01 08 17393.14 0.00 10/99 11595.42 0.00 5797.72 66.7
000373 Work Surfa 01/01/96 SLHY 03 08 31012.91 0.00 10/99 14768.06 0.00 16244.85 47.6
000374 Work Surfa 01/01/96 SLHY 03 08 80013.30 0.00 10/99 38101.57 0.00 41911.73 47.6
000375 Work Surfa 01/01/96 SLHY 03 08 29681.57 0.00 10/99 14134.09 0.00 15547.48 47.6
000376 Work Surfa 01/01/96 SLHY 03 08 5433.76 0.00 10/99 2587.50 0.00 2846.26 47.6
000420 FurnaTURE 02/01/96 SLHY 03 08 1378.92 0.00 10/99 656.63 0.00 722.29 47.6
000421 fURNATURE 02/01/96 SLHY 03 08 2311.09 0.00 10/99 1100.53 0.00 1210.56 47.6
000422 SYS FURN, 02/01/96 SLHY 03 08 12921.00 0.00 10/99 6152.86 0.00 6768.14 47.6
000428 Install Ke 03/01/96 SLHY 03 08 710.00 0.00 10/99 338.10 0.00 371.90 47.6
000429 Fgt on Cop 03/01/96 SLHY 03 08 70.56 0.00 10/99 33.60 0.00 36.96 47.6
000430 2 Copyboar 03/01/96 SLHY 03 08 2940.00 0.00 10/99 1400.00 0.00 1540.00 47.6
000431 Work Surfa 03/01/96 SLHY 03 08 6349.93 0.00 10/99 3023.77 0.00 3326.16 47.6
000432 Freight 03/01/96 SLHY 03 08 265.72 0.00 10/99 126.53 0.00 139.19 47.6
000441 Work Surfa 01/01/96 SLHY 03 08 14389.54 0.00 10/99 6852.17 0.00 7537.37 47.6
000450 Installati 04/01/96 SLHY 03 08 12070.25 0.00 10/99 5747.73 0.00 6322.52 47.6
000460 Shelving 06/01/96 SLHY 03 08 1570.00 0.00 10/99 747.62 0.00 822.38 47.6
000462 2 Electron 06/01/96 SLHY 03 08 1526.32 0.00 10/99 726.82 0.00 799.50 47.6
000475 Work Surfa 01/01/96 SLHY 03 08 10120.80 0.00 10/99 4819.43 0.00 5301.37 47.6
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000480 Work Surfa 07/01/96 SLHY 03 08 21573.46 0.00 10/99 10273.06 0.00 11300.40 47.6
000502 Work Surfa 08/01/96 SLHY 03 08 79478.85 0.00 10/99 37847.06 0.00 41631.79 47.6
000537 Lateral Fi 10/07/96 SLHY 03 08 5110.19 0.00 10/99 2433.42 0.00 2676.77 47.6
000538 Cabinets/C 10/22/96 SLHY 03 08 5000.60 0.00 10/99 2381.23 0.00 2619.37 47.6
000539 Work Surfa 10/16/96 SLHY 03 08 7557.31 0.00 10/99 3598.73 0.00 3958.58 47.6
000540 Work Surfa 10/22/96 SLHY 03 08 3778.75 0.00 10/99 1799.40 0.00 1979.35 47.6
000544 Work Surfa 11/11/96 SLHY 03 08 1685.50 0.00 10/99 802.62 0.00 882.88 47.6
000563 Shelving U 01/30/97 SLHY 04 08 1052.71 0.00 10/99 350.90 0.00 701.81 33.3
000566 Lateral Fi 01/15/97 SLHY 04 08 2091.60 0.00 10/99 697.20 0.00 1394.40 33.3
000695 4 HI Later 03/21/97 SLHY 04 08 1476.02 0.00 10/99 492.00 0.00 984.02 33.3
000716 6 Panel Pi 03/12/97 SLHY 04 08 4099.33 0.00 10/99 1366.44 0.00 2732.89 33.3
000717 1 File Cab 03/20/97 SLHY 04 08 636.83 0.00 10/99 212.28 0.00 424.55 33.3
000718 5 Tables & 04/22/97 SLHY 04 08 18617.70 0.00 10/99 6205.90 0.00 12411.80 33.3
000719 1 Table & 04/18/97 SLHY 04 08 5738.30 0.00 10/99 1912.77 0.00 3825.53 33.3
000722 2 blackout 05/16/97 SLHY 04 08 287.00 0.00 10/99 95.66 0.00 191.34 33.3
000723 3 chairs 03/25/97 SLHY 04 08 1334.03 0.00 10/99 444.68 0.00 889.35 33.3
000724 8 cubicle 03/11/97 SLHY 04 08 671.33 0.00 10/99 223.78 0.00 447.55 33.3
000725 27 cubicle 03/25/97 SLHY 04 08 304.89 0.00 10/99 101.64 0.00 203.25 33.3
000729 5 tables & 01/17/97 SLHY 04 08 20000.00 0.00 10/99 6666.66 0.00 13333.34 33.3
000732 tables, lo 06/04/97 SLHY 04 08 80252.99 0.00 10/99 26750.99 0.00 53502.00 33.3
000733 cubicle pi 06/14/97 SLHY 04 08 8100.71 0.00 10/99 2700.24 0.00 5400.47 33.3
000745 Core holes 06/30/97 SLHY 04 08 2073.54 0.00 10/99 691.18 0.00 1382.36 33.3
000746 Bookcases 06/25/97 SLHY 04 08 6644.02 0.00 10/99 2214.67 0.00 4429.35 33.3
000747 cubicle pi 06/11/97 SLHY 04 08 686.83 0.00 10/99 228.94 0.00 457.89 33.3
000748 cubicle pi 06/06/97 SLHY 04 08 918.95 0.00 10/99 306.32 0.00 612.63 33.3
000776 Misc Furni 09/11/97 SLHY 04 08 6880.00 0.00 10/99 2293.34 0.00 4586.66 33.3
000788 File Cabin 11/17/97 SLHY 04 08 1056.30 0.00 10/99 352.10 0.00 704.20 33.3
000860 Misc Furni 04/20/98 SLHY 05 08 1040.35 0.00 10/99 198.16 0.00 842.19 19.0
000902 OFFICE FUR 10/05/98 SLHY 05 08 9301.90 0.00 10/99 1771.78 0.00 7530.12 19.0
000906 Filing Cab 07/01/98 SLHY 05 08 16586.47 0.00 10/99 3159.33 0.00 13427.14 19.0
000907 OFFICE FUR 12/24/98 SLHY 05 08 3481.00 0.00 10/99 663.04 0.00 2817.96 19.0
000908 OFFICE FUR 02/27/99 SLHY 06 08 11434.60 0.00 10/99 668.25 0.00 10766.35 5.8
--------- ---- --------- ---- ---------
Location Lincoln Count= 91 884803.50 0.00 494974.69 0.00 389828.81
Less disposals 0.00 0.00 0.00 0.00 0.00
--------- ---- --------- ---- ---------
Net 884803.50 0.00 494974.69 0.00 389828.81
--------- ---- --------- ---- ---------
000575 3 Data Cab 08/31/93 SLHY 00 08 7528.03 0.00 10/99 6811.06 0.00 716.97 90.5
000576 8 Medium, 12/07/93 SLHY 00 08 7560.00 0.00 10/99 6840.00 0.00 720.00 90.5
000577 2 Overstor 05/26/94 SLHY 01 08 7094.63 0.00 10/99 5405.44 0.00 1689.19 76.2
000578 6 Chairs 0 08/08/94 SLHY 01 08 3454.35 0.00 10/99 2631.89 0.00 822.46 76.2
000579 1 Hanging 08/03/95 SLHY 02 08 2926.11 0.00 10/99 1811.42 0.00 1114.69 61.9
000580 6 GEI100 P 09/07/95 SLHY 02 08 12001.32 0.00 10/99 7429.41 0.00 4571.91 61.9
000581 6 GEI100 P 09/07/95 SLHY 02 08 8407.92 0.00 10/99 5204.90 0.00 3203.02 61.9
000582 3 GEI100 G 09/07/95 SLHY 02 08 6597.44 0.00 10/99 4084.12 0.00 2513.32 61.9
000583 1 GEI100 S 09/07/95 SLHY 02 08 1303.80 0.00 10/99 807.12 0.00 496.68 61.9
000584 4 GEI100 J 09/07/95 SLHY 02 08 2798.40 0.00 10/99 1732.34 0.00 1066.06 61.9
000585 2 GEI100 P 09/07/95 SLHY 02 08 3754.52 0.00 10/99 2324.22 0.00 1430.30 61.9
000586 2 GEI100 P 09/07/95 SLHY 02 08 2438.00 0.00 10/99 1509.25 0.00 928.75 61.9
000587 2 GEI100 U 09/07/95 SLHY 02 08 3737.56 0.00 10/99 2313.74 0.00 1423.82 61.9
000588 2 GEI100 P 09/07/95 SLHY 02 08 2618.20 0.00 10/99 1620.80 0.00 997.40 61.9
000589 4 Jewel S1 09/07/95 SLHY 02 08 2798.40 0.00 10/99 1732.34 0.00 1066.06 61.9
000590 8 HOW100 9 09/07/95 SLHY 02 08 11744.80 0.00 10/99 7270.60 0.00 4474.20 61.9
000591 40 0FS102 09/07/95 SLHY 02 08 9200.80 0.00 10/99 5695.73 0.00 3505.07 61.9
000592 GEI100 30" 09/07/95 SLHY 02 08 1590.00 0.00 10/99 984.27 0.00 605.73 61.9
000593 1 GEI100 P 09/07/95 SLHY 02 08 2130.60 0.00 10/99 1318.94 0.00 811.66 61.9
000594 1 GEI100 L 09/07/95 SLHY 02 08 1343.02 0.00 10/99 831.39 0.00 511.63 61.9
000595 1 GEI100 P 09/07/95 SLHY 02 08 1987.50 0.00 10/99 1230.36 0.00 757.14 61.9
000596 4 GEI100 3 09/07/95 SLHY 02 08 3336.88 0.00 10/99 2065.70 0.00 1271.18 61.9
000597 1 JG100 Wo 09/07/95 SLHY 02 08 39622.80 0.00 10/99 24528.40 0.00 15094.40 61.9
000598 7 Work Cha 09/07/95 SLHY 02 08 5015.92 0.00 10/99 3105.09 0.00 1910.83 61.9
000599 6 OFS 1025 09/07/95 SLHY 02 08 4095.84 0.00 10/99 2535.52 0.00 1560.32 61.9
000600 3 0FS1025 09/07/95 SLHY 02 08 2318.22 0.00 10/99 1435.11 0.00 883.11 61.9
000601 14 HAR101 09/07/95 SLHY 02 08 18847.86 0.00 10/99 11667.72 0.00 7180.14 61.9
000602 2 GEI100 H 09/07/95 SLHY 02 08 2618.20 0.00 10/99 1620.80 0.00 997.40 61.9
000603 15 GEI100 09/07/95 SLHY 02 08 11893.20 0.00 10/99 7362.46 0.00 4530.74 61.9
000604 Installati 09/07/95 SLHY 02 08 7740.12 0.00 10/99 4791.50 0.00 2948.62 61.9
000605 2 Decorati 01/15/96 SLHY 03 08 1722.93 0.00 10/99 820.43 0.00 902.50 47.6
000606 1 NEV100 N 02/01/96 SLHY 03 08 2400.90 0.00 10/99 1143.29 0.00 1257.61 47.6
000607 2 CYR100 S 04/26/96 SLHY 03 08 5380.56 0.00 10/99 2562.17 0.00 2818.39 47.6
000608 2 GEIIOO G 03/22/96 SLHY 03 08 4940.66 0.00 10/99 2352.70 0.00 2587.96 47.6
000609 Visual Dis 03/19/96 SLHY 03 08 3275.40 0.00 10/99 1559.73 0.00 1715.67 47.6
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000610 3 OFS102 S 02/22/96 SLHY 03 08 2047.92 0.00 10/99 975.20 0.00 1072.72 47.6
000611 3 OFS102 S 02/22/96 SLHY 03 08 2318.22 0.00 10/99 1103.93 0.00 1214.29 47.6
000612 2 GEI100 3 02/28/96 SLHY 03 08 4023.76 0.00 10/99 1916.06 0.00 2107.70 47.6
000613 2 GEI100 R 02/28/96 SLHY 03 08 2605.48 0.00 10/99 1240.70 0.00 1364.78 47.6
000614 1 GEI100 C 02/28/96 SLHY 03 08 1661.02 0.00 10/99 790.97 0.00 870.05 47.6
000615 BIBER Adju 09/07/96 SLHY 03 08 6737.38 0.00 10/99 3208.26 0.00 3529.12 47.6
000616 3 Light Fi 03/31/96 SLHY 03 08 1139.50 0.00 10/99 542.62 0.00 596.88 47.6
000617 1 GEI100 G 03/31/96 SLHY 03 08 3874.30 0.00 10/99 1844.90 0.00 2029.40 47.6
000688 25 drawer 02/09/94 SLHY 01 08 3040.56 0.00 10/99 2316.63 0.00 723.93 76.2
---------- ---- --------- ---- ---------
Location Stamford Count= 44 243673.03 0.00 151079.23 0.00 92593.80
Less disposals 0.00 0.00 0.00 0.00 0.00
---------- ---- --------- ---- ---------
Net 243673.03 0.00 151079.23 0.00 92593.80
========== ==== ========= ==== =========
Grand Total Count= 161 1351604.75 0.00 727907.49 0.00 623697.26
Less disposals 0.00 0.00 0.00 0.00 0.00
---------- ---- --------- ---- ---------
Net 1351604.75 0.00 727907.49 0.00 623697.26
========== ==== ========= ==== =========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Furniture & Fixtures
Include Assets that meet the following conditions:
Class is FF
Sort Assets by:
Location in ascending order and report subtotals
November 30, 1999 Page
4:19PM
Renaissance Solutions, Inc.
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000470 Security S 06/01/96 SLHY 01 08 5714.00 0.00 10/99 3809.33 0.00 1904.67 66.7
000471 Telephone 05/01/96 SLHY 01 08 5530.00 0.00 10/99 3686.66 0.00 1843.34 66.7
000478 Fax Machin 02/01/96 SLHY 01 08 746.91 0.00 10/99 497.93 0.00 248.98 66.7
000703 Remote Doo 03/31/97 SLHY 02 08 979.27 0.00 10/99 456.98 0.00 522.29 46.7
000841 Security S 11/26/97 SLHY 02 08 1156.67 0.00 10/99 539.77 0.00 616.90 46.7
000859 Presentati 04/20/98 SLHY 03 08 31655.00 0.00 10/99 8441.33 0.00 23213.67 26.7
000884 1 Sharp Fa 06/22/98 SLHY 03 08 1644.75 0.00 10/99 438.60 0.00 1206.15 26.7
000904 Computers 07/01/98 SLHY 03 08 3786.51 0.00 10/99 1009.73 0.00 2776.78 26.7
000912 Claricom - 05/01/99 SLMM 09 06 5000.22 0.00 10/99 250.01 0.00 4750.21 5.0
-------- ---- -------- ---- --------
Location Chicago Count= 9 56213.33 0.00 19130.34 0.00 37082.99
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 56213.33 0.00 19130.34 0.00 37082.99
-------- ---- -------- ---- --------
000001 Telephone 03/25/92 SLHY 00 00 23726.50 0.00 10/99 23726.50 0.00 0.00 100.0
000002 Telephone 04/01/92 SLHY 00 00 12240.50 0.00 10/99 12240.50 0.00 0.00 100.0
000003 IBIC Bindi 07/01/92 SLHY 00 00 1423.80 0.00 10/99 1423.80 0.00 0.00 100.0
000004 Prime Tele 01/01/93 SLHY 00 00 2554.75 0.00 10/99 2554.75 0.00 0.00 100.0
000005 Digital Ca 06/01/93 SLHY 00 00 1500.00 0.00 10/99 1500.00 0.00 0.00 100.0
000006 Digital Se 06/01/93 SLHY 00 00 1740.00 0.00 10/99 1740.00 0.00 0.00 100.0
000007 Tax 06/01/93 SLHY 00 00 162.00 0.00 10/99 162.00 0.00 0.00 100.0
000008 Overhead/C 06/01/93 SLHY 00 00 737.65 0.00 10/99 737.65 0.00 0.00 100.0
000009 Panasonic 06/01/93 SLHY 00 00 650.00 0.00 10/99 650.00 0.00 0.00 100.0
000010 Sta LC & S 11/01/93 SLHY 00 00 2446.75 0.00 10/99 2446.75 0.00 0.00 100.0
000011 Install Te 11/01/93 SLHY 00 00 2940.00 0.00 10/99 2940.00 0.00 0.00 100.0
000012 Install Ne 11/01/93 SLHY 00 00 3660.00 0.00 10/99 3660.00 0.00 0.00 100.0
000013 Install Pr 11/01/93 SLHY 00 00 2922.25 0.00 10/99 2922.25 0.00 0.00 100.0
000014 Binding Ma 12/01/93 SLHY 00 00 1633.80 0.00 10/99 1633.80 0.00 0.00 100.0
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000015 Upgrade Vo 12/01/93 SLHY 00 00 3045.00 0.00 10/99 3045.00 0.00 0.00 100.0
000016 Electric C 12/01/93 SLHY 00 00 4690.65 0.00 10/99 4690.65 0.00 0.00 100.0
000017 StacLC/6SS 03/01/94 SLHY 00 00 3155.75 0.00 10/99 3155.75 0.00 0.00 100.0
000018 Ricoh Copi 03/01/94 SLHY 00 08 2847.60 0.00 10/98 2278.08 0.00 569.52 80.0
000019 HP LJ 4S1 04/01/94 SLHY 00 00 5594.63 0.00 10/99 5594.63 0.00 0.00 100.0
000020 Proxima De 04/01/94 SLHY 00 08 8955.00 0.00 10/98 7164.00 0.00 1791.00 80.0
000021 Corinth ha 05/01/94 SLHY 00 00 966.00 0.00 10/99 966.00 0.00 0.00 100.0
000022 ONS 12 Por 05/01/94 SLHY 00 00 2249.75 0.00 10/99 2249.75 0.00 0.00 100.0
000023 Electronic 06/01/94 SLHY 00 00 4696.87 0.00 10/99 4696.87 0.00 0.00 100.0
000024 Proxima Eq 06/01/94 SLHY 00 08 1070.00 0.00 10/98 856.00 0.00 214.00 80.0
000025 Tel Trex E 06/01/94 SLHY 00 00 960.00 0.00 10/99 960.00 0.00 0.00 100.0
000026 System Tra 06/01/94 SLHY 00 00 2261.85 0.00 10/99 2261.85 0.00 0.00 100.0
000027 Add 3 SS4D 08/01/94 SLHY 00 00 6167.25 0.00 10/99 6167.25 0.00 0.00 100.0
000028 ONS Card a 09/01/94 SLHY 00 00 3711.75 0.00 10/99 3711.75 0.00 0.00 100.0
000029 Sony BM 80 09/01/94 SLHY 00 00 414.75 0.00 10/99 414.75 0.00 0.00 100.0
000030 COV SuperS 10/01/94 SLHY 00 00 1575.00 0.00 10/99 1575.00 0.00 0.00 100.0
000031 4PortExp 10/01/94 SLHY 00 00 5880.00 0.00 10/99 5880.00 0.00 0.00 100.0
000032 HP LJ 4M+ 10/01/94 SLHY 00 00 4475.57 0.00 10/99 4475.57 0.00 0.00 100.0
000033 10 TelTrek 11/01/94 SLHY 00 00 1200.00 0.00 10/99 1200.00 0.00 0.00 100.0
000034 Marantz Re 11/01/94 SLHY 00 00 393.75 0.00 10/99 393.75 0.00 0.00 100.0
000035 Sony BM-23 12/01/94 SLHY 00 00 476.70 0.00 10/99 476.70 0.00 0.00 100.0
000036 2 HP Laser 01/01/95 SLHY 00 08 4461.97 0.00 10/99 3867.02 0.00 594.95 86.7
000037 3 HP Laser 01/01/95 SLHY 00 08 2218.42 0.00 10/99 1922.61 0.00 295.81 86.7
000038 Video Conf 01/01/95 SLHY 00 08 44220.00 0.00 10/99 38324.00 0.00 5896.00 86.7
000039 2 HP Laser 03/01/95 SLHY 00 08 4221.82 0.00 10/99 3658.89 0.00 562.93 86.7
000040 HP Laser P 03/01/95 SLHY 00 08 2126.99 0.00 10/99 1843.40 0.00 283.59 86.7
000306 ONS Line C 03/01/95 SLHY 00 08 3459.75 0.00 10/99 2998.45 0.00 461.30 86.7
000309 ONS 12 Por 04/01/95 SLHY 00 08 2493.00 0.00 10/99 2160.60 0.00 332.40 86.7
000310 4 Port exp 04/01/95 SLHY 00 08 2719.75 0.00 10/99 2357.12 0.00 362.63 86.7
000325 Infocus 58 07/01/95 SLHY 00 08 9515.00 0.00 10/99 8246.33 0.00 1268.67 86.7
000326 Infocus 58 07/01/95 SLHY 00 08 10990.00 0.00 10/99 9524.66 0.00 1465.34 86.7
000337 HP Laserje 08/01/95 SLHY 00 08 2569.74 0.00 10/99 2227.11 0.00 342.63 86.7
000342 HP U Lase 09/01/95 SLHY 00 08 2698.27 0.00 10/99 2338.48 0.00 359.79 86.7
000350 HP Laserje 10/01/95 SLHY 00 08 2263.66 0.00 10/99 1961.83 0.00 301.83 86.7
000355 Conference 11/01/95 SLHY 00 08 2163.00 0.00 10/99 1874.60 0.00 288.40 86.7
000368 Cable Inst 11/01/95 SLHY 00 08 2267.50 0.00 10/99 1965.16 0.00 302.34 86.7
000369 Install Tr 11/01/95 SLHY 00 08 2034.75 0.00 10/99 1763.45 0.00 271.30 86.7
000379 Projection 12/01/95 SLHY 00 08 1870.00 0.00 10/99 1620.66 0.00 249.34 86.7
000383 Network Se 01/01/96 SLHY 01 08 5750.00 0.00 10/99 3833.33 0.00 1916.67 66.7
000384 Mitel\Trun 01/01/96 SLHY 01 08 16439.68 0.00 10/99 10959.80 0.00 5479.88 66.7
000419 Projection 02/01/96 SLHY 01 08 1870.00 0.00 10/99 1246.66 0.00 623.34 66.7
000424 11 Dpeaker 02/01/96 SLHY 01 08 5382.19 0.00 10/99 3588.13 0.00 1794.06 66.7
000425 Fl 2 data 02/01/96 SLHY 01 08 4524.15 0.00 10/99 3016.10 0.00 1508.05 66.7
000426 Mitel Mail 04/01/96 SLHY 01 08 15434.65 0.00 10/99 10289.77 0.00 5144.88 66.7
000479 Mitel Mail 07/01/96 SLHY 01 08 6614.75 0.00 10/99 4409.83 0.00 2204.92 66.7
000484 Ibico Bind 06/01/96 SLHY 01 08 1447.13 0.00 10/99 964.76 0.00 482.37 66.7
000485 8 Handsfre 06/01/96 SLHY 01 08 1088.50 0.00 10/99 725.66 0.00 362.84 66.7
000492 Analog & D 07/01/96 SLHY 01 08 6079.40 0.00 10/99 4052.93 0.00 2026.47 66.7
000497 Ti Trunkw 09/01/96 SLHY 01 08 3611.56 0.00 10/99 2407.70 0.00 1203.86 66.7
000498 Ti Work 09/01/96 SLHY 01 08 614.75 0.00 10/99 409.83 0.00 204.92 66.7
000499 Tl work 09/01/96 SLHY 01 08 279.75 0.00 10/99 186.50 0.00 93.25 66.7
000500 SS410 & SS 08/01/96 SLHY 01 08 1178.75 0.00 10/99 785.83 0.00 392.92 66.7
000501 US Robotic 09/01/96 SLHY 01 08 1056.70 0.00 10/99 704.46 0.00 352.24 66.7
000533 Tel Trex H 09/14/96 SLHY 01 08 3764.25 0.00 10/99 2509.50 0.00 1254.75 66.7
000536 Audio Visu 10/22/96 SLHY 01 08 39769.10 0.00 10/99 26512.73 0.00 13256.37 66.7
000543 CAT 5/CAT 11/15/96 SLHY 01 08 4691.04 0.00 10/99 3127.36 0.00 1563.68 66.7
000556 Unity Call 12/02/96 SLHY 01 08 2190.00 0.00 10/99 1460.00 0.00 730.00 66.7
000557 Sarif Shut 11/26/96 SLHY 01 08 3721.20 0.00 10/99 2480.80 0.00 1240.40 66.7
000565 Telephone 01/28/97 SLHY 02 08 9121.20 0.00 10/99 4256.56 0.00 4864.64 46.7
000689 Sarif Shut 02/04/97 SLHY 02 08 7027.25 0.00 10/99 3279.38 0.00 3747.87 46.7
000696 Sarif Shut 03/24/97 SLHY 02 08 4114.75 0.00 10/99 1920.22 0.00 2194.53 46.7
000702 2nd Instal 03/06/97 SLHY 02 08 62494.30 0.00 10/99 29164.00 0.00 33330.30 46.7
000704 Analog Sta 04/21/97 SLHY 02 08 3334.50 0.00 10/99 1556.10 0.00 1778.40 46.7
000705 TI Card In 04/21/97 SLHY 02 08 3637.55 0.00 10/99 1697.52 0.00 1940.03 46.7
000726 3 Robotic 05/21/97 SLHY 02 08 1260.00 0.00 10/99 588.00 0.00 672.00 46.7
000727 3rd instal 05/05/97 SLHY 02 08 13984.04 0.00 10/99 6525.88 0.00 7458.16 46.7
000728 2nd instal 03/28/97 SLHY 02 08 7305.12 0.00 10/99 3409.04 0.00 3896.08 46.7
000730 20 CAT5 da 06/26/97 SLHY 02 08 3173.93 0.00 10/99 1481.17 0.00 1692.76 46.7
000731 Mitel 6X36 03/28/97 SLHY 02 08 1825.15 0.00 10/99 851.74 0.00 973.41 46.7
000743 Relocated 06/16/97 SLHY 02 08 1025.00 0.00 10/99 478.33 0.00 546.67 46.7
000744 cabling fo 07/07/97 SLHY 02 08 6951.39 0.00 10/99 3243.98 0.00 3707.41 46.7
000755 Line Card 08/02/97 SLHY 02 08 2840.50 0.00 10/99 1325.56 0.00 1514.94 46.7
000756 1 Sarif Sh 07/28/97 SLHY 02 08 4887.50 0.00 10/99 2280.83 0.00 2606.67 46.7
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
000800 Patriot Sn 12/14/97 SLHY 02 08 1149.46 0.00 10/99 536.41 0.00 613.05 46.7
000803 Epson LCD 11/25/97 SLHY 02 08 6592.50 0.00 10/99 3076.50 0.00 3516.00 46.7
000883 2 Sharp Fa 06/22/98 SLHY 03 08 3289.49 0.00 10/99 877.20 0.00 2412.29 26.7
000903 Digital Eu 11/01/98 SLHY 04 06 188124.70 0.00 12/98 0.00 0.00 188124.70 0.0
000909 COMPUTER E 02/27/99 SLMM 09 04 15263.30 0.00 10/99 1017.55 0.00 14245.75 6.7
000911 Computer 02/27/99 SLMM 09 04 47444.93 0.00 10/99 3163.00 0.00 44281.93 6.7
--------- ---- --------- ---- ---------
Location Lincoln Count= 93 745773.60 0.00 363606.37 0.00 382167.23
Less disposals 200997.30 0.00 10298.08 0.00 190699.22
--------- ---- --------- ---- ---------
Net 544776.30 0.00 353308.29 0.00 191468.01
--------- ---- --------- ---- ---------
000619 Hewlett Pa 07/31/94 SLHY 00 00 975.31 0.00 10/99 975.31 0.00 0.00 100.0
000620 Cannon NP4 08/09/94 SLHY 00 00 8497.50 0.00 10/99 8497.50 0.00 0.00 100.0
000621 1 Sharp XG 07/05/95 SLHY 00 08 5052.29 0.00 10/99 4378.66 0.00 673.63 86.7
000622 Video Conf 09/29/95 SLHY 00 08 84363.30 0.00 10/99 73114.86 0.00 11248.44 86.7
000623 1 Xerox Co 06/15/96 SLHY 01 08 740.24 0.00 10/99 493.49 0.00 246.75 66.7
-------- ---- -------- ---- --------
Location Lincoln - ISS Count= 5 99628.64 0.00 87459.82 0.00 12168.82
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 99628.64 0.00 87459.82 0.00 12168.82
-------- ---- -------- ---- --------
000625 Phone Syst 09/29/95 SLHY 00 08 51614.58 0.00 10/99 44732.65 0.00 6881.93 86.7
000626 Audio Visu 10/10/95 SLHY 00 08 43728.52 0.00 10/99 37898.03 0.00 5830.49 86.7
000627 Video Conf 09/29/95 SLHY 00 08 85166.76 0.00 10/99 73811.18 0.00 11355.58 86.7
000628 1 Cannon N 03/13/96 SLHY 01 08 37401.32 0.00 10/99 24934.20 0.00 12467.12 66.7
000629 Audio Visu 03/25/96 SLHY 01 08 26883.80 0.00 10/99 17922.53 0.00 8961.27 66.7
000630 1 Cannon C 07/31/96 SLHY 01 08 20161.96 0.00 10/99 13441.30 0.00 6720.66 66.7
000706 IDS E&M Co 04/14/97 SLHY 02 08 3806.12 0.00 10/99 1776.18 0.00 2029.94 46.7
--------- ---- --------- ---- --------
Location Stamford Count= 7 268763.06 0.00 214516.07 0.00 54246.99
Less disposals 0.00 0.00 0.00 0.00 0.00
--------- ---- --------- ---- --------
Net 268763.06 0.00 214516.07 0.00 54246.99
--------- ---- --------- ---- --------
000624 1 Hewlett 06/24/94 SLHY 00 00 1106.11 0.00 10/99 1106.11 0.00 0.00 100.0
---------- ---- --------- ---- ---------
Location Washington Count= 1 1106.11 0.00 1106.11 0.00 0.00
Less disposals 0.00 0.00 0.00 0.00 0.00
---------- ---- --------- ---- ---------
Net 1106.11 0.00 1106.11 0.00 0.00
========== ==== ========= ==== =========
Grand Total Count= 115 1171484.74 0.00 685818.71 0.00 485666.03
Less disposals 200997.30 0.00 10298.08 0.00 190699.22
---------- ---- --------- ---- ---------
Net 970487.44 0.00 675520.63 0.00 294966.81
========== ==== ========= ==== =========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Equipment
Include Assets that meet the following conditions:
Class is M
Sort Assets by:
Location in ascending order and report subtotals
November 30, 1999 Page
3:27 PM
Strategy
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
010136 Fax Machin 07/01/97 SLHY 02 08 2942.50 0.00 10/99 1373.16 0.00 1569.34 46.7
------- ---- ------- ---- -------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Location Atlanta Count= 1 2942.50 0.00 1373.16 0.00 1569.34
Less disposals 0.00 0.00 0.00 0.00 0.00
------- ---- ------- ---- -------
Net 2942.50 0.00 1373.16 0.00 1569.34
------- ---- ------- ---- -------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
010089 1 Ricoh 25 02/14/97 SLHY 00 00 662.95 0.00 09/99 662.95 0.00 0.00 100.0
010090 1 Ricoh 30 02/14/97 SLHY 00 00 1197.66 0.00 09/99 1197.66 0.00 0.00 100.0
010091 1 Omnifax 02/14/97 SLHY 00 00 519.09 0.00 09/99 519.09 0.00 0.00 100.0
010092 1 Mita 559 02/14/97 SLHY 00 00 4421.74 0.00 09/99 4421.74 0.00 0.00 100.0
010093 1 Mita 809 02/14/97 SLHY 00 00 7580.13 0.00 09/99 7580.13 0.00 0.00 100.0
010094 1 Mercedes 02/14/97 SLHY 00 00 12549.64 0.00 09/99 12549.64 0.00 0.00 100.0
010095 1 GBC III 02/14/97 SLHY 00 00 1447.92 0.00 09/99 1447.92 0.00 0.00 100.0
010096 1 GBC 500 02/14/97 SLHY 00 00 409.01 0.00 09/99 409.01 0.00 0.00 100.0
010101 Misc Phone 04/30/98 SLHY 00 08 10320.59 0.00 10/99 6880.40 0.00 3440.19 66.7
-------- ---- -------- ---- -------
Location Boston Count= 9 39108.73 0.00 35668.54 0.00 3440.19
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- -------
Net 39108.73 0.00 35668.54 0.00 3440.19
-------- ---- -------- ---- -------
010124 Xerox 7042 06/18/96 SLHY 01 08 2546.90 0.00 10/99 1697.93 0.00 848.97 66.7
010125 25 Voice/D 01/31/98 SLHY 03 08 5110.87 0.00 10/99 1362.89 0.00 3747.98 26.7
010126 Sharp Copi 04/03/98 SLHY 03 08 7907.48 0.00 10/99 2108.66 0.00 5798.82 26.7
-------- ---- ------- ---- --------
Location San Francisco Count= 3 15565.25 0.00 5169.48 0.00 10395.77
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- ------- ---- --------
Net 15565.25 0.00 5169.48 0.00 10395.77
======== ==== ======== ==== ========
Grand Total Count= 13 57616.48 0.00 42211.18 0.00 15405.30
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- ------- ---- --------
Net 57616.48 0.00 42211.18 0.00 15405.30
======== ==== ======== ==== ========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Office Equipment
Include Assets that meet the following conditions:
Class is M
Sort Assets by:
Location in ascending order and report subtotals
November 30, 1999 Page
3:26 PM
Strategy
NET BOOK VALUE REPORT
<TABLE>
<CAPTION>
In-Svc Dep Rem Unadjusted Salvage Curr Current Accum Pct
SYS No Co Desc Date Meth Life Basis Value Thru Depreciation Sec 179 Net Bk Value Dep
Asset No + S179 x
BOOK: INTERNAL FY: DECEMBER
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
010137 Bookcase 04/12/96 SLHY 03 08 507.04 0.00 10/99 241.46 0.00 265.58 47.6
010138 Bookcase 11/03/96 SLHY 03 08 537.20 0.00 10/99 255.80 0.00 281.40 47.6
010139 Bookcases 04/16/97 SLHY 04 08 1156.78 0.00 10/99 385.60 0.00 771.18 33.3
010140 Bookcases 01/12/98 SLHY 05 08 1163.52 0.00 10/99 221.62 0.00 941.90 19.0
------- ---- ------- ---- -------
Location Atlanta Count= 4 3364.54 0.00 1104.48 0.00 2260.06
Less disposals 0.00 0.00 0.00 0.00 0.00
------- ---- ------- ---- -------
Net 3364.54 0.00 1104.48 0.00 2260.06
------- ---- ------- ---- -------
010059 8 shelves 02/14/97 SLHY 01 08 252.67 0.00 10/99 147.39 0.00 105.28 58.3
010060 1 display 02/14/97 SLHY 01 08 157.92 0.00 10/99 92.12 0.00 65.80 58.3
010061 28 desk ch 02/14/97 SLHY 01 08 1326.52 0.00 10/99 773.80 0.00 552.72 58.3
010062 1 desk cha 02/14/97 SLHY 01 08 94.75 0.00 10/99 55.27 0.00 39.48 58.3
010063 1 guest ch 02/14/97 SLHY 01 08 31.58 0.00 10/99 18.43 0.00 13.15 58.4
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
010064 1 desk cha 02/14/97 SLHY 01 08 47.38 0.00 10/99 27.64 0.00 19.74 58.3
010065 1 desk 02/14/97 SLHY 01 08 31.58 0.00 10/99 18.43 0.00 13.15 58.4
010066 1 file cab 02/14/97 SLHY 01 08 23.69 0.00 10/99 13.81 0.00 9.88 58.3
010067 1 side tab 02/14/97 SLHY 01 08 23.69 0.00 10/99 13.81 0.00 9.88 58.3
010068 3 kitchen 02/14/97 SLHY 01 08 37.90 0.00 10/99 22.12 0.00 15.78 58.4
010069 35 office 02/14/97 SLHY 01 08 66.33 0.00 10/99 38.68 0.00 27.65 58.3
010070 2 cupboard 02/14/97 SLHY 01 08 157.92 0.00 10/99 92.12 0.00 65.80 58.3
010071 13 desks 02/14/97 SLHY 01 08 307.94 0.00 10/99 179.63 0.00 128.31 58.3
010072 35 file ca 02/14/97 SLHY 01 08 3316.31 0.00 10/99 1934.52 0.00 1381.79 58.3
010073 3 file cab 02/14/97 SLHY 01 08 189.50 0.00 10/99 110.55 0.00 78.95 58.3
010074 2 folding 02/14/97 SLHY 01 08 63.17 0.00 10/99 36.84 0.00 26.33 58.3
010075 19 desk la 02/14/97 SLHY 01 08 120.02 0.00 10/99 70.01 0.00 50.01 58.3
010076 1 lamp (ex 02/14/97 SLHY 01 08 23.69 0.00 10/99 13.81 0.00 9.88 58.3
010077 1 small re 02/14/97 SLHY 01 08 31.58 0.00 10/99 18.43 0.00 13.15 58.4
010078 1 coffee t 02/14/97 SLHY 01 08 78.96 0.00 10/99 46.06 0.00 32.90 58.3
010079 4 computer 02/14/97 SLHY 01 08 126.34 0.00 10/99 73.70 0.00 52.64 58.3
010080 1 small co 02/14/97 SLHY 01 08 205.30 0.00 10/99 119.76 0.00 85.54 58.3
010081 9 bulletin 02/14/97 SLHY 01 08 71.06 0.00 10/99 41.45 0.00 29.61 58.3
010082 10 white b 02/14/97 SLHY 01 08 94.75 0.00 10/99 55.27 0.00 39.48 58.3
010083 1 file cab 02/14/97 SLHY 01 08 236.56 0.00 10/99 137.99 0.00 98.57 58.3
010084 4 small co 02/14/97 SLHY 01 08 240.04 0.00 10/99 140.02 0.00 100.02 58.3
010085 20 confere 02/14/97 SLHY 01 08 789.60 0.00 10/99 460.60 0.00 329.00 58.3
010086 8 44mg car 02/14/97 SLHY 01 08 159.18 0.00 10/99 92.86 0.00 66.32 58.3
010087 34 200mg 02/14/97 SLHY 01 08 1127.54 0.00 10/99 657.73 0.00 469.81 58.3
010088 4 office c 02/14/97 SLHY 01 08 252.67 0.00 10/99 147.39 0.00 105.28 58.3
010102 Chairs 10/01/98 SLHY 05 08 3297.50 0.00 10/99 628.09 0.00 2669.41 19.0
010104 Visual Boa 09/01/99 SLHY 06 08 1417.50 0.00 10/99 50.62 0.00 1366.88 3.6
010105 Autumn Che 09/01/99 SLHY 03 08 2408.70 0.00 10/99 150.54 0.00 2258.16 6.2
010106 Mahogany C 09/01/99 SLHY 03 08 1995.00 0.00 10/99 124.69 0.00 1870.31 6.3
010141 Five Drawe 11/01/99 SLHY 04 00 727.65 0.00 0.00 0.00 727.65 0.0
010142 Five Drawe 11/01/99 SLHY 04 00 727.65 0.00 0.00 0.00 727.65 0.0
010143 Five Drawe 11/01/99 SLHY 04 00 602.28 0.00 0.00 0.00 602.28 0.0
010144 Five Drawe 11/01/99 SLHY 04 00 602.28 0.00 0.00 0.00 602.28 0.0
010145 Five Drawe 11/01/99 SLHY 04 00 602.28 0.00 0.00 0.00 602.28 0.0
010146 Five Drawe 11/01/99 SLHY 04 00 602.28 0.00 0.00 0.00 602.28 0.0
010147 Five Drawe 11/01/99 SLHY 04 00 602.28 0.00 0.00 0.00 602.28 0.0
-------- ---- ------- ---- --------
Location Boston Count= 41 23271.54 0.00 6604.18 0.00 16667.36
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- ------- ---- --------
Net 23271.54 0.00 6604.18 0.00 16667.36
-------- ---- ------- ---- --------
010111 6 Work Sur 05/25/95 SLHY 02 08 21402.18 0.00 10/99 13248.99 0.00 8153.19 61.9
010112 6 Lateral 05/25/95 SLHY 02 08 3156.17 0.00 10/99 1953.81 0.00 1202.36 61.9
010113 14 Desk Ch 05/25/95 SLHY 02 08 6085.22 0.00 10/99 3767.05 0.00 2318.17 61.9
-------- ---- -------- ---- --------
Location San Francisco Count= 3 30643.57 0.00 18969.85 0.00 11673.72
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 30643.57 0.00 18969.85 0.00 11673.72
======== ==== ======== ==== ========
Grand Total Count= 48 57279.65 0.00 26678.51 0.00 30601.14
Less disposals 0.00 0.00 0.00 0.00 0.00
-------- ---- -------- ---- --------
Net 57279.65 0.00 26678.51 0.00 30601.14
======== ==== ======== ==== ========
</TABLE>
Calculation Assumptions
- --------------------------------------------------------------------------------
Book Short Years Midquarter Convention Adjustment Convention
- ---- ----------- --------------------- ---------------------
Internal [Y] [N] None
Asset Grouping/Sorting
- --------------------------------------------------------------------------------
Group: Furniture & Fixtures
Include Assets that meet the following conditions:
Class is FF
Sort Assets by:
Location in ascending order and report subtotals
<PAGE>
Inventory of assets located at
100 Colony Square, Atlanta, GA
o Dark wooden desk with filing cabinet and bookshelf (2)
o Office chairs (35)
o Conference table (1)
o Black file cabinets (6)
o Black desks (12)
o Returns (3)
o File cabinets (4)
o Tables w/ wheels forming conference table (8)
o Rug (1)
o Oak table (1)
o Long glass tables (2)
o Couch (1)
o Bookshelves (5)
o Oak file tables (2)
o Trash cans (8)
o Burgundy chairs (2)
Inventory of assets taken from 100 Colony Square
to 15 Piedmont Center, 3575 Piedmont Road, Atlanta, GA
o Black office chairs (4)
o Black desk returns (4)
o Oak office desks (2)
o Oak file cabinets (2)
o Oak desk returns (2)
o Regular office chairs (12)
o Small conference table (1)
o Black file cabinets (8)
o Bookcases (15)
o White boards (2)
o Laptops (2) [Dell Latitudes under lease agreement with
Renaissance Worldwide, Inc.]
o Desktop computers (2)
o Printers (2) [HP LJ 5, Tektronix Phaser 560 - both owned]
o Fax machine [Sharp FO-3850, owned]
<PAGE>
Asset inventory of
200 West Madison, Chicago, IL
o Leather chairs (20)
o Blue leather chair (1)
o Fax machine (1)
o $5,000 worth of artwork
Asset inventory of
200 Berkley Street, Boston, MA
Schedule 17
Hammond Office products
Invoice # 767820
Office 2223
1 Desk, 66x30 left pedestal
1 Right return, flush height
1 lateral file, 2-drawer
1 keyboard
1 mgmt./operations Chair, BFC
2 side chair, BFC
Office 2222
2 Desk, double pedestal
2 knee space credenza
2 task chair
2 side chair
Office 2221
3 desk, double pedestal
3 lateral file, 2-drawer
2 mgmt/operations Chair, BFC
Office 2220
3 desk, double-pedestal
2 lateral file, 2-drawer
3 mgmt/operations Chair, BFC
Office 2219
1 mgmt/operations chair
2 side chair
Office 2242
2 operators chair, hi-perf
<PAGE>
Office 2203
1 single pedestal desk
1 left return, flush height
1 lateral file
1 top conference
1 base, conference
1 executive chair, hi-back
2 side chair, BFC
Office 2202
1 desk, left pedestal
1 right return, flush height
1 lateral files
1 top, conference
1 base conference
1 executive chair, hi-back
2 side chair, BFC
cubicle seating
40 operators chair, BFC\
Human Resource files
11 lateral files, recessed drwrs.
Master file room
35 5-drawer lateral files
8 3-drawer lateral files
bullpen area
24 Rosemount cubicles per specification
file area
2 Rosemount cubicles per specification
IRC/Production area
8 velocity stations in 3 private offices
hallway area
14 hall cubicles
Room 2219A
1 open shelf files as per diagram
Office 2207
1 desk, single pedestal
1 right return flush height
1 lateral files
1 top conference
1 base, conference
1 executive chair, hi-back
2 side chair, BFC
Office 2206
1 desk, single pedestal
1 return, flush height
<PAGE>
1 lateral files
1 top conference
1 base, conference
1 executive hi-back chair
2 side chair, BFC
Office 2205
1 desk, single pedestal
1 return, flush height
1 return, flush height
1 return, flush height
1 lateral files
2 mgmt/operator chair
2 side chair
Office 2204
1 desk, single pedestal
1 return, flush height
1 return, flush height
1 return, flush height
1 lateral file
2 mgmt/operators chair
2 side chair
Office 2276
1 mgmt/operators chair, BFC
1 hi-perf. Operators chair, BFC
Office 2212
1 desk, double pedestal
1 knee space credenza
1 lateral file
1 table, 42"
1 chair, executive, hi-back
4 side chairs, BFC
Conference rooms 2111 & 2110
2 conference table
12 mgmt/conference chair
Office 2209
1 desk, left pedestal
1 right return, flush height
2 lateral files
1 conference table 36x72
6 mgmt/conference chairs
1 executive hi-back
<PAGE>
Office 2208
1 desk, single pedestal
1 right return
1 lateral files
1 executive hi-back chair
2 side chair, BFC
<PAGE>
LIST G
Miscellaneous (i.e. automobiles, etc.)
- --------------------------------------------------------------------------------
LEASE AGREEMENT
MAKE YEAR AGREEMENT NUMBER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Volvo 1993 Volvo Finance / 10089981
Andrew Belt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Schedule 2.15 - Title to Property
1. See Schedule 2.14.
2. Real property leases.
a. Leasehold: Stamford, CT
Action: International Systems Services, Ltd., a former subsidiary of
Company, assigned this leasehold to Renaissance Worldwide ITCS,
an affiliate. No assignment documentation has been executed. The
landlord was not notified as required by the lease.
b. Leasehold: London - 4 Great James Street
Action: Coba Consulting Ltd. has taken responsibility for this lease.
c. Leasehold: Atlanta - Colony Square
Action: Coba Group USA, Ltd., a former subsidiary of Company, assigned
this lease to Company. No assignment documentation has been
executed.
d. Leasehold: Chicago - 200 West Madison
Action: The Hunter Group, Inc., an affiliate of Company, is the tenant on
the lease. Company currently occupies the location. To assign or
sublease requires the consent of the landlord. See Schedule 2.6.
e. Leasehold: Cavendish Square, London, UK
Action:
3. Liens
a. The Bank of America has liens in all of the properties and assets of
Company and its subsidiaries and in all of the properties and assets used
in the Business Strategy Group business pursuant to the Credit Agreement.
<PAGE>
Schedule 2.16 - Taxes
The Subsidiaries have not complied with the statutory audits required under UK
law. Compliance efforts have commenced.
Coba Consulting Ltd. is entitled to refunds of taxes paid in Canada and the
United Kingdom in the amount of (pound)210,000 and (pound)300,000, for taxable
periods ending December 31, 1998. These refunds (including interest) shall be
promptly paid to the Company when received pursuant to Section 4.9(b) of the
Agreement.
<PAGE>
Schedule 2.18 - Intellectual Property
(a) 1. The Company typically enters into engagement letters with clients. The
letters do not address the issue of intellectual property ownership. It is
possible that one or more clients might dispute Company's ability to re-sell
similar intellectual property to other clients.
2. Seller has granted to Bank of America a lien and security interest in its
intellectual property rights pursuant to the Pledge and Security Agreement
of the Credit Agreement.
<PAGE>
Schedule 2.19 - Immigration Compliance
c. Pending visa petitions:
1. Jimmy Law
2. Tara Green
3. Raza Haider
4. Mark Wolinsky
<PAGE>
Schedule 2.20 - Transactions with Affiliates
1. Subcontract for the provision of consulting services to Sprint between Seller
and Company dated August 27, 1998.
2. Loans.
a. The Company owes Seller $6,318,177.
b. Seller owes RWS Ltd. $2,854,150.
3. Assignment of client contracts set forth on Schedule 4.11 from Seller to the
Company. In connection with this transaction, Seller shall assign to the
Company certain client contracts and license to the Company the intellectual
property described in Section 4.10 of the Agreement. The Company shall assign
certain rights and obligations to the Seller relating to the litigation
referred to in Schedule 2.11 pursuant to an Assignment Agreement in the form
attached as Exhibit B to the Agreement.
4. Assignment of real property leases.
a. Leasehold: First Stamford Place, Stamford, CT
b. Leasehold: Colony Square, Atlanta, GA
c. Leasehold: 44 Montgomery, San Francisco, CA
d. Leasehold: 200 West Madison, Chicago, IL
e. Leasehold: 4 Great James Street, WC1, London, England
f. Leasehold: One Curzon Street, London, England
5. Assignment or buy-out of personal property leases.
a. In connection with this transaction, Seller plans to assign or arrange
for the buy-out by the Company of the personal property as identified
on Attachment 1 to Schedule 2.14.
b. In connection with this transaction, RWS Ltd. shall assign to
Renaissance Worldwide Limited the personal property leases specified
below:
i. Master lease agreement for computers by and between Dell and RWS
Ltd. dated August 3, 1999.
ii. Master lease agreement for copiers by and between Xerox and RWS
Ltd.
6. Other assignments.
a. Coba Consulting Limited shall assign to Coba Group Limited the
intellectual property rights relating to the Coba marks, as set forth
in the Intellectual Property Rights License dated February 5, 1999, for
(pound)166,000 which it shall pay upon receipt to Renaissance Worldwide
Limited.
<PAGE>
Schedule 2.20 - Transactions with Affiliates (cont'd)
b. The Company is obligated to indemnify Seller for any liability relating
to Amex cards used by the employees of the Company. No written
indemnity agreement was entered into between Seller and the Company.
c. Company shall assign to Seller the Joint Development and Marketing
Agreement, dated as of December 19, 1997, by and between Renaissance
Solutions, Inc. and Gentia Software, Inc.
<PAGE>
Schedule 2.21 - Brokers
Letter agreement dated February 24, 2000 between the Seller and Mark Bruneau.
<PAGE>
Schedule 2.23 - Accounts Receivable; Accounts Payable
b. Buyer owes Seller amounts payable to Seller by the Company pursuant
to the Stock Purchase Agreement in cash to repay Seller for advances
of amounts due and bonuses to the employees of the Company as
described on Schedules 1.3 and 4.13.
<PAGE>
Schedule 2.24 - Warranty and Related Matters
Client File Name
------ ---------
1. IBM Corp. IBM/127
2. Nortel Networks NTL/125, NTL/125B
3. Cisco Systems, Inc. CIS/110, CIS/110B, CIS/111
4. Xerox XRX/110, XRX/111
5. Sprint SPR/120B, 5PR/132
6. Hughes HUGH/110
7. AT&T ATT/142, ATT/143
<PAGE>
Schedule 2.25 - Corporate Records; Copies of Documents
Copies of corporate documents, which authorize the distribution or dissolution
of certain subsidiaries referred to on Schedule 4.1, shall be provided.
<PAGE>
Schedule 2.26 - 1999 Customer Accounts Worth $250,000 +
1. Electric Lightwave; ELI/110
2. GM Onstar; GMON/110
3. Ontario Hydro; 0H/122
4. Century Telephone, Inc.; SHRCO 110-0lA
5. Telesystem mt. Wireless, Inc.; TIW/112
6. Nortel Networks; NT/12513 & NTL/125 & NTL/125B
7. Dell Computer Co.; DEL/112, DEL/110-0l
8. Citizens Utilities; CZN/115B, CZN/110-01A
9. Interactive Media Group; IMG/NOPRG
10. Wisconsin Electric Power Co.; WE/110B
11. Cisco Systems, Inc.; CIS/110 & CIS/110B & CIS/111
12. General Dynamics; GD/110 & GD/111 & GD/112
13. Nextnet, Inc.; NEXT 111
14. Lucent Technologies, Inc.; LUC/132, LUC/118
15. Xerox; XRX/110 & XRX/111
16. GTE Government Systems; GD/110
17. Global Ventures/Concert/Concert Management Services; GV/110 & GV/111
18. IBM Corp.; IBM/127
19. Hewlett Packard; HP/111B & HP 115
20. Geo-AT&T; GEO-ATT/110
21. Norwest Mortgage; NORW/110
22. Gew; GEW/110
23. Telesystems Int; TIW/114
24. Sprint Business; SPR/120B, SPR/127-01
25. AT&T; ATT/142 & ATT/143
26. BCE Mobile Communications, Inc.; BEL/202
<PAGE>
Schedule 2.29 - Employees of The Business Strategy Group
Boston, MA - 200 Berkeley Street
1. Allnut, David
2. Andrew, James
3. Andromalos, Susan
4. Belt, Andy
5. Bolt, Kristen
6. Breault, Michael
7. Bruneau, Mark
8. Cant, Michael
9. Carroll, Ann
10. Caperan, Horacio
11. Cavallari, Ford
12. Clark, John
13. Cole, Andrew
14. Conway, Eileen
15. Conway, Maureen
16. Crews, Michele
17. Daunais, Steve
18. Davila, Gerardo
19. Ehrhardt, Larry
20. Emelife, Maduka
21. Foley, Bob
22. Fox, Tim
23. Frazier, Elizabeth
24. Fuller, Laura
25. Gallagher, Tim
26. Gaut, Erica
27. Goldstein, Amy
28. Goldstein, Steve
29. Graham, Katie
30. Green, Tara
31. Grossi, Michael
32. Haugh, Aimee
33. Jackson, Chris
34. Jackson, Jessica
35. Jubber, Peter
36. Kaminski, Jane
37. Kaplan, Nancy
38. Kirby, Blaik
39. Law, Jimmy
40. Luther, Jon
41. Malhotra, Ayesha
42. McCarthy, John
43. Meng, Cynthia
44. Messina, Michelle
45. Mishra, Ranjan
46. Moran, Craig
47. Muelbert, Philipp
48. Neale, Simon
49. O'Donnell, Terrence
50. Olandino, Lauren
51. O'Shea, George
52. Park, Sean
53. Polson, Glyn
54. Pritchett, Eric
55. Pugh, Patrick
56. Reese, Richard
57. Rengel, Urs
58. Ryder, Laura
59. Seyfert, Deborah
60. Schreck, Brad
61. Sturm, John
62. Turben, Nick
63. Van Dissel, Bar
64. Willoughby, Ken
65. Wolinsky, Mark
66. Zimmer, Adriana
Chicago, IL - 200 West Madison Street
1. Awuah, Sam
2. Borish, Anne
3. Camble, Carita
4. Kennedy, Lisa
5. Wallace, Carrie
Atlanta, GA - 3575 Piedmont Center
1. Booher, Jim
2. Haugen, Tiffany
<PAGE>
Schedule 2.29 - Employees of The Business Strategy Group (cont'd)
San Francisco, CA - 44 Montgomery Street
1. Cela, Miguel
2. Coe, Keith
3. Darbyshire, Gabrielle
4. De Vegt, RoIf
5. Gupta, Charu
6. Preston, Paul
7. Salazar, Nancy
8. Steels, Liz
9. Tay, Heather
10. Thompson, Lillian
11. Torrey, Bruce
12. Wery, Roger
Stamford, CT - 100 First Stamford Place
1. Chmielowiec, Mary
2. Frostig, Rich
New York, NY - 101 E. 52nd Street
1. Anifalaje, Tokunbo
2. Bingham, Anne
3. Gonsalves, John
4. Jenkins, Beth
5. Thumser, Mark
6. Whitley, Charla
London, Eng - 33 Cavendish Square
1. Allwood, Richard
2. Bland, Richard
3. Chiang, Pang
4. Coe, Keith
5. Curtis, Lisa
6. Elm, Nader
7. He, Xin
8. House, Bob
9. Jones, Jeff
10. McGuire, Hilary
11. Reay, Susannah
12. Ross, Nick
13. Saunders, Deborah (3/1)
14. Tapper, Josie
15. Whittaker, Sam
RWW/GEO IV - 200 Berkeley Street
1. Aguirre, Pascal
2. Arnold, Alecia
3. Bricker, Todd
4. Lewis, Finlay
5. O'Brien, Bill
<PAGE>
Schedule 4.1 - Conduct of Business Prior to Closing
(g)
1. List of companies the Company is dissolving (3): COBA Group, USA,
Ltd. (GA), Technomic Consultants, Inc. (IL), Technomic Research
Associates Limited (UK).
2. See Schedule 4.11.
3. Coba Consulting Limited shall (i) execute a termination agreement
with Coba Group Limited pursuant to which Coba Consulting Limited
shall receive (pound)166,000 relating to the Intellectual Property
Rights License dated February 5, 1999 ("License"), and (ii) pay said
(pound)166,000 immediately to Renaissance Worldwide Limited, and
(iii) execute an assignment with Renaissance Worldwide Limited to
effect the assignment of any remaining rights and obligations in the
License.
(i) The client contract by and between Nationwide Building Society and
Renaissance Worldwide Strategy Limited shall be assigned to Renaissance
Worldwide Limited.
<PAGE>
Schedule 4.2 - Exclusivity
1. The Company shall dissolve or distribute certain of its other
subsidiaries.
a. Coba Group USA, Ltd. (GA) to be dissolved.
b. Technomic Consultants, Inc. (IL) to be dissolved.
c. Technomic Research Associates Limited (UK) to be dissolved.
2. See Schedule 4.11.
<PAGE>
Schedule 4.11 - Assignment of Rights Under Certain Agreements
1. Transfer of intellectual property
a. Company shall transfer certain intellectual property rights to
Seller pursuant to an Assignment of Rights in Trademarks, Service
Marks and Trade Names attached as Exhibit A-1 to the Agreement.
b. Coba Consulting Ltd. shall transfer certain intellectual property
rights to Renaissance Worldwide Ltd. pursuant to an Assignment of
Rights in Trademarks, Service Marks and Trade Names attached as
Exhibit A-2 to the Agreement.
2. Transfer of litigation. The Company shall transfer certain rights with
respect to the litigation referenced in Schedule 2.11 pursuant to an
Assignment Agreement attached as Exhibit B to the Agreement.
3. Transfer of Client Contracts and Equipment Leases (or pieces of
equipment):
a. Client Contracts. The following are in the name of Seller and shall
be assigned to the Company:
1. Electric Lightwave; ELI/110
2. Global Crossing; GC/1l0
3. Geo Partners; GEO-TRW/110
4. GM Onstar; GMON/110, GM/1ll
5. Ontario Hydro; 0H/122
6. Fore Systems; RSGLON/for 110
7. Century Telephone, Inc.; SHRCO 110-0lA
8. Telesystem Int. Wireless, Inc.; TIW/112
9. Nortel Networks; NT/12513 & NTL/125 & NTL/125B.
10. Dell Computer Co.; DEL/112
11. Emergence LLC; LLC/GENC
12. Energis Communications. Ltd.; RSGLON/ENR11O
13. Citizens Utilities; CZN/115B, CZN/110-01A
14. Interactive Media Group; IMG/NOPRG, 1MG/112-02
15. Wisconsin Electric Power Co.; WE/110B, WEC/129
16. Lucent Microelectronics; LUC/133
17. Cisco Systems, Inc.; CIS/110 & CIS/110B & CIS/111
18. Nextnet, Inc.; Next/1ll
19. Lucent Technologies, Inc.;LUC/132, LUC/131-01, LUC/118
20. Xerox; XRX/11O & XRX/111
21. GTE Government Systems; GD/110
22. Citizens Communications; CZN/122, C2N/115C
23. Global Ventures/Concert/Concert Management Services; GV/110 & GV/111
24. IBM Corp.; IBM/127
25. Hewlett Packard; HP/177B & HP/175
26. Geo - AT&T; ATT/11O
27. Norwest Mortgage; NORW/110
28. General Dynamics; GD/110, 111 & 112
<PAGE>
Schedule 4.11 - Assignment of Rights Under Certain Agreements (cont'd)
29. Geo IDC; IDC/ll0
30. Gew; GEW/110
31. Sun Microsystems; SUN/125B
32. Telesystems Int; TIW/114
33. Tandem Computers; TDM/120
34. Sprint Business; SPR/120B, SPR/127-0l
35. British Columbia Hydro and Power Authority; BCH/ll0
36. AT&T; ATT/142,143
37. GATX Liquid Logistics; GATX/111
38. Guidant Insurance Group; GUID/110
39. Hughes Telecommunications and Space; Hugh/110
40. Kemper Insurance Companies; KEMP/110
41. Omron Healthcare, Inc.; OMRO/100-0l
42. ORBCOMM; ORB/118-O1, ORB/115
43. Rights Exchange, Inc.; REI/110-0l
44. Sun Microsystems, Inc.; SUN/122
45. Duke Energy Services; DUK/lll
46. Bell South Business; BSC/131
47. Iridium North America; IRID/ll0-0l
48. Southwestern Bell; PCB/1ll-Olw, SBL/l10-01
49. Air Products and Chemicals, Inc.; ARP/110-02
50. BG Media Investors; BGM/ll0-01
51. Marshall Funds Investor Services; M&I/l10-01
52. Neoglyphics; NEO/l10
53. Bell Mobility; BCEM/110-04
54. BCE Mobile Communications, Inc.; BEL/202
55. Siemens AG-PN M; SMN/l12
56. CUPA; CUP/110-02
57. Dell Catalog Sales; DEL/110-0l
58. Fluor Daniel Telecom; FLD/110-03
59. Nortel; 124/A
60. Siemens Enterprise Network Division; SMN/116
61. Stratus Computer, Inc.; STRAT/110-01
62. Daleen Technologies, Inc.; DLN/110
63. Air Touch Communications; ATC/110-0l
64. Equiva Trading Company; EQUILN
65. PageMart Wireless; PAGE W/ll0
66. Royal Bank Financial Group; ROY/113-0l
67. Conill Advertising, Inc.; SAA/110-02
68. Enron Energy Services; ENRON/l10-01
b. See Attachment 1 Schedule 2.14.
4. Transfer of Other Assets:
The Seller shall assign to the Company its right and interest in the BSG
Documents.
<PAGE>
Schedule 4.12 - Leases
a. Non-BSG Leases
1. Leasehold: Stamford, CT
Tenant: International Systems Services, Ltd., a former subsidiary of the
Company.
Action: To be assigned to RWITCS.
2. Leasehold: London - 4 Great James Street
Tenant: Coba Consulting Ltd. has taken responsibility for this lease.
Action: Deed of Indemnity of Coba Consulting Ltd. is to be released and
a new Deed of Indemnity is to be given by Renaissance
Worldwide Ltd.
3. Leasehold: Atlanta - Colony Square
Tenant: Coba Group USA, Ltd., a former subsidiary of the Company,
assigned this lease to the Company. No assignment documentation
has been executed.
Action: Seller is arranging for the buyout or assignment of this lease
on behalf of Company.
4. Leasehold: One Curzon Street, London, England
Tenant: Renaissance Worldwide Strategy Limited assigned this leasehold
to a third party on December 7, 1999.
5. Leasehold: 40 Holborn Viaduct, London, England
Tenant: Coba Consulting Limited assigned this leasehold to a third party
on December 21, 1998.
6. Leasehold: 22 Grafton Street, London, England
Tenant: Renaissance Worldwide Strategy Limited
b. To be assigned to the Company or a Subsidiary subject to the consent of the
landlord.
1. Leasehold: 200 West Madison, Chicago, IL
Tenant: The Hunter Group, Inc., affiliate of Company
Action: To be assigned in whole.
c.
1. Leasehold: 33 Cavendish Square, London, UK
Tenant:Renaissance Worldwide Limited
Payment subject to escalations, etc., as set by the landlord pursuant
to the lease and based upon a prorata share of the premises: $16,496.21
per month
<PAGE>
Schedule 4.12 - Leases (cont'd)
2. Leasehold: Stamford, CT
Tenant: International Systems Services, Ltd., a former subsidiary of the
Company, to assign this leasehold to RWITCS, an affiliate.
Payment subject to escalations, etc., as set by the landlord pursuant to
the lease and based upon a prorata share of the premises:
02/29/00 -- 12/31/00 Price per month to be determined
based on the percentage of the
premises being used by employees
of BSG.
3. Leasehold: 15 Piedmont Center, Suite 1400, 3575 Piedmont Road, NE,
Atlanta, GA
Tenant: The Hunter Group, Inc.
Action: To sublease a small portion of the premises to Company.
Payment subject to escalations, etc., as set by the landlord pursuant to
the lease and based upon a prorata share of the premises:
05/99-04/00 $1,759.29 per month
05/00-12/31/00 $1,812.06 per month
4. Leasehold: 101 East 52nd Street, New York, NY
Tenant: Renaissance Worldwide, Inc.
Action: To sublease a small portion of the premises to Company.
Payment subject to escalations, etc., as set by the landlord pursuant to
the lease and based upon a prorata share of the premises:
11/01/98 -- 12/31/00 $4,211.15 per month
5. Leasehold: 44 Montgomery Street, San Francisco, CA
Tenant: Renaissance Worldwide Strategy, Inc.
Payment subject to escalations, etc., as set by the landlord pursuant to
the lease and based upon a prorata share of the premises.
<PAGE>
Schedule 4.13 - Bonus Repayment
See Attachment 4.13.
<PAGE>
Attachment 4.13 - UK December Bonus
Strategy Bonuses - (pound) Sterling
---------------------------------------------
Bonus Tax Net Emp'ers NI
(pound) (pound) (pound) (pound)
- --------------------------------------------------------------------------
Allwood, Richard 1,665.00 382.95 1,282.05 203.13
Bland, Richard 3,600.00 1,440.00 2,160.00 439.20
Curtis, Lisa 11,400.00 4,560.00 6,840.00 1,390.80
Darbyshire, Gabrielle 3,654.00 0.00 3,654.00 445.79
He, Xin 795.00 182.85 612.15 96.99
House, Bob 8,884.62 3,553.85 5,330.77 1,083.92
Moran, Craig 1,158.00 266.34 891.66 141.28 1.59
Reay, Susannah 1,665.00 382.95 1,282.05 203.13
Ross, Nick 1,290.00 296.70 993.30 157.38
Souness, Helen 4,118.85 1,647.54 2,471.31 502.50
Steels, Elizabeth 2,115.00 0.00 2,115.00 258.03
Tapper, Josie 660.00 151.80 508.20 80.52
Whittaker, Sam 887.88 204.21 683.67 108.32
=============================================
Totals 41,893.35 13,069.19 28,824.16 5,110.99
66,610.43 20,780.01 45,830.41 8,126.47
Total Cost to Company - BPS 47,004.34
Total Cost to Company - USD 74,736.90
<PAGE>
Attachment 4.13 - US December Bonus
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Bonus Dec 12-18-
EMPL ID. Employee Name Hire Date Incentive 99 Med/ER OASDI/ER FUTA/ER SUI/ER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
100376 Aquirre,Pascal 09/01/94 BNI 40,367.31 585.33 -
- ------------------------------------------------------------------------------------------------------------------------------------
102489 Andrew,James 10/06/97 BNI 11,746.08 170.31 -
- ------------------------------------------------------------------------------------------------------------------------------------
102386 Andromalos,Susan 09/15/97 BNI 1,922.31 27.88 119.18
- ------------------------------------------------------------------------------------------------------------------------------------
107673 Anifalaje,Adetokunbo 08/31/98 BNI 2,400.00 34.80 148.80
- ------------------------------------------------------------------------------------------------------------------------------------
111151 Arnold,Alecia 09/16/99 BNI 581.54 8.44 36.06
- ------------------------------------------------------------------------------------------------------------------------------------
111264 Awuah,Samuel 10/04/99 BNI 1,973.08 28.61 122.33
- ------------------------------------------------------------------------------------------------------------------------------------
100087 Belt,Andrew R 01/01/92 BNI 46,800.00 678.60 -
- ------------------------------------------------------------------------------------------------------------------------------------
102347 Bingham,Anne M 09/02/97 BNI 13,800.00 200.10 -
- ------------------------------------------------------------------------------------------------------------------------------------
102810 Booher,James 12/15/97 BNI 14,580.00 211.41 -
- ------------------------------------------------------------------------------------------------------------------------------------
101183 Bodrock,Philip BNI 10,946.38 158.71
- ------------------------------------------------------------------------------------------------------------------------------------
102850 Borish,Anne 12/29/97 BNI 24,300 00 352.35 -
- ------------------------------------------------------------------------------------------------------------------------------------
107085 Breault,Michael 04/12/99 BNI 7,234.62 104.91 53.13
- ------------------------------------------------------------------------------------------------------------------------------------
111149 Bricker,Todd A. 09/16/99 BNI 3,392.31 49.19 210.32
- ------------------------------------------------------------------------------------------------------------------------------------
100088 Bruneau,Mark R 01/01/92 BNI 90,000.00 1,305.00 -
- ------------------------------------------------------------------------------------------------------------------------------------
103392 Cant,Michael J 03/30/98 BNI 15,000.00 217.50 -
- ------------------------------------------------------------------------------------------------------------------------------------
111612 Caperan,Horacio J. 11/29/99 BNI 1,500.00 21.75 93.00 12.00 40.80
- ------------------------------------------------------------------------------------------------------------------------------------
100934 Carroll,Ann 03/18/96 BNI 12,600.00 182.70 -
- ------------------------------------------------------------------------------------------------------------------------------------
105728 Catron,Carol BNI 1,938.46 28.11 120.18
- ------------------------------------------------------------------------------------------------------------------------------------
101393 Cavallari,Ford 11/01/96 BNI 48,173.08 698.51 -
- ------------------------------------------------------------------------------------------------------------------------------------
111079 Cela,Miguel O. 09/01/99 BNI 6,230.77 90.35 -
- ------------------------------------------------------------------------------------------------------------------------------------
102346 Chmielowiec,Mary 09/02/97 BNI 29,340.00 425.43 -
- ------------------------------------------------------------------------------------------------------------------------------------
108296 Clark,John B. 08/17/99 BNI 600.00 8.70 37.20 16.32
- ------------------------------------------------------------------------------------------------------------------------------------
103515 Coe,Keith 04/13/98 BNI 15,000.00 217.50 -
- ------------------------------------------------------------------------------------------------------------------------------------
102483 Cole,Andrew 10/06/97 BNI 39,657.69 2,750.04
- ------------------------------------------------------------------------------------------------------------------------------------
107574 Conway,Mary Eileen 06/01/99 BNI 1,502.31 21.78 93.14
- ------------------------------------------------------------------------------------------------------------------------------------
102054 Conway,Maureen 06/23/97 BNI 4,275.00 61.99 265.05
- ------------------------------------------------------------------------------------------------------------------------------------
108106 Crews,Michele R. 08/09/99 BNI 3,973.85 57.62 246.38
- ------------------------------------------------------------------------------------------------------------------------------------
107084 Daunais,Steve 04/12/99 BNI 1,578.46 22.89 97.86
- ------------------------------------------------------------------------------------------------------------------------------------
104860 Davila,Juan Gerardo 10/20/98 BNI 2,370.00 34.37 146.94
- ------------------------------------------------------------------------------------------------------------------------------------
100365 Devegt,Rolf 08/10/94 BNI 41,076.92 595.61 -
- ------------------------------------------------------------------------------------------------------------------------------------
101333 Ehrhardt,Laurence W 10/01/96 BNI 20,550.00 297.98 -
- ------------------------------------------------------------------------------------------------------------------------------------
111321 Emelife,Maduka J. 10/15/99 BNI 5,140.38 74.53 318.71 - -
- ------------------------------------------------------------------------------------------------------------------------------------
100061 Foley, Robert BNI 18,000.00 261.00 -
- ------------------------------------------------------------------------------------------------------------------------------------
107573 Fox,Timothy 06/07/99 BNI 5711.54 82.81 354.11
- ------------------------------------------------------------------------------------------------------------------------------------
111155 Frazier,Elizabeth L. 09/13/99 BNI 1,753.85 25.43 108.74
- ------------------------------------------------------------------------------------------------------------------------------------
102908 Frostig,Richard 01/12/98 BNI 6,000.00 87.00 -
- ------------------------------------------------------------------------------------------------------------------------------------
104508 Fuller,Laura J 09/08/98 BNI 11,760.00 170.52 -
- ------------------------------------------------------------------------------------------------------------------------------------
107889 Gallagher,Timothy P. 07/12/99 BNI 300.00 4.35 18.60 2.40 8.16
- ------------------------------------------------------------------------------------------------------------------------------------
105213 Gamble,Carita M 12/01/98 BNI 2,520.00 36.54 156.24
- ------------------------------------------------------------------------------------------------------------------------------------
105743 Gaut,Erica 02/04/99 BNI 2 060.77 29.88 127.77
- ------------------------------------------------------------------------------------------------------------------------------------
103455 Goldstein,Stephen H 04/06/98 BNI 12,600.00 182.70 -
- ------------------------------------------------------------------------------------------------------------------------------------
100200 Gonsalves,John 07/26/93 BNI 13,200.00 191.40 -
- ------------------------------------------------------------------------------------------------------------------------------------
107846 Graham,Kathleen E. 07/06/99 BNI 4,110.58 59.60 254.85
- ------------------------------------------------------------------------------------------------------------------------------------
111048 Green,Tara A. 09/07/99 BNI 2,795.19 40.53 173.30
- ------------------------------------------------------------------------------------------------------------------------------------
103295 Grossi,Michael J 03/16/98 BNI 20,370.00 295.36 -
- ------------------------------------------------------------------------------------------------------------------------------------
101268 Gupta,Charu 09/03/96 BNI 20,670.00 299.72 -
- ------------------------------------------------------------------------------------------------------------------------------------
106965 Hannan, Matthew BNI 1,485.00 21.53 92.07
- ------------------------------------------------------------------------------------------------------------------------------------
101418 Haugen,Tiffany 11/13/96 BNI 2,280.00 33.06 141.36
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
108107 Jackson,Christopher E. 08/09/99 BNI 751.15 10.90 46.57 0.90
- ------------------------------------------------------------------------------------------------------------------------------------
111152 Jackson,Jessica 09/15/99 BNI 951.92 13.80 59.02
- ------------------------------------------------------------------------------------------------------------------------------------
104496 Jenkins,Elizabeth 09/08/98 BNI 9,450.00 137.03 -
- ------------------------------------------------------------------------------------------------------------------------------------
101845 Jubber,Peter A. 04/21/97 BNI 25,740.00 373.23 -
- ------------------------------------------------------------------------------------------------------------------------------------
107571 Kaminski,Jane 06/01/99 BNI 1,108.85 16.08 68.75
- ------------------------------------------------------------------------------------------------------------------------------------
100191 Kaplan,Nancy J 07/01/93 BNI 13,200.00 191.40 -
- ------------------------------------------------------------------------------------------------------------------------------------
100274 Kennedy,Lisa 02/21/94 BNI 6,120.00 88.74 166.81
- ------------------------------------------------------------------------------------------------------------------------------------
100857 Kirby,Marcus B 02/01/96 BNI 39,657.69 2,750.04 -
- ------------------------------------------------------------------------------------------------------------------------------------
111050 Law,Jimmy C. 09/07/99 BNI 2,795.19 40.54 173.31
- ------------------------------------------------------------------------------------------------------------------------------------
111150 Lewis,Finlay I 09/16/99 BNI 1,696.15 24.59 105.16
- ------------------------------------------------------------------------------------------------------------------------------------
111502 Luther,Jonathan A. 11/08/99 BNI 553.85 8.03 34.33 4.43 15.07
- ------------------------------------------------------------------------------------------------------------------------------------
104519 Malhotra,Ayesha 09/08/98 BNI 2,640.00 38.28 163.68
- ------------------------------------------------------------------------------------------------------------------------------------
111147 Meng,Jinhong Cynthia 09/20/99 BNI 2,596.15 37.65 160.96
- ------------------------------------------------------------------------------------------------------------------------------------
111624 Mishra,Ranjan Kumar 11/29/99 BNI 986.54 14.30 61.16 7.89 26.84
- ------------------------------------------------------------------------------------------------------------------------------------
104520 Muelbert,Philipp 09/08/98 BNI 7,920.00 114.84 491.04
- ------------------------------------------------------------------------------------------------------------------------------------
100550 Neale,Simon D. 04/15/95 BNI 3,480.00 50.46 215.76
- ------------------------------------------------------------------------------------------------------------------------------------
111148 OBrien,William F. 09/20/99 BNI 3,876.92 56.21 240.37
- ------------------------------------------------------------------------------------------------------------------------------------
106991 ODonnell,Terrence 04/05/99 BNI 2,160.00 31.32 133.92
- ------------------------------------------------------------------------------------------------------------------------------------
105241 Orlandino,Lauren 12/07/98 BNI 2,310.00 33.50 143.22
- ------------------------------------------------------------------------------------------------------------------------------------
100175 O'Shea,George M 04/26/93 BNI 2,103.84 30.51 130.43
- ------------------------------------------------------------------------------------------------------------------------------------
102678 Polson,Glyn 11/17/97 BNI 2,640.00 38.28 163.68
- ------------------------------------------------------------------------------------------------------------------------------------
104170 Preston,Paul K 07/20/98 BNI 13,800.00 200.10 -
- ------------------------------------------------------------------------------------------------------------------------------------
108249 Pritchett,Eric 08/16/99 BNI 1,104.23 16.01 68.46 0.74
- ------------------------------------------------------------------------------------------------------------------------------------
103029 Pugh,Patrick W 02/02/98 BNI 13,800.00 200.10 -
- ------------------------------------------------------------------------------------------------------------------------------------
102473 Rengel,Urs 10/01/97 BNI 27,000.00 391.50 -
- ------------------------------------------------------------------------------------------------------------------------------------
107702 Ryder,Laura 05/10/99 BNI 1,961.54 28.44 121.62
- ------------------------------------------------------------------------------------------------------------------------------------
111265 Salazar,Nancy 09/30/99 BNI 495.00 7.18 30.69
- ------------------------------------------------------------------------------------------------------------------------------------
111263 Schreck,Bradley J. 10/04/99 BNI 480.00 6.96 29.76 3.84 13.06
- ------------------------------------------------------------------------------------------------------------------------------------
100749 Seyfert,Deborah 10/30/95 BNI 3,000.00 43.50 186.00
- ------------------------------------------------------------------------------------------------------------------------------------
103109 Sturm,John T 02/17/98 BNI 1,891.50 27.43 117.27
- ------------------------------------------------------------------------------------------------------------------------------------
111610 Tay,Heather 11/29/99 BNI 908.65 13.18 56.34 7.27 31.80
- ------------------------------------------------------------------------------------------------------------------------------------
107890 Thompson,Lillian H. 07/06/99 BNI 7,200.00 104.40 446.40
- ------------------------------------------------------------------------------------------------------------------------------------
100769 Thumser,Mark 11/09/95 BNI 10,350.00 150.08 -
- ------------------------------------------------------------------------------------------------------------------------------------
100769 Thumser,Mark 11/09/95 BNI 3,450.00 50.03 213.90
- ------------------------------------------------------------------------------------------------------------------------------------
111378 Turben,Nicholas A. 10/26/99 BNI 2,653.85 38.48 164.54 1.41
- ------------------------------------------------------------------------------------------------------------------------------------
100476 Van Dissel,Bart J 01/05/95 BNI 14,100.00 204.45 -
- ------------------------------------------------------------------------------------------------------------------------------------
100639 Wallace,Carrie A 07/24/95 BNI 1,973.08 28.61 -
- ------------------------------------------------------------------------------------------------------------------------------------
101883 Wery,Roger F 05/01/97 BNI 48,173.08 2,873.51 -
- ------------------------------------------------------------------------------------------------------------------------------------
100684 Whitley,Charla 09/02/95 BNI 8,100.00 117.45 -
- ------------------------------------------------------------------------------------------------------------------------------------
100819 Willoughby,Kenneth A 01/02/96 BNI 9,450.00 137.03 -
- ------------------------------------------------------------------------------------------------------------------------------------
111049 Wolinsky,Mark E. 09/07/99 BNI 2,795.19 40.54 173.31
- ------------------------------------------------------------------------------------------------------------------------------------
** Moran, Craig BNI 1,880.10
- ------------------------------------------------------------------------------------------------------------------------------------
953,471.95 20,323.14 7,701.78 37.83 155.10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Thumser's second bonus was paid in January. They made adjustments to his
Dec bonus and then paid this additional amount
** Mr. Moran is a contactor not an employee.
<PAGE>
Attachment 4.13 - UK February Bonus
Strategy Bonuses - (pound) Sterling
<TABLE>
<CAPTION>
-----------------------------------------------
Bonus Tax Net Emp'ers NI
(pound) (pound) (pound) (pound)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allwood, Richard 1,131.03 260.14 870.89 137.99
Bland, Richard 2,512.00 1,004.80 1,507.20 306.46
Curtis, Lisa 0.00 0.00 0.00 0.00
Darbyshire, Gabrielle 2,512.00 0.00 2,512.00 306.46
He, Xin 314.00 72.22 241.78 38.31
House, Bob 34,540.00 13,816.00 20,724.00 4,213.88 1.59 exchange rate
Moran, Craig 0.00 0.00 0.00 0.00
Reay, Susannah 1,131.66 260.28 871.38 138.06
Ross, Nick 876.69 201.64 675.05 106.96
Souness, Helen 2,198.00 879.20 1,318.80 268.16
Steels, Elizabeth 1,381.60 0.00 1,381.60 168.56
Tapper, Josie 471.00 108.33 362.67 57.46
Whittaker, Sam 157.00 36.11 120.89 19.15
===============================================
Totals BPS 47,224.98 16,638.72 30,586.26 5,761.45
Totals USD 75,199.01 26,494.77 48,704.24 9,174.28
</TABLE>
Total Cost to Company 52,986.43
Total Cost to Company - 84,373.29
USD
<PAGE>
Attachment 4.13 - US February Bonus
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ER
Social ER MA UI-
ID Name SSN Tot Gross Security Medicare FUTA SUTA SPL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
100376 Aguirre,Pascal 018765896 26,911.54 67.54 390.22
- ------------------------------------------------------------------------------------------------------------------------------------
102489 Andrew,James 182428645 7,830.72 113.55
- ------------------------------------------------------------------------------------------------------------------------------------
102386 Andromatos,Susan 047621557 1,281.30 79.44 18.58 10.25 33.31 1.54
- ------------------------------------------------------------------------------------------------------------------------------------
107673 Anifalaje,Adetokunbo 112722701 1,200.00 74.40 17.40 9.60 24.00
- ------------------------------------------------------------------------------------------------------------------------------------
111151 Arnold,Alecia 539848329 291.00 18.04 4.22 2.32 7.57 0.35
- ------------------------------------------------------------------------------------------------------------------------------------
111264 Awuah,Samuel 195724836 1,151.00 71.36 16.69
- ------------------------------------------------------------------------------------------------------------------------------------
100087 Belt,Andrew R 032604993 31,200.00 1,934.40 452.40
- ------------------------------------------------------------------------------------------------------------------------------------
102347 Bingham,Anne M 031502970 9,200.00 570.40 133.40 10.38
- ------------------------------------------------------------------------------------------------------------------------------------
102810 Booher,James 503807838 9,720.00 602.64 140.94
- ------------------------------------------------------------------------------------------------------------------------------------
102850 Borish,Anne 115382711 8,100.00 502.20 117.45
- ------------------------------------------------------------------------------------------------------------------------------------
107085 Breault,Michael 044701432 4,220.00 261.64 61.19 1.57
- ------------------------------------------------------------------------------------------------------------------------------------
111149 Bricker,ToddA. 063500590 1,979.00 122.70 28.70 2.26
- ------------------------------------------------------------------------------------------------------------------------------------
100088 Bruneau,Mark R. 032668936 60,000.00 2,013.84 870.00
- ------------------------------------------------------------------------------------------------------------------------------------
103392 Cant,Michael J 014824159 15,000.00 930.00 217.50
- ------------------------------------------------------------------------------------------------------------------------------------
111612 Caperan,Horacio J. 028808651 750.00 46.50 10.88
- ------------------------------------------------------------------------------------------------------------------------------------
100934 Carroll,Ann 025464971 6,300.00 390.60 91.35
- ------------------------------------------------------------------------------------------------------------------------------------
101393 Cavallari,Ford 026424803 57,115.00 3,541.13 828.17
- ------------------------------------------------------------------------------------------------------------------------------------
111079 Cela,Miguel O. 019625922 2,000.00 124.00 29.00
- ------------------------------------------------------------------------------------------------------------------------------------
102346 Chmielowiec,Mary 147621509 14,670.00 909.54 212.72
- ------------------------------------------------------------------------------------------------------------------------------------
108296 Clark,John B. 025565032 400.00 24.80 5.80
- ------------------------------------------------------------------------------------------------------------------------------------
103515 Coe,Keith 241372471 10,000.00 620.00 145.O0
- ------------------------------------------------------------------------------------------------------------------------------------
102483 Cole,Andrew 033764821 26,438.00 1,639.16 383.35
- ------------------------------------------------------------------------------------------------------------------------------------
107574 Conway,Mary Eileen 094341204 500.00 31.00 7.25
- ------------------------------------------------------------------------------------------------------------------------------------
102054 Conway,Maureen 046561991 3,500.00 217.00 50.75
- ------------------------------------------------------------------------------------------------------------------------------------
108106 Crews,Michele R. 292601230 1,500.00 93.00 21.75
- ------------------------------------------------------------------------------------------------------------------------------------
107084 Daunais,Steve 048582923 1,052.00 65.22 15.25
- ------------------------------------------------------------------------------------------------------------------------------------
104860 Davila,Juan Gerardo 010829956 1,580.00 97.96 22.91
- ------------------------------------------------------------------------------------------------------------------------------------
100365 Devegt,Rolf 019782841 20,000.00 1,240 00 290.00
- ------------------------------------------------------------------------------------------------------------------------------------
101333 Ehrhardt,Laurence W 013461853 13,700.00 849.40 198.65
- ------------------------------------------------------------------------------------------------------------------------------------
111321 Emelife,Maduka J. 474068137 4,050.00 251.10 58.73
- ------------------------------------------------------------------------------------------------------------------------------------
100061 Foley,Robert E 027386120 12,000.00 744.00 174.00
- ------------------------------------------------------------------------------------------------------------------------------------
107573 Fox,Timothy 002624273 3,808.00 236.10 55.22
- ------------------------------------------------------------------------------------------------------------------------------------
111155 Frazier,Elizabeth L. 591189081 1,315.00 81.53 19.07
- ------------------------------------------------------------------------------------------------------------------------------------
102908 Frostig,Richard 019404576 4,000.00 248.00 58.00
- ------------------------------------------------------------------------------------------------------------------------------------
104508 Fuller,Laura J 020589808 10,000.00 620.00 145.00
- ------------------------------------------------------------------------------------------------------------------------------------
105213 Gamble,Carita M 324688310 1,680.00 104.16 24.36
- ------------------------------------------------------------------------------------------------------------------------------------
105743 Gaut,Erica 620058146 1,374.00 85.19 19.92
- ------------------------------------------------------------------------------------------------------------------------------------
103455 Goldstein,Stephen H 048400087 7,000.00 434.00 101.50
- ------------------------------------------------------------------------------------------------------------------------------------
100200 Gonsalves,John 123683387 8,000.00 496.00 116.00
- ------------------------------------------------------------------------------------------------------------------------------------
107846 Graham,Kathleen E. 227311597 2,055.00 127.41 29.80
- ------------------------------------------------------------------------------------------------------------------------------------
111048 Green,Tara A. 105882218 932.00 57.78 13.51
- ------------------------------------------------------------------------------------------------------------------------------------
103295 Grossi,Michael J 128563459 13,580.00 841.96 196.91
- ------------------------------------------------------------------------------------------------------------------------------------
101268 Gupta,Charu 017807559 13,780.00 854.36 199.81
- ------------------------------------------------------------------------------------------------------------------------------------
101418 Haugen,Tiffany 255175928 1,520.00 94.24 22.04
- ------------------------------------------------------------------------------------------------------------------------------------
108107 Jackson,Christopher E. 226025574 500.70 31.04 7.26
- ------------------------------------------------------------------------------------------------------------------------------------
111152 Jackson,Jessica 047623758 519.23 32.19 7.53
- ------------------------------------------------------------------------------------------------------------------------------------
104496 Jenkins,Elizabeth 016542431 6,300.00 390.60 91.35
- ------------------------------------------------------------------------------------------------------------------------------------
101845 Jubber,Peter A 151841818 12,000.00 744.00 174.00
- ------------------------------------------------------------------------------------------------------------------------------------
107571 Kaminski,Jane 017501511 739.30 45.84 10.72
- ------------------------------------------------------------------------------------------------------------------------------------
100191 Kaplan,Nancy J 015366024 8,000.00 496.00 116.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
100274 Kennedy,Lisa 320662324 3,060.00 189.72 44.37
- ------------------------------------------------------------------------------------------------------------------------------------
100857 Kirby,Marcus B 011802391 26,500.00 1,643.00 384.25
- ------------------------------------------------------------------------------------------------------------------------------------
111050 Law,Jimmy C. 028823669 932.00 57.78 13.51
- ------------------------------------------------------------------------------------------------------------------------------------
111150 Lewis,Finlay I 577049492 989.00 61.32 14.34
- ------------------------------------------------------------------------------------------------------------------------------------
111502 Luther,Jonathan A. 024600980 500.00 31.00 7.25
- ------------------------------------------------------------------------------------------------------------------------------------
104519 Malhotra,Ayesha 538924503 1,760.00 109.12 25.52
- ------------------------------------------------------------------------------------------------------------------------------------
111147 Meng,Jinhong Cynthia 346928711 1,298.00 80.48 18.82
- ------------------------------------------------------------------------------------------------------------------------------------
111692 Messina,Michelle 031622920 500.00 31.00 7.25
- ------------------------------------------------------------------------------------------------------------------------------------
111624 Mishra,Ranjan Kumar 031826899 1,500.00 93.00 21.75
- ------------------------------------------------------------------------------------------------------------------------------------
104520 Muelbert,Philipp 305135440 4,625.00 286.75 67.06
- ------------------------------------------------------------------------------------------------------------------------------------
100550 Neale,Simon D 029786500 2,500.00 155.00 36.25
- ------------------------------------------------------------------------------------------------------------------------------------
111148 O'Brien,William F. 016423104 2,584.00 160.21 37.47
- ------------------------------------------------------------------------------------------------------------------------------------
106991 O'Donnell,Terrence 032649152 1,440.00 89.28 20.88
- ------------------------------------------------------------------------------------------------------------------------------------
105241 Orlandino,Lauren 014545677 1,540.00 95.48 22.33
- ------------------------------------------------------------------------------------------------------------------------------------
100175 O'Shea,George M 016746689 3,000.00 186.00 43.50
- ------------------------------------------------------------------------------------------------------------------------------------
102678 Polson,Glyn 095564168 1,760.00 109.12 25.52
- ------------------------------------------------------------------------------------------------------------------------------------
104170 Preston Paul K 550992201 9,200.00 570.40 133.40
- ------------------------------------------------------------------------------------------------------------------------------------
108249 Pritchett,Eric 419943542 1,000.00 62.00 14.50
- ------------------------------------------------------------------------------------------------------------------------------------
103029 Pugh,Patrick W 443803467 8,050.00 499.10 116.73
- ------------------------------------------------------------------------------------------------------------------------------------
102473 Rengel,Urs 138408803 13,500.00 837.00 195.75
- ------------------------------------------------------------------------------------------------------------------------------------
107702 Ryder,Laura 156606234 1,000.00 62.00 14.50
- ------------------------------------------------------------------------------------------------------------------------------------
111265 Salazar,Nancy 344722762 330.00 20.46 4.79
- ------------------------------------------------------------------------------------------------------------------------------------
111263 Schreck,Bradley J. 366826183 320.00 19.84 4.64
- ------------------------------------------------------------------------------------------------------------------------------------
100749 Seyfert,Deborah 480968944 2,000.00 124.00 29.00
- ------------------------------------------------------------------------------------------------------------------------------------
103109 Sturm,John T 202684012 1,000.00 62.00 14.50
- ------------------------------------------------------------------------------------------------------------------------------------
111610 Tay,Heather 032821470 500.00 31.00 7.25
- ------------------------------------------------------------------------------------------------------------------------------------
100769 Thumser,Mark 107509219 6,900.00 427 80 100 05
- ------------------------------------------------------------------------------------------------------------------------------------
111378 Turben,Nicholas A. 286564972 1,327.00 82.27 19.24
- ------------------------------------------------------------------------------------------------------------------------------------
100639 Wallace,Carrie A 387829700 2,030.00 125.86 29.44
- ------------------------------------------------------------------------------------------------------------------------------------
101883 Wery,Roger F 304981394 32,000.00 1,984.00 464.00
- ------------------------------------------------------------------------------------------------------------------------------------
100684 Whitley,Charla 253173229 4,500.00 279.00 65.25
- ------------------------------------------------------------------------------------------------------------------------------------
100819 Willoughby,Kenneth A 042583545 5,000.00 310.00 72.50
- ------------------------------------------------------------------------------------------------------------------------------------
111049 Wolinsky,Mark E. 028826671 1,641.00 101.74 23.79
- ------------------------------------------------------------------------------------------------------------------------------------
Allnut, David 30,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
Moran, Craig 1,253.00
- ------------------------------------------------------------------------------------------------------------------------------------
626,781.79 33,130.14 8,635.17 22.17 64.88 16.10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule 4.15 - Provision of Employees
1. Reid Menting - Renaissance Worldwide IT Consulting Services, Inc. 03/31/00
2. John Parnell - Renaissance Worldwide IT Consulting Services, Inc. 03/31/00
3. Mark Braxton - The Hunter Group, Inc. 04/30/00
<PAGE>
Schedule 4.17 - Dissolutions and Distributions
a.
1. 1045795 Ontario, Inc. (Canada) dissolved effective November 15, 1999.
2. International Systems Services (UK) Ltd. dissolved effective December 7,
1999.
3. Coba Group USA, Ltd. (GA) to be dissolved.
4. Technomic Consultants, Inc. (IL) to be dissolved.
5. Technomic Research Associates Limited (UK) to be dissolved.
b.
1. Renaissance Worldwide AB (Sweden) distributed effective 01/00.
2. The Management Decisions Group Inc. (IL) distributed effective 02/00.
3. Renaissance Worldwide KK (Japan) distributed effective 02/00.
4. Renaissance Technomic Limited (Hong Kong) distributed effective 12/99.
5. Renaissance Worldwide Strategy (S) Pte. Ltd. distributed effective
12/99.
<PAGE>
Schedule 6.13 - Dissolutions and Distributions
1. Technomic Research Associates Limited
2. Coba Group, U.S.A., Ltd.
3. Technomic Consultants, Inc.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS OF THE REGISTRANT
The information required by this Item is included in Item 1 of this report
or will be included under the captions "Election of Class II Director--Nominee,"
"Election of Class II Director--Other Directors," "Election of Class II
Director--Board of Directors and Committees," and "Election of Class II
Director--Director Compensation" and "Section 16(a) Beneficial ownership
Reporting Compliance' in the Proxy Statement, and is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be included under the captions
"Executive Compensation--Summary Compensation Table," "Executive
Compensation--Option Grants in Last Fiscal Year", "Executive Compensation
- --Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values" and "Executive Compensation--Employment Agreements" in the Proxy
Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item will be included under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item will be included under the caption
"Certain Relationships and Related Transactions" in the Proxy Statement and is
incorporated herein by reference.
<PAGE>
Exhibit 10.1
RENAISSANCE WORLDWIDE, INC.
1996 STOCK PLAN
(as amended on April 21, 1998)
1. Purpose. The purpose of this 1996 Stock Plan (the "Plan") is to advance
the interests of Renaissance Worldwide, Inc., a Massachusetts corporation (the
"Company"), by strengthening the ability of the Company to attract, retain and
motivate key employees, officers and consultants of or to the Company or any
present or future parent or subsidiary of the Company (the "Company Group") by
providing them with an opportunity to purchase or receive as bonuses stock of
the Company and thereby permitting them to share in the Company's success. It is
intended that this purpose will be effected by granting (i) incentive stock
options ("Incentive Options") which are intended to qualify under the provisions
of Section 422 of the Internal Revenue Code of 1986, as heretofore and hereafter
amended (the "Code"), and non-statutory stock options ("Nonqualified Options")
which are not intended to meet the requirements of Section 422 of the Code and
which are intended to be taxed under Section 83 of the Code (both Incentive
Options and Nonqualified Options shall be collectively referred to as
"Options"), (ii) stock purchase authorizations ("Purchase Authorizations") and
(iii) stock bonus awards ("Bonuses").
2. Effective Date. This Plan was adopted by the Board of Directors of the
Company (the "Board") on March 6, 1996, approved by the sole stockholder of the
Company on March 22, 1996 (the "effective date" of the Plan) and subsequently
amended on January 9, 1997 to increase the number of shares that may be made
subject to Options, Purchase Authorization or Bonuses. On April 21, 1998, the
Board of Directors voted to amend the Plan by increasing the number of shares
that may be made subject to Options, Purchase Authorization or Bonuses, subject
to stockholder approval.
3. Stock Covered by the Plan.
a. Subject to adjustment as provided in Sections 9 and 10 below, and
further subject to stockholder approval as noted in Section 2 above,
the shares that may be made subject to Options, Purchase
Authorizations or Bonuses under this Plan shall not exceed in the
aggregate 7,200,000' shares of the common stock, without par value,
of the Company ("Company Stock"), plus the number of shares of
Company Stock added pursuant to paragraph 3b (the "Shares").
b. The number of Shares that may be made subject to Options, Purchase
Authorizations or Bonuses under this Plan shall automatically
increase on the first day of each fiscal year, beginning in 1998 and
continuing through 2000, by a number of shares of Company Stock
equal to four percent (4%) of the total number of shares of Company
Stock outstanding on the last trading day of the previous fiscal
year. For 1998, the
- -----------------
(1) This figure was amended in the 1998 amendment to reflect the 2-for-1
stock split effected the first quarter.
<PAGE>
increase shall take effect on the date of stockholder approval of
the amendments to the Plan and shall be based on the total number of
shares of Company Stock outstanding on the day of the 1998 annual
meeting.
c. The number of Shares subject to Options that are intended to be
Incentive Options shall not exceed 15,000,000.
d. Any Shares subject to an Option or Purchase Authorization which for
any reason expires or is terminated unexercised as to such Shares
and any Shares reacquired by the Company pursuant to forfeiture or a
repurchase right hereunder may again be the subject of an Option,
Purchase Authorization or Bonus under the Plan. The Shares purchased
pursuant to Purchase Authorizations or the exercise of Options under
this Plan or issued as Bonuses may, in whole or in part, be either
authorized but unissued Shares or issued Shares reacquired by the
Company.
4. Administration. This Plan shall be administered by the Board, whose
construction and interpretation of the Plan's terms and provisions shall be
final and conclusive. The Board shall have authority, subject to the express
provisions of the Plan, to construe the Plan and the respective Options,
Purchase Authorizations, Bonuses and related agreements, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Options, Purchase Authorizations, Bonuses and
related agreements, and to make all other determinations in the judgement of the
Board necessary or desirable for the administration of the Plan. The Board may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Option, Purchase Authorization, Bonus, or related agreement in
the manner and to the extent it shall deem expedient to carry the Plan into
effect, and it shall be the sole and final judge of such expediency. No director
shall be liable for any action or determination made in good faith.
Effective on and as of the date that the Company registers the Company
Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Act"), the Plan shall be administered by a committee (the "Committee")
consisting of not less than two (2) members of the Board, provided that the
Committee may delegate authority to grant Options to any single member of the
Board subject to such guidelines and qualifications as may be from time to time
determined by the Committee. Each member of the Committee must be an "outside
director" as that term is used in Treasury Regulation Section 1. 162-27(e)(3)(i)
under Section 162(m) of the Code.
The Committee shall be appointed by, and shall serve at the pleasure of,
the Board and shall have the powers granted to the Board in this Section 4, and
on and after the commencement of the Committee's duties hereunder, all
references (other than in this sentence) to the Board in Sections 4, 5 and 7 of
this Plan or as specified in any agreement associated with this Plan shall mean
and relate to such Committee.
-2-
<PAGE>
5. Eligible Recipients. Options, Purchase Authorizations and Bonuses may
be granted to such key employees, officers, directors or consultants of or to
the Company Group, as are selected by the Board (a "Participant"); provided,
however, that only employees of the Company Group may be granted Incentive
Options.
6. Duration of the Plan. This Plan shall terminate ten (10) years from the
effective date hereof, unless terminated earlier pursuant to Section 14 below,
and no Options, Purchase Authorizations or Bonuses may be granted or made
thereafter.
7. Terms and Conditions of Options, Purchase Authorizations and Bonuses.
Options, Purchase Authorizations and Bonuses granted or made under this Plan
shall be evidenced by agreements in such form and containing such terms and
conditions as the Committee shall determine; provided, however, that such
agreements shall evidence among their terms and conditions the following:
a. Price. The purchase price per Share payable upon the exercise of
each Option or the purchase pursuant to each Purchase Authorization
granted or made hereunder shall be determined by the Committee at
the time the Option or Purchase Authorization is granted or made.
The purchase price per Share payable upon the exercise of each
Incentive Option granted hereunder shall not be less than one
hundred percent (100%) of the fair market value per Share of Company
Stock on the day the Incentive Option is granted (or 110% in the
case of Incentive Options to which paragraph 7(j)(i) applies). The
purchase price per Share payable on exercise of each Nonqualified
Option or upon the purchase of Shares pursuant to each Purchase
Authorization granted hereunder shall be not less than eighty-five
percent (85%) of the fair market value per Share of Company Stock
on the date of the grant. Fair market value shall be determined in
accordance with procedures to be established in good faith by the
Board. Bonus Shares shall be issued in consideration of services
previously rendered, which shall be valued for such purposes by the
Board.
b. Number of Shares. Each agreement shall specify the number of Shares
to which it pertains. The maximum number of Shares with respect to
which Options may be granted under the Plan to any individual during
any single calendar year shall be 200,000 Shares.
c. Exercise of Options. Each Option shall be exercisable for the full
amount or for any part thereof and at such intervals or in such
installments as the Board may determine at the time it grants such
Option; provided, however, that no Option shall be exercisable with
respect to any Shares later than ten (10) years after the date of
the grant of such Option (or five (5) years in the case of Incentive
Options to which paragraph 7(j)(ii) applies). An Option shall be
exercisable only by delivery of a written notice to the Company's
Treasurer, or any other officer of the Company designated by the
Board to accept such notices on its behalf, specifying the number of
-3-
<PAGE>
Shares for which the Option is exercised and accompanied by either
(i) full payment or (ii) if permitted by the Board, irrevocable
instructions to a broker to promptly deliver to the Company full
payment in accordance with subparagraph (ii) of the first sentence
of paragraph 7(d) below of the amount necessary to pay the aggregate
exercise price. With respect to an Incentive Option, the permission
of the Board referred to in clause (ii) of the preceding sentence
must be specifically granted at the time the Incentive Option is
granted.
d. Payment. Payment shall be made in full (i) at the time the Option is
exercised, (ii) promptly after the Participant forwards the
irrevocable instructions referred to in paragraph 7(c)(ii) above to
the appropriate broker, if exercise of an Option is made pursuant to
paragraph 7(c)(ii) above, or (iii) at the time the purchase pursuant
to a Purchase Authorization is made. Payment shall be made either
(a) in cash, (b) by check, (c) if permitted by the Board (with
respect to an Incentive Option, such permission to have been granted
at the time of the Incentive Option grant), by delivery and
assignment to the Company of shares of Company Stock (provided that
such shares have been held by such Participant for at least 6 months
before delivery) having a fair market value (as determined by the
Board) equal to the exercise or purchase price, (d) if permitted by
the Board, stated in the agreement evidencing the Option or Purchase
Authorization, and to the extent permitted by any applicable law, by
the Participant's recourse promissory note, which note must be due
and payable not more than five (5) years after the date the Option
or Purchase Authorization is exercised, or (e) by a combination of
(a), (b), (c) and/or (d). If shares of Company Stock are to be used
to pay the exercise price of an Incentive Option, the Company prior
to such payment must be furnished with evidence satisfactory to it
that the acquisition of such shares and their transfer in payment of
the exercise price satisfy the requirements of Section 422 of the
Code and other applicable laws.
e. Withholding Taxes Delivery of Shares. The Company's obligation to
deliver Shares upon exercise of an Option or upon purchase pursuant
to a Purchase Authorization or issuance pursuant to a Bonus shall be
subject to the satisfaction of all applicable federal, state and
local income and employment tax withholding obligations. Without
limiting the generality of the foregoing, the Company shall have the
right to deduct from payments of any kind otherwise due to the
Participant any federal, state or local taxes of any kind required
by law to be withheld with respect to any Shares issued upon
exercise of Options or purchased or issued pursuant to Purchase
Authorization or Bonuses. The Participant may elect to satisfy such
obligation(s), in whole or in part, by (i) delivering to the Company
a check for the amount required to be withheld or (ii) if the Board
in its sole discretion approves in any specific or general case,
having the Company withhold Shares or delivering to the Company
already-owned shares of Company Stock, having a value equal to the
amount required to be withheld, as determined by the Board.
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<PAGE>
f. Non-Transferability. No Option or Purchase Authorization shall be
transferable by the Participant otherwise than by will or the laws
of descent or distribution, and each Option or Purchase
Authorization shall be exercisable during the Participant's lifetime
only by the Participant; provided, however, that (i) Nonqualified
Options may be transferred pursuant to a qualified domestic
relations order (as defined in Rule 1 6b-3 under the Act) and (ii)
the Board may grant Nonqualified Options that are transferable
(subject to any terms and conditions imposed by the Board) by the
Participant, either directly or in trust, to one or more members of
the Participant's family, and the Board may amend accordingly the
form of Option Grant attached hereto. Following any transfer
permitted pursuant to this paragraph, of which the Participant has
notified the Board in writing, such option may be exercised by the
transferee(s), subject to all terms and conditions of the Option
Grant. For these purposes, the members of the Participant's family
are only the Participant's: (i) spouse, (ii) lineal descendants;
(iii) lineal ancestors; and (iv) siblings and spouses and children
of such siblings.
g. Termination of Options and Purchase Authorizations. The Board is
authorized, subject to the express provisions of this Plan, to
determine the timing and terms on which an Option or Purchase
Authorization granted or awarded hereunder shall terminate and to
alter or amend the form of Option Agreement attached hereto to
effect such determinations.
h. Rights as Stockholders. A Participant shall have no rights as a
stockholder with respect to any Shares covered by an Option,
Purchase Authorization or Bonus until the date of issuance of a
stock certificate in the Participants name for such Shares.
i. Repurchase of Shares by the Company. Any Shares purchased or
acquired upon exercise of an Option or pursuant to a Purchase
Authorization or Bonus may in the discretion of the Board be subject
to repurchase by or forfeiture to the Company and to the extent set
forth in the option, purchase or bonus agreement pursuant to which
the Shares were purchased or acquired. Certificates representing
Shares subject to such repurchase or forfeiture may be subject to
such escrow and stock legending provisions as may be set forth in
the option, purchase or bonus agreement pursuant to which the Shares
were purchased or acquired.
j. 10% Stockholder. If any Participant to whom an Incentive Option is
granted pursuant to the provisions of the Plan is on the date of
grant the owner of stock (as determined under Section 424(d) of the
Code) possessing more than 10% of the total combined voting power or
value of all classes of stock of the Company, its parent, if any, or
subsidiaries, then the following special provisions shall be
applicable:
i. The exercise price per Share subject to such Option shall not
be less than 110% of the fair market value of each Share on
the date of grant; and
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ii. The Option shall not have a term in excess of five years from
the date of grant.
k. Confidentiality and Non-Solicitation Agreements. In the sole
discretion of the Board, each Participant shall be required to
execute, prior to or contemporaneously with the grant of any Option,
Purchase Authorization or Bonus hereunder, the Company's then
standard form of agreement relating to nondisclosure of confidential
information, non-solicitation and related matters.
8. Restrictions on Incentive Options. Incentive Options granted under this
Plan shall be specifically designated as such and shall be subject to the
additional restriction that the aggregate fair market value, determined as of
the date the Incentive Option is granted, of the Shares with respect to which
Incentive Options are exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000. If an Incentive Option which exceeds
the $100,000 limitation of this paragraph 8 is granted, the portion of such
Option which is exercisable for Shares in excess of the $100,000 limitation
shall be treated as a Nonqualified Option pursuant to Section 422(d) of the
Code, notwithstanding its original designation as an Incentive Option. In the
event that such Participant is eligible to participate in any other stock
incentive plans of the Company, its parent, if any, or a subsidiary which are
also intended to comply with the provisions of Section 422 of the Code, such
annual limitation shall apply to the aggregate number of Shares for which
options may be granted under all such plans.
9. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made by the Board in the maximum number of
Shares subject to the Plan and in the number, kind, and exercise or purchase
price of Shares covered by outstanding Options and Purchase Authorizations
granted hereunder to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and other similar changes in the capital
structure of the Company after the effective date of the Plan.
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<PAGE>
10. Merger; Sale of Assets.
a. In the event of a change of the Company Stock resulting from a
merger or similar reorganization as to which the Company is the
surviving corporation, the number and kind of Shares which
thereafter may be purchased pursuant to an Option or Purchase
Authorization under the Plan and the number and kind of Shares then
subject to Options or Purchase Authorizations granted hereunder and
the price per Share thereof shall be appropriately adjusted in such
manner as the Board may determine equitable to prevent dilution or
enlargement of the rights available or granted hereunder.
b. Except as otherwise determined by the Board, a merger or a similar
reorganization which the Company does not survive, or a sale of all
or substantially all of the assets of the Company, shall cause every
Option and Purchase Authorization hereunder to terminate, to the
extent not then exercised, unless any surviving entity agrees to
assume the obligations hereunder; provided, however, that, in the
case of such a merger or similar reorganization, or such a sale of
all or substantially all of the assets of the Company, if there is
no such assumption, the Board may provide that some or all of the
unexercised portion of any one or more of the outstanding Options or
Purchase Authorizations and some or all of the Unvested Shares (as
defined in the applicable agreement with the Participant) acquired
upon exercise of any one or more of such Options or Purchase
Authorizations or acceptance of any one or more of the outstanding
Bonuses shall be immediately exercisable and vested or no longer
subject to repurchase rights as of such date prior to such merger,
similar reorganization or sale of assets as the Board determines.
c. If any person or group, other than the Company, any of its
subsidiaries or affiliates or any employee benefit plan of the
Company, either publicly or in a written communication to the
Company or to its Board of Directors, makes a tender or exchange
offer or other bona fide offer to acquire directly or indirectly
voting securities under circumstances such that, immediately after
such acquisition, such person or group would beneficially own voting
securities with aggregate voting power representing 20% or more of
the total voting power of the Company, the Board may in its sole
discretion provide that all outstanding options shall immediately
become fully exercisable.
11. Investment Representations; Transfer Restrictions. The Company may
require Participants, as a condition of purchasing Shares pursuant to the
exercise of an Option or to a Purchase Authorization or receipt of Shares as a
Bonus, to give written assurances in substance and form satisfactory to the
Company to the effect that such person is acquiring the Shares for the
Participant's own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate (including without limitation
confirmation that the Participant is aware of any
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<PAGE>
applicable restrictions on transfer of the Shares, as specified in the by-laws
of the Company or otherwise) in order to comply with federal and applicable
state securities laws.
12. Definitions.
a. The term "employee" shall have, for purposes of this Plan, the
meaning ascribed to "employee" under Section 3401(c) of the Code and
the regulations promulgated thereunder.
b. The term "parent" shall have, for purposes of this Plan, the meaning
ascribed to it under Section 424(e) of the Code and the regulations
promulgated thereunder.
c. The term "subsidiary" shall have, for all purposes under this Plan,
the meaning ascribed to it under Section 424(f) of the Code and the
regulations promulgated thereunder.
13. Termination or Amendment of Plan. The Board may at any time terminate
the Plan or make such changes in or additions to the Plan as it deems advisable
without further action on the part of the stockholders of the Company, provided:
a. that no such termination or amendment shall adversely affect or
impair any then outstanding Option, Purchase Authorization, Bonus or
related agreement without the consent of the Participant holding
such Option, Purchase Authorization, Bonus or related agreement; and
b. that no such amendment which (i) increases the maximum number of
Shares subject to this Plan (except to the extent provided in
Sections 3, 9 and 10) or (ii) increases the benefits accruing to
Participants or modifies the requirements as to eligibility for
participation in the Plan (but only to the extent that either such
change would require approval by the stockholders pursuant to the
Code or the regulations thereunder) may be made without obtaining,
or being conditioned upon, stockholder approval.
With the written consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in a
manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.
14. Governing Law. This Plan shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts.
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Exhibit 10.2
RENAISSANCE WORLDWIDE, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated Effective May 28, 1998)
The following constitute the provisions of the 1996 Employee Stock
Purchase Plan of Renaissance Worldwide, Inc. (formerly, The Registry, Inc. 1996
Employee Stock Purchase Plan).
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Subsidiaries with an opportunity to purchase Common Stock of the
Company. It is the intention of the Company to have the Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue
Code of 1986, as amended. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock, no par value, of the
Company.
(d) "Company" shall mean Renaissance Worldwide, Inc., a Massachusetts
corporation.
(e) "Compensation" shall mean all base pay, salary, bonuses and
commissions, including payments for overtime and sales commissions.
(t) "Contributions" shall mean all amounts credited to the account of a
participant pursuant to the Plan.
(g) "Eligible Employee" shall mean any person who is an Employee on the
first day of any Offering Period.
(h) "Employee" shall mean any person, including an officer, who is an
employee of the Company or one of its Subsidiaries, as determined
pursuant to Treasury Regulation Section 1.421-7(h) or any successor
thereto.
<PAGE>
(i) "Exercise Date" shall mean the last business day of each Offering
Period of the Plan.
(j) "Offering Date" shall mean the first business day of each Offering
Period of the Plan.
(k) "Offering Period" shall mean the period described in Section 4.
(1) "Plan" shall mean this Employee Stock Purchase Plan, as amended from
time to time.
(m) "Subsidiary" shall mean a corporation, domestic or foreign, defined
as such in Section 424(t) of the Code, whether or not such
corporation now exists or is hereafter organized or acquired by the
Company or a subsidiary, who adopts the Plan with the consent of the
Company.
3. Eligibility.
(a) Except as otherwise provided below, any person who is an Eligible
Employee as of the Offering Date of a given Offering Period shall be
eligible to participate in such Offering Period under the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own stock and/or hold outstanding options
to purchase stock possessing five percent (5 %) or more of the total
combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option
would permit his or her rights to purchase stock under all employee
stock purchase plans (described in Section 423 of the Code) of the
Company and its Subsidiaries to accrue at a rate which exceeds
twenty-five thousand dollars ($25,000) of fair market value of such
stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4. Offering Periods. The periods of January 1 to June 30 and July 1 to
December 31 of each year (or such other time or times as may be determined
by the Board consistent with the requirements of Codess.423) will each be
termed an "Offering Period." The Plan shall continue until terminated in
accordance with the terms of the Plan. The
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<PAGE>
Board shall have the power to change the duration and/or the frequency of
Offering Periods with respect to future offerings without stockholder
approval if such change is announced at least fifteen (15) days prior to
the scheduled beginning of the first Offering Period to be affected by
such change.
5. Method of Participation. For each Offering Period, an Eligible Employee
may elect to participate in the Plan by executing and delivering to the
Company's Human Resources Department, at such time, in such manner and on
such form as shall be prescribed by the Company, a written subscription
agreement.
6. Payroll Deduction.
(a) The written subscription agreement will contain a payroll deduction
authorization that will request withholding at a rate (in whole
percentages) of not less than 1% nor more than 10% from the
participant's Compensation by means of substantially equal payroll
deductions over the Offering Period from payroll periods ending in
the Offering Period.
(b) All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any
additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10, or, on one occasion only during the
Offering Period, may increase or decrease the rate of his or her
Contributions during the Offering Period by completing and filing
with the Company a new subscription agreement at such time as may be
determined by the Company prior to the date on which the change is
to be effective. The change in rate shall be effective as of the
beginning of the calendar quarter following the date of filing of
the new subscription agreement.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions shall be decreased to zero (0%)
percent at such time during any Offering Period which is scheduled
to end during the current calendar year that the aggregate of all
payroll deductions accumulated with respect to such Offering Period
and any other Offering Period ending within the same calendar year
equal or exceed twenty-five thousand dollars ($25,000). Payroll
deductions shall re-commence at the rate provided in such
participant's then current subscription agreement at the beginning
of the first Offering Period which is scheduled to end in
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<PAGE>
the following calendar year, unless terminated by the participant as
provided in Section 10.
7. Grant of Option: Option Price.
(a) On the Offering Date of each Offering Period, each Eligible Employee
participating in such Offering Period shall be granted an option to
purchase on the Exercise Date a maximum of two hundred (200) shares
of the Company's Common Stock (subject to adjustment as provided in
subsection 18(a) hereof) to the extent of the Employee's
Contributions accumulated prior to the Exercise Date. The number of
shares within the above-stated maximum that a participant may
acquire shall be determined by dividing such Employee's
Contributions accumulated prior to such Exercise Date and retained
in the participant's account as of the Exercise Date by the purchase
price per share of the Company's Common Stock (determined under
Section 7(b)). The Company will reduce on a substantially
proportionate basis, the number of shares of Common Stock receivable
by each participant upon the exercise of his option for an Offering
Period in the event that the number of shares then available under
the Plan is otherwise insufficient, as provided in Section 12. No
fractional shares may be purchased under the Plan. Employee
Contributions that represent fractional shares will be returned to
the Employee without interest as soon as reasonably practicable
after the end of the Offering Period.
(b) The purchase price per share of the Common Stock issued pursuant to
the exercise of an option (the "Option Price") will be 85 % of the
fair market value of the Common Stock at (1) the time of grant of
the option or (2) the time at which the option is deemed exercised,
whichever is less. The fair market value of the Company's Common
Stock on a given date shall be determined by the Board based on (i)
the average of the high and low prices of the Common Stock on such
date on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price
of the Common Stock on the NASDAQ National Market System on such
date, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price or the average
of bid prices last quoted on such date by an established quotation
service for over-the-counter securities, if the Common Stock is not
reported on the NASDAQ National Market System or on a national
securities exchange. If the Common Stock is not publicly traded at
the time a right is granted under this Plan, "fair market value"
shall mean the fair market value of the Common Stock as determined
by the Board in its discretion after taking into consideration all
factors
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<PAGE>
which it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date of the Offering Period,
and the maximum number of shares (including fractional shares) subject to
option (but in no event more than two hundred (200), subject to adjustment
as provided in subsection 18(a) hereof) will be purchased at the
applicable Option Price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall
be deemed to be transferred to the participant on the Exercise Date.
During his or her lifetime, a participant's option to purchase shares
hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after the Exercise Date of each
Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option. Any cash remaining to the
credit of a participant's account under the Plan after a purchase by him
or her of shares at the termination of each Offering Period shall be
returned to the participant.
10. Withdrawal: Termination of Employment.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any
time prior to the Exercise Date of the Offering Period by giving
written notice to the Company. All of the participant's
Contributions credited to his or her account will be paid to him or
her promptly after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares
will be made during the Offering Period. Upon such withdrawal, the
balance in his or her withholding account will be returned to the
participant.
(b) In the event that a participant terminates employment for any reason
during the three months beginning with the Offering Date and ending
on the day three (3) months before the Exercise Date, the
participant's option shall terminate, and the Contributions credited
to his or her account will be returned to him or her or, in the case
of his or her death, to his or her designated beneficiary hereunder
(or as otherwise provided in Section 14(b) herein), and the
participant or his or her designated beneficiary, as the case may
be, will have no further rights under
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<PAGE>
the Plan. In the event that a participant terminates employment for
any reason on any date following the day three months before the
Exercise Date, the participant's option shall not, by reason of such
employment termination, terminate, and the participant's account
balance will remain in the Plan and the option exercised as provided
herein, unless the participant earlier withdraws from the Plan
pursuant to subsection 10(a) above.
11. Interest. No interest shall accrue on the Contributions of a participant
in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be six hundred
thousand (600,000) shares) subject to adjustment upon changes in
capitalization of the Company as provided in subsection 18(a)
hereof. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) on the Offering
Date of an Offering Period exceeds the number of shares then
available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Company
shall make a pro rata allocation of the shares remaining available
for option grant in as uniform a manner as shall be practicable and
as it shall determine to be equitable and consistent with the
requirements of Section 423(b)(5) of the Code. In such event, the
Company shall give written notice of such reduction of the number of
shares subject to the option to each Employee affected thereby and
shall similarly reduce the rate of Contributions, if necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the
participant and his or her spouse, at the participant's election.
13. Administration of Plan. The Plan will be administered by the Board of
Directors (or a committee thereof), which will have the right to determine
any questions which may arise regarding the interpretation and application
of the provisions of the Plan and to
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1 Reflects the 2:1 stock split that occurred on March 24, 1998.
6
<PAGE>
make or rescind, administer, and interpret such rules and regulations as
it will deem necessary or advisable. For example, without limitation, the
Board (or its delegate) may limit the frequency and/or number of changes
in the amount withheld during an Offering Period, permit payroll
withholding in excess of the amount designated by a participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure
that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the
participant's Compensation.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who is
to receive any shares and cash, if any, from the participant's
account under the Plan in the event of such participant's death
subsequent to the end of the Offering Period but prior to delivery
to him or her of such shares and cash.
(b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's
death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge
of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative
is known to the Company, then to such other person as the Company
may designate. To the extent of any such delivery of shares and/or
cash hereunder, the Company's obligation under the Plan with respect
to the participant shall be discharged.
15. Transferability. Neither Contributions credited to a participant's account
nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election
to withdraw funds in accordance with Section 10.
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<PAGE>
16. Use of Funds. All Contributions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.
17. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees
promptly following the Exercise Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of
shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization.
(a) The number of shares of Common Stock covered by each option under
the Plan which has not yet been exercised and the number of shares
of Common Stock which have been authorized for issuance under the
Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered
by each option under the Plan which has not yet been exercised,
shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company. Such adjustment shall be
made by the Board, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein,
no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to
an option.
(b) In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, the options granted during
such Offering Period shall terminate and each participant's
contributions shall be returned, unless otherwise provided by the
Board. In the event of a proposed sale of all or substantially all
of the assets of the Company, or the merger of the Company with or
into another corporation, each option under the Plan shall be
assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor
corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, to
shorten the
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Offering Period then in progress by setting a new Exercise Date (the
"New Exercise Date"). If the Board shortens the Offering Period then
in progress in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify each participant in
writing, at least ten (10) days prior to the New Exercise Date, that
the Exercise Date for his or her option has been changed to the New
Exercise Date and that his or her option will be exercised
automatically on the New Exercise Date, unless prior to such date he
or she has withdrawn from the Offering Period as provided in Section
10. For purposes of this Section, an option granted under the Plan
shall be deemed to be assumed if, following the sale of assets or
merger, the option confers the right to purchase, for each share of
option stock subject to the option immediately prior to the sale of
assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by
holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered
a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares of Common Stock);
provided, however, that if such consideration received in the sale
of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the
Code), the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon exercise of the
option to be solely common stock of the successor corporation or its
parent equal in fair market value to the per share consideration
received by holders of Common Stock in the sale of assets or merger.
The Board may, if it so determines in the exercise of its sole
discretion but subject to the requirements of Section 423 of the
Code, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option,
in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions
of shares of its outstanding Common Stock not covered by subsection
(a) hereof, and in the event of the Company being consolidated with
or merged into any other corporation.
(c) In the event of a proposed sale of all or substantially all the
assets or stock of any Subsidiary, the options granted to affected
participants' of such Subsidiary during such Offering Period shall
terminate and each participant's contributions shall be returned,
unless otherwise provided by the Board.
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19. Amendment or Termination.
(a) The Board reserves the right at any time or times to amend the Plan
to any extent and in any manner it may deem advisable by vote of the
Board; provided, however, that any amendment relating to the
aggregate number of shares which may be issued under the Plan (other
than an adjustment provided for in Section 18) or to the Employees
(or class of Employees) eligible to receive options under the Plan
will have no force or effect unless it will have been approved by
the shareholders within twelve months before or after its adoption.
Such amendments may include, without limitation, (without
stockholder consent and without regard to whether any participant
rights may be considered to have been adversely affected), a change
or changes to the duration of future Offering Periods (subject to
Section 4 hereof).
(b) The Plan may be suspended or terminated at any time by the Board of
Directors, but no such suspension or termination will adversely
affect the rights and privileges of holders of the outstanding
options. The Plan will terminate in any case when all or
substantially all of the Common Stock reserved for the purposes of
the Plan has been purchased.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt
thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a
10
<PAGE>
representation is required by any of the aforementioned applicable
provisions of law.
22. Term of Plan: Effective Date. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 19.
23. Employment Rights. Nothing contained in the provisions of the Plan will be
construed to give any Employee the right to be retained in the employ of
the Company or to interfere with the right of the Company to discharge any
employee at any time.
11
<PAGE>
Exhibit 10.4
RENAISSANCE WORLDWIDE, INC.
1998 ACQUISITION STOCK OPTION PLAN
1. PURPOSE
The purpose of this Acquisition Stock Option Plan (the `Plan") is to
advance the interests of Renaissance Worldwide, Inc. and its subsidiaries
(together, the "Company") by enhancing the ability of the Company and its
subsidiaries to complete acquisitions and attract and retain directors,
employees, consultants or advisers who are in a position to make significant
contributions to the success of the Company, to reward them for their
contributions and to encourage them to take into account the long-term interests
of the Company.
The Plan provides for the award of options to purchase shares of the
Company's common stock ("Stock"). Options granted pursuant to the Plan will not
be "incentive stock options" within the meaning of section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. ELIGIBILITY FOR AWARDS
Persons eligible to receive awards under the Plan shall be all directors,
including directors who are not employees, of the Company and all executive
officers of the Company and its subsidiaries and other employees, consultants
and advisers who, in the opinion of the Board, are in a position to make a
significant contribution to the success of the Company and its subsidiaries. A
subsidiary for purposes of the Plan shall be a corporation in which the Company
owns, directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock. Persons selected for awards under the Plan
are referred to herein as "participants." It is intended that the options
hereunder be issued only to employees of or consultants to businesses acquired
by the Company.
3. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board") of
the Company. The Board shall have authority, not inconsistent with the express
provisions of the Plan, (a) to grant awards consisting of options to such
participants as the Board may select; (b) to determine the time or times when
awards shall be granted and the number of shares of Stock subject to each award;
(c) to determine the terms and conditions of each award; (d) to prescribe the
form or forms of any instruments evidencing awards and any other instruments
required under the Plan and to change such forms from time to time; (e) to
adopt, amend and rescind rules and regulations for the administration of the
Plan; and (f) to interpret the Plan and to decide any questions and settle all
controversies and disputes that may arise in connection with the Plan. Such
determinations of the Board shall be conclusive and shall bind all parties.
Subject to Section 8 the Board shall also have the authority,
<PAGE>
both generally and in particular instances, to waive compliance by a participant
with any obligation to be performed by the participant under an award, to waive
any condition or provision of an award, and to amend or cancel any award (and if
an award is canceled, to grant a new award on such terms as the Board shall
specify) except that the Board may not take any action with respect to an
outstanding award that would adversely affect the rights of the participant
under such award without such participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 5(c) and Section 6(i).
The Board may, in its discretion, delegate some or all of its powers with
respect to the Plan to a committee (the "Committee"), in which event all
references in this Plan (as appropriate) to the Board shall be deemed to refer
to the Committee. The Committee, if one is appointed, shall consist of at least
two directors. A majority of the members of the Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority of
the Committee members.
4. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by the
Board of Directors of the Company.
No awards shall be granted under the Plan after the completion often years
from the date on which the Plan was adopted by the Board, but awards previously
granted may extend beyond that date.
5. SHARES SUBJECT TO THE PLAN
(1) Number of Shares. Subject to adjustment as provided in Section 5(c),
the aggregate number of shares of Stock that may be delivered upon the exercise
of awards granted under the Plan shall be 750,000. If any award granted under
the Plan terminates without having been exercised in full, or upon exercise is
satisfied other than by delivery of Stock, the number of shares of Stock as to
which such award was not exercised shall be available for future grants within
the limits set forth in this Section 5(a).
(2) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
(3) Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of Stock subject to awards then outstanding
or subsequently granted under the Plan, the
<PAGE>
exercise price of such awards, the maximum number of shares of Stock that may be
delivered under the Plan, and other relevant provisions shall be appropriately
adjusted by the Board, whose determination shall be binding on all persons.
The Board may also adjust the number of shares subject to outstanding
awards and the exercise price and the terms of outstanding awards to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, consolidations or mergers (except those described in
Section 6(i)), acquisitions or dispositions of stock or property or any other
event if it is determined by the Board that such adjustment is appropriate to
avoid distortion in the operation of the Plan.
6. TERMS AND CONDITIONS OF OPTIONS
(a) Exercise Price of Options. The exercise price of each option shall be
determined by the Board, but the exercise price, in the case of an original
issue of authorized stock, shall not be less than par value.
(b) Duration of Options. Options shall be exercisable during such period
or periods as the Board may specify. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date that is ten years from
the date the option was granted or such earlier date as the Board may specify at
the time the option is granted.
(c) Exercise of Options. Options shall become exercisable at such time or
times and upon such conditions as the Board shall specify. In the case of an
option not immediately exercisable in full, the Board may at any time accelerate
the time at which all or any part of the option may be exercised.
(1) Options may be exercised only in writing. Written notice of
exercise must be signed by the proper person and furnished to the Company,
together with (i) such documents as the Board may require and (ii) payment
in full as specified below in Section 6(d) for the number of shares for
which the option is exercised.
(2) The delivery of Stock upon the exercise of an option shall be
subject to compliance with (i) applicable federal and state laws and
regulations, (ii) if the outstanding Stock is at the time listed on any
stock exchange, the listing requirements of such exchange, and (iii)
Company counsel's approval of all other legal matters in connection with
the issuance and delivery of such Stock. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the option, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing
such Stock bear an appropriate legend restricting transfer.
<PAGE>
(3) The Board shall have the right to require that the participant
exercising the option remit to the Company an amount sufficient to satisfy
any federal, state, or local withholding tax requirements (or make other
arrangements satisfactory to the Company with regard to such taxes) prior
to the delivery of any Stock pursuant to the exercise of the option. If
permitted by the Board, either at the time of the grant of the option or
the time of exercise, the participant may elect, at such time and in such
manner as the Board may prescribe, to satisfy such withholding obligation
by (i) delivering to the Company Stock (which in the case of Stock
acquired from the Company shall have been owned by the participant for at
least six months prior to the delivery date) having a fair market value
equal to such withholding obligation, or (ii) requesting that the Company
withhold from the shares of Stock to be delivered upon the exercise a
number of shares of Stock having a fair market value equal to such
withholding obligation.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the option has
been transferred by the participant's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Stock pursuant to such exercise until the Company is satisfied as
to the authority of the person or persons exercising the option.
(d) Payment for and Delivery of Stock. Stock purchased upon exercise of an
option under the Plan shall be paid for as follows:
(1) in cash or by personal check, certified check, bank draft or
money order payable to the order of the Company; or
(2) if so permitted by the Board, (A) through the delivery of shares
of Stock (which, in the case of Stock acquired from the Company, shall
have been held for at least six months prior to delivery) having a fair
market value on the last business day preceding the date of exercise equal
to the purchase price or (B) by delivery of a promissory note of the
participant to the Company, such note to be payable on such terms as are
specified by the Board or (C) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (D) by any combination of
the permissible forms of payment; provided, that if the Stock delivered
upon exercise of the option is an original issue of authorized Stock, at
least so much of the exercise price as represents the par value of such
Stock shall be paid other than by a personal check or promissory note of
the person exercising the option.
(e) Rights as Shareholder. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock actually
received by the participant under the Plan.
<PAGE>
(f) Nontransferability of Awards. Except as the Board may otherwise
determine, no award may be transferred other than by will or by the laws of
descent and distribution, and during a participant's lifetime an award may be
exercised only by the participant.
(g) Death. If a participant dies, each option held by the participant
immediately prior to death may be exercised, to the extent it was exercisable
immediately prior to death, by the participant's executor or administrator or by
the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within the one-year
period (or such longer or shorter period as the Board may determine) beginning
with the date of the participant's death but in no event beyond the Final
Exercise Date. Except as the Board may otherwise determine, all options held by
a participant immediately prior to death that are not then exercisable shall
terminate on the date of death.
(h) Termination of Service Other Than By Death. If an employee's
employment with the Company and its subsidiaries terminates for any reason other
than by death, unless the Board shall otherwise determine, all options held by
the employee that are not then exercisable shall terminate. Options that are
exercisable on the date employment terminates shall continue to be exercisable
for a period of three months (or such longer period as the Board may determine,
but in no event beyond the Final Exercise Date) unless the employee was
discharged for cause that in the opinion of the Board casts such discredit on
the employee as to justify termination of the employee's options. After
completion of the post-termination exercise period, such options shall terminate
to the extent not previously exercised, expired or terminated. For purposes of
this Section 6(h), employment shall not be considered terminated (i) in the case
of sick leave or other bona fide leave of absence approved for purposes of the
Plan by the Board, so long as the employee's right to reemployment is guaranteed
either by statute or by contract, or (ii) in the case of a transfer of
employment between the Company and a subsidiary or between subsidiaries, or to
the employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option. For purposes of this Section 6(h), a
change in a classification by the Company to a "W-2 employee" or "W-2
consultant" shall be treated as a termination of employment.
In the case of a participant who is not an employee, provisions relating
to the exercisability of options following termination of service shall be
specified in the award. If not so specified, all options held by such
participant that are not then exercisable shall terminate upon termination of
service. Options that are exercisable on the date the participant's service as a
director, consultant or adviser terminates shall continue to be exercisable for
a period of three months (or such longer period as the Board may determine, but
in no event beyond the Final Exercise Date) unless the director, consultant or
adviser was terminated for cause that in the opinion of the Board casts such
discredit on him or her as to justify termination of his or her options. After
completion of the post-termination exercise period, such options shall terminate
to the extent not previously exercised, expired or terminated.
<PAGE>
(i) Mergers. etc. In the event of a change of the Company Stock resulting
from a merger or similar reorganization as to which the Company is the surviving
corporation, the number and kind of shares which thereafter may be purchased
pursuant to an option under the Plan and the number and kind of shares then
subject to options granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Board may determine equitable to
prevent dilution or enlargement of the rights available or granted hereunder.
(1) Except as otherwise determined by the Board, a merger or a
similar reorganization which the Company does not survive, or a sale of
all or substantially all of the assets of the Company, shall cause every
option hereunder to terminate, to the extent not then exercised, unless
any surviving entity agrees to assume the obligations hereunder; provided,
however, that, in the case of such a merger or similar reorganization, or
such a sale of all or substantially all of the assets of the Company, if
there is no such assumption, the Board may provide that some or all of the
unexercised portion of any one or more of the outstanding options shall be
immediately exercisable and vested as of such date prior to such merger,
similar reorganization or sale of assets as the Board determines.
(2) If any person or group, other than the Company, any of its
subsidiaries or affiliates or any employee benefit plan of the Company,
either publicly or in a written communication to the Company or to its
Board, makes a tender or exchange offer or other bona fide offer to
acquire directly or indirectly voting securities under circumstances such
that, immediately after such acquisition, such person or group would
beneficially own voting securities with aggregate voting power
representing 20% or more of the total voting power of the Company, the
Board may in its sole discretion provide that all outstanding options
shall immediately become fully exercisable.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall confer upon
any participant any right to continue as an employee or director of, or
consultant or adviser to, the Company or any parent or subsidiary or affect in
any way the right of the Company or parent or subsidiary to terminate them at
any time. Except as specifically provided by the Board in any particular case,
the loss of existing or potential profit in awards granted under this Plan shall
not constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company to the participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION. AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such
<PAGE>
participant Stock as a bonus or otherwise, or to adopt other plans or
arrangements under which Stock may be issued.
The Board may at any time discontinue granting awards under the Plan. With
the consent of the participant, the Board may at any time cancel an existing
award in whole or in part and grant another award for such number of shares as
the Board specifies. The Board may at any time or times amend the Plan or any
outstanding award for the purpose of satisfying the requirements of the Code or
of any changes in applicable laws or regulations or for any other purpose that
may at the time be permitted by law, or may at any time terminate the Plan as to
further grants of awards, but no such amendment shall adversely affect the
rights of any participant (without the participant's consent) under any award
previously granted.
9. GOVERNING LAW.
This Plan shall be governed by, construed and enforced in accordance with
the laws of The Commonwealth of Massachusetts.
<PAGE>
Exhibit 10.5
RENAISSANCE WORLDWIDE, INC.
1998 INTERNATIONAL STOCK OPTION PLAN
1. PURPOSE
The purpose of this International Stock Option Plan (the "Plan") is to
advance the interests of Renaissance Worldwide, Inc. (the "Company") by
enhancing the ability of its non-U.S. subsidiaries (individually a "Foreign
Subsidiary" and collectively the "Foreign Subsidiaries") to attract and retain
directors, employees, consultants or advisers who are in a position to make
significant contributions to the success of the Company, to reward them for
their contributions and to encourage them to take into account the long-term
interests of the Company.
The Plan provides for the award of options to purchase shares of the
Company's common stock ("Stock"). Options granted pursuant to the Plan will be
non-incentive options.
2. ELIGIBILITY FOR AWARDS
Persons eligible to receive awards under the Plan shall be all directors,
including directors who are not employees, of the Foreign Subsidiaries and all
executive officers of the Foreign Subsidiaries and their subsidiaries and other
employees, consultants and advisers (collectively, "Optionees") who, in the
opinion of the Board, are in a position to make a significant contribution to
the success of the Company and its subsidiaries. A subsidiary for purposes of
the Plan shall be a corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power of
all classes of stock. Persons selected for awards under the Plan are referred to
herein as "participants."
3. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board") of
the Company. The Board shall have authority, not inconsistent with the express
provisions of the Plan, (a) to grant awards consisting of options to such
participants as the Board may select; (b) to determine the time or times when
awards shall be granted and the number of shares of Stock subject to each award;
(c) to determine the terms and conditions of each award; (d) to prescribe the
form or forms of any instruments evidencing awards and any other instruments
required under the Plan and to change such forms from time to time; (e) to
adopt, amend and rescind rules and regulations for the administration of the
Plan; and (f) to interpret the Plan and to decide any questions and settle all
controversies and disputes that may arise in connection with the Plan. Such
determinations of the Board shall be conclusive and shall bind all parties.
Subject to Section 9 the Board shall also have the authority, both generally and
in particular instances, to waive compliance by a participant with any
obligation to be performed by the participant under an award, to waive any
condition or provision of an award, and to amend or cancel any award (and if an
award is canceled, to grant a new award on such terms as the Board shall
specify) except that the Board may not take any action with respect to an
<PAGE>
outstanding award that would adversely affect the rights of the participant
under such award without such participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 5(c) and Section 6(i).
The Board may, in its discretion, delegate some or all of its powers with
respect to the Plan to a committee (the "Committee"), in which event all
references in this Plan (as appropriate) to the Board shall be deemed to refer
to the Committee. The Committee, if one is appointed, shall consist of at least
two directors. A majority of the members of the Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority of
the Committee members.
4. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by the
Board of Directors of the Company.
No awards shall be granted under the Plan after the completion often years
from the date on which the Plan was adopted by the Board, but awards previously
granted may extend beyond that date.
5. SHARES SUBJECT TO THE PLAN
a. Number of Shares. Subject to adjustment as provided in Section 5(c),
the aggregate number of shares of Stock that may be delivered upon the exercise
of awards granted under the Plan shall be 250,000. If any award granted under
the Plan terminates without having been exercised in full, or upon exercise is
satisfied other than by delivery of Stock, the number of shares of Stock as to
which such award was not exercised shall be available for future grants within
the limits set forth in this Section 5(a).
b. Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
c. Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of Stock subject to awards then outstanding
or subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares of Stock that may be delivered under the Plan, and
other relevant provisions shall be appropriately adjusted by the Board, whose
determination shall be binding on all persons.
-2-
<PAGE>
The Board may also adjust the number of shares subject to outstanding
awards and the exercise price and the terms of outstanding awards to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, consolidations or mergers (except those described in
Section 6(i)), acquisitions or dispositions of stock or property or any other
event if it is determined by the Board that such adjustment is appropriate to
avoid distortion in the operation of the Plan.
6. TERMS AND CONDITIONS OF OPTIONS
a. Exercise Price of Options. The exercise price of each option shall be
determined by the Board, but the exercise price, in the case of an original
issue of authorized stock, shall not be less than par value.
b. Duration of Options. Options shall be exercisable during such period or
periods as the Board may specify. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date that is ten years from
the date the option was granted or such earlier date as the Board may specify at
the time the option is granted.
c. Exercise of Options
(1) Options shall become exercisable at such time or times and upon
such conditions as the Board shall specify. In the case of an option not
immediately exercisable in full, the Board may at any time accelerate the
time at which all or any part of the option may be exercised.
(2) Options may be exercised only in writing. Written notice of
exercise must be signed by the proper person and furnished to the Company,
together with (i) such documents as the Board may require and (ii) payment
in full as specified below in Section 6(d) for the number of shares for
which the option is exercised.
(3) The delivery of Stock upon the exercise of an option shall be
subject to compliance with (i) applicable laws and regulations, (ii) if
the outstanding Stock is at the time listed on any stock exchange, the
listing requirements of such exchange, and (iii) Company counsel's
approval of all other legal matters in connection with the issuance and
delivery of such Stock. If the sale of Stock has not been registered under
the Securities Act of 1933, as amended, the Company may require, as a
condition to exercise of the option, such representations or agreements as
counsel for the Company may consider appropriate to avoid violation of
such Act and may require that the certificates evidencing such Stock bear
an appropriate legend restricting transfer.
(4) The Board shall have the right to require that the participant
exercising the option remit to the Company an amount sufficient to satisfy
any U.S. or foreign federal, state, or local withholding tax requirements
(or make other arrangements satisfactory to the
-3-
<PAGE>
Company with regard to such taxes) prior to the delivery of any Stock
pursuant to the exercise of the option. If permitted by the Board, either
at the time of the grant of the option or the time of exercise, the
participant may elect, at such time and in such manner as the Board may
prescribe, to satisfy such withholding obligation by (i) delivering to the
Company Stock (which in the case of Stock acquired from the Company shall
have been owned by the participant for at least six months prior to the
delivery date) having a fair market value equal to such withholding
obligation, or (ii) requesting that the Company withhold from the shares
of Stock to be delivered upon the exercise a number of shares of Stock
having a fair market value equal to such withholding obligation.
(5) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the option has
been transferred by the participant's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Stock pursuant to such exercise until the Company is satisfied as
to the authority of the person or persons exercising the option.
(6) Notwithstanding anything herein to the contrary, to the extent
that the granting or exercise of an option or the delivery of Stock upon
exercise of an option are subject to different or additional requirements
or restrictions particular to the Optionees of the Foreign Subsidiary that
is the subject of a Schedule to the Plan, as described in Section 9, the
grant or exercise of such option or the delivery of Stock upon exercise of
such option shall be subject to such different or additional requirements
or restrictions set forth in such Schedule.
d. Payment for and Delivery of Stock. Stock purchased upon exercise of an
option under the Plan shall be paid for as follows:
(1) in cash or by personal check, certified check, bank draft or
money order payable to the order of the Company; or
(2) if so permitted by the Board, (A) through the delivery of shares
of Stock (which, in the case of Stock acquired from the Company, shall
have been held for at least six months prior to delivery) having a fair
market value on the last business day preceding the date of exercise equal
to the purchase price or (B) by delivery of a promissory note of the
participant to the Company, such note to be payable on such terms as are
specified by the Board or (C) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (D) by any combination of
the permissible forms of payment; provided, that if the Stock delivered
upon exercise of the option is an original issue of authorized Stock, at
least so much of the exercise price as represents the par value of such
Stock shall be paid other than by a personal check or promissory note of
the person exercising the option.
-4-
<PAGE>
e. Rights as Shareholder. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock actually
received by the participant under the Plan.
f. Nontransferability of Awards. Except as the Board may otherwise
determine, no award may be transferred other than by will or by the laws of
descent and distribution, and during a participant's lifetime an award may be
exercised only by the participant.
g. Death. If a participant dies, each option held by the participant
immediately prior to death may be exercised, to the extent it was exercisable
immediately prior to death, by the participant's executor or administrator or by
the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within the one-year
period (or such longer or shorter period as the Board may determine) beginning
with the date of the participant's death but in no event beyond the Final
Exercise Date. All options held by a participant immediately prior to death that
are not then exercisable shall terminate on the date of death.
h. Termination of Service Other Than By Death. If an employee's employment
with the Company and its subsidiaries terminates for any reason other than by
death, all options held by the employee that are not then exercisable shall
terminate. Options that are exercisable on the date employment terminates shall
continue to be exercisable for a period of three months (or such longer period
as the Board may determine, but in no event beyond the Final Exercise Date)
unless the employee was discharged for cause that in the opinion of the Board
casts such discredit on the employee as to justify termination of the employee's
options. After completion of the post-termination exercise period, such options
shall terminate to the extent not previously exercised, expired or terminated.
For purposes of this Section 5(h), employment shall not be considered terminated
(i) in the case of sick leave or other bona fide leave of absence approved for
purposes of the Plan by the Board, so long as the employee's right to
reemployment is guaranteed either by statute or by contract, or (ii) in the case
of a transfer of employment between the Company and a subsidiary or between
subsidiaries, or to the employment of a corporation (or a parent or subsidiary
corporation of such corporation) issuing or assuming an option.
In the case of a participant who is not an employee, provisions relating
to the exercisability of options following termination of service shall be
specified in the award. If not so specified, all options held by such
participant that are not then exercisable shall terminate upon termination of
service. Options that are exercisable on the date the participant's service as a
director, consultant or adviser terminates shall continue to be exercisable for
a period of three months (or such longer period as the Board may determine, but
in no event beyond the Final Exercise Date) unless the director, consultant or
adviser was terminated for cause that in the opinion of the Board casts such
discredit on him or her as to justify termination of his or her options. After
completion of the post termination exercise period, such options shall terminate
to the extent not previously exercised, expired or terminated.
-5-
<PAGE>
i. Mergers, etc. In the event of a change of the Company Stock resulting
from a merger or similar reorganization as to which the Company is the surviving
corporation, the number and kind of shares which thereafter may be purchased
pursuant to an option under the Plan and the number and kind of shares then
subject to options granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Board may determine equitable to
prevent dilution or enlargement of the rights available or granted hereunder.
(1) Except as otherwise determined by the Board, a merger or a
similar reorganization which the Company does not survive, or a sale of
all or substantially all of the assets of the Company, shall cause every
option hereunder to terminate, to the extent not then exercised, unless
any surviving entity agrees to assume the obligations hereunder; provided,
however, that, in the case of such a merger or similar reorganization, or
such a sale of all or substantially all of the assets of the Company, if
there is no such assumption, the Board may provide that some or all of the
unexercised portion of any one or more of the outstanding options shall be
immediately exercisable and vested as of such date prior to such merger,
similar reorganization or sale of assets as the Board determines.
(2) If any person or group, other than the Company, any of its
subsidiaries or affiliates or any employee benefit plan of the Company,
either publicly or in a written communication to the Company or to its
Board, makes a tender or exchange offer or other bona fide offer to
acquire directly or indirectly voting securities under circumstances such
that, immediately after such acquisition, such person or group would
beneficially own voting securities with aggregate voting power
representing 20% or more of the total voting power of the Company, the
Board may in its sole discretion provide that all outstanding options
shall immediately become fully exercisable.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall confer upon
any participant any right to continue as an employee or director of, or
consultant or adviser to, the Company or any parent or subsidiary or affect in
any way the right of the Company or parent or subsidiary to terminate them at
any time. Except as specifically provided by the Board in any particular case,
the loss of existing or potential profit in awards granted under this Plan shall
not constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company to the participant by contract or otherwise.
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8. EFFECT,DISCONTINUANCE, CANCELLATION, TERMINATION,AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued.
The Board may at any time discontinue granting awards under the Plan. With
the consent of the participant, the Board may at any time cancel an existing
award in whole or in part and grant another award for such number of shares as
the Board specifies. The Board may at any time or times amend the Plan or any
outstanding award for the purpose of satisfying the requirements of the Code or
of any changes in applicable laws or regulations or for any other purpose that
may at the time be permitted by law, or may at any time terminate the Plan as to
further grants of awards, but no such amendment shall adversely affect the
rights of any participant (without the participant's consent) under any award
previously granted.
9. RULES PARTICULAR TO SPECIFIC FOREIGN SUBSIDIARIES
Notwithstanding anything herein to the contrary, the terms and conditions
of this Plan may be amended with respect to a particular Foreign Subsidiary by
means of an addendum to the Plan in the form of a Schedule, and to the extent
that the terms and conditions set forth in the Schedule conflict with any
provisions of this Plan, the provisions of the Schedule shall govern. Terms and
conditions set forth in the Schedule shall apply only to options issued to
Optionees of the Foreign Subsidiary that is the subject of the Schedule and
shall not apply to options issued to Optionees of any other Foreign Subsidiary.
The adoption of any such Schedule shall be subject to the approval of the Board.
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RENAISSANCE WORLDWIDE, INC. FINAL
1998 INTERNATIONAL STOCK OPTION PLAN
ADDENDUM GOVERNING OPTIONS GRANTED TO EMPLOYEES IN TILE UNITED KINGDOM
1 GENERALLY
1.1 The 1998 International Stock Plan (the "Plan") and this addendum shall
collectively constitute the Renaissance Worldwide, Inc UK share option scheme
(the "UK Scheme"). The purpose of the UK Scheme is to grant options to employees
of Renaissance Worldwide, Inc, and its subsidiaries in the United Kingdom.
1.2 The rules of the UK Scheme (the "Rules") comply with the requirements for
approval by the Board of Inland Revenue as set out in Schedule 9 to ensure that
the UK Scheme is an approved employee share option scheme within the meaning of
Schedule 9.
1.3 The UK Scheme shall be governed and construed in accordance with the laws of
England. The rules of the Plan shall apply to the UK Scheme unless the Rules
expressly or by implication provide to the contrary, but so that nothing in
either the Plan or the UK Scheme shall operate to prejudice approval by the
Inland Revenue of the UK Scheme. The Company may, for the avoidance of doubt
only grant Options under the UK Scheme.
2 DEFINITIONS
2.1 In this addendum, the following words and expression shall have the
following meanings:
"Acquiring Company" a company which for the purposes of Rule 7 comes
within the definition of "the acquiring company" in paragraph 15(1) of Schedule
9;
"Acquisition Price" in relation to an Option, the total amount
payable on any exercise being an amount equal to the relevant Subscription Price
multiplied by the number of Shares in respect of which the Option is exercised;
"Any Other Approved Scheme" any scheme other than the UK Scheme
established by the Company or by any Associated Company and approved in
accordance with Schedule 9 but excluding for the purposes of this definition any
savings-related share option scheme or profit sharing scheme so established;
"Approved Date" the date on which the UK Scheme is approved by the
Board of Inland Revenue under Schedule 9;
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"Associated Company" has the same meaning as in the section 416 of
ICTA 1988;
"Board" the board of directors of the Company or a Committee
appointed under section 3 of the Plan;
"Company" Save as provided in Rule 7.6, Renaissance Worldwide, Inc;
"Control" has the same meaning as in Section 840 of ICTA 1988;
"Controlling Company" a company other than the Company and an
Acquiring Company which falls within paragraph 10(b) or 10(c) of Schedule 9;
"Date of Grant" the date on which an Option is, was, or is to be
granted under the UK Scheme;
"Eligible Employee" any director of any Participating Company (other
than the Company) who is required to devote to his duties not less than 25 hours
per week (excluding meal breaks) or any employee of any Participating Company
who is not also a director or officer of the Company and, in both cases, who is
not precluded by paragraph 8 of Schedule 9 from participating in the UK Scheme;
"ICTA 1988" the Income and Corporation Taxes Act 1988;
"Market Value" on any day the market value of a Share determined in
accordance with the provisions of Part VIII of the Taxation of Chargeable Gains
Act 1992 and agreed in writing for the purposes of the UK Scheme with the Inland
Revenue Shares Valuation Division on or before that day;
"Option" a right to acquire Shares granted (or to be granted) in
accordance with the Rules;
"Option Holder" an individual to whom an Option has been granted or
his personal representatives;
"Participating Company" the Company and any other company of which
the Company has Control;
"Schedule 9" Schedule 9 to ICTA 1988;
"Share" subject to Rule 7, a share of Common Stock in the capital of
the 6Company which satisfies the conditions specified in paragraphs 10-14
inclusive of Schedule 9;
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"Subscription Price" the price at which each Share subject to an
Option may be acquired on the exercise of that Option determined by the Board
PROVIDED THAT the Subscription Price shall not be less than the Market Value of
a Share on the Date of Grant
"Subsisting Option" an Option granted under the UK Scheme which has
neither lapsed nor been exercised.
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2.2 Where the context so admits the singular shall include the plural and
vice versa and the masculine shall include the feminine.
2.3 Any references in the UK Scheme to any enactment includes a reference
to that enactment as from time to time modified, extended or re-enacted.
3 GRANT OF OPTIONS
3.1 At any time after the Approved Date, the Board may, at their absolute
discretion, grant Options under the Plan to Eligible Employees.
3.2 The Directors may adopt such procedure as they think fit for granting
Options, whether by invitation to Eligible Employees to apply for Options or by
granting Options without issuing invitations, PROVIDED THAT any documentation
used in such procedure is approved in advance by the Inland Revenue.
3.3 The Company shall issue to each Option Holder an Option Certificate which,
except where the Option is granted in consideration of the payment by the
Eligible Employee of (pound)1, shall be executed under seal (or in such other
manner as shall take effect as a deed of the Company) and which shall be in such
form as the Directors shall from time to time determine (subject to the approval
of the Inland Revenue). The Option Certificate shall include details of:
a the Date of Grant of the Option;
b the Share Price; and
c the number of Shares subject to the Option; and
d subject to Rules 5, 6 and 7, the period during which the option is
exercisable PROVIDED THAT such period shall not end later than ten
years after the relevant Date of Grant; and
e the performance targets or conditions to be satisfied as a condition
of the exercise of the Option. Options may be granted subject to the
condition that it shall only become exercisable following the
attainment of an objective performance condition(s). The performance
condition(s) must be acceptable to and approved by the Inland
Revenue.
In the application of such conditions, when events have occurred which
cause the Board to consider that the existing constraints and/or conditions (as
the case may be) has become unfair or impractical, they may, in their discretion
(provided such discretion is exercised fairly and reasonably), amend, relax,
waive or substitute such constraints or conditions so amended, relaxed, waived
or substituted would, in the reasonable opinion of the Board, be no more or less
difficult to abide by or satisfy than when they were originally imposed or last
amended or relaxed (as the case may be).
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3.4 Each Eligible Employee to whom an Option is granted may by notice in writing
within 30 days of the Date of Grant disclaim in whole or in part his rights
under the Option in which case the Option shall for all purposes be deemed never
to have been granted.
3.5 Where an Option is to be granted pursuant to an invitation and the
Subscription Price is determined by reference to the market value of a share on
the date of the invitation (or such earlier time agreed between the Company and
the Inland Revenue), the Option must be granted no later than thirty days from
the date of the invitation or such earlier date.
3.6 Notwithstanding paragraph 6(f) of the Plan, no Option may be transferred,
assigned or charged and any purported transfer, assignment or charge shall cause
the Option to lapse forthwith.
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4 LIMITATION ON GRANTS
No Option shall be granted to an Eligible Employee under the UK Scheme if as a
result the total Subscription Price of the Shares issuable on the exercise of
such Option when aggregated with the total market price at the relevant Date of
Grant of shares still capable of being issued on the exercise of options
previously granted to him under the UK Scheme and Any Other Approved Scheme
would exceed (pound)30,000 (or its equivalent in any other currency, taking as
the rate of exchange the spot rate for the currency in question on the date of
the grant of the Option as quoted by any of the Company's bankers from time to
time) or such other amount as may be prescribed by statute from time to time.
5 EXERCISE OF OPTIONS
5.1 Subject to Rules 5.2, 6 and 7, any Option which has not lapsed may be
exercised in whole or in part in accordance with the vesting schedules contained
on the Option Certificate.
5.2 An Option shall lapse on the earliest of the following events:
i the tenth anniversary of its Date of the Grant or such earlier
date specified pursuant to Rule 3.3 (d).
ii the end of the relevant exercise period specified in Rule 5.4.
iii the Option Holder ceasing to be director or employee of any
Participating Company, other than by reason specified in Rule 5.4.
iv the Option Holder being adjudicated bankrupt.
5.3 Save as provided in Rule 5.4 an option may only be exercised by an
Option Holder while he is a director or employee of a Participating Company or
an Associated Company of a Participating Company.
5.4 i An Option may be exercised by an Option Holder within a period of
ninety days following the date on which he ceases to be employed by a
Participating Company or an Associated Company of a Participating Company by
reason of disability, to the extent that the option was exercisable on the date
of such cessation.
ii An Option may be exercised by the personal representatives of a
deceased Option Holder during the period of twelve months following the date of
death, to the extent that the Option was exercisable on the date of such
cessation.
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iii An Option may be exercised, to the extent that the Option was
exercisable on the date of cessation by an Option Holder within the period of
ninety days following the date on which he ceases to hold any office or
employment with a Participating Company or an Associated Company of a
Participating Company on account of:
a retirement at contractual retirement age including late
retirement; or
b early retirement by agreement with his employer; or
c redundancy and injury; or
d any other reason in the absolute discretion of the Directors.
6 EXERCISE OF OPTIONS: MERGER: SALE OF ASSETS
6.1 Except as otherwise determined by the Board, a merger or a similar
reorganisation which the Company does not survive, or a sale of all or
substantially all of the assets of the Company, shall cause every Option
hereunder to terminate, to the extent not then exercised, unless any surviving
entity agrees to assume the obligations hereunder pursuant to Rule 7; provided,
however, that, in the case of such a merger or similar reorganisation, or such a
sale of all or substantially all of the assets of the Company, if there is no
such assumption, the Board may provide that some or all of the unexercised
portion of any one or more of the outstanding Options shall be immediately
exercisable as of such date prior to such merger, similar reorganisation or sale
of assets as to the Board determines.
6.2 If any person or group, other than the Company, any of its
subsidiaries or affiliates or any employee benefit plan of the Company, either
publicly or in a written communication to the Company or to its Board of
Directors, makes a tender or exchange offer or other bona fide offer to acquire
directly or indirectly voting securities under circumstances such that,
immediately after such acquisition, such person or group would beneficially own
voting securities with aggregate voting power representing 20% or more of the
total voting power of the Company, the Board may in its sole discretion provide
that all outstanding options shall immediately become fully exercisable.
7 REPLACEMENT OF OPTIONS ON CHANGE OF CONTROL OF THE COMPANY
7.1 Rule 7.2 shall apply where an Acquiring Company obtains Control of the
Company as a result of making:
(a) a general offer to acquire the whole of the issued share capital
of the Company (other than that which is already owned by it and/or any of its
subsidiaries) made on a condition such that if it is satisfied the Acquiring
Company will have Control of the Company; or
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(b) a general offer to acquire all the Shares (or such Shares as are
not already owned by the Acquiring Company and/or by any of its subsidiaries);
7.2 An Option Holder may, at any time within the appropriate period as
defined in Rule 7.4 by agreement with the Acquiring Company, release any of his
Option(s) (the "Old Option" for the purposes of this Rule 7) in consideration of
the grant to him of a new option (the "New Option" for the purposes of this
paragraph) PROVIDED THAT any New Option satisfies the conditions of Rule 7.3.
7.3 The New Option must:
(a) be over shares in the Acquiring Company or a Controlling Company which
shares satisfy the conditions specified in paragraphs 10 to 14 inclusive of
Schedule 9 (and the term "Shares" in the UK Scheme shall thereafter be construed
accordingly);
(b) be a right to acquire such number of shares which on acquisition of
the New Option have an aggregate market value (determined in accordance with
Part VIII of the Taxation of Chargeable Gains Act 1992) equal to the aggregate
market value (determined on a like basis) of the Shares the subject of the Old
Option immediately before its release; and
(c) have a subscription price per share such that the aggregate price
payable on complete exercise of the New Option equals the aggregate price which
would have been payable on complete exercise of the Old Option at the time of
its release.
7.4 The appropriate period referred to in Rule 7.2 is a period six months
commencing on the date when the Acquiring Company making the offer has obtained
Control of the Company and any condition subject to which the offer is made is
satisfied.
7.5 The New Option shall be exercisable in the same manner as the Old
Option and in accordance with the provisions of the Scheme as it had effect in
relation to the Old Option immediately before its release (references to the
term "Option" in the Scheme being construed accordingly), and the New Option
shall, for all purposes of the Scheme other than clause 7.6, be treated as
having been granted on the date when the corresponding Old Option was granted.
7.6 With effect from the grant of a New Option hereunder, Rules 5, 6, 7,
8, 9 and 11 shall, in relation to the New Option, be construed as if references
to the Company were references to the Acquiring Company, or as the case may be,
the Controlling Company.
8 MANNER OF EXERCISE OF OPTIONS
8.1 No Option may be exercised by an individual at any time when he is
precluded by paragraph 8 of Schedule 9 from participating in the Scheme.
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8.2 No Option may be exercised at any time when the shares which may
thereby be acquired do not satisfy the conditions specified in paragraphs 10-14
of Schedule 9.
8.3 The Board shall determine the manner in which Options may be
exercised. Payment shall be made either in cash, by cheque or by a combination
of cash and cheque.
8.4 The relevant Shares shall be allotted or transferred (as the case may
be) within 28 days following such delivery and, accordingly in cases where
Shares are to be transferred, the Company shall use its best endeavors to ensure
due transfer thereof. At the request of the Option Holder, the Shares may be
allotted or transferred (as the case may be) to a nominee provided the Option
Holder has beneficial ownership of the Shares at the time of such allotment or
transfer.
9 VARIATIONS IN THE SHARE CAPITAL OF THE COMPANY
9.1 The number of Shares over which an Option is granted and the
Subscription Price thereof may, subject to the prior approval of the Inland
Revenue, be adjusted in such manner as the Directors shall determine following
any capitalization issue, subdivision, consolidation or reduction of share
capital and in respect of any discount element in any rights issue or other
variation of share capital to the intent that (as nearly as may be possible
without involving fractions of a Share or a Subscription Price calculated to
more than two decimal places) the Acquisition Price payable in respect of an
Option shall remain unchanged.
9.2 All Option Holders shall be notified in writing of any such
adjustments as soon as practicable thereafter and the Company shall be entitled
to call in the instruments evidencing the grant of the Options affected by such
adjustments for endorsement or replacement, as may appear appropriate.
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10 ADMINISTRATION AND AMENDMENT
10.1 Subject to Rule 10.2, the Board may at any time:
(a) amend by resolution all or any of the provisions of the UK
Scheme;
(b) make such changes to any Option as may be necessary or
appropriate from time to time so that Options granted under the UK Scheme will
continue to be non-qualified stock options under the Internal Revenue Code as in
existence from time to time; and
(c) make such other changes in the UK Scheme as from time to time
the Board deems advisable without further action on the part of the stockholders
of the Company, PROVIDED THAT the Board may not; increase the number of Shares
authorized for the UK scheme; reduce the Subscription Price to an amount less
than 100% of the Market Value at the time of granting of the Option; change the
class of employees eligible to receive Options under the UK Scheme; adversely
affect or impair (except as authorized or elsewhere under the UK Scheme) any
Option previously granted under the UK Scheme; materially increase the benefits
accruing to Option Holders under the UK Scheme.
10.2 No amendment to the UK Scheme shall be effective until approved by the
Board of Inland Revenue and nothing shall be done to the UK Scheme which would
prejudice the obtaining of the approval of the Board of Inland Revenue or cause
it to be withdrawn.
10.3 The Board may at any time by resolution and without other formality amend
the UK Scheme in any way to the extent necessary to secure and maintain the
approval of the Board of Inland Revenue and to ensure that such approval is not
withdrawn pursuant to any statutory modification of the provisions of the Taxes
Act.
10.4 On any such amendment being made by the Board all Option Holders shall be
notified in writing as soon as possible thereafter.
10.5 The UK Scheme shall remain in effect until and shall terminate on such date
as the Board determines in accordance with section 8 of the rules of the Plan.
The Board may not grant Options under the UK Scheme after that date but Options
granted before that date will continue to be effective in accordance with their
terms.
11 ADDITIONAL PROVISIONS
11.1 The Company shall at all times maintain an amount of authorized and
unissued Shares sufficient to satisfy outstanding Options under the UK Scheme
or, where appropriate, be able to procure that sufficient Shares are available
for transfer to satisfy all Options under which
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Shares may be acquired.
11.2 Every Option shall be subject to the condition that no Shares shall
be issued or transferred to an Option Holder following the exercise of an Option
if such issue would be contrary to any enactment or regulation for the time
being in force of the United Kingdom or of any other country having jurisdiction
in relation thereto. The Company shall not be bound to take any action to obtain
that such issue or transfer shall be in accordance with any such enactment or
regulation if such action could in the opinion of the Board be unduly onerous.
11.3 The rights and obligations of a Option Holder under his terms of
employment with any Participating Company shall not be affected by his
participation in the UK Scheme and the UK Scheme shall not afford to a Option
Holder any right to continued employment or any additional right to compensation
in consequence of the termination of his employment for any reason whatsoever.
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Exhibit 10.9
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
among
RENAISSANCE WORLDWIDE, INC.,
as Borrower,
BANK OF AMERICA, N.A.
as Administrative Agent,
BNY FACTORING LLC,
as Syndication Agent,
and
the Lenders named herein
July 15, 1999
================================================================================
Banc of America Securities LLC
as
Sole Lead Arranger and Sole Book Manager
<PAGE>
TABLE OF CONTENTS
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ARTICLE 1 - Definitions.................................................................. 1
Section 1.1 Definitions.......................................................... 1
Section 1.2 Other Definitional Provisions........................................ 19
Section 1.3 Accounting Terms and Determinations.................................. 20
Section 1.4 Time of Day.......................................................... 20
ARTICLE 2 - Revolving Credit Facility.................................................... 20
Section 2.1 Revolving Commitments................................................ 20
Section 2.2 Revolving Notes...................................................... 21
Section 2.3 Repayment of Revolving Loans......................................... 21
Section 2.4 Use of Proceeds...................................................... 22
Section 2.5 Revolving Commitment Fee............................................. 22
Section 2.6 Termination or Reduction of Revolving Commitments.................... 22
Section 2.7 Letters of Credit.................................................... 22
Section 2.8 Borrowing Base....................................................... 26
ARTICLE 3 - Term Loan Facility........................................................... 26
Section 3.1 Term Loans........................................................... 26
Section 3.2 Term Notes........................................................... 26
Section 3.3 Repayment of Term Loans.............................................. 26
Section 3.4 Use of Proceeds...................................................... 27
ARTICLE 4 - Interest and Fees............................................................ 27
Section 4.1 Interest Rate........................................................ 27
Section 4.2 Determinations of Margins and Commitment Fee Rate.................... 27
Section 4.3 Payment Dates........................................................ 28
Section 4.4 Default Interest..................................................... 28
Section 4.5 Conversions and Continuations of Accounts............................ 29
Section 4.6 Computations......................................................... 29
ARTICLE 5 - Administrative Matters....................................................... 29
Section 5.1 Borrowing Procedure.................................................. 29
Section 5.2 Minimum Amounts...................................................... 29
Section 5.3 Certain Notices...................................................... 29
Section 5.4 Prepayments.......................................................... 30
Section 5.5 Method of Payment.................................................... 31
Section 5.6 Pro Rata Treatment................................................... 32
Section 5.7 Sharing of Payments.................................................. 33
Section 5.8 Non-Receipt of Funds by Administrative Agent......................... 33
Section 5.9 Participation Obligations Absolute; Failure to Fund Participation.... 33
ARTICLE 6 - Change in Circumstances...................................................... 34
Section 6.1 Increased Cost and Reduced Return.................................... 34
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Section 6.2 Limitation on Libor Accounts......................................... 35
Section 6.3 Illegality. ........................................................ 35
Section 6.4 Treatment of Affected Accounts....................................... 36
Section 6.5 Compensation. ...................................................... 36
Section 6.6 Taxes................................................................ 37
Section 6.7 Withholding Tax Exemption............................................ 37
Section 6.8 Mitigation........................................................... 38
ARTICLE 7 - Security..................................................................... 39
Section 7.1 Collateral........................................................... 39
Section 7.2 Guaranties........................................................... 39
Section 7.3 New Subsidiaries, New Issuances of Capital Stock..................... 40
Section 7.4 New Mortgaged Properties............................................. 40
Section 7.5 Release of Collateral................................................ 41
ARTICLE 8 - Conditions Precedent......................................................... 41
Section 8.1 Initial Loan and Letter of Credit.................................... 41
Section 8.2 All Loans and Letters of Credit...................................... 46
ARTICLE 9 - Representations and Warranties............................................... 46
Section 9.1 Corporate Existence.................................................. 46
Section 9.2 Financial Condition.................................................. 47
Section 9.3 Corporate Action; No Breach.......................................... 47
Section 9.4 Operation of Business................................................ 47
Section 9.5 Litigation and Judgments............................................. 47
Section 9.6 Rights in Properties; Liens.......................................... 48
Section 9.7 Enforceability....................................................... 48
Section 9.8 Approvals............................................................ 48
Section 9.9 Debt................................................................. 48
Section 9.10 Taxes................................................................ 48
Section 9.11 Margin Securities.................................................... 48
Section 9.12 ERISA................................................................ 49
Section 9.13 Disclosure........................................................... 49
Section 9.14 Subsidiaries; Capitalization......................................... 49
Section 9.15 Agreements........................................................... 49
Section 9.16 Compliance with Laws................................................. 50
Section 9.17 Investment Company Act............................................... 50
Section 9.18 Public Utility Holding Company Act................................... 50
Section 9.19 Environmental Matters................................................ 50
Section 9.20 Broker's Fees........................................................ 51
Section 9.21 Employee Matters..................................................... 51
Section 9.22 Solvency............................................................. 51
Section 9.23 Year 2000 Compliance................................................. 51
ARTICLE 10 - Positive Covenants.......................................................... 52
Section 10.1 Reporting Requirements............................................... 52
Section 10.2 Maintenance of Existence; Conduct of Business........................ 54
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Section 10.3 Maintenance of Properties............................................ 54
Section 10.4 Taxes and Claims..................................................... 54
Section 10.5 Insurance............................................................ 54
Section 10.6 Inspection Rights.................................................... 56
Section 10.7 Keeping Books and Records............................................ 56
Section 10.8 Compliance with Laws................................................. 56
Section 10.9 Compliance with Agreements........................................... 56
Section 10.10 Further Assurances................................................... 56
Section 10.11 ERISA................................................................ 56
Section 10.12 Unified Cash Management System; Dominion of Funds.................... 57
Section 10.13 Year 2000 Compliance................................................. 57
ARTICLE 11 - Negative Covenants.......................................................... 57
Section 11.1 Debt................................................................. 57
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries................. 58
Section 11.3 Mergers, Etc......................................................... 59
Section 11.4 Restricted Junior Payments........................................... 60
Section 11.5 Investments.......................................................... 61
Section 11.6 Limitation on Issuance of Capital Stock.............................. 62
Section 11.7 Transactions With Affiliates......................................... 62
Section 11.8 Disposition of Assets................................................ 62
Section 11.9 Lines of Business.................................................... 62
Section 11.10 Limitations on Restrictions Affecting Subsidiaries................... 62
Section 11.11 Environmental Protection............................................. 62
Section 11.12 ERISA................................................................ 63
ARTICLE 12 - Financial Covenants......................................................... 63
Section 12.1 Minimum Tangible Net Worth........................................... 63
Section 12.3 Minimum Fixed Charge Coverage Ratio.................................. 63
Section 12.4 Maximum Capital Expenditures......................................... 63
ARTICLE 13 - Default..................................................................... 64
Section 13.1 Events of Default.................................................... 64
Section 13.2 Remedies............................................................. 66
Section 13.3 Cash Collateral...................................................... 67
Section 13.4 Performance by Administrative Agent.................................. 67
Section 13.5 Set-off.............................................................. 67
Section 13.6 Continuance of Default............................................... 67
ARTICLE 14 - Administrative Agent........................................................ 68
Section 14.1 Appointment, Powers, and Immunities. ............................... 68
Section 14.2 Reliance by Administrative Agent..................................... 68
Section 14.3 Defaults. .......................................................... 68
Section 14.4 Rights as Lender..................................................... 69
Section 14.5 Indemnification. .................................................... 69
Section 14.6 Non-Reliance on Agents and Other Lenders............................. 70
Section 14.7 Resignation of Administrative Agent.................................. 70
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Section 14.8 Administrative Agent Fee............................................. 70
Section 14.9 Several Commitments.................................................. 71
ARTICLE 15 - Miscellaneous............................................................... 71
Section 15.1 Expenses............................................................. 71
Section 15.2 Indemnification...................................................... 72
Section 15.3 Limitation of Liability.............................................. 73
Section 15.4 No Duty.............................................................. 73
Section 15.5 No Fiduciary Relationship............................................ 73
Section 15.6 Equitable Relief..................................................... 73
Section 15.7 No Waiver; Cumulative Remedies....................................... 73
Section 15.8 Successors and Assigns............................................... 73
Section 15.9 Survival............................................................. 75
Section 15.10 Entire Agreement..................................................... 75
Section 15.11 Amendments and Waivers............................................... 76
Section 15.12 Maximum Interest Rate................................................ 77
Section 15.13 Notices.............................................................. 77
Section 15.14 Governing Law; Venue; Service of Process............................. 78
Section 15.15 Counterparts......................................................... 78
Section 15.16 Severability......................................................... 78
Section 15.17 Headings............................................................. 78
Section 15.18 Construction......................................................... 78
Section 15.19 Independence of Covenants............................................ 79
Section 15.20 Waiver of Jury Trial................................................. 79
Section 15.21 Confidentiality...................................................... 79
Section 15.22 Currency Conversion.................................................. 79
Section 15.23 Amendment and Restatement............................................ 79
</TABLE>
iv
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
------- ----------------------
"A-1" Revolving Note
"A-2" Swingline Note
"B" Term Note
"C" Borrowing Base Certificate
"D" Assignment and Acceptance Agreement
"E" Compliance Certificate
"F" Subsidiary Guaranty
"G" Joinder Agreement
"H" Notice of Borrowing
INDEX TO SCHEDULES
------------------
Schedule Description of Schedule
-------- -----------------------
1.1 Commitments
7.1 Transfer Restrictions, Etc.
9.1 Corporate Existence/Good Standing
9.3 Corporate Action/No Breach
9.4 Operation of Business
9.5 Litigation and Judgments
9.6 Collateral Matters
9.9 Debt
9.10 Taxes
9.12 ERISA
9.13 Disclosure Documents
9.14 Subsidiaries; Capitalization
9.15 Agreements
9.19 Environmental Matters
9.21 Employee Matters
9.22 Solvency
9.23 Year 2000 Compliance
11.2 Liens
11.3 Subsidiary Mergers, Resolutions, Etc.
11.5 Investments
11.8 Asset Dispositions
viii
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
----------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement"), dated as of July
---------
15, 1999, is among RENAISSANCE WORLDWIDE, INC., a corporation duly organized and
validly existing under the laws of the Commonwealth of Massachusetts
("Borrower"), each of the banks or other lending institutions which is or which
--------
may from time to time become a signatory hereto or any successor or assignee
thereof pursuant to Section 15.8(b) hereof (individually, a "Lender" and,
--------------- ------
collectively, the "Lenders"), BANK OF AMERICA, N.A., a national banking
-------
association (formerly known as NationsBank, N.A.), as Fronting Bank (as defined
below) and administrative agent for the Lenders (in its capacity as
administrative agent, together with its successors in such capacity,
"Administrative Agent"), and BNY FACTORING LLC, a New York limited liability
--------------------
company, as syndication agent for the Lenders (in its capacity as syndication
agent, together with its successors in such capacity, "Syndication Agent").
-----------------
R E C I T A L S:
---------------
Borrower has requested that the Lenders extend credit to Borrower in the
form of a revolving credit facility, a letter of credit subfacility and a term
loan facility to be used in part to amend, extend and restate the Original
Revolving Credit Agreement currently in effect between Borrower and NationsBank
and to increase the credit facility available to Borrower. Lenders are willing
to extend such credit to Borrower upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions. As used in this Agreement, the following terms
-----------
have the following meanings:
"Account" means either a Base Rate Account or a Libor Account.
-------
"Account Debtor" means a Person who is obligated on a Receivable.
--------------
"Adjusted EBITDA" means, for any period and any Person, the total of the
---------------
following calculated without duplication on a consolidated basis for such
period: (a) EBITDA of such Person; plus (b) on a pro forma basis, the EBITDA
----
attributable to all Subsidiaries of such Person or assets acquired by such
Person during such period, in each case for any portion of such period occurring
prior to the date of the acquisition of such Subsidiary or assets; minus (c)
-----
EBITDA of such Person and its Subsidiaries attributable to any Subsidiary or
assets disposed of during such period, in each case for any portion of such
period occurring prior to the date of the disposal of any such Subsidiary or
assets.
<PAGE>
"Adjusted Libor Rate" means, for any Libor Account for any Interest Period
-------------------
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by Administrative Agent to be equal to the quotient
obtained by dividing (a) the Libor Rate for such Libor Account for such Interest
Period by (b) 1 minus the Reserve Requirement for such Libor Account for such
Interest Period.
"Adjusted Net Income" means, for any period and any Person, such Person's
-------------------
consolidated net income (or loss) determined in accordance with GAAP, but
excluding: (a) the income of any other Person (other than its Subsidiaries) in
which such Person or any of its Subsidiaries has an ownership interest, unless
received by such Person or its Subsidiary in a cash distribution; and (b) any
after-tax gains or losses attributable to an asset disposition.
"Administrative Agent" has the meaning set forth in the introductory
--------------------
paragraph of this Agreement.
"Affiliate" means, with respect to any Person, any other Person (a) that
---------
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10%) or more of any class
of Voting Stock of such Person; or (c) ten percent (10%) or more of the Voting
Stock of which is directly or indirectly beneficially owned or held by the
Person in question. As used in this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause direction of
the management and policies of a Person, whether through the ownership of Voting
Stock, by contract, or otherwise; provided, however, in no event shall the
-------- -------
Agents or any Lender be deemed an Affiliate of Borrower or any Subsidiary of
Borrower.
"Agents" means the Administrative Agent and the Syndication Agent,
------
collectively.
"Agreement" has the meaning set forth in the introductory paragraph of this
---------
Agreement, as the same may be amended or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
-------------------------
Account, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Account on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Administrative Agent and Borrower by written notice in
accordance with the terms hereof as the office by which its Accounts of such
Type are to be made and maintained.
"Applicable Rate" has the meaning set forth in Section 4.1.
--------------- -----------
"Applicable Rate Calculation" has the meaning set forth in Section 10.1(d).
--------------------------- ---------------
"Asset Disposition" means, with respect to any Person, the disposition of
-----------------
any asset of such Person (including, without limitation, the sale of any Capital
Stock of any Subsidiary of such Person) other than (i) sales of Inventory in the
ordinary course of business, (ii) dispositions of equipment no longer used or
useful in such Person's business and (iii) dispositions of other equipment to be
2
<PAGE>
replaced (and such equipment is so replaced) with other functionally equivalent
equipment within one hundred twenty (120) days of the disposition thereof.
"Assignment and Acceptance" means an assignment and acceptance, in
-------------------------
substantially the form of Exhibit "D", entered into by a Lender and an Eligible
-----------
Assignee and accepted by Administrative Agent pursuant to Section 15.8(b).
---------------
"Authorized Representative" has the meaning set forth in Section 10.1(f).
------------------------- ---------------
"Bank of America" means Bank of America, N.A. (formerly known as
---------------
NationsBank, N.A.) and its successors and assigns.
"Bankruptcy Code" has the meaning set forth in Section 13.1(e).
--------------- ---------------
"Base Rate" means, for any day, the rate per annum equal to the higher of
---------
(a) the Federal Funds Rate plus one-half of one percent (0.5%), or (b) the Prime
Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Account" means a portion of a Loan that bears interest at a rate
-----------------
based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 4.2.
---------------- -----------
"Borrower" has the meaning set forth in the introductory paragraph of this
--------
Agreement.
"Borrowing Base" means, at any time, an amount equal to eighty-five percent
--------------
(85%) of the face value of Eligible Receivables due and owing at such time plus
----
fifty percent (50%) of earned but unbilled Receivables that would constitute
Eligible Receivables upon the issuance of an invoice therefor.
"Borrowing Base Certificate" means a certificate, signed by an Authorized
--------------------------
Representative of Borrower, in substantially the form attached hereto as Exhibit
-------
"C".
- ---
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
------------
which either is a legal holiday under the laws of the Commonwealth of
Massachusetts or the State of Texas or is a day on which banking institutions
located in any such states are closed, and (b), with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with Loans subject to Libor Accounts, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings in
----------
Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" means, with respect to any Person, all expenditures
--------------------
made and liabilities incurred for the acquisition of assets which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years.
3
<PAGE>
"Capital Lease Obligations" means, as to any Person, the obligations of
-------------------------
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person according to GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares, partnership
-------------
interests, membership interests, equity interests, rights, securities, or other
equivalent evidences of ownership, or any options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person (however designated) issued by any
entity (whether a corporation, partnership, limited liability company, limited
partnership, or other type of entity).
"Change of Control" means the occurrence of any of the following: (i) the
-----------------
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d) (3) of the
Securities Exchange Act), (ii) the adoption of a plan relating to the
liquidation or dissolution of Borrower, (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) first
occurring after the Closing Date the result of which is that any "person" (as
defined above), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition), directly or
indirectly, of more than 50% of the Voting Stock of Borrower (measured by voting
power rather than number of shares), or (iv) the first day on which a majority
of the members of the Board of Directors of Borrower are not Continuing
Directors.
"Closing Date" means July 15, 1999.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" means all Property of any nature whatsoever upon which a Lien
----------
is created or purported to be created by any Loan Document as security for the
Obligations or any portion thereof.
"Commitment Fee Rate" has the meaning specified in Section 4.2.
------------------- -----------
"Commitment Percentage" means, with respect to each Lender, the percentage
---------------------
equivalent of the amount of the Commitments of such Lender (or the Commitment in
question) divided by the aggregate amount of all the Commitments of all of the
Lenders (or the Commitment in question of all the Lenders).
"Commitments" means, with respect to each Lender, its Revolving Commitment
-----------
and its Term Commitment, and, with respect to all Lenders, all such commitments.
4
<PAGE>
"Compliance Certificate" means a certificate in substantially the form of
----------------------
Exhibit "E", properly completed and executed by the chief financial officer of
- -----------
Borrower.
"Continue", "Continuation", and "Continued" shall refer to the continuation
-------- ------------ ---------
pursuant to Section 4.5 of a Libor Account from one Interest Period to the next
-----------
Interest Period.
"Continuing Directors" means, as of any date of determination, any member
--------------------
of the Board of Directors of Borrower who (i) was a member of such Board of
Directors on the Closing Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"Contract Rate" has the meaning specified in subsection 15.12(a).
------------- -------------------
"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 4.5 or Article 6 of one Type of Account into another Type of
----------- ---------
Account.
"Debt" means, as to any Person at any time (without duplication): (a) all
----
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business; (d) all Capital Lease Obligations of such Person; (e) all
Debt or other obligations of others Guaranteed by such Person; (f) all
obligations secured by a Lien existing on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person; provided, however, that the amount of
-------- -------
such Debt of any Person described in this clause (f) shall, for purposes of this
----------
Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid
amount of such Debt or (ii) in the case of non-recourse obligations, the fair
market value of the property or asset encumbered, as determined by
Administrative Agent in its reasonable discretion; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); and (i) all vested
obligations of such Person for the payment of money under any noncompete,
consulting, or similar arrangements providing for the deferred payment of the
purchase price for an acquisition consummated prior to the date hereof;
provided, however, that the term "Debt" shall not include any earnout or similar
- -------- -------
contingent payments incurred in connection with an acquisition until such amount
is actually earned.
"Default" means an Event of Default or the occurrence of an event or
-------
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
------------
Reimbursement Obligation, or any other amount payable by Borrower under any Loan
Document, a rate per annum during the period specified in Section 4.4, equal to
-----------
the sum of two percent (2%), plus the Applicable Rate for Base Rate Accounts as
----
in effect from time to time (provided, that if such amount is subject
--------
5
<PAGE>
to a Libor Account, the "Default Rate" for such amount shall be, for the period
to but excluding the last day of the Interest Period therefor, two percent (2%),
plus the interest rate for such Account for such Interest Period as provided in
- ----
Section 4.1, and, thereafter, the rate provided for above in this definition).
- -----------
"Dollars" and "$" mean lawful money of the U.S.
------- -
"Domestic Subsidiary" means each direct or indirect Subsidiary of Borrower
-------------------
formed under the laws of the U.S. or any state thereof (other than CANAM L.L.C.,
a Delaware limited liability company).
"EBITDA" means, for any period and any Person, the total of the following
------
calculated without duplication for such Person on a consolidated basis for such
period: (a) Adjusted Net Income; plus (b) any provision for (or less any benefit
----
from) income or franchise taxes deducted in determining Adjusted Net Income;
plus (c) Interest Expense deducted in determining Adjusted Net Income; plus (d)
- ---- ----
amortization and depreciation expense deducted in determining Adjusted Net
Income; plus (e) charges taken during the second, third and fourth Fiscal
----
Quarters of Fiscal 1998 associated with acquisitions and restructuring fees,
divested businesses and write-offs of accounts receivable in the amount of Six
Million Nine Hundred Thousand Dollars ($6,900,000) in such second Fiscal
Quarter, Nine Million Dollars ($9,000,000) in such third Fiscal Quarter and
Forty-Two Million Two Hundred Thousand Dollars ($42,200,000) in such fourth
Fiscal Quarter, deducted in determining Adjusted Net Income to the extent not
already deducted in accordance with clause (d) above; plus (f) transaction costs
---------- ----
during any subsequent Fiscal Quarter associated with acquisitions completed
during such Fiscal Quarter deducted in determining Adjusted Net Income.
"EBITDAR" means, for any period and any Person, the sum of the following
-------
calculated without duplication for such Person on a consolidated basis for such
period: (a) Adjusted EBITDA; plus (b) Rental Expense deducted in determining
Adjusted EBITDA.
"Eligible Assignee" has the meaning specified in subsection 15.8(b)(i).
----------------- ---------------------
"Eligible Receivable" means a Receivable that consists of the unpaid
-------------------
portion of the obligation stated on the invoice issued to an Account Debtor with
respect to Inventory sold and shipped to or services performed for such Account
Debtor in the ordinary course of Borrower's or its Subsidiaries' business, net
of any credits or rebates owed by Borrower or its Subsidiaries to the Account
Debtor and net of any commissions payable by Borrower or its Subsidiaries to
third parties and that Administrative Agent determines to meet all of the
following requirements:
(a) such Receivable is owned by Borrower or its Subsidiaries,
represents a bona fide transaction and the Account Debtor is not the
Borrower or any of its Subsidiaries;
(b) not more than ninety (90) days have elapsed from the date of the
original invoice;
(c) the goods the sale of which gave rise to such Receivable were
shipped or delivered to the Account Debtor on an absolute sale basis and
not on a bill and hold sale
6
<PAGE>
basis, a consignment sale basis, a guaranteed sale basis, a sale or return
basis or on the basis of any other similar understanding, and no material
part of such goods has been returned or rejected;
(d) such Receivable is not evidenced by chattel paper or an instrument
of any kind unless such chattel paper or instrument (i) has been
collaterally assigned to Administrative Agent, for the benefit of the
Lenders, pursuant to an assignment in form and substance satisfactory to
Administrative Agent and (ii) is in the possession of Administrative Agent;
(e) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action, threatened or pending, which
might, in Administrative Agent's sole judgment, have a Material Adverse
Effect on such Account Debtor, and is not, in the reasonable discretion of
Administrative Agent, deemed ineligible for credit or other reasons;
(f) such Receivable is not owing by an Account Debtor having fifty
percent (50.0%) or more in face value of its then existing aggregate total
accounts owing to Borrower or its Subsidiaries, in the aggregate, which do
not meet the requirements of clause (b) or clause (c) above;
---------- ----------
(g) such Receivable is not owing by an Account Debtor whose then
existing accounts owing to Borrower or its Subsidiaries, in the aggregate,
exceed in face amount ten percent (10%) of Borrower's total Eligible
Receivables; provided that only the amount of the excess of such Receivable
--------
over such ten percent (10%) figure shall be excluded and provided, further,
-------- -------
that such exclusion shall not apply to Account Debtors with a Debt rating
of A or better by Standard & Poor's Corporation or Moody's Investors
Service, Inc.;
(h) such Receivable is not owing by an Account Debtor that is located
outside of the United States of America;
(i) such Receivable is a valid, legally enforceable obligation of the
Account Debtor with respect thereto and is not subject to any present or
contingent (and no facts exist which are the basis for any future) offset,
deduction or counterclaim, dispute or other defense on the part of such
Account Debtor;
(j) such Receivable is subject to a perfected first priority Lien in
favor of Administrative Agent, on behalf of the Lenders, and such
Receivable is subject to no other Lien whatsoever other than a Permitted
Lien;
(k) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any applicable law now or hereafter
existing similar in effect thereto, or to any other prohibition (under
applicable law, by contract or otherwise) against its assignment or
requiring notice of or consent to such assignment, unless all such required
notices have been given, all such required consents have been received and
all other
7
<PAGE>
procedures have been complied with such that such Receivable shall have
been duly and validly assigned to Administrative Agent, for the benefit of
Lenders; and
(l) neither the Account Debtor with respect to such Receivable, nor
such Receivable, is determined by Administrative Agent in its reasonable
discretion to be ineligible for any other reason.
"Environmental Laws" means any and all federal, state, and local laws,
------------------
regulations, and requirements regulating health, safety, or the environment, as
such laws, regulations, and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
-------------------------
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all reasonable fees, disbursements, and expenses of counsel,
expert and consulting fees, and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal or civil statute, including, without
limitation, any Environmental Law, permit, order, or agreement with any
Governmental Authority or other Person, arising from environmental, health, or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations issued thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
---------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Loan Party or is under common control (within
the meaning of Section 414(c) of the Code) with any Loan Party.
"Event of Default" has the meaning specified in Section 13.1.
---------------- ------------
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
--------
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
"Fiscal Quarters" means the three (3) month periods falling in each Fiscal
---------------
Year ending on the last Saturday of each March, June, September, and December.
8
<PAGE>
"Fiscal Year" means a twelve (12) month period ending the last Saturday in
-----------
December.
"Foreign Subsidiary" means each direct or indirect Subsidiary of Borrower
------------------
that is not a Domestic Subsidiary.
"Fronting Bank" means Bank of America or such other Lender which is a
-------------
commercial bank as Borrower and Bank of America may mutually designate from time
to time which agrees to be the issuer of a Letter of Credit.
"Funded Debt" means, with respect to any Person for such Person and its
-----------
Subsidiaries, determined on a consolidated basis in accordance with GAAP, at the
time of determination, the sum of all Debt other than: (a) Debt or other
obligations of others guaranteed by such Person and its Subsidiaries; (b) all
Reimbursement Obligations (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); and (c) all liabilities in respect of unfunded vested
benefits under any Plan.
"GAAP" means generally accepted accounting principles, applied on a
----
"consistent basis" (as such phrase is interpreted in accordance with Section 1.3
-----------
hereof), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"Governmental Authority" means any nation or government, any state or
----------------------
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Guarantee" means any obligation, contingent or otherwise, of any Person
---------
directly or indirectly guaranteeing any Debt or other obligation of any other
Person or indemnifying such other Person for an obligation and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect the obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
--------
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee of any guaranteeing Person shall be deemed to be the
lesser of (i) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or (ii) the
maximum amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guaranteeing Person may be liable are not
stated or determinable, in which case the amount of such Guarantee shall be such
guaranteeing Person's maximum reasonably anticipated liability in respect
thereof as mutually determined by Borrower and Administrative Agent in good
faith. The term "Guarantee" used as a verb has a corresponding meaning.
9
<PAGE>
"Guarantor" means any Person which has executed a Guaranty, and
---------
"Guarantors" means all of such Persons, collectively.
----------
"Guaranty" means each of the Subsidiary Guaranties, and any and all
--------
amendments, modifications, supplements, renewals, extensions, or restatements
thereof, and "Guaranties" means the Subsidiary Guaranties, collectively.
----------
"Hazardous Material" means any substance, product, waste, pollutant,
------------------
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law as a result
of its hazardous or toxic nature.
"Hedge Agreements" means any and all agreements, devices, or arrangements
----------------
designed to protect Borrower from the fluctuations of interest rates, exchange
rates, or forward rates applicable to its assets, liabilities, or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and forward
rate currency or interest rate options, as the same may be amended or modified
and in effect from time to time, and any and all cancellations, buy backs,
reversals, terminations, or assignments of any of the foregoing.
"Installment Note" means the $2,000,000 Convertible Subordinated Promissory
----------------
Note from Zefer Corp., as maker, payable to Borrower.
"Intellectual Property" means any U.S. or foreign patents, patent
---------------------
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service mark registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
"Interest Expense" means, for any period and for any Person, the sum of (a)
----------------
interest expense of such Person calculated without duplication on a consolidated
basis for such period in accordance with GAAP, plus (b) payments made under
----
Hedge Agreements during such period, minus (c) payments received under Hedge
-----
Agreements during such period.
"Interest Period" means with respect to any Libor Account, each period
---------------
commencing on the date such Account is established or Continued, or Converted
from a Base Rate Account to a Libor Account, or the last day of the next
preceding Interest Period with respect to such Libor Account, and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as Borrower may select as provided in Section 4.5 or Section
----------- -------
5.1, except that each such Interest Period which commences on the last Business
- ---
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (a) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day (or if such
succeeding Business Day falls in the next
10
<PAGE>
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Termination Date shall end on the
Termination Date; (c) no more than five (5) Interest Periods shall be in effect
at the same time; (d) no Interest Period for any Libor Account shall have a
duration of less than one (1) month and, if the Interest Period would otherwise
be a shorter period, the related Libor Account shall not be available hereunder;
and (e) no Interest Period in respect of any Term Loan may extend beyond a
principal repayment date thereof unless, after giving effect thereto, the
aggregate principal amount of such Term Loan subject to Libor Accounts having
Interest Periods that end after such principal payment date shall be equal to or
less than the aggregate principal amount of such Term Loan to be outstanding
hereunder after such principal payment date.
"Inventory" means all inventory now owned or hereafter acquired by Borrower
---------
or any Subsidiary of Borrower wherever located and whether or not in transit,
which is or may at any time be held for sale or lease, or furnished under any
contract (exclusive of leases of real Property) for service or held as raw
materials, work in process, or supplies or materials used or consumed in the
business of Borrower or any Subsidiary of Borrower.
"Investments" has the meaning specified in Section 11.5.
----------- ------------
"Joinder Agreement" means an agreement which has been or will be executed
-----------------
by a Subsidiary adding it as a party to the Guaranty and certain Security
Documents, in substantially the form of Exhibit "G", as the same may be amended
-----------
or otherwise modified.
"Lender" has the meaning set forth in the introductory paragraph of this
------
Agreement.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
----------------------------
aggregate undrawn face amount of all outstanding Letters of Credit, plus (b) all
----
unreimbursed drawings under Letters of Credit.
"Letters of Credit" has the meaning specified in Section 2.7(a).
----------------- --------------
"Letter of Credit Agreement" means, with respect to each Letter of Credit
--------------------------
to be issued by the Fronting Bank therefor, the letter of credit application and
reimbursement agreement which such Fronting Bank requires to be executed by
Borrower in connection with the issuance of such Letter of Credit.
"Leverage Ratio" means, for any period, the ratio of Borrower's Funded Debt
--------------
as of the end of such period to Adjusted EBITDA for the twelve (12) month period
then ending.
"Libor Account" means any portion of a Loan that bears interest at a rate
-------------
based upon the Adjusted Libor Rate.
"Libor Rate" means, for any Libor Account for any Interest Period therefor,
----------
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period for a
11
<PAGE>
term comparable to such Interest Period. If for any reason such rate is not
available, the term "Libor Rate" shall mean, for any Libor Account for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
-------- -------
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Libor Rate Margin" has the meaning specified in Section 4.2.
----------------- -----------
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
----
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement, the Notes, the Security Documents,
--------------
the Letters of Credit, the Letter of Credit Agreements, the Joinder Agreements,
any Hedge Agreement between Borrower or any Subsidiary of Borrower and any
Lender and all other agreements, documents, and instruments now or hereafter
executed and/or delivered pursuant to or in connection with any of the
foregoing, and any and all amendments, modifications, supplements, renewals,
extensions, or restatements thereof (including, without limitation, any
amendment that increases the amount of any Obligations due thereunder).
"Loan Party" means (a) Borrower, (b) the Guarantors, and (c) any other
----------
Person who is or becomes a party to any agreement, document, or instrument that
Guarantees or secures payment or performance of the Obligations or any part
thereof.
"Loans" means Revolving Loans, Term Loans and Swingline Advances.
-----
"Material Adverse Effect" means, with respect to any Person, any material
-----------------------
adverse effect, or the occurrence of any event or the existence of any condition
that could reasonably be expected to have a material adverse effect, on (a) with
respect to Borrower or any of its Subsidiaries, the prospects, business or
financial condition, or performance of Borrower and its Subsidiaries, taken as a
whole and, with respect to any other Person, the prospects, business or
financial condition, or performance of such Person and its Subsidiaries, taken
as a whole, (b) the ability of such Person to pay and perform the obligations
for which such Person is responsible when due, or (c) with respect to any Loan
Party, the validity or enforceability of (i) any of the Loan Documents, (ii) any
Lien created or purported to be created by any of the Loan Documents or the
required priority of any such Lien, or (iii) the rights and remedies of
Administrative Agent or the Lenders under any of the Loan Documents.
"Maximum Rate" means, at any time and with respect to any Lender, the
------------
maximum rate of nonusurious interest under applicable law that such Lender may
charge Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged, or received in connection with the Loan Documents that constitute
12
<PAGE>
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to Borrower at the time of such change in the
Maximum Rate.
"Mortgaged Property" means, any Property consisting of real property or
------------------
interests therein which becomes or is required to become subject to a Mortgage
pursuant to Section 7.4, and "Mortgaged Properties" means all of such real
----------- --------------------
property or interests, collectively.
"Mortgage" means any (if any) deed of trust, leasehold deed of trust,
--------
mortgage, leasehold mortgage, collateral assignment of leases, or other real
estate security document executed and delivered pursuant to this Agreement by
any Loan Party in favor of Administrative Agent for the benefit of the Agents
and the Lenders with respect to any Mortgaged Property, and any and all
amendments, modifications, supplements, renewals or restatements thereof, and
"Mortgages" means all of such Mortgages, collectively.
---------
"Multiemployer Plan" means a multiemployer plan defined as such in Section
------------------
3(37) of ERISA to which contributions have been made by any Loan Party or any
ERISA Affiliate at any time within the six (6) year period preceding the date
hereof or hereafter and which is covered by Title IV of ERISA.
"Net Proceeds" means (i) in connection with any disposition of assets of
------------
any Loan Party, the cash proceeds received by such Loan Party from such
disposition (including, without limitation, payments under notes or other debt
Securities received in connection with any such disposition, but only as and
when received) net of (a) the costs of such disposition (including reasonable,
out-of-pocket professional fees and expenses, taxes, notarial fees, survey
costs, title insurance premiums, required escrow deposits, and purchase price
adjustments and other customary fees and expenses, in each case attributable to
and actually paid in connection with such disposition), and (b) amounts applied
to repayment of Debt (other than the Obligations) secured by a lien, security
interest, claim or encumbrance on the asset or property disposed and (ii) in
connection with issuance of any equity Securities, the cash proceeds received
from such issuance, net of all costs of such issuance (including reasonable,
out-of-pocket professional fees and expenses, notarial fees, underwriting
discounts and commissions, and other customary fees and expenses) actually paid.
"Net Worth" means with respect to any Person, such Person's total
---------
shareholders' equity (including, without limitation, capital stock, additional
paid-in capital and retained earnings, after deducting treasury stock, or other
form of equity (i.e., partner's capital, membership interests, etc.)) which
would appear as such on a balance sheet of such Person prepared in accordance
with GAAP.
"Notes" means the Revolving Notes, the Swingline Note, and the Term Notes.
-----
"Notice of Borrowing" means a Notice of Borrowing substantially in the form
-------------------
of Exhibit "H" hereto executed on behalf of Borrower.
-----------
"Obligations" means any and all (a) obligations, indebtedness, and
-----------
liabilities of Borrower and its Subsidiaries to the Agents and the Lenders, or
any of them, arising pursuant to any of the Loan Documents, whether now existing
or hereafter arising, whether direct, indirect, fixed, contingent,
13
<PAGE>
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, the obligation of Borrower to repay the Loans, the
Reimbursement Obligations, interest on the Loans and Reimbursement Obligations,
and all fees, costs, and expenses (including, without limitation, attorneys'
fees) provided for in the Loan Documents, and (b) indebtedness, liabilities, and
obligations of any Loan Party under any Hedge Agreement that it may enter into
with the Agent or any Affiliate of any Lender if and to the extent that such
Hedge Agreement is permitted in accordance with Section 11.1(i).
---------------
"Original Revolving Credit Agreement" means that certain Credit Agreement
-----------------------------------
dated as of February 24, 1999, among Borrower, Administrative Agent and
NationsBank, N.A., as the same has been amended or modified prior to the
effectiveness of this Agreement.
"Original Revolving Credit Facility" or "ORCF" means the credit facility
---------------------------------- ----
provided by the Original Revolving Credit Agreement.
"Other Taxes" has the meaning specified in Section 6.6(b).
----------- --------------
"Outstanding Revolving Credit" means, at any time of determination, the sum
----------------------------
of (a) the aggregate amount of Revolving Loans then outstanding; plus (b) the
aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to any Lender, such Lender's pro rata share of the Revolving Loans then
outstanding and participation or other interest in such Letter of Credit
Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to all or any of its functions under ERISA.
"Permitted Liens" means the Liens permitted by Section 11.2.
--------------- ------------
"Person" means any individual, corporation, limited liability company,
------
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by any
----
Loan Party or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Prime Rate" means the per annum rate of interest established from time to
----------
time by Bank of America as its prime rate, which rate may not be the lowest rate
of interest charged by Bank of America to its customers.
"Principal Office" means the office of Administrative Agent, located at 901
----------------
Main Street, 67th Floor, Dallas, Texas 75202.
"Prohibited Transaction" means any transaction described in Section 406 or
----------------------
407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means Borrower's forecasted consolidated: (a) balance sheets;
-----------
(b) profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all materially consistent
14
<PAGE>
with Borrower's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
--------
personal or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Purchase Price" means, as of any date of determination and with respect to
--------------
any acquisition, the purchase price to be paid for the equity interests issued
by the Person to be acquired or the assets of the Person to be acquired,
including all cash consideration paid (whether classified as purchase price,
debt assumption, noncompete payments, consulting payments or otherwise and
without regard to whether such amount is paid at closing or paid over time but
excluding the amount of any finance charges attributable to deferred payments
and excluding amounts payable as salary and benefits under any employment
agreement entered into with any seller for the purpose of retaining such seller
as an active officer or employee of Borrower or a Subsidiary) and the Dollar
value of all other assets to be transferred by the purchaser in connection with
such acquisition to the seller or sellers (including the value of all capital
stock of Borrower issued or to be issued to the seller) all valued in accordance
with the applicable purchase agreements.
"Quarterly Payment Date" means the last day of March, June, September, and
----------------------
December of each year, the first of which shall be September 30, 1999.
"Receivable" or "Receivables" means, as at any date of determination
---------- -----------
thereof, each and every "account" as such term is defined in article or chapter
9 of the UCC (or any successor statute) and includes, without limitation, the
unpaid portion of the obligation, as stated on the respective invoice, or, if
there is no invoice, other writing, of a customer of Borrower or any Subsidiary
of Borrower in respect of Inventory sold and shipped or services rendered by
Borrower or any Subsidiary of Borrower.
"Register" has the meaning specified in subsection 15.8(c).
-------- ------------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after the
-----------------
date of this Agreement (other than with respect to taxes excluded by the first
sentence of Section 6.6(a)) in U.S. federal, state, or foreign laws or
--------------
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests (other than with respect to
taxes excluded by the first sentence of Section 6.6(a)) applying to a class of
--------------
lenders including such Lender of or under any U.S. federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
15
<PAGE>
"Reimbursement Obligations" means all indebtedness, liabilities, and
-------------------------
obligations of Borrower or any other Loan Party to reimburse Administrative
Agent or the Fronting Bank in accordance with subsection 2.7(e) for any demand
-----------------
for payment or drawing under a Letter of Credit.
"Release" means, as to any Person, any release, spill, emission, leaking,
-------
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or from
property owned by such Person, including, without limitation, the migration of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable Environmental
---------------
Laws to (a) cleanup, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials, or (c) perform pre-
remedial studies and investigations and post-remedial monitoring and care;
provided that "Remedial Action" shall not include such actions taken in the
- --------
normal course of business and in material compliance with Environmental Laws.
"Rental Expense" means, for any period and for any Person, the rental or
--------------
lease expense of such Person under operating leases calculated without
duplication on a consolidated basis for such period as determined in accordance
with GAAP.
"Required Lenders" means any combination of Lenders having (a) more than
----------------
fifty percent (50%) of the sum of the Revolving Commitments and the outstanding
principal amount of the Term Loans or (b) if the Revolving Commitments have
terminated or have otherwise been fulfilled, more than fifty percent (50%) of
the outstanding principal amount of the Loans and participations in the Letters
of Credit.
"Reportable Event" means any of the events set forth in Section 4043 of
----------------
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, at any time, the maximum rate at which
-------------------
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"Revolving Commitment" means, as to each Lender, the obligation of such
--------------------
Lender to make advances of funds and purchase participation interests in (or
with respect to the Fronting Bank as a Lender, hold other interests in) Letters
of Credit in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set forth opposite the name of such Lender on Schedule
1.1 (or if applicable, the most recent Assignment and Acceptance executed by it)
under the
16
<PAGE>
heading "Revolving Commitment", as the same may be reduced or terminated
pursuant to Section 2.6, Section 5.4, or Section 13.2. The aggregate amount of
----------- ----------- ------------
all the Revolving Commitments as of the Closing Date equals One Hundred Million
Dollars ($100,000,000).
"Revolving Loans" means, as to any Lender, the advances made by such Lender
---------------
pursuant to Section 2.1, and, as to all Lenders making such Loans, all such
-----------
Loans made or held by such Lenders pursuant to Section 2.1.
-----------
"Revolving Notes" means the promissory notes provided for by Section 2.2
--------------- -----------
and all amendments or other modifications thereof.
"Revolving Termination Date" means July 15, 2002.
--------------------------
"Securities" means any stock, shares, options, warrants, voting trust
----------
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Security Agreements" means security agreements, pledge agreements,
-------------------
securities pledge agreements, debenture pledge agreements, and other agreements,
documents or instruments evidencing or creating a Lien as security for the
Obligations or any portion thereof in form and substance satisfactory to
Administrative Agent executed by any of Borrower, each Domestic Subsidiary of
Borrower, and any other Loan Party, dated the date of the ORCF, the Closing Date
or a subsequent date (in the case of Domestic Subsidiaries acquired after the
Closing Date), in favor of Administrative Agent, for the benefit of the Agents
and the Lenders, and any such agreement, document, or instrument executed
pursuant to Article 7, and any and all amendments, modifications, supplements,
---------
renewals, extensions, or restatements thereof, including, without limitation,
the Security Agreements delivered in connection with the ORCF, as amended or
confirmed as of the Closing Date.
"Security Documents" means the Guaranties, the Security Agreements, and the
------------------
Mortgages, as such agreements may be amended, modified, supplemented, renewed,
extended, or restated from time to time, and any and all other agreements, deeds
of trust, mortgages, chattel mortgages, security agreements, pledges,
guaranties, assignments of proceeds, assignments of income, assignments of
contract rights, assignments of partnership interests, assignments of royalty
interests, or other collateral assignments, completion or surety bonds, standby
agreements, subordination agreements, undertakings, and other agreements,
documents, instruments, and financing statements now or hereafter executed
and/or delivered by any Loan Party in connection with or as security or
assurance for the payment or performance of the Obligations or any part thereof.
"Solvent" means, with respect to any Person as of the date of any
-------
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other
17
<PAGE>
liabilities, contingent obligations, and other commitments as they mature in the
normal course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Spot Rate" means, as of any date of determination (whether current or as
---------
of a prior date of determination if such conversion is to be determined as of a
prior date) with respect to the conversion of an amount denominated in one
currency (the "Original Currency") to another currency (the "Other Currency"),
----------------- --------------
the rate of exchange which, in accordance with customary banking procedures and
at such time and in such foreign exchange market as Administrative Agent shall
determine consistent with such procedures and for such purpose, Administrative
Agent on such date could purchase or could have purchased (if such conversion is
to calculated as of a prior date) such amount of the Original Currency with such
Other Currency.
"Subordinated Debt" means Debt of Borrower or its Subsidiaries subordinated
-----------------
to the Obligations on terms and conditions satisfactory to Administrative Agent
in its absolute discretion.
"Subsidiary" means, (a) when used to determine the relationship of a Person
----------
to another Person, a Person of which an aggregate of more than fifty percent
(50%) or more of the Capital Stock is owned of record or beneficially by such
other Person, or by one or more Subsidiaries of such other Person, or by such
other Person and one or more Subsidiaries of such Person, (i) if the holders of
such Capital Stock (A) are ordinarily, in the absence of contingencies, entitled
to vote for the election of a majority of the directors (or other individuals
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency, or (B) are entitled,
as such holders, to vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person, whether or not the
right so to vote exists by reason of the happening of a contingency, or (ii) in
the case of Capital Stock which is not issued by a corporation, if such
ownership interests constitute a majority voting interest, and (b) when used
with respect to a Plan, ERISA, or a provision of the Code pertaining to employee
benefit plans, means, with respect to a Person, any corporation, trade, or
business (whether or not incorporated) which is under common control with such
Person and is treated as a single employer with such Person under Section 414(b)
or (c) of the Code and the regulations thereunder.
"Subsidiary Guaranty" means (a) the guaranty of the Domestic Subsidiaries
-------------------
of Borrower in favor of Administrative Agent, for the benefit of the Agents and
the Lenders, in substantially the form of Exhibit "F", as the same may be
-----------
modified pursuant to one or more Joinder Agreements and as the same may be
otherwise modified from time to time and (b) each of the "Subsidiary Guaranties"
delivered in connection with the ORCF, as amended or confirmed as of the Closing
Date.
18
<PAGE>
"Swingline Advances" has the meaning specified in Section 2.1.
------------------ -----------
"Swingline Note" means the swingline promissory note provided for by
--------------
Section 2.2 and all amendments and other modifications thereof.
- -----------
"Syndication Agent" has the meaning set forth in the introductory paragraph
-----------------
of this Agreement.
"Tangible Net Worth" means, at the time of determination, the remainder of
------------------
(a) Net Worth minus (b) the aggregate book value of all intangible assets of
-----
Borrower and its Subsidiaries which are included in the determination of Net
Worth.
"Taxes" has the meaning specified in Section 6.6.
----- -----------
"Term Commitment" means, with respect to any Lender, the obligation of such
---------------
Lender to make an advance of funds on the Closing Date (or with respect to any
Person becoming a Lender after the Closing Date, on such date) in the principal
amount set forth opposite the name of such Lender on the signature pages hereto
under the heading "Term Commitment." The aggregate amount of all of the Term
Commitments as of the Closing Date equals Fifty Million Dollars ($50,000,000).
"Term Loans" means, as to any Lender, the Term Loans made or held by such
----------
Lender pursuant to Section 3.1 and, as to all Lenders making such Loans, all
-----------
such Loans made or held by such Lenders pursuant to Section 3.1.
-----------
"Term Notes" means the promissory notes provided for by Section 3.2 and all
---------- -----------
amendments or other modifications thereof.
"Term Termination Date" means July 15, 2002.
---------------------
"Termination Date" means the Revolving Termination Date or the Term
----------------
Termination Date.
"Termination Event" means (a) a Reportable Event, or (b) the filing of a
-----------------
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"Type" shall mean either type of Account (i.e., a Base Rate Account or
----
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the Commonwealth of
---
Massachusetts and/or any other jurisdiction, the laws of which may be applicable
to or in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
--------------------------------
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds,
19
<PAGE>
(b) the fair market value of all Plan assets allocable to such benefits; all
determined as of the then most recent valuation date for such Plan.
"U.S." means the United States of America.
----
"Voting Stock" means Capital Stock of a Person having by the terms thereof
------------
ordinary voting power to elect a majority of the board of directors (or similar
governing body) of such Person (irrespective of whether or not at the time
Capital Stock of any other class or classes of such Person shall have or might
have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary that (i) is owned 100% by
-----------------------
Borrower and/or a Subsidiary of Borrower, and (ii) is organized under the laws
of a state within the U.S.
"Year 2000 Compliant" has the meaning set forth in Section 9.24 hereof.
------------------- ------------
"Year 2000 Problem" has the meaning set forth in Section 9.24 hereof.
----------------- ------------
Section 1.2 Other Definitional Provisions. All definitions contained in
-----------------------------
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article, Section, and Schedule references pertain to Articles,
Sections, and Schedules of this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein, shall have the meanings specified
in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
-----------------------------------
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Administrative Agent and the
Lenders hereunder shall be prepared, in accordance with GAAP, on a "consistent
basis" with those used in the preparation of the financial statements referred
to in Section 9.2. All calculations made for the purposes of determining
-----------
compliance with the provisions of this Agreement shall be made by application of
GAAP, on a "consistent basis" with those used in the preparation of the
financial statements referred to in Section 9.2. Accounting principles are
-----------
applied on a "consistent basis" when the accounting principles applied in a
current period are comparable in all material respects to those accounting
principles applied in a preceding period. Changes in the application of
accounting principles which do not have a material impact on calculating the
financial covenants herein shall be deemed comparable in all material respects
to accounting principles applied in a preceding period. To enable the ready and
consistent determination of compliance by Borrower with its obligations under
this Agreement, Borrower will not, nor will it permit any other Loan Party to,
change the manner in which either the last day of its Fiscal Year or the last
days of the first three Fiscal Quarters of its Fiscal Years is calculated
without the prior written consent of the Required Lenders. In the event any
changes in accounting principles required by GAAP, recommended by Borrower's or
any other Loan Party's certified public accountants or requested by Borrower (or
that Borrower otherwise requests and Administrative Agent and the Required
Lenders agree to accept, such agreement not unreasonably to be denied) and
implemented by Borrower or any other Loan Party occur and such changes result in
a change in the method of the calculation of financial
20
<PAGE>
covenants under this Agreement, then Borrower, Administrative Agent, and the
Required Lenders agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such changes with the
desired result that the criteria for evaluating such covenants shall be the same
after such changes as if such changes had not been made. Until such time as such
an amendment shall have been executed and delivered by Borrower, Administrative
Agent, and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such changes
had not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
-----------
this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
Revolving Credit Facility
-------------------------
Section 2.1 Revolving Commitments. Subject to the terms and conditions
---------------------
of this Agreement, each Lender who has agreed to provide a Revolving Commitment
severally agrees to make advances to Borrower from time to time from and
including the Closing Date to but excluding the Revolving Termination Date in an
aggregate principal amount at any time outstanding up to but not exceeding the
amount of such Lender's Revolving Commitment as then in effect; provided,
--------
however, (a) the Outstanding Revolving Credit applicable to a Lender shall not
- -------
at any time exceed such Lender's Revolving Commitment, and (b) the Outstanding
Revolving Credit of all of the Lenders shall not at any time exceed the lesser
of (i) the Borrowing Base minus the outstanding principal amount of the Term
Loans, or (ii) the aggregate Revolving Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, prepay, and reborrow hereunder the amount of the Revolving Commitments
and may establish Base Rate Accounts and Libor Accounts thereunder and, until
the Revolving Termination Date, Borrower may Continue Libor Accounts established
under the Revolving Loans or Convert Accounts established under the Revolving
Loans of one Type into Accounts of the other Type. Accounts of each Type under
the Revolving Loans made by each Lender shall be established and maintained at
such Lender's Applicable Lending Office for Revolving Loans of such Type.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
may from time to time request, and Bank of America may at its discretion from
time to time advance (but shall in no event be obligated to advance), Revolving
Loans which are to be funded solely by Bank of America (the "Swingline
---------
Advances"); provided, however, that (i) the aggregate principal amount of the
- -------- -------- -------
Swingline Advances outstanding at any time shall not exceed Five Million Dollars
($5,000,000) and the aggregate principal amount of the Revolving Loans
outstanding at any time (inclusive of the Swingline Advances) shall not exceed
the aggregate principal amount of the Revolving Commitments, (ii) all Swingline
Advances shall bear interest at the rate provided by Section 4.1(c), (iii) each
--------------
Swingline Advance shall be a minimum principal amount of One Hundred Thousand
Dollars ($100,000) or any larger amount in increments of Fifty Thousand Dollars
($50,000), and (iv) Bank of America shall give the Administrative Agent and each
Lender written notice of the aggregate outstanding principal amount of the
Swingline Advances upon the written request of the Administrative Agent or any
Lender (but no more often than once every calendar quarter). Furthermore, upon
one Business Day's prior written notice given by Bank of America to the
Administrative Agent and the other Lenders at any time and from time to time
(including, without limitation, at any time following the
21
<PAGE>
occurrence of a Default or an Event of Default) and, in any event, without
notice on the Business Day immediately preceding the Termination Date, each
Lender (including, without limitation, Bank of America) severally agrees, as
provided in the first sentence of this Section 2.1, and notwithstanding anything
-----------
to the contrary contained in this Agreement, any Default or Event of Default or
the inability or failure of Borrower or any of its Subsidiaries or any other
Loan Party to satisfy any condition precedent to funding any of the Revolving
Loans contained in Article 8 (which conditions precedent shall not apply to this
---------
sentence), to make a Revolving Loan, in the form of a Base Rate Account, in an
amount equal to its Commitment Percentage of the aggregate principal amount of
the Swingline Advances then outstanding, and the proceeds of such Revolving
Loans shall be promptly paid by the Administrative Agent to Bank of America and
applied as a repayment of the aggregate principal amount of the Swingline
Advances then outstanding.
Section 2.2 Revolving Notes. The Revolving Loans made by a Lender shall
---------------
be evidenced by a single promissory note of Borrower in substantially the form
of Exhibit "A", payable to the order of such Lender, in the maximum principal
-----------
amount equal to its Revolving Commitment as originally in effect (or, if
greater, its Revolving Commitment thereafter increased) and otherwise duly
completed; provided, however, that the Swingline Advances made by Bank of
America shall be evidenced by a single promissory note of Borrower in the
maximum original principal amount of Five Million Dollars ($5,000,000) payable
to the order of Bank of America in substantially the form of Exhibit "A-2"
-------------
hereto, dated the Closing Date.
Section 2.3 Repayment of Revolving Loans. Borrower shall pay to
----------------------------
Administrative Agent, for the account of the Lenders, the outstanding principal
amount of all of the Revolving Loans on the Revolving Termination Date and shall
repay each of the Swingline Advances upon demand, but in any event no later than
the 30th day after the making of such Swingline Advance and if at any time the
aggregate Outstanding Revolving Credit shall exceed the Borrowing Base, Borrower
shall pay the Administrative Agent for the account of the Lenders such excess
amount.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement,
---------------
the proceeds of the Revolving Loans shall be used by Borrower (i) to refinance
the existing Debt outstanding under the Original Revolving Credit Facility and
(ii) otherwise for general corporate purposes arising in the ordinary course of
business of Borrower and its Subsidiaries, to finance working capital
requirements and Capital Expenditures of Borrower and its Subsidiaries, and for
payment of the Reimbursement Obligations.
Section 2.5 Revolving Commitment Fee. Borrower agrees to pay to Agent
------------------------
for the account of each Lender a commitment fee on the daily average unused
amount of such Lender's Revolving Commitment for the period from and including
the date of this Agreement to and including the Revolving Termination Date, at a
per annum rate equal to the Commitment Fee Rate, computed on the basis of a year
of 360 days and the actual number of days elapsed (including the first day but
excluding the last day) provided that for purposes of calculating such fee (i)
the amount of outstanding Letters of Credit shall constitute use of the
Revolving Commitment but (ii) Swingline Advances shall not constitute use of the
Revolving Commitment. Accrued commitment fees under this Section 2.5 shall be
-----------
payable in arrears on the last Business Day of each calendar quarter and on the
Revolving Termination Date.
22
<PAGE>
Section 2.6 Termination or Reduction of Revolving Commitments. Borrower
-------------------------------------------------
shall have the right to terminate fully or to reduce in part the unused portion
of the Revolving Commitments at any time and from time to time, provided that:
--------
(a) Borrower shall not have the right to terminate or reduce in part any unused
portion of the Revolving Commitments that could or may be required to be
advanced by the Lenders to refinance Swingline Advances then outstanding; (b)
Borrower shall give Administrative Agent at least five (5) Business Days notice
of each such termination or reduction as provided in Section 5.3 hereof; (c)
-----------
each partial reduction shall be in an aggregate amount at least equal to One
Million Dollars ($1,000,000) or any multiple One Hundred Thousand Dollars
($100,000) in excess thereof; and (d) the Revolving Commitments may not be
reduced below an amount equal to the Letter of Credit Liabilities. The
Revolving Commitments may not be reinstated after they have been terminated or
reduced.
Section 2.7 Letters of Credit.
-----------------
(a) Commitment to Issue. Borrower may utilize Revolving
-------------------
Commitments by requesting that the Fronting Bank issue, and the Fronting
Bank, subject to the terms and conditions of this Agreement, shall issue,
standby and commercial letters of credit for Borrower's account (such
letters of credit being hereinafter referred to as the "Letters of Credit",
-----------------
which may be for the benefit of a Subsidiary of Borrower); provided,
--------
however, (i) the aggregate amount of outstanding Letter of Credit
-------
Liabilities shall not at any time exceed Fifteen Million Dollars
($15,000,000), (ii) the Outstanding Revolving Credit shall not at any time
exceed the maximum amount prescribed by Section 2.1, and (iii) the
-----------
Outstanding Revolving Credit applicable to any Lender shall not at any time
exceed the maximum amount for a Lender prescribed by Section 2.1. Upon the
-----------
date of issue of a Letter of Credit, Administrative Agent shall be deemed,
without further action by any party hereto, to have sold to each Lender who
holds a Revolving Commitment, and each such Lender shall be deemed, without
further action by any party hereto, to have purchased from Administrative
Agent, a participation to the extent of such Lender's Commitment Percentage
(calculated with respect to the Revolving Commitments) in such Letter of
Credit and the related Letter of Credit Liabilities.
(b) Letter of Credit Request Procedure. Except for Letters of
----------------------------------
Credit issued on the Closing Date, Borrower shall give Administrative Agent
not less than three (3) Business Days prior notice (effective upon receipt)
specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice
Administrative Agent shall promptly notify the Fronting Bank and each
Lender who holds a Revolving Commitment of the contents thereof and of such
Lender's Commitment Percentage of the amount of the proposed Letter of
Credit. Each Letter of Credit shall have an expiration date that does not
extend beyond a date which is thirty (30) days prior to the Revolving
Termination Date, shall be payable in Dollars, must support a transaction
entered into in the ordinary course of business of Borrower or its
Subsidiaries, must be reasonably satisfactory in form and substance to
Administrative Agent and the Fronting Bank, and shall be issued pursuant to
such documentation as Administrative Agent and the Fronting Bank may
reasonably require, including, without limitation, the Fronting Bank's
standard form Letter of Credit Agreement; provided, that, in the event of
--------
any conflict between the terms of
23
<PAGE>
such agreement and the other Loan Documents, the terms of the other Loan
Documents shall control.
(c) Letter of Credit Fees. Borrower will pay to Administrative
---------------------
Agent for the account of each Lender holding a Revolving Commitment a fee
on such Lender's Commitment Percentage (calculated with respect to the
Revolving Commitments only) of the daily average amount available for
drawings under the Letters of Credit, such fee (i) to be paid in arrears on
the last Business Day of each calendar quarter occurring after the date of
the issuance of the first Letter of Credit and on each last Business Day of
each calendar quarter thereafter until the date of expiration or
termination of all Letters of Credit and (ii) to be calculated at a rate
per annum equal to the Libor Rate Margin applicable to the Revolving Loans
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day). After receiving any
payment of any fees under this clause (c), Administrative Agent will
----------
promptly pay to each Lender that holds a Revolving Commitment the fees then
due such Lender. Borrower will also pay to the Fronting Bank for its
account only a fronting fee on the amount available to be drawn under each
Letter of Credit, such fronting fee (i) to be paid in advance on the date
of the issuance of each Letter of Credit and (ii) to be calculated at a
rate per annum equal to one-eighth of one percent (0.125%) on the basis of
a year of 360 days and the actual number of days such Letter of Credit is
to be outstanding (including the first day but excluding the last day).
Borrower will also pay to the Fronting Bank, for its account only, all
customary fees for amendments to and processing of the Letters of Credit.
(d) Funding of Drawings. Upon receipt from the beneficiary of any
-------------------
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Fronting Bank shall promptly so notify Administrative
Agent and Administrative Agent shall promptly so notify Borrower and each
Lender that holds a Revolving Commitment as to the amount to be paid as a
result of such demand or drawing and the respective payment date. Not
later than 2:00 p.m. on the applicable payment date if Borrower has not
reimbursed the Fronting Bank for the amount paid as a result of such demand
or drawing, each Lender will make available to Administrative Agent, at the
Principal Office, in immediately available funds, an amount equal to such
Lender's Commitment Percentage (calculated based only on the Revolving
Commitments) of the amount to be paid as a result of such demand or drawing
which has not been reimbursed even if the conditions to a Loan under
Article 8 hereof have not been satisfied and Administrative Agent shall
---------
promptly pay such amounts to the Fronting Bank.
(e) Reimbursements. Borrower shall be irrevocably and
--------------
unconditionally obligated to immediately reimburse the Fronting Bank
(through Administrative Agent) for any amounts paid by the Fronting Bank
upon any demand for payment or drawing under any Letter of Credit, without
presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made to Administrative
Agent not later than 2:00 p.m. on the date of the corresponding payment
under the Letter of Credit by the Fronting Bank; provided, that
--------
Administrative Agent has provided notice to Borrower prior to 11:00 a.m. on
such day that such payment is due. In the event such notice is received
after 11:00 a.m. on a Business Day, such payment shall be due not later
than 1:00 p.m. on the next
24
<PAGE>
succeeding Business Day. Subject to the other terms and conditions of this
Agreement, such reimbursement may be made by Borrower requesting a
Revolving Loan in accordance with Section 5.1 hereof, the proceeds of which
-----------
shall be credited against Borrower's Reimbursement Obligations.
Administrative Agent will pay to each Lender participating in a Letter of
Credit such Lender's Commitment Percentage (calculated based only on the
Revolving Commitments) of all amounts received from Borrower for
application in payment, in whole or in part, to the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent such
Lender has made payment to Administrative Agent in respect of such Letter
of Credit pursuant to clause (d) of this Section 2.7.
---------- -----------
(f) Reimbursement Obligations Absolute. The Reimbursement
----------------------------------
Obligations of Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and Borrower hereby waives any defense to the payment of the
Reimbursement Obligations based on any circumstance whatsoever, including,
without limitation, in either case, the following circumstances: (i) any
lack of validity or enforceability of any Letter of Credit or any other
Loan Document; (ii) the existence of any claim, set-off, counterclaim,
defense, or other rights which any Loan Party or any other Person may have
at any time against any beneficiary of any Letter of Credit, the Fronting
Bank, Administrative Agent, any Lender, or any other Person, whether in
connection with any Loan Document or any unrelated transaction; (iii) any
statement, draft, or other documentation presented under any Letter of
Credit proving to be forged, fraudulent, invalid, or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever; (iv) payment by the Fronting Bank under any Letter of Credit
against presentation of a draft or other document that does not comply with
the terms of such Letter of Credit; or (v) any other circumstance
whatsoever, whether or not similar to any of the foregoing, except in each
instance as otherwise provided in the penultimate sentence of clause (g) of
----------
this Section 2.7.
-----------
(g) Assumption of Risk by Borrower. As among Borrower and the
------------------------------
Lenders, Borrower assumes all risks of the acts and omissions of, or misuse
of any of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the applications for the issuance of Letters
of Credit, the Lenders, the Fronting Bank, and Administrative Agent shall
not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection
with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged;
(ii) the validity or sufficiency of any instrument transferring
or assigning, or purporting to transfer or assign, any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason;
25
<PAGE>
(iii) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter
of Credit;
(iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control
of any Lender or the Fronting Bank, including, without limitation, any
acts of any Governmental Authorities.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
Lenders, the Fronting Bank or Administrative Agent's rights or powers under this
Section 2.7. Borrower shall have a claim against the Fronting Bank, and the
- -----------
Fronting Bank shall be liable to Borrower, to the extent of any direct (but not
indirect, consequential, remote, exemplary or punitive) damages suffered by
Borrower or its Subsidiaries which Borrower proves in a final nonappealable
judgment were caused by (A) the Fronting Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of Credit
complied with the terms thereof or (B) the Fronting Bank's willful failure to
pay under any Letter of Credit after presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit.
Subject to the preceding sentence, the Fronting Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Section 2.8 Borrowing Base. Percentages used from time to time in
--------------
calculating the Borrowing Base are for the sole purpose of determining the
maximum amount of the Outstanding Revolving Credit that may be outstanding from
time to time under this Agreement, and shall not be evidentiary of or binding
upon Administrative Agent or Lenders with respect to the market value or
liquidation value of any Collateral. Funding of Revolving Loans and issuance of
Letters of Credit hereunder shall at all times remain subject to confirmation by
Administrative Agent of Eligible Receivables and the Borrowing Base. Any
request for a Revolving Loan which, if funded, would result in the unpaid
balance of the Revolving Loans being in excess of the amount allowed by this
Agreement may be declined by Administrative Agent in its sole discretion without
prior notice.
ARTICLE 3
Term Loan Facility
------------------
26
<PAGE>
Section 3.1 Term Loans. Subject to the terms and conditions of this
----------
Agreement, each Lender who holds a Term Commitment severally agrees to make an
advance of funds to Borrower on the Closing Date in the amount of such Lender's
Term Commitment. Borrower may not repay and reborrow the Term Loans. Borrower
may establish Base Rate Accounts or Libor Accounts in respect of the Term Loans
and, until the Term Termination Date, Borrower may Continue Libor Accounts
established under the Term Loans or Convert Accounts established under the Term
Loans of one Type into Accounts of another Type. Accounts of each Type
established under the Term Loans made by each Lender shall be made and
maintained at such Lender's Applicable Lending Office for Accounts of such Type.
Section 3.2 Term Notes. Each Term Loan made by a Lender shall be
----------
evidenced by a single promissory note of Borrower in substantially the form of
Exhibit "B" payable to the order of such Lender, in the amount of its Term
- -----------
Commitment and otherwise duly completed.
Section 3.3 Repayment of Term Loans. Borrower shall pay to
-----------------------
Administrative Agent for the account of the Lenders who hold Term Loans the
aggregate principal amount of the Term Loans advanced in installments as
follows:
(a) Consecutive quarterly principal installments due and payable on
each Quarterly Payment Date commencing September 30, 2000, in accordance
with the following schedule:
--------------------------------------------------
Quarterly Payment Dates Term Loan
Installment
--------------------------------------------------
September 2000 $250,000
--------------------------------------------------
December 2000 $250,000
--------------------------------------------------
March 2001 $250,000
--------------------------------------------------
June 2001 $250,000
--------------------------------------------------
September 2001 $250,000
--------------------------------------------------
December 2001 $250,000
--------------------------------------------------
March 2002 $250,000
--------------------------------------------------
June 2002 $250,000
--------------------------------------------------
(b) In any event, all unpaid Obligations in respect of the Term Loans
will be due and payable on the Term Termination Date.
Section 3.4 Use of Proceeds. Subject to the terms of this Agreement, the
---------------
proceeds of the Term Loans shall be used by Borrower (i) to refinance the
existing Debt outstanding under the Original Revolving Credit Facility and (ii)
otherwise for general corporate purposes arising in the ordinary course of
business of Borrower and its Subsidiaries, to finance working capital
requirements and Capital Expenditures of Borrower and its Subsidiaries, and for
payment of the Reimbursement Obligations.
27
<PAGE>
ARTICLE 4
Interest and Fees
-----------------
Section 4.1 Interest Rate. Borrower shall pay to Administrative Agent,
-------------
for the account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender for the period commencing on the date of such Loan to
but excluding the date such Loan is due, at a fluctuating rate per annum equal
to the Applicable Rate. The term "Applicable Rate" means:
---------------
(a) during the period that such Loans or portions thereof are subject
to a Base Rate Account, the Base Rate, plus the Base Rate Margin;
----
(b) during the period that such Loans or portions thereof are subject
to a Libor Account, the Adjusted Libor Rate, plus the Libor Rate Margin;
----
and
(c) with respect to Loans constituting Swingline Advances, the lesser
of the Maximum Rate or the rate determined pursuant to clause (a) above, as
----------
the case may be.
Section 4.2 Determinations of Margins and Commitment Fee Rate. Prior to
-------------------------------------------------
receipt of the Applicable Rate Certificate to be delivered with Borrower's
financial statements for the Fiscal Quarter ending December 25, 1999, the
margins identified in Section 4.1 and the Commitment Fee Rate shall be as
-----------
follows: (i) the Base Rate Margin shall be one and three-quarters percent
(1.75%), (ii) the Libor Rate Margin shall be three percent (3.00%), and (iii)
the Commitment Fee Rate shall be one-half of one percent (0.50%); thereafter,
the Base Rate Margin, the Libor Rate Margin, and the Commitment Fee Rate shall
be determined in accordance with the following table:
=========================================================================
LIBOR RATE BASE RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN FEE RATE
Less than 0.75 to 1.00 1.50% 0.25% 0.375%
-------------------------------------------------------------------------
Greater than or equal to 0.75 to 2.00% 0.75% 0.50%
1.00 but less than 1.75 to 1.00
-------------------------------------------------------------------------
Greater than or equal to 1.75 to 2.50% 1.25% 0.50%
1.00 but less than 2.75 to 1.00
-------------------------------------------------------------------------
Greater than or equal to 2.75 3.00% 1.75% 0.50%
to 1.00
=========================================================================
Upon delivery of the Applicable Rate Calculations pursuant to subsection
----------
10.1(c) in connection with the financial statements of Borrower and its
- -------
Subsidiaries required to be delivered pursuant to subsection 10.1(b) after the
------------------
end of each Fiscal Quarter commencing with such Applicable Rate Certificate
delivered for the Fiscal Quarter ending December 25, 1999, the Commitment Fee
Rate, the Base Rate Margin, and the Libor Rate Margin shall automatically be
adjusted to the fee or rate, as applicable, corresponding to the Leverage Ratio
of Borrower set forth in the table above, such automatic adjustment to take
effect prospectively the third Business Day
28
<PAGE>
after receipt by Administrative Agent of the Applicable Rate Calculation (the
"Adjustment Date"). If Borrower fails to deliver such Applicable Rate
---------------
Calculation with respect to any Fiscal Quarter which sets forth the Leverage
Ratio within the period of time required by subsection 10.1(c): (i) the
------------------
Commitment Fee Rate shall automatically be adjusted to one-half percent (0.50%)
per annum; (ii) the Base Rate Margin shall automatically be adjusted to one and
three-quarters percent (1.75%) per annum, and (iii) the Libor Rate Margin (for
Interest Periods commencing after the applicable Adjustment Date) shall
automatically be adjusted to three percent (3.00%) per annum. The automatic
adjustments provided for in the preceding sentence shall take effect on the last
day that the Applicable Rate Calculation was required to be delivered and shall
remain in effect until subsequently adjusted in accordance herewith upon the
delivery of such Applicable Rate Certificate.
Section 4.3 Payment Dates. Accrued interest on the Loans shall be due
-------------
and payable as follows: (i) in the case of Loans subject to Base Rate Accounts,
on each Quarterly Payment Date and on the Termination Date of such Loan; (ii) in
the case of Loans subject to Libor Accounts and with respect to each such
Account, on (A) the last day of the Interest Period with respect thereto, (B) in
the case of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period, and (C) on the
Termination Date of such Loan.
Section 4.4 Default Interest. Notwithstanding anything to the contrary
----------------
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, at the option of Required Lenders and following notice to
Borrower, Borrower will pay to Administrative Agent for the account of each
Lender, in lieu of the interest payments required under Section 4.1, interest at
-----------
the applicable Default Rate on any principal of any Loan made by such Lender,
any Reimbursement Obligation, and (to the fullest extent permitted by law) any
other amount payable by Borrower under any Loan Document to or for the account
of Administrative Agent or such Lender.
Section 4.5 Conversions and Continuations of Accounts. Subject to
-----------------------------------------
Section 5.2 hereof, Borrower shall have the right from time to time to Convert
- -----------
all or part of any Base Rate Account in existence under a Loan into a Libor
Account under the same Loan or to continue Libor Accounts in existence under a
Loan as Libor Accounts under the same Loan, provided that: (a) Borrower shall
--------
give Administrative Agent notice of each such Conversion or Continuation as
provided in Section 5.3 hereof; (b) subject to Section 6.3 hereof, a Libor
----------- -----------
Account may only be Converted on the last day of the Interest Period therefor;
and (c) except for Conversions into Base Rate Accounts, no Conversions or
Continuations shall be made without the consent of Administrative Agent and the
Required Lenders while a Default has occurred and is continuing.
Section 4.6 Computations. Interest and fees payable by Borrower hereunder
------------
and under the other Loan Documents in respect of the interest and fees, other
than interest based on the Base Rate, shall be computed on the basis of a year
of 360 days and the actual number of days elapsed (including the first day but
excluding the last day) in the period for which interest is payable unless such
calculation would result in a rate that exceeds the Maximum Rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be; interest based on the Base Rate shall be computed on the basis of a
365 or 366 day year, as the case may be.
ARTICLE 5
29
<PAGE>
Administrative Matters
----------------------
Section 5.1 Borrowing Procedure. Borrower shall give Administrative
-------------------
Agent, and Administrative Agent will give the Lenders, notice of each borrowing
under the Commitments in accordance with Section 5.3 hereof. Not later than
-----------
12:00 noon on the date specified for each borrowing under the applicable
Commitment, each Lender obligated with respect to such Commitment will make
available the amount of the Loan to be made by it on such date to Administrative
Agent, at the Principal Office, in immediately available funds, for the account
of Borrower. The amounts received by Administrative Agent shall, subject to the
terms and conditions of this Agreement, be made available to Borrower by 3:00
p.m. at Borrower's direction by transferring the same, in immediately available
funds by wire transfer, automated clearinghouse debit, or interbank transfer to
(a) a bank account of Borrower designated by Borrower in writing or (b) a Person
or Persons designated by Borrower in writing.
Section 5.2 Minimum Amounts. Except for prepayments and Conversions
---------------
pursuant to Section 5.4(a) and Article 6 hereof, each Base Rate Account
-------------- ---------
applicable to a Loan and each prepayment of principal of a Loan shall be in a
minimum principal amount of One Hundred Thousand Dollars ($100,000) or
increments Fifty Thousand Dollars ($50,000) in excess thereof. Each LIBOR
Account applicable to a Loan shall be in a minimum principal amount of One
Million Dollars ($1,000,000) or increments One Hundred Thousand Dollars
($100,000) in excess thereof.
Section 5.3 Certain Notices. Notices by Borrower to Administrative
---------------
Agent of terminations or reductions of Commitments, of borrowings and
prepayments of Loans and of Conversion and Continuations of Accounts shall be
irrevocable and shall be effective only if received by Administrative Agent not
later than 11:00 a.m. on the Business Day prior to (or, with respect to Base
Rate Accounts, on) the date of the relevant termination, reduction, borrowing,
Conversion, Continuation, or other repayment specified below:
<TABLE>
<CAPTION>
========================================================================================
Notice Number of Business
Days Prior
Termination or reduction of Commitments 5
----------------------------------------------------------------------------------------
<S> <C>
Borrowing of Loans subject to Base Rate Accounts, prepayment or
repayment of Loans subject to Base Rate Accounts, or Conversions 0
into Base Rate Accounts or Swingline Advances
----------------------------------------------------------------------------------------
Borrowing, prepayment, or repayment of Loans subject to Libor 3
Accounts, Conversions into or Continuations as Libor Accounts
========================================================================================
</TABLE>
Notwithstanding the foregoing, Borrower may give an effective notice of
borrowing of Revolving Loans subject to Base Rate Accounts in accordance with
Section 2.7(e) not later than 12:00 noon on the Business Day of the proposed
- --------------
borrowing if the proceeds of such borrowing will be used to satisfy
Reimbursement Obligations. Any notices of the type described in this Section
-------
5.3 which are received by Administrative Agent after the applicable time set
- ---
forth above on a Business Day shall be deemed to be received and shall be
effective on the next Business Day. Each such notice of termination or
reduction shall specify the applicable Commitments to be affected and the amount
30
<PAGE>
of the Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation, or prepayment shall specify (a) the Loans to be
borrowed or prepaid or the Accounts to be Converted or Continued; (b) the amount
(subject to Section 5.2 hereof) to be borrowed, Converted, Continued, or
-----------
prepaid; (c) in the case of a Conversion, the Type of Account to result from
such Conversion; (d) in the case of a borrowing, the Type of Account or Accounts
to be applicable to such borrowing and the amounts thereof; (e) in the event a
Libor Account is selected, the duration of the Interest Period therefor; and (f)
the date of borrowing, Conversion, Continuation, or prepayment (which shall be a
Business Day). Any notices by Borrower of the type described in this Section
-------
5.3 may be made orally or in writing and, if made orally, must be confirmed in
- ---
writing not more than two (2) Business Days after the notice is given.
Administrative Agent shall notify the Lenders of the contents of each such
notice on the date of its receipt of the same or, if received on or after the
applicable time set forth above on a Business Day, on the next Business Day. In
the event Borrower fails to select the Type of Account applicable to a Loan, or
the duration of any Interest Period for any Libor Account, within the time
period and otherwise as provided in this Section 5.3, such Account (if
-----------
outstanding as a Libor Account) will be automatically Converted into a Base Rate
Account on the last day of the preceding Interest Period for such Account or (if
outstanding as a Base Rate Account) will remain as, or (if not then outstanding)
will be made as, a Base Rate Account. Borrower may not borrow any Loans subject
to a Libor Account, Convert any Base Rate Accounts into Libor Accounts, or
Continue any Libor Account as a Libor Account if the Applicable Rate for such
Libor Accounts would exceed the Maximum Rate.
Section 5.4 Prepayments.
-----------
(a) Mandatory.
---------
(i) Revolving Loans. If at any time the Outstanding Revolving
---------------
Credit exceeds the aggregate Revolving Commitments or the Borrowing
Base, Borrower shall, within one (1) Business Day after the occurrence
thereof, prepay outstanding Swingline Advances (first) and the
outstanding Revolving Loans by the amount of such excess.
(ii) Prepayments from Asset Dispositions. Immediately upon
-----------------------------------
receipt by Borrower or any of its Subsidiaries of the Net Proceeds of
any Asset Disposition, Borrower shall make a prepayment in respect of
the Obligations equal to the amount of such Net Proceeds in prepayment
of the Loans as provided in Section 5.4(a)(iv); provided, however,
------------------ -------- -------
that if no Default or Event of Default has occurred and is continuing,
Borrower shall not be required to make such prepayment to the extent
that the Net Proceeds from such Asset Dispositions during any fiscal
year of Borrower do not exceed Ten Million Dollars ($10,000,000) in
the aggregate and if they should exceed such amount, then the excess
amount only shall be required to be prepaid. Concurrently with the
making of any such payment, Borrower shall deliver to Administrative
Agent a certificate of Borrower's chief financial officer
demonstrating the calculations of the amount required to be prepaid.
(iii) Prepayments from Debt Offerings. In the event that
-------------------------------
Borrower, or any Subsidiary of Borrower issues any Debt Securities
(including, without limitation, any
31
<PAGE>
Subordinated Debt Securities), other than Debt described in clauses
-------
(a) through (k) of Section 11.1 hereof, no later than the third
--- --- ------------
Business Day following the date of receipt of the proceeds from such
issuance, Borrower shall make a prepayment in respect of the
Obligations equal to the amount of such proceeds, net of underwriting
discounts and commissions and other reasonable costs associated
therewith, in prepayment of the Loans as provided in Section
-------
5.4(a)(iv).
----------
(iv) Application of Proceeds of Prepayments. All prepayments of
--------------------------------------
Loans pursuant to this Section 5.4(a) shall be accompanied by an
--------------
appropriate notice of prepayment in accordance with Section 5.3 and,
-----------
except to the extent otherwise provided in clause (i), shall be
----------
applied to the Term Loans, pro rata with respect to each remaining
installment of principal, until the Term Loans are paid in full. Upon
payment of the Term Loans in full, the prepayments made pursuant to
this Section 5.4(a) shall be applied to permanently reduce the
--------------
Revolving Commitments.
(b) Optional. Subject to Section 5.2 and the provisions of this
-------- -----------
clause (b), Borrower may, at any time and from time to time without premium
----------
or penalty upon prior notice to Administrative Agent as specified in
Section 5.3, prepay or repay any Loan in full or in part; provided that the
-----------
optional prepayments of the Loans shall be applied first to any outstanding
Swingline Advances (until such advances are paid in full) and then to the
Outstanding Loans other than the Swingline Advances. Any optional
prepayment of the Term Loans shall be accompanied with accrued interest on
the amount prepaid to the date of prepayment. Any partial prepayments of
the Term Loans shall be applied to installments due under the Term Loans,
pro rata with respect to each remaining installment of principal. Loans
subject to a Libor Account may be prepaid or repaid only on the last day of
the Interest Period applicable thereto unless Borrower pays to
Administrative Agent, for the account of the applicable Lenders, any
amounts due under Section 6.5 as a result of such prepayment or repayment.
-----------
Section 5.5 Method of Payment. Except as otherwise expressly provided
-----------------
herein, all payments of principal, interest, and other amounts to be made by
Borrower or any other Loan Party under the Loan Documents shall be made to
Administrative Agent at the Principal Office for the account of each Lender's
Applicable Lending Office in Dollars and in immediately available funds, without
set-off, deduction, or counterclaim, not later than 12:00 noon on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). Borrower shall, at the time of making each such payment, specify to
Administrative Agent the sums payable under the Loan Documents to which such
payment is to be applied (and in the event that Borrower fails to so specify, or
if an Event of Default has occurred and is continuing, Administrative Agent may
apply such payment to the Obligations in such order and manner as it may elect
in its sole discretion, subject to Section 5.6 and provided that when applying
-----------
any such amounts to any Loans, Loans subject to Base Rate Accounts shall be
prepaid in full prior to any application to Loans subject to Libor Accounts);
provided, however that, unless Bank of America expressly agrees to the contrary,
such payment shall be applied first to any outstanding Swingline Advances until
such advances are paid in full. Each payment received by Administrative Agent
under any Loan Document for the account of a Lender shall be paid to such Lender
by 3:00 p.m. on the date the payment is deemed made to Administrative
32
<PAGE>
Agent in immediately available funds, for the account of such Lender's
Applicable Lending Office. Whenever any payment under any Loan Document shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest and commitment
fee, as the case may be.
Section 5.6 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein: (a) each Loan shall be made by the Lenders holding Commitments for such
Loan, each payment of commitment fees under Sections 2.5 and letter of credit
------------
fees under subsection 2.7(c) shall be made for the account of the Lenders
-----------------
holding Revolving Commitments and each termination or reduction of the
Commitments shall be applied to the Commitments of the Lenders holding the
applicable Commitments, pro rata according to their respective Commitment
Percentages (calculated with respect to the Commitments for the Loans in
question only); (b) the making, Conversion, and Continuation of Accounts of a
particular Type (other than Conversions provided for by Section 6.4) shall be
-----------
made pro rata among the Lenders holding Accounts of such Type according to their
respective Commitment Percentages (calculated with respect to the Commitments
for the Loans in question only); (c) each payment and prepayment of principal of
or interest on Loans or Reimbursement Obligations by Borrower shall be made to
Administrative Agent for the account of the Lenders holding such Loans or
Reimbursement Obligations (or participation interests therein) pro rata in
accordance with the respective unpaid principal amounts of such Loans or
participation interests held by such Lenders; provided that as long as no
--------
default in the payment of interest exists, payments of interest made when
Lenders are holding different types of Accounts applicable to the same Loan as a
result of the application of Section 6.4, shall be made to the Lenders in
-----------
accordance with the amount of interest owed to each; and (d) the Lenders holding
Revolving Commitments shall purchase from the Fronting Bank participations in
the Letters of Credit to the extent of their respective Commitment Percentages
(calculated only with respect to the Revolving Commitments). All payments of
the Term Loans shall be applied pro rata with respect to each remaining
installment of principal. If at any time payment, in whole or in part, of any
amount distributed by Administrative Agent hereunder is rescinded or must
otherwise be restored or returned by Administrative Agent as a preference,
fraudulent conveyance, or otherwise under any bankruptcy, insolvency, or similar
law, then each Person receiving any portion of such amount agrees, upon demand,
to return the portion of such amount it has received to Administrative Agent.
Section 5.7 Sharing of Payments. If a Lender shall obtain payment of
-------------------
any principal of or interest on any of the Obligations due to such Lender
hereunder directly (and not through Administrative Agent) through the exercise
of any right of set-off, banker's lien, counterclaim, or similar right, or
otherwise, it shall promptly purchase from the other Lenders participations in
the Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment pro rata in accordance with the
unpaid principal of and interest on the Obligations then due to each of them.
To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Obligations
held by the other Lenders may exercise all rights of set-off, banker's lien,
counterclaim, or similar rights with respect to such participation as fully as
if such Lender were a direct holder of
33
<PAGE>
Obligations in the amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of Borrower.
Section 5.8 Non-Receipt of Funds by Administrative Agent. Unless
--------------------------------------------
Administrative Agent shall have been notified by a Lender or Borrower (the
"Payor") prior to the date on which such Lender is to make payment to
-----
Administrative Agent hereunder or Borrower is to make a payment to
Administrative Agent, for the account of one or more of the Agents or the
Lenders, as the case may be (such payment being herein called the "Required
--------
Payment"), which notice shall be effective upon receipt, that the Payor does not
- -------
intend to make the Required Payment to Administrative Agent, Administrative
Agent may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to Administrative Agent, (a) the recipient of
such payment shall, on demand, pay to Administrative Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by Administrative Agent
until the date Administrative Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such period, and (b) Administrative Agent
shall be entitled to offset against any and all sums to be paid to such
recipient, the amount calculated in accordance with the foregoing clause (a).
----------
Section 5.9 Participation Obligations Absolute; Failure to Fund
---------------------------------------------------
Participation. The obligations of a Lender holding a Revolving Commitment to
- -------------
fund its participation in the Letters of Credit in accordance with the terms
hereof shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances: (a) any lack of validity of any Loan Document; (b) the occurrence
of any Default; (c) the existence of any claim, set-off, counterclaim, defense,
or other right which such Lender, any Loan Party, or any other Person may have;
(d) the occurrence of any event that has or could reasonably be expected to have
a Material Adverse Effect on Borrower or any other Loan Party; (e) the failure
of any condition to a Loan under Article 8 hereof to be satisfied; (f) the fact
---------
that after giving effect to the funding of the participation the Outstanding
Revolving Credit may exceed the aggregate Revolving Commitments or the Borrowing
Base; or (g) any other circumstance whatsoever, whether or not similar to any of
the foregoing. If a Lender fails to fund its participation in a Letter of
Credit as required hereby, such Lender shall, subject to the foregoing proviso,
remain obligated to pay to Administrative Agent the amount it failed to fund on
demand together with interest thereon in respect of the period commencing on the
date such amount should have been funded until the date the amount was actually
funded to Administrative Agent at a rate per amount equal to the Federal Funds
Rate for such period and Administrative Agent shall be entitled to offset
against any and all sums to be paid to such Lender hereunder the amount due
Administrative Agent or the Fronting Bank under this sentence.
ARTICLE 6
Change in Circumstances
-----------------------
Section 6.1 Increased Cost and Reduced Return.
---------------------------------
34
<PAGE>
(a) Increased Cost. If, after the Closing Date, any Regulatory
--------------
Change or compliance by any Lender (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law) of any
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Libor
Accounts, its Notes, or its obligation to make Libor Accounts, or
change the basis of taxation of any amounts payable to such Lender (or
its Applicable Lending Office) under this Agreement or its Notes in
respect of any Libor Accounts (other than franchise taxes or taxes
imposed on or measured by the net income of such Lender by the
jurisdiction in which such Lender is organized, has its principal
office or such Applicable Lending Office or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Libor Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitments
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Accounts or to reduce any sum received
or receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Notes with respect to any Libor Accounts, then Borrower
shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction, as then or
previously incurred. If any Lender requests compensation by Borrower under
this Section 6.1(a), Borrower may, by notice to such Lender (with a copy to
--------------
Administrative Agent), suspend the obligation of such Lender to make or
maintain Libor Accounts, or to Convert Base Rate Accounts into Libor
Accounts, until the event or condition giving rise to such request ceases
to be in effect (in which case the provisions of Section 6.4 shall be
-----------
applicable); provided that such suspension shall not affect the right of
--------
such Lender to receive the compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
----------------
have determined that any Regulatory Change has or would have the effect of
reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time upon demand, Borrower shall pay to
35
<PAGE>
such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) Claims Under this Section 6.1. Each Lender shall promptly
-----------------------------
notify Borrower and Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender
to such compensation pursuant to this Section 6.1 and will designate a
-----------
different Applicable 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 Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 6.1 shall furnish to Borrower and
-----------
Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
Section 6.2 Limitation on Libor Accounts. If on or prior to the first
----------------------------
day of any Interest Period for any Libor Account:
(a) Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Libor Rate
for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Libor Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Libor Accounts for such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof specifying
the amounts or periods, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional Libor Accounts, Continue
Libor Accounts, or to Convert Base Rate Accounts into Libor Accounts and
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Libor Accounts, either prepay such Libor Accounts or Convert
such Libor Accounts into Base Rate Accounts in accordance with the terms of
this Agreement.
Section 6.3 Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify Borrower and Administrative Agent thereof
and such Lender's obligation to make or Continue Libor Accounts and to Convert
Base Rate Accounts into Libor Accounts shall be suspended until such time as
such Lender may again make, maintain, and fund Libor Accounts (in which case the
provisions of Section 6.4 shall be applicable).
-----------
Section 6.4 Treatment of Affected Accounts. If the obligation of any
------------------------------
Lender to make a particular Libor Account or to Continue, or to Convert Base
Rate Accounts into, Libor Accounts shall be suspended pursuant to Section 6.1 or
-----------
Section 6.3 (Accounts of such Type being herein called "Affected Accounts"),
- ----------- -----------------
such Lender's Affected Accounts shall be automatically Converted into Base Rate
Accounts on the last day(s) of the then current Interest Period(s) for the
Affected Accounts (or, in the case of a Conversion required by Section 6.3
-----------
hereof, on such earlier date as such Lender may
36
<PAGE>
specify to Borrower with a copy to Administrative Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 6.1 or Section 6.3 hereof that gave rise to such Conversion no longer
- ----------- -----------
exist:
(a) to the extent that such Lender's Affected Accounts have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Accounts shall be applied instead to
its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or Continued by such
Lender as Libor Accounts shall be made or Continued instead as Base Rate
Accounts, and all Accounts of such Lender that would otherwise be Converted
into Libor Accounts shall be Converted instead into (or shall remain as)
Base Rate Accounts.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in Section 6.1 or Section 6.3 hereof that gave
----------- -----------
rise to the Conversion of such Lender's Affected Accounts no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Libor Accounts made by other Lenders are outstanding, such Lender's
Base Rate Accounts shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Accounts, to the
extent necessary so that, after giving effect thereto, all Accounts held by the
Lenders holding Libor Accounts and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 6.5 Compensation. Upon the request of any Lender, Borrower shall
------------
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including, without limitation, any such amounts incurred in connection
with syndication of the Loans) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by Borrower of a Libor
Account for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 13.2) on a date other than the last day of
------------
the Interest Period for such Libor Account; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 8
---------
to be satisfied) to borrow, Convert, Continue, or prepay a Libor Account on
the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
Section 6.6 Taxes.
-----
(a) Withholding Taxes. Except as otherwise provided in this
-----------------
Agreement, any and all payments by any Loan Party to or for the account of
any Lender, any of the Agents or the Fronting Bank hereunder or under any
other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect
thereto, excluding, in the
---------
37
<PAGE>
case of each Lender, each of the Agents, or the Fronting Bank (as
applicable), taxes imposed on or measured by its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office), such of the Agents, or the
Fronting Bank (as the case may be) is organized, located or doing business
or any political subdivision thereof (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If a Loan Party shall be required by
-----
law to deduct any Taxes from or in respect of any sum payable under any
Loan Document to any Lender, any of the Agents, or the Fronting Bank (as
applicable), (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 6.6) such Lender, such of the
-----------
Agents, or the Fronting Bank (as applicable) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
applicable Loan Party shall make such deductions, (iii) the applicable Loan
Party shall pay the full amount deducted to the relevant taxing authority
or other authority in accordance with applicable law, and (iv) the
applicable Loan Party shall furnish to Administrative Agent the original or
a certified copy of a receipt evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, Borrower agrees to pay any and all
----------------
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment
made under this Agreement or any other Loan Document or from the execution
or delivery of, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
-----------
(c) Tax Indemnification. BORROWER AGREES TO INDEMNIFY EACH LENDER,
-------------------
EACH OF THE AGENTS, AND THE FRONTING BANK FOR THE FULL AMOUNT OF TAXES AND
OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES
IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS
SECTION 6.6) PAID BY SUCH LENDER, SUCH OF THE AGENTS, OR THE FRONTING BANK
-----------
(AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO.
Section 6.7 Withholding Tax Exemption. Each Lender organized under the
-------------------------
laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Administrative Agent (but only so long as
such Lender remains lawfully able to do so), shall provide Borrower and
Administrative Agent with (a) if such Lender is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (i) Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the U.S. is a party which reduces to zero the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the U.S., (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and (iii) any other form or certificate
38
<PAGE>
required by any taxing authority (including any certificate required by Sections
871(h) and 881(c) of the Code), certifying that such Lender is entitled to a
complete exemption from tax on payments pursuant to any of the Loan Documents or
(b) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, a Form W-8, or any subsequent versions thereof or successors thereto
(and, if such non-U.S. Lender delivers a Form W-8, a certificate (including any
certificate required by Sections 871(h) and 881(c) of the Code) representing
that such non-U.S. Lender is not a bank for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of Borrower and is not a controlled foreign
corporation related to Borrower (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly executed by such non-U.S. Lender claiming
complete exemption from United States Federal withholding tax on payments of
interest by Borrower under this Agreement and the other Loan Documents. For any
period with respect to which a Lender has failed to provide Borrower and
Administrative Agent with the appropriate form pursuant to this Section 6.7 and
-----------
thereby to establish complete exemption from U.S. withholding tax (unless such
failure to establish complete exemption from U.S. withholding tax is due to a
change in treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), (A) the applicable Loan Party
shall deduct all required Taxes from any amounts payable to such Lender under
any Loan Document, (B) the applicable Loan Party shall pay the full amount
allocated to the relevant taxing authority or other authority in accordance with
applicable law, (C) the applicable Loan Party shall furnish to Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
and (D) such Lender shall not be entitled to an indemnification or increases in
the sum payable under Section 6.6 or Section 14.5 with respect to Taxes imposed
----------- ------------
by the U.S.; provided, however, that should a Lender, which is otherwise exempt
-------- -------
from or subject to a reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder, Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
Section 6.8 Mitigation. If Borrower is required to pay additional amounts
----------
to or for the account of any Lender pursuant to this Article 6, then such Lender
---------
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the reasonable judgment
of such Lender, is not otherwise disadvantageous to such Lender.
ARTICLE 7
Security
--------
Section 7.1 Collateral. To secure the full and complete payment and
----------
performance of the Obligations, Borrower shall, and, to secure the Subsidiary
Guaranty, Borrower shall cause each Subsidiary of Borrower, other than the
Foreign Subsidiaries, to grant to Administrative Agent, for the benefit of the
Agents and the Lenders, a perfected (except, in the case of immaterial items of
Collateral perfection against which requires extraordinary filings or other
actions, where not required by Administrative Agent in the exercise of its
absolute discretion), first priority Lien on all of its right, title, and
interest in and to the following Property, whether now owned or hereafter
acquired, pursuant to the Security Documents:
39
<PAGE>
(a) all Capital Stock of each Subsidiary of Borrower other than
Foreign Subsidiaries (whether present or future), owned as of the Closing
Date or thereafter acquired by Borrower or any Domestic Subsidiary of
Borrower;
(b) 65% of the shares of each class of Capital Stock of each Foreign
Subsidiary (whether present or future) that is a direct, wholly-owned
Subsidiary of Borrower or of a Domestic Subsidiary of Borrower, owned as of
the Closing Date or thereafter acquired by Borrower or such Domestic
Subsidiary; and
(c) all other Property of Borrower and, for purposes of securing the
Subsidiary Guaranty, each Subsidiary of Borrower, other than the Foreign
Subsidiaries, owned as of the Closing Date or thereafter acquired,
including, without limitation, all accounts (including, without limitation,
Receivables), inventory (including, without limitation, Inventory),
equipment, furniture, fixtures, contract rights, general intangibles,
documents, instruments, investment property, chattel paper, permits,
Intellectual Property, intercompany Debt, licenses, and material real
Property, excluding only the Installment Note.
Except as set forth in Schedule 7.1, Borrower covenants that none of the Capital
-------------
Stock to be pledged, in accordance with this Section 7.1 shall be subject to
-----------
any transfer restrictions, shareholders' agreement, or other restriction except
for such restrictions under applicable securities laws and such restrictions, if
any, as may be reasonably acceptable to Administrative Agent. In connection
with and in addition to the foregoing, Borrower and its Subsidiaries shall
execute and/or deliver such Security Documents and further agreements,
documents, and instruments (including, without limitation, stock certificates,
stock powers, and financing statements) as Administrative Agent may reasonably
request in order for it to obtain and maintain the perfected, first priority
Liens to be granted in accordance with this Section 7.1.
-----------
Section 7.2 Guaranties. Each Domestic Subsidiary shall guarantee payment
----------
and performance of the Obligations pursuant to the Subsidiary Guaranty.
Section 7.3 New Subsidiaries, New Issuances of Capital Stock.
------------------------------------------------
Contemporaneously with the creation or acquisition of any Subsidiary of Borrower
(other than a Foreign Subsidiary) Borrower shall, and shall cause each of its
Subsidiaries to:
(a) grant or cause to be granted to Administrative Agent, for the
benefit of the Agents and the Lenders, a perfected, first priority security
interest in all Capital Stock in such Subsidiary owned by Borrower or its
Domestic Subsidiaries (to the extent such Capital Stock is not already so
pledged to Administrative Agent);
(b) cause each such Subsidiary to Guarantee the payment and
performance of the Obligations by executing and delivering to
Administrative Agent an appropriate Guaranty; and
(c) cause each such Subsidiary to execute and deliver to
Administrative Agent an appropriate Security Agreement and such other
Security Documents as Administrative Agent may reasonably request to grant
Administrative Agent, for the benefit of the Agents
40
<PAGE>
and the Lenders, a perfected, first priority Lien (except for Permitted
Liens, if any) on all Property of such Subsidiary in order to secure such
Subsidiary's Guaranty.
Contemporaneously with the issuance of any additional Capital Stock of any
Subsidiary of Borrower, Borrower shall, and shall cause each of its Subsidiaries
to, grant or cause to be granted to Administrative Agent, for the benefit of the
Agents and the Lenders, a perfected, first priority security interest in all
Capital Stock in such Subsidiary owned by Borrower, or any Subsidiary of
Borrower (to the extent such Capital Stock are already not so pledged to
Administrative Agent). Borrower covenants that none of the Capital Stock to be
pledged in accordance with this Section 7.3 shall be subject to any transfer
-----------
restriction, shareholders' agreement, or other restriction except for such
restrictions under applicable securities laws and such restrictions, if any, as
may be reasonably acceptable to Administrative Agent. Notwithstanding anything
to the contrary contained in this Section 7.3, (i) neither Borrower nor any
-----------
Subsidiary of Borrower shall be obligated to pledge more than 65% of each class
of the issued and outstanding capital stock of any Foreign Subsidiary that is a
direct, wholly-owned Subsidiary of Borrower or its Domestic Subsidiaries or to
pledge any Capital Stock of any Subsidiary of any such Foreign Subsidiaries,
(ii) no Foreign Subsidiary shall be obligated to execute a Guaranty guaranteeing
payment or performance of the Obligations, and (iii) no Foreign Subsidiary shall
be obligated to execute a Security Agreement securing payment or performance of
the Obligations. In connection with and in addition to the foregoing, Borrower
and its Subsidiaries shall execute and/or deliver such further agreements,
documents and instruments (including, without limitation, stock certificates,
stock powers, and financing statements) as Administrative Agent may reasonably
request in order for it to obtain and maintain the perfected, first priority
Liens to be granted in accordance with this Section 7.3.
-----------
Section 7.4 New Mortgaged Properties. If requested by Administrative
------------------------
Agent, Borrower shall, and shall cause each of its Subsidiaries other than its
Foreign Subsidiaries to, contemporaneously with the acquisition of any fee real
Property, execute, acknowledge and deliver to Administrative Agent a Mortgage or
an amendment or modification to a then existing Mortgage covering all fee real
Property acquired by Borrower or any of such Subsidiaries subsequent to the
Closing Date, together with evidence reasonably satisfactory to Administrative
Agent and its counsel, including, without limitation, if requested by
Administrative Agent, a commitment for a mortgagee policy of title insurance or
a title opinion in favor of Administrative Agent, in form and substance
reasonably satisfactory to Administrative Agent, that the Mortgage creates a
valid, first priority Lien on the fee estate in favor of Administrative Agent,
for the benefit of the Agents and the Lenders (except for Permitted Liens, if
any), together with appraisals and surveys if requested by Administrative Agent.
Following the date of each such acquisition of Property, if requested by
Administrative Agent, Borrower shall, and shall cause each of its Subsidiaries
(other than its Foreign Subsidiaries) with an interest in such Properties to,
(a) deliver or cause to be delivered to Administrative Agent, a mortgagee policy
of title insurance insuring the Liens of the Mortgage covering such fee real
Property in an amount reasonably satisfactory to Administrative Agent on
standard form policies (except for Permitted Liens, if any) and (b) provide
Administrative Agent with a current environmental assessment of such Property in
form and substance reasonably satisfactory to Administrative Agent.
Section 7.5 Release of Collateral. Upon any sale, transfer or other
---------------------
disposition of Collateral that is expressly permitted under Section 11.8 and
-------------
upon five Business Days prior written
41
<PAGE>
request by Borrower, Administrative Agent shall execute at Borrower's expense
such documents as may be necessary to evidence the release by Administrative
Agent of its Liens on such Collateral being sold, transferred, or otherwise
disposed of; provided, however, that (a) Administrative Agent shall not be
-------- -------
required to release any Lien on any Collateral if a Default shall have occurred
and be continuing, (b) Administrative Agent shall not be required to execute any
such document on terms which, in Administrative Agent's opinion, would expose
Administrative Agent to liability or create any obligation not reimbursed by
Borrower or entail any consequences other than the release of such Lien without
recourse or warranty, and (c) such release shall not in any manner discharge,
affect or impair any of the Obligations or any of Administrative Agent's Liens
on any Collateral retained by Borrower or any of its Subsidiaries, including,
without limitation, its Liens on the proceeds of any such sale, transfer or
other disposition.
ARTICLE 8
Conditions Precedent
--------------------
Section 8.1 Initial Loan and Letter of Credit. The obligation of each
---------------------------------
Lender to make its initial Loan are subject to the fulfillment of the following
conditions precedent to the satisfaction of Administrative Agent on or before
July 15, 1999:
(a) Deliveries. Administrative Agent shall have received on or
----------
before the Closing Date and on or before the day of any such Loan or Letter
of Credit all of the following, each dated (unless otherwise indicated) the
Closing Date, in form and substance reasonably satisfactory to
Administrative Agent:
(i) Resolutions; Authority. Resolutions of the board of
----------------------
directors (or similar governing body) of each Loan Party certified by
its Secretary, its Assistant Secretary, its Clerk or its Assistant
Clerk which authorize its execution, delivery, and performance of the
Loan Documents to which it is or is to be a party;
(ii) Incumbency Certificate. A certificate of incumbency
----------------------
certified by the Secretary, the Assistant Secretary, the Clerk or the
Assistant Clerk of each Loan Party (or confirmations of the Incumbency
Certificates in the case of Loan Parties subject to the ORCF)
certifying the names of its officers (A) who are authorized to sign
the Loan Documents to which it is or is to be a party (including the
certificates contemplated herein) together with specimen signatures of
each such officer and (B) who will, until replaced by other officers
duly authorized for that purpose, act as its representative for the
purposes of signing documentation and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby;
(iii) Organizational Documents. The certificate of incorporation
------------------------
of each Loan Party certified by the Secretary of State of the state of
its incorporation and dated a current date or a certificate of no
change from the copy delivered at the closing of the ORCF;
42
<PAGE>
(iv) Bylaws. The bylaws of each Loan Party certified by its
------
Secretary or an Assistant Secretary or a certificate of no change from
the copy delivered at the closing of the ORCF;
(v) Governmental Certificates. Certificates of the
-------------------------
appropriate government officials of the state of incorporation of each
Loan Party as to its existence and, to the extent applicable good
standing, and certificates of the appropriate government officials of
each state in which each Loan Party's principal business office is
located, as to each Loan Party's qualification to do business and good
standing in such state, all dated a current date;
(vi) Notes. The Notes executed by Borrower dated the date
-----
hereof;
(vii) Guaranties. The Guaranties (or amendments and/or
----------
confirmations of Guaranties delivered in connection with the ORCF)
executed by the Domestic Subsidiaries of Borrower;
(viii) Lien Search Reports. UCC, tax, and judgment Lien search
-------------------
reports listing all documentation on file against Borrower and its
Domestic Subsidiaries in the central filing locations of each
jurisdiction in which any such party's business offices are located
and in the local filing offices of each jurisdiction in which such
party's principal business office is located in each case for those
jurisdictions and Domestic Subsidiaries not previously searched in
connection with the ORCF;
(ix) Termination or Assignment of Liens. Duly executed UCC-3
----------------------------------
termination statements, mortgage releases, and such other
documentation as shall be necessary to terminate, release, or assign
to Administrative Agent all Liens other than those permitted by
Section 11.2 hereof;
------------
(x) Security Agreements. Security Agreements executed by each
-------------------
of the Loan Parties not party to the Security Agreements executed in
connection with the ORCF and amendments and/or confirmations of the
Security Agreements executed in connection with the ORCF;
(xi) Stock Certificates. The stock certificates representing
------------------
all of the issued and outstanding Capital Stock the Domestic
Subsidiaries and 65% of the outstanding Capital Stock of its first
tier Foreign Subsidiaries (excluding Foreign Subsidiaries with total
assets of less than Two Million Five Hundred Thousand Dollars
($2,500,000), provided that the total assets of all such excluded
Foreign Subsidiaries shall not exceed Five Million Dollars
($5,000,000) in the aggregate), in each case accompanied by
appropriate instruments of transfer or stock powers executed in blank
(as appropriate), or registration of Administrative Agent's Lien, in
form and substance satisfactory to Administrative Agent (in the case
of book entry securities); provided that Borrower may have up to 30
--------
days after the Closing Date to deliver all of the Capital Stock of its
first tier Foreign Subsidiaries required to be pledged as aforesaid;
43
<PAGE>
(xii) Financing Statements. UCC Financing statements and all
--------------------
other requisite filing documents executed by the Loan Parties
necessary to perfect the Liens created pursuant to the Security
Documents;
(xiii) Consents. Copies of all material consents or waivers
--------
(other than consents or waivers previously delivered to Administrative
Agent and certified by a Loan Party as being true and correct copies)
necessary for the execution, delivery, and performance by each of the
Loan Parties of the Loan Documents to which it is a party, as
Administrative Agent may require, which consents shall be certified by
an Authorized Representative of the applicable Loan Party as true and
correct copies of such consents as of the Closing Date;
(xiv) Permits. Copies of all material permits (other than
-------
permits previously delivered to Administrative Agent and certified by
a Loan Party as being true and correct copies) affecting Borrower or
any of its Subsidiaries in connection with its businesses or any of
the Properties owned or leased by it, and evidence satisfactory to
Administrative Agent that Borrower and its Subsidiaries are able to
conduct their businesses with the use of such permits in full force
and effect;
(xv) Insurance Policies. Certificates of insurance
------------------
summarizing the insurance policies of Borrower and its Subsidiaries
required by this Agreement and reflecting Administrative Agent as
additional insured under such policies;
(xvi) Opinions of Counsel. Opinions of legal counsel to
-------------------
Borrower and the Subsidiaries of Borrower, and as to such matters, as
Administrative Agent may reasonably request;
(xvii) Fees. The underwriting and structuring fees set forth in
----
that certain letter dated January 13, 1999, from Administrative Agent
to Borrower, as the same may be amended from time to time (such fees
are expected to be paid on the Closing Date);
(xviii) Employment Agreements. Copies of all employment
---------------------
contracts or other compensation arrangements not previously delivered
to Administrative Agent between Borrower and any of its Subsidiaries
and their respective executive officers as Administrative Agent shall
reasonably request;
(xix) Letter of Direction. A letter of direction from Borrower
-------------------
addressed to Administrative Agent with respect to the disbursement of
the proceeds of the initial Loans;
(xx) Borrowing Base Certificate. A Borrowing Base
--------------------------
Certificate calculating the Borrowing Base as of May 29, 1999; and
44
<PAGE>
(xxi) Schedules. The Schedules to be attached hereto in form
---------
and substance satisfactory to Lenders in their sole discretion.
(b) Financial Statements. Receipt and satisfactory review by
--------------------
Administrative Agent of the consolidated financial statements of Borrower
and its Subsidiaries for the periods ended December 26, 1998, and March
27, 1999, including balance sheets, income and cash flow statements audited
(in the case of the December 26, 1998 financial statements) by independent
public accountants of recognized national standing and prepared, in each
case, in conformity with GAAP and such other financial information as
Administrative Agent may request.
(c) Attorneys' Fees and Expenses. The reasonable costs and
----------------------------
expenses (including attorneys' fees) referred to in Section 15.1 hereof for
------------
which statements have been presented shall have been paid in full;
(d) Compliance with Laws. As of the Closing Date, each Loan Party
--------------------
shall have complied with all requirements of all Governmental Authorities
necessary to consummate the transactions contemplated by this Agreement and
the other Loan Documents;
(e) No Prohibitions. No requirement of any Governmental Authority
---------------
shall prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment, or decree of
any Governmental Authority or arbitrator shall, and no litigation or other
proceeding shall be pending or threatened which would, enjoin, prohibit,
restrain, or otherwise adversely affect in any material manner the
consummation of the transactions contemplated by this Agreement and the
other Loan Documents or otherwise have a Material Adverse Effect on
Borrower or any other Loan Party;
(f) No Material Adverse Change. As of the Closing Date, no material
--------------------------
adverse change shall have occurred with respect to the condition (financial
or otherwise), results of operations, business, operations, capitalization,
assets, liabilities, or prospects of Borrower and its Subsidiary taken as a
whole since December 26, 1998, and Administrative Agent shall be satisfied
that the economic performance of Borrower and each of its Subsidiaries to
the Closing Date is not materially different from the economic projections
for Borrower and each of its Subsidiaries through the Closing Date that
were previously submitted to Administrative Agent;
(g) No Material Litigation. Except as set forth in Schedule 9.5
---------------------- ------------
hereto, as of the Closing Date, no action, suit, investigation, or
proceeding shall be pending or threatened before any Governmental Authority
that purports to affect Borrower or any Subsidiary of Borrower that could
result in a Material Adverse Effect on Borrower or that could have an
adverse effect on the ability of Borrower or any Subsidiary of Borrower to
perform their Obligations under the Loan Documents;
(h) Compliance With Financial Obligations. As of the Closing Date,
-------------------------------------
each of Borrower and the Subsidiaries of Borrower shall be in compliance
with all of their respective
45
<PAGE>
existing financial obligations except where failure to be in compliance
could not have a Material Adverse Effect;
(i) Due Diligence Review. Receipt and review, with results reasonably
--------------------
satisfactory to Administrative Agent and its counsel, of information (or
confirmation of no material changes to the information provided in
connection with the ORCF) regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real estate leases,
material contracts, debt agreements, property ownership, environmental
matters, contingent liabilities and management of Borrower and its
subsidiaries which information may include, if requested by Administrative
Agent, a written audit of the accounts receivable, controls and systems of
Borrower and its Subsidiaries.
(j) Year 2000 Matters. Receipt and review, with results reasonably
-----------------
satisfactory to Administrative Agent, of information (or confirmation of no
changes to the information provided in connection with the ORCF) confirming
that (a) Borrower and its Subsidiaries are taking all necessary and
appropriate steps to ascertain the extent of, and to quantify and
successfully address, business and financial risks facing Borrower and its
Subsidiaries as a result of the Year 2000 Problem, including risks
resulting from the failure of key vendors and customers of Borrower and its
Subsidiaries to successfully address the Year 2000 Problem, and (b)
Borrower's and its Subsidiaries' material computer applications and those
of its key vendors and customers will, on a timely basis, adequately
address the Year 2000 Problem in all material respects.
(k) No Material Market Changes. The absence of any material
--------------------------
disruption of or material adverse change in conditions in the financial,
banking or capital markets which Administrative Agent and Syndication
Agent, in their reasonable discretion, deem material in connection with the
syndication of the Loans.
(l) Additional Documentation. Administrative Agent shall have
------------------------
received such additional approvals, opinions, or other documentation as
Administrative Agent may reasonably request.
Failure to fulfill each of the foregoing conditions to the satisfaction of
Administrative Agent on or before July 15, 1999 shall result in the termination
of all Commitments.
Section 8.2 All Loans and Letters of Credit. The obligation of each
-------------------------------
Lender to make any Loan (including the initial Loans) and the obligation of the
Fronting Bank to issue any Letter of Credit (including any initial Letter of
Credit) are subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or
----------
would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations and
------------------------------
warranties contained in Article 9 hereof and in the other Loan Documents
----------
shall be true and correct in all material respects on and as of the date of
such Loan or Letter of Credit with the same
46
<PAGE>
force and effect as if such representations and warranties had been made on
and as of such date except to the extent that such representations and
warranties relate specifically to another date, and except as to
transactions permitted hereunder; and
(c) Notice of Borrowing. Administrative Agent shall have received a
-------------------
Notice of Borrowing requesting such Loan or Letter of Credit.
Each notice of borrowing by Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by Borrower that the conditions precedent set forth in subsection 8.1(a) and
-----------------
subsection 8.1(b) hereof have been satisfied (both as of the date of such notice
- -----------------
and, unless Borrower otherwise notifies Administrative Agent prior to the date
of such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
ARTICLE 9
Representations and Warranties
------------------------------
To induce the Agents and the Lenders to enter into this Agreement, Borrower
represents and warrants to the Agents and the Lenders that the following
statements are, and, after giving effect to the transactions contemplated
hereby, will be true, correct, and complete:
Section 9.1 Corporate Existence.
-------------------
(a) Except as set forth in Schedule 9.1 (any such exception to be
------------
cured within thirty (30) days of the Closing Date), Borrower and each
Subsidiary of Borrower is (i) a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite power and authority to own its assets
and carry on its business as now being or as proposed to be conducted; and
(iii) is qualified to do business in all jurisdictions in which the nature
of its business makes such qualification necessary and where failure to so
qualify would have a Material Adverse Effect;
(b) Each Loan Party has the power and authority to execute, deliver,
and perform its respective obligations under the Loan Documents to which it
is or may become a party.
Section 9.2 Financial Condition.
-------------------
(a) Financial Statements. All financial statements concerning
--------------------
Borrower and its Subsidiaries delivered at any time to Administrative Agent
or any Lender have been, and at all times subsequent to the Closing Date
shall be, prepared in accordance with GAAP, and present fairly, in all
material respects the financial condition of Borrower and its Subsidiaries
as of the respective dates indicated therein and the results of operations
for the respective periods indicated therein. Neither Borrower nor any
Subsidiary of Borrower has any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses from any unfavorable commitments except as referred to
or reflected in such financial statements.
47
<PAGE>
(b) Projections. The Projections delivered and to be delivered
-----------
have been and will be prepared by Borrower in light of the past operation
of the business of Borrower and its Subsidiaries. The Projections
represent, as of the date thereof, a good faith estimate by Borrower and
its senior management of the financial conditions and performance of
Borrower and its Subsidiaries based on assumptions believed to be
reasonable at the time made.
Section 9.3 Corporate Action; No Breach. Except as set forth in
---------------------------
Schedule 9.3, the execution, delivery, and performance by each Loan Party of the
- ------------
Loan Documents to which each is or may become a party and compliance with the
terms and provisions thereof have been duly authorized by all requisite action
on the part of each Loan Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) the articles of
incorporation, certificate of formation, bylaws, or operating agreement of any
Loan Party, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii) any
agreement or instrument to which any Loan Party is a party or by which any of
them or any of their property is bound or subject, or (b) constitute a default
under any such agreement or instrument, or result in the creation or imposition
of any Lien upon any of the revenues or assets of any Loan Party.
Section 9.4 Operation of Business. Each Loan Party possesses all
---------------------
material licenses, permits, franchises, patents, copyrights, trademarks, and
tradenames, or rights thereto, necessary to conduct its respective businesses
substantially as now conducted and as presently proposed to be conducted, and no
Loan Party is in violation of any valid rights of others with respect to any of
the foregoing where such violation could reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 9.4, since the last
------------
Saturday of 1998, the Loan Parties have conducted their respective businesses
only in the ordinary and usual course, except for transactions permitted hereby.
Section 9.5 Litigation and Judgments. Except as set forth in Schedule
------------------------ --------
9.5, to Borrower's knowledge there is no action, suit, investigation, or
- ---
proceeding before or by any Governmental Authority or arbitrator pending or
threatened against or affecting any Loan Party which could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, except as
set forth in Schedule 9.5, there are no outstanding judgments against any Loan
------------
Party.
Section 9.6 Rights in Properties; Liens. Except as set forth in
---------------------------
Schedule 9.6, each Loan Party has good title to or valid leasehold interests in
- ------------
its respective properties and assets, real and personal, including, as of the
Closing Date, the properties, assets, and leasehold interests reflected in the
most recent financial statements described in Section 9.2 (except for any
-----------
thereof disposed of in compliance with Section 11.8), and none of such
------------
properties, assets, or leasehold interests of any Loan Party is subject to any
Lien, except as permitted by Section 11.2. Except as disclosed on Schedule
------------ --------
9.6(a), as of the Closing Date, no Loan Party owns any material right, title, or
- ------
interest in any real Properties. Except as disclosed on Schedule 9.6(b), as of
---------------
the Closing Date, no Loan Party owns any right, title, or interest of a material
nature in Intellectual Property that is registered with any Governmental
Authority. As of the Closing Date, Schedule 9.6(c) sets forth the locations of
---------------
all of the offices and other places of business of the Loan Parties and the
locations of all of the material Properties of the Loan Parties, as well as the
identities of the Loan Parties who conduct business or
48
<PAGE>
own Properties at such locations and the identities of the predecessor entities
who previously conducted business or owned Properties at such locations and
whose Capital Stock or assets were acquired by any Loan Party. The Lenders' Lien
on the Collateral required by Article 7 constitutes a perfected first priority
---------
Lien subject only to Permitted Liens.
Section 9.7 Enforceability. The Loan Documents to which any Loan Party
--------------
is a party, when delivered, shall constitute the legal, valid, and binding
obligations of the applicable Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 9.8 Approvals. No authorization, approval, or consent of, and
---------
no filing or registration with, any Governmental Authority or other third party
is or will be necessary for the execution, delivery, or performance by any Loan
Party of the Loan Documents to which each is or may become a party or for the
validity or enforceability thereof except for such authorizations, approvals,
consents, filings, and registrations which have been obtained or made.
Section 9.9 Debt. Except as set forth in Schedule 9.9, no Loan Party
---- ------------
has any Debt, except as permitted by Section 11.1.
------------
Section 9.10 Taxes. Except as set forth in Schedule 9.10, the Loan
----- -------------
Parties have filed all material tax returns (federal, state, and local) required
to be filed, including all material income, franchise, employment, property, and
sales tax returns, and have paid all of their respective material liabilities
for taxes, assessments, governmental charges, and other levies that are due and
payable other than those being contested in good faith by appropriate
proceedings diligently pursued for which adequate reserves have been established
in accordance with GAAP. Except as set forth in Schedule 9.10, Borrower knows
-------------
of no pending investigation of any Loan Party by any taxing authority with
respect to any material liability for tax or of any pending but unassessed
material tax liability of any Loan Party.
Section 9.11 Margin Securities. No Loan Party is engaged principally,
-----------------
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
Section 9.12 ERISA. With respect to each Plan, each Loan Party is in
-----
substantial compliance with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. Except for termination of Borrower's Plans on the
Closing Date, no notice of intent to terminate a Plan has been filed, nor has
any Plan been terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings. No
Loan Party nor any ERISA Affiliate has completely or partially withdrawn from a
Multiemployer Plan. The Loan Parties and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to each Plan. Except as
set forth in Schedule 9.12 hereto, the present value of all vested benefits
-------------
under each Plan do not exceed the fair
49
<PAGE>
market value of all Plan assets allocable to such benefits, as determined on the
most recent valuation date of the Plan and in accordance with ERISA. No Loan
Party nor any ERISA Affiliate has any outstanding liability to the PBGC under
ERISA (other than liability for the payment of PBGC premiums in the ordinary
course of business).
Section 9.13 Disclosure. All factual information furnished by or on
----------
behalf of any Loan Party in writing to the Agents or any Lender in this
Agreement, the Schedules hereto, the other Loan Documents, or the documents
listed on Schedule 9.13 hereto, and all other such factual information hereafter
-------------
furnished by or on behalf of any Loan Party to the Agents or any Lender, are and
will be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
Section 9.14 Subsidiaries; Capitalization. Schedule 9.14 sets forth as
---------------------------- -------------
of the Closing Date the jurisdiction of incorporation or organization of
Borrower and each Subsidiary of Borrower, the percentage of Borrower's or
another Subsidiary's (as applicable) ownership of the outstanding Voting Stock
of each Subsidiary of Borrower, and the authorized, issued, and outstanding
Capital Stock of Borrower and each Subsidiary of Borrower. All of the
outstanding Capital Stock of Borrower and each Subsidiary of Borrower has been
validly issued, is fully paid, is nonassessable, and has not been issued in
violation of any preemptive or similar rights. Except as disclosed in Schedule
--------
9.14, there are (a) no outstanding subscriptions, options, warrants, calls, or
- ----
rights (including preemptive rights) to acquire, and no outstanding securities
or instruments convertible into, Capital Stock of any Subsidiary of Borrower to
which Borrower or any Subsidiary of Borrower is a party, and (b) no shareholder
agreements, voting trusts, or similar agreements in effect and binding on any
shareholder of Borrower or any Subsidiary of Borrower or the Capital Stock of
any Subsidiary of Borrower to which Borrower or any Subsidiary of Borrower is a
party. All shares of Capital Stock of Borrower and each Subsidiary of Borrower
were issued in compliance with all applicable state and federal securities laws.
Section 9.15 Agreements. Except as set forth in Schedule 9.15, no Loan
---------- -------------
Party is a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction that is so unusually burdensome as could have a Material Adverse
Effect with respect to such Loan Party. No Loan Party is in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
to which it is a party where such default could reasonably be expected to cause
a Material Adverse Effect with respect to such Loan Party.
Section 9.16 Compliance with Laws. No Loan Party is in violation of any
--------------------
law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except for unintentional violations which could not reasonably be
expected to have a Material Adverse Effect with respect to such Loan Party.
Section 9.17 Investment Company Act. No Loan Party is an "investment
----------------------
company" within the meaning of the Investment Company Act of 1940, as amended.
50
<PAGE>
Section 9.18 Public Utility Holding Company Act. No Loan Party is a
----------------------------------
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Borrower Company Act of 1935, as amended.
Section 9.19 Environmental Matters.
---------------------
Except as disclosed on Schedule 9.19:
-------------
(a) Each Loan Party, and all of their respective properties, assets,
and operations are in compliance in all material respects with all
Environmental Laws. Borrower is not aware of, nor has any Loan Party
received notice of, any past, present, or future conditions, events,
activities, practices, or incidents which may interfere with or prevent the
compliance or continued compliance of the Loan Parties with all
Environmental Laws except for such noncompliance as could not reasonably be
expected to have a Material Adverse Effect on Borrower;
(b) The Loan Parties have obtained and maintained, and are in material
compliance with, all material permits, licenses, and authorizations that
are required under applicable Environmental Laws;
(c) No Hazardous Materials exist on, about, or within or have been
used, generated, stored, transported, disposed of on, or Released from any
of the properties or assets of any Loan Party (other than lubricants,
cleaning solutions, and similar materials used for maintenance in the
ordinary course of business). The use which the Loan Parties make and
intend to make of their respective properties and assets will not result in
the use, generation, storage, transportation, accumulation, disposal, or
Release of any Hazardous Material on, in, or from any of their properties
or assets (other than lubricants, cleaning solutions, and similar materials
used for maintenance in the ordinary course of business);
(d) No Loan Party nor any of their respective currently or previously
owned or leased properties or operations is subject to any outstanding or
threatened order from or agreement with any Governmental Authority or other
Person or subject to any judicial or administrative proceeding with respect
to (i) failure to comply with Environmental Laws, (ii) Remedial Action, or
(iii) any Environmental Liabilities arising from a Release or threatened
Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of any
Loan Party that could reasonably be expected to result in any Environmental
Liabilities, except as could not reasonably be expected to result in a
Material Adverse Effect on Borrower;
(f) No Loan Party is a treatment, storage, or disposal facility
requiring a permit under the Resource Conservation and Recovery Act, 42
U.S.C. (S) 6901 et seq., regulations thereunder or any comparable provision
of state law. Except as would not reasonably be expected to have a
Material Adverse Effect with respect to any Loan Party, as the case may
51
<PAGE>
be, the Loan Parties are in compliance with all applicable financial
responsibility requirements of all applicable Environmental Laws;
(g) Except as would not reasonably be expected to have a Material
Adverse Effect with respect any Loan Party, as the case may be, no Loan
Party has filed or failed to file any notice required under applicable
Environmental Law reporting an unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of any Loan Party.
Section 9.20 Broker's Fees. No broker's or finder's fee, commission or
-------------
similar compensation will be payable by any Loan Party with respect to the
transactions contemplated by this Agreement. No other similar fees or
commissions will be payable by any Loan Party to any Person (other than the
Agents and the Lenders) for any other services rendered to any Loan Party
ancillary to this Agreement.
Section 9.21 Employee Matters. Except as set forth on Schedule 9.21
---------------- -------------
hereto, as of the Closing Date, (a) no Loan Party, nor any of their respective
employees, is subject to any collective bargaining agreement, (b) no petition
for certification or union election is pending with respect to the employees of
any Loan Party and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Loan Party,
and (c) there are no strikes, slowdowns, work stoppages, or controversies
pending or, to the best knowledge of Borrower after due inquiry, threatened
between any Loan Party and its respective employees.
Section 9.22 Solvency. Except as set forth in Schedule 9.22, as of and
-------- -------------
from and after the date of this Agreement and after giving effect to the
consummation of the transactions contemplated hereby, each of the Loan Parties
individually and on a consolidated basis is Solvent.
Section 9.23 Year 2000 Compliance. Except as set forth in Schedule
-------------------- --------
9.23, Borrower has (i) undertaken a detailed review and assessment of all areas
- ----
within the business and operations of it and its Subsidiaries that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
-----------------
applications used by Borrower or its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (ii) developed a detailed plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Borrower reasonably
anticipates that all computer applications that are material to the business and
operations of it and its Subsidiaries will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant").
-------------------
ARTICLE 10
Positive Covenants
------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, it will perform and observe the following
positive covenants:
52
<PAGE>
Section 10.1 Reporting Requirements. Borrower will furnish to
----------------------
Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any
---------------------------
event within ninety (90) days after the end of each Fiscal Year of
Borrower, beginning with Fiscal Year 1999, (i) a copy of the annual audit
report of Borrower and its Subsidiaries for such Fiscal Year containing, on
a consolidated basis, balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form the
figures for the preceding Fiscal Year, all in reasonable detail and audited
and certified on an unqualified basis by independent certified public
accountants of recognized standing selected by Borrower and reasonably
acceptable to Administrative Agent, to the effect that such report has been
prepared in accordance with GAAP; (ii) a copy of the annual unaudited
report of Borrower and its Subsidiaries for such Fiscal Year containing, on
a consolidating basis balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form the
figures for the preceding Fiscal Year, and in reasonable detail certified
by the chief executive officer or chief financial officer of Borrower to
have been prepared in accordance with GAAP and to fairly present the
financial condition and results of operation of Borrower and such
significant business divisions, on a consolidating basis at the date and
for the Fiscal Year then ended; and (iii) a copy of Projections for each of
Borrower's Fiscal Year through the Fiscal Year first ending after the
Termination Date;
(b) Quarterly Financial Statements. As soon as available, and in
------------------------------
any event within forty-five (45) days after the end of each of the first
three Fiscal Quarters beginning with the Fiscal Quarter ending on the last
Saturday of March, 1999, a copy of an unaudited financial report of
Borrower and its Subsidiaries as of the end of such period and for the
portion of the Fiscal Year then ended containing, on a consolidated basis,
balance sheets and statements of income, retained earnings, and cash flow,
in each case setting forth in comparative form the figures for the
corresponding period of the preceding Fiscal Year, all in reasonable detail
certified by the chief executive officer or chief financial officer of
Borrower to have been prepared in accordance with GAAP and to fairly
present, in all material respects, the financial condition and results of
operations of Borrower and its Subsidiaries on a consolidated basis, at the
date and for the periods indicated therein, subject to year-end audit
adjustments;
(c) Compliance Certificate. As soon as available, and in any event
----------------------
within forty-five (45) days after the end of each of the first three Fiscal
Quarters and accompanying the annual financial statements delivered in
accordance with subsection 10.1(a), a Compliance Certificate, together with
------------------
schedules setting forth the calculations supporting the computations
therein and, within forty-five (45) days after the end of each Fiscal
Quarter, a calculation enabling Administrative Agent to determine the
Applicable Rate (the "Applicable Rate Calculation");
---------------------------
53
<PAGE>
(d) Borrowing Base Certificate. After the Closing Date, Borrower
--------------------------
shall deliver to Administrative Agent as soon as available, but in any
event no later than the twentieth day of each month (fifteenth day for the
February, 2000 report and each report thereafter), unless such day falls
upon a weekend or a bank holiday in either Texas or Massachusetts, in which
case such delivery shall be due upon the next succeeding day not a weekend
or bank holiday in Texas or Massachusetts, a Borrowing Base Certificate and
a backlog report in Borrower's customary form prepared as of the close of
business on the last Business Day of the previous month (but giving pro
forma effect to any sales of Subsidiaries or business units occurring on or
after the close of business on such last Business Day and prior to the date
of such Borrower Base Certificate) in form acceptable to Administrative
Agent;
(e) Notice of Litigation. Promptly after receipt by any Loan Party of
--------------------
notice of the commencement thereof, notice of all actions, suits, and
proceedings before any Governmental Authority or arbitrator affecting any
Loan Party which, if determined adversely to such Loan Party, could
reasonably be expected to have a Material Adverse Effect with respect to
such Loan Party;
(f) Notice of Default. As soon as possible and in any event within
-----------------
two (2) Business Days after the chief executive officer, president, chief
financial officer, the general counsel, any president of a major operating
unit, secretary, assistant secretary, treasurer, or any assistant treasurer
of Borrower (each an "Authorized Representative") has knowledge of the
-------------------------
occurrence of a Default, a written notice setting forth the details of such
Default and the action that Borrower has taken and proposes to take with
respect thereto;
(g) ERISA. As soon as possible and in any event within thirty (30)
-----
days after Borrower knows, or has reason to know, that
(i) any Termination Event with respect to a Plan has occurred
or will occur, or
(ii) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0, or
(iii) any Loan Party is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of any Loan Party's complete or partial withdrawal
(as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan,
Borrower will provide Administrative Agent and the Lenders a certificate of
its president or its chief financial officer setting forth the details of
such event and the action which is proposed to be taken with respect
thereto, together with any notice or filing which may be required by the
PBGC or any other Governmental Authority with respect to such event.
(h) Notice of Material Adverse Effect. As soon as possible and in
---------------------------------
any event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect with respect to any Loan Party, written notice thereof;
54
<PAGE>
(i) Proxy Statements, Etc. As soon as available, one copy of each
----------------------
financial statement, report, notice, or proxy statement sent by any Loan
Party to its stockholders generally and one copy of each regular, periodic,
or special report, registration statement, or prospectus filed by any Loan
Party with any securities exchange or the Securities and Exchange
Commission or any successor agency; and
(j) General Information. Promptly, such other information
-------------------
concerning any Loan Party as Administrative Agent or any Lender may from
time to time reasonably request.
Section 10.2 Maintenance of Existence; Conduct of Business. Except as
---------------------------------------------
permitted by Section 11.3, Borrower will, and will cause each of its
------------
Subsidiaries to, preserve and maintain its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications, and rights
that are necessary in the ordinary conduct of its business, except where the
failure of a Subsidiary so to preserve and maintain could not reasonably be
expected to have a Material Adverse Effect on Borrower. Borrower will, and will
cause each of its Subsidiaries to, conduct its business in an orderly and
efficient manner in accordance with good business practices.
Section 10.3 Maintenance of Properties. Borrower will, and will cause
-------------------------
each other Loan Party to, maintain, keep, and preserve all of its material
properties necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 10.4 Taxes and Claims. Borrower will, and will cause each other
----------------
Loan Party to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither no Loan Party shall be
-------- -------
required to pay or discharge any tax, levy, assessment, or governmental charge
(i) which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves in accordance with GAAP have been
established or (ii) if the failure to pay the same would not result in a Lien on
the property of any Loan Party.
Section 10.5 Insurance. (a) Each of the Loan Parties will, and will
---------
cause each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by responsible
corporations engaged in the same or a similar business similarly situated
against loss or damage of the kinds and in the amounts customarily insured
against by such corporations or entities and carry such other insurance as is
usually carried by such corporations or entities, provided that in any event
--------
each Loan Party (as appropriate) will maintain:
(i) Property Insurance -- Insurance against loss or damage covering
------------------
substantially all of the tangible real and personal Property and
improvements of such Loan Party by reason of any Peril (as defined
below) in such amounts (subject to any deductibles as shall be
reasonably satisfactory to Administrative Agent) as shall be
reasonable and customary and sufficient to avoid the insured named
therein from becoming a co-insurer of any loss under such policy, but
in any event in such amounts as are
55
<PAGE>
reasonably available as determined by Borrower's independent insurance
broker reasonably acceptable to Administrative Agent.
(ii) Automobile Liability Insurance for Bodily Injury and Property Damage -
--------------------------------------------------------------------
- Insurance in respect of all vehicles (whether owned, hired, or
rented by any Loan Party) at any time located at, or used in
connection with, its Properties or operations against liabilities for
bodily injury and Property damage in such amounts as are then
customary for vehicles used in connection with similar Properties and
businesses, but in any event to the extent required by applicable law.
(iii) Comprehensive General Liability Insurance -- Insurance against
-----------------------------------------
claims for bodily injury, death, or Property damage occurring on, in
or about the Property (and adjoining streets, sidewalks, and
waterways) of any Loan Party, in such amounts as are then customary
for Property similar in use in the jurisdictions where such Properties
are located.
(iv) Worker's Compensation Insurance -- Worker's compensation insurance
-------------------------------
(including, without limitation, employers' liability insurance) to the
extent required by applicable law, which may be self-insurance to the
extent permitted by applicable law.
Such insurance shall be written by financially responsible companies selected by
the applicable Loan Party and having an A.M. Best Rating of "A-" or better and
being in a financial size category of "VI" or larger, or by other companies
reasonably acceptable to Administrative Agent. Each policy referred to in this
Section 10.5 shall provide that it will not be canceled, amended, or reduced
- ------------
except after not less than thirty (30) days' prior written notice to
Administrative Agent and shall also provide that the interests of Administrative
Agent and the Lenders shall not be invalidated or reduced by any act, omission
or negligence of any Loan Party. Borrower will advise Administrative Agent
promptly of any policy cancellation, reduction, or amendment. For purposes
hereof, the term "Peril" shall mean, collectively, fire, lightning, flood,
-----
windstorm, hail, explosion, riot and civil commotion, vandalism and malicious
mischief, damage from aircraft, vehicles and smoke, and other perils covered by
the "all-risk" endorsement then in use in the jurisdictions where the Properties
of the Loan Parties are located.
(b) Borrower will cause each insurance recovery (other than any portion of
an insurance recovery payable to a landlord to repair or replace Property leased
by Borrower or any of its Subsidiaries) paid to it or any other Loan Party by
any insurance company to be deposited promptly with Administrative Agent as
security for the Obligations if a Default has then occurred and is continuing.
(c) If a Default shall have occurred and be continuing, Borrower will
cause all proceeds of insurance paid to it or any other Loan Party on account of
the loss of or damage to any Property of any Loan Party and all awards of
compensation for any Property of any Loan Party taken by condemnation or eminent
domain to be paid directly to Administrative Agent to be applied against or held
as security for the Obligations, at the election of Administrative Agent and the
Required Lenders.
56
<PAGE>
Section 10.6 Inspection Rights. Each of the Loan Parties will, and will
-----------------
cause each of its Subsidiaries to, permit representatives and agents of
Administrative Agent and each Lender, during normal business hours and upon
reasonable notice to Borrower, to examine, copy, and make extracts from its
books and records, to visit and inspect its Properties and to discuss its
business, operations, and financial condition with its officers and independent
certified public accountants. Borrower will authorize its accountants in
writing (with a copy to Administrative Agent) to comply with this Section 10.6.
------------
Administrative Agent or its representatives may, at any time and from time to
time at Borrower's expense, conduct field examinations and audits of the
Collateral and Borrowing Base and of other matters pertaining to Borrower and
its Subsidiaries for such purposes as Administrative Agent may reasonably
request.
Section 10.7 Keeping Books and Records. Borrower will, and will cause
-------------------------
each other Loan Party to, maintain proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
Section 10.8 Compliance with Laws. Borrower will, and will cause each
--------------------
other Loan Party to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws), rules, regulations,
orders, and decrees of a material nature of any Governmental Authority or
arbitrator other than any such laws, rules, regulations, orders, and decrees
contested by appropriate actions or proceedings diligently pursued, if adequate
reserves in conformity with GAAP and satisfactory to Administrative Agent are
established with respect thereto and except for unintentional violations which
could not reasonably be expected to have a Material Adverse Effect with respect
to any such Loan Party.
Section 10.9 Compliance with Agreements. Borrower will, and will cause
--------------------------
each other Loan Party to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 10.10 Further Assurances.
------------------
(a) Further Assurance. Borrower will, and will cause each other
-----------------
Loan Party to, execute and deliver pursuant to this clause (a) such further
documentation and take such further action as may be reasonably requested
by Administrative Agent to carry out the provisions and purposes of the
Loan Documents.
(b) Subsidiary Joinder. Within ten (10) days after the end of each
------------------
Fiscal Quarter, Borrower shall cause each Domestic Subsidiary created or
acquired during the Fiscal Quarter then ending to execute and deliver to
Administrative Agent a Joinder Agreement and such other documentation as
Administrative Agent may require to cause such Domestic Subsidiary to
evidence, perfect, and otherwise implement the guaranty and/or security for
repayment of the Obligations contemplated by this Agreement, the Subsidiary
Guaranty, and any applicable Security Document.
57
<PAGE>
Section 10.11 ERISA. With respect to each Plan, Borrower will, and will
-----
cause each other Loan Party to, comply with all minimum funding requirements and
all other material requirements of ERISA, if applicable, so as not to give rise
to any liability which could reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 10.12 Unified Cash Management System; Dominion of Funds.
-------------------------------------------------
Borrower will, and will cause each of its Subsidiaries (other than Foreign
Subsidiaries) to maintain a unified cash management system and Borrower will
ensure, and will cause each of its Subsidiaries (other than Foreign
Subsidiaries) to ensure, that all monies, checks, notes, drafts and other
payments relating to or constituting proceeds of any trade accounts receivable
or other Receivables are (a) deposited directly, as received, into a lockbox or
collection account of Borrower or such Subsidiary (as applicable) and (b) on a
daily basis after such deposit, transferred into a concentration account of
Borrower or such Subsidiary (as applicable) maintained with Administrative Agent
or another depository bank acceptable to Administrative Agent. Borrower will,
and will cause each of its Subsidiaries (other than Foreign Subsidiaries) to,
maintain in effect an agreement governing each of its lockbox accounts,
collection accounts and/or concentration accounts and collaterally assigning
such accounts to Administrative Agent, all of which shall be in a form approved
by Administrative Agent.
Section 10.13 Year 2000 Compliance. Borrower will promptly notify
--------------------
Administrative Agent in the event Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect on Borrower.
ARTICLE 11
Negative Covenants
------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, Borrower will perform and observe the following
negative covenants:
Section 11.1 Debt. Borrower will not, and will not permit any other
----
Loan Party to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 9.9 hereto, and any extensions,
------------
renewals, or refinancings of such existing Debt so long as (i) the
principal amount of such Debt after such renewal, extension, or refinancing
shall not exceed the principal amount of such Debt which was outstanding
immediately prior to such renewal, extension, or refinancing and (ii) such
Debt shall not be secured by any assets other than assets securing such
Debt, if any, prior to such renewal, extension, or refinancing;
58
<PAGE>
(c) Debt of a Subsidiary of Borrower owed to Borrower or another
Subsidiary of Borrower;
(d) Guaranties incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds,
and other similar obligations including those of the type otherwise
described in Section 11.2(f);
---------------
(e) Debt of Borrower or any Subsidiary of Borrower constituting
purchase money Debt (including, without limitation, Capital Lease
Obligations) incurred after the Closing Date not to exceed Two Million
Dollars ($2,000,000) in the aggregate at any time outstanding secured by
purchase money Liens permitted by Section 11.2(g);
---------------
(f) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on Borrower's or any
of its Subsidiaries' behalf in accordance with the policies issued to
Borrower or such Subsidiary of Borrower;
(g) Debt secured by the Liens permitted by clauses (d) and (e) of
----------- ---
Section 11.2;
------------
(h) unsecured Debt arising under, created by and consisting of Hedge
Agreements, provided, (i) such Hedge Agreements shall have been entered
--------
into for the purpose of hedging actual risk and not for speculative
purposes and (ii) that each counterparty to such Hedge Agreement shall be a
Lender (or an Affiliate thereof) or shall be rated in one of the two
highest rating categories of Standard and Poor's Corporation or Moody's
Investors Service, Inc.; and
(i) Subordinated Debt to the relevant seller (including pursuant to a
transaction permitted by Section 11.3) incurred in connection with the
------------
acquisition of any Person not to exceed Twenty Million Dollars
($20,000,000) in the aggregate from the Closing Date through the
Termination Date;
(j) Debt of Borrower or any Subsidiary of Borrower for borrowed money
in currencies other than Dollars in an amount not to exceed the equivalent
of Ten Million Dollars ($10,000,000) in the aggregate at any time
outstanding; and
(k) Debt in addition to the Debt described in the foregoing clauses
-------
(a) through (j) in an aggregate amount not exceeding Ten Million Dollars
--- ---
($10,000,000) in the aggregate principal amount at any one time
outstanding.
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries.
----------------------------------------------------
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following:
(a) Liens described on Schedule 11.2 hereto, and any extensions,
-------------
renewals, or refinancings of the Debt secured by such Liens as permitted
under Section 11.1(b), provided that (i) no such Lien is expanded to cover
--------------- --------
any additional Property (other than after acquired title in or on such
Property and proceeds of the existing collateral) after the Closing Date
and
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(ii) no such Lien is spread to secure any additional Debt after the
Closing Date other than Debt permitted by Section 11.1(b);
---------------
(b) Liens in favor of Administrative Agent, for the benefit of the
Agents and each Lender pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually or
in the aggregate) materially detract from the value of the real Property
encumbered thereby or materially impair the ability of Borrower or any
other Loan Party to use such real Property in their respective businesses;
(d) Liens for taxes, assessments, or other governmental charges (but
excluding Environmental Liens or Liens under ERISA) that are not delinquent
or which are being contested in good faith and for which adequate reserves
have been established in accordance with GAAP;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other similar statutory Liens securing obligations that are
not overdue or are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established in
accordance with GAAP and are incurred in the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance or other social security programs or
to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety, performance and appeal bonds, bids, and other
contracts incurred in the ordinary course of business (other than for
payment of Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; provided that: (i) the Debt secured by any such Lien is
--------
permitted under Section 11.1(e) hereof; and (ii) any such Lien encumbers
---------------
only the Property so purchased or leased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Any interest or title of a licensor, lessor, or sublessor under
any license or lease entered into in the ordinary course of business;
(j) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by Borrower or
another Loan Party in the ordinary course of business; and
(k) Nonconsensual Liens in favor of banking institutions arising as a
matter of law and encumbering the deposits (including the right of set-off)
held by such banking institutions in the ordinary course of business.
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Section 11.3 Mergers, Etc. Borrower will not, and will not permit any
------------
other Loan Party to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or a substantial part of the business or Property of any
Person or all or a substantial part of the business or Property of a division or
branch of a Person or more than a majority interest in the Capital Stock of any
Person, or wind-up, dissolve, or liquidate itself; provided that as long as no
--------
Default exists or would result therefrom and provided Borrower gives
Administrative Agent and the Lenders prior written notice:
(i) A Subsidiary may wind-up, dissolve, or liquidate if (a) its
Property is transferred to Borrower or a Wholly-Owned Subsidiary of
Borrower and (b) the Loan Party acquiring such Property complies with its
obligations under Section 10.9 simultaneously with such acquisitions;
------------
(ii) Any Subsidiary of Borrower may merge or consolidate with
Borrower (provided Borrower is the surviving entity) or with any Wholly-
Owned Subsidiary of Borrower (provided the Wholly-Owned Subsidiary is the
surviving entity);
(iii) Borrower or any Domestic Subsidiary of Borrower may acquire any
Person or all or a substantial part of the business or Property of a Person
(or a division or branch thereof) provided that the aggregate Purchase
Price of all such acquisitions shall not exceed Fifty Million Dollars
($50,000,000) in the aggregate from the Closing Date through the
Termination Date and provided further that the cash consideration paid (as
described in the definition of Purchase Price) shall not exceed Twenty Five
Million Dollars ($25,000,000) in the aggregate during such period; and
(iv) The Subsidiaries of Borrower described on Schedule 11.3 may be
-------------
merged, wound up, dissolved or liquidated on the terms described in such
schedule.
Section 11.4 Restricted Junior Payments. Borrower will not, and will
--------------------------
not permit any other Loan Party to, directly or indirectly declare, order, pay,
make, or set apart any sum for (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of any Loan
Party now or hereafter outstanding; (b) any redemption, conversion, exchange,
retirement, sinking fund, or similar payment, purchase, or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
Loan Party now or hereafter outstanding; or (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options, or other rights
to acquire shares of any class of Capital Stock of any Loan Party now or
hereafter outstanding except:
(i) Subsidiaries of Borrower may make, declare, and pay dividends
and make other distributions with respect to their Capital Stock to
Borrower or Wholly-Owned Subsidiaries of Borrower;
(ii) Borrower may declare and pay dividends on any class of its
Capital Stock payable solely in shares of Capital Stock of Borrower; and
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(iii) Borrower may purchase or redeem stock, stock rights, options or
similar rights not to exceed Fifteen Million Dollars ($15,000,000) in the
aggregate from the Closing Date through the Termination Date provided, in
each instance, that after giving effect to any such purchase or redemption
Borrower will have at least Fifteen Million Dollars ($15,000,000) of
borrowing availability under both the Borrowing Base and the aggregate
Revolving Commitments.
Section 11.5 Investments. Borrower will not, and will not permit any
-----------
other Loan Party to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stocks, bonds, notes, debentures, or other Securities of any
Person, or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "Investments"), except:
-----------
(a) Borrower and its Subsidiaries may make equity investments in and
may make loans to Subsidiaries of Borrower (in the case of loans, as
permitted by Section 11.1) and may make the acquisitions permitted by
------------
Section 11.3(iii); provided that total investments in Foreign Subsidiaries
----------------- --------
shall never exceed Thirty Million Dollars ($30,000,000) in the aggregate at
any time outstanding (determined on the basis of the Dollar cost equivalent
value of each Investment as of the date such Investment is made);
(b) readily marketable direct obligations of the U.S. or any agency
thereof with maturities of one year or less from the date of acquisition;
(c) fully insured certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of One Hundred
Million Dollars ($100,000,000);
(d) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poor's Corporation or Moody's Investors Service,
Inc. or any successor thereto and shares of any mutual fund company
substantially all the assets of which consist of cash and the Investments
of the type described in clause (c), clause (d), and this clause (e);
---------- ---------- ----------
(e) advances to officers, directors, and employees for business
expenses incurred in the ordinary course of business;
(f) if no Event of Default exists, Borrower and its Subsidiaries may
make capital contributions to or investments in, or purchase any Capital
Stock of, Borrower or a Wholly-Owned Domestic Subsidiary of Borrower;
(g) Borrower and its Subsidiaries may acquire and own any Investments
of any Person received in connection with the bankruptcy or reorganization
of suppliers and customers and in connection with the settlement of
delinquent obligations of, and disputes with, customers and suppliers
arising in the ordinary course of business;
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(h) deposits with and advances to trade creditors and extensions of
trade credit to trade debtors in the ordinary course of business;
(i) Investments described on Schedule 11.5; and
-------------
(j) Investments other than those described in clauses (a)-(i) of this
---------------
Section 11.5 if the aggregate amount thereof never exceeds Five Million
------------
Dollars ($5,000,000) at any time (determined based on the cost or
outstanding principal amount thereof, as applicable, without regard to any
write up or write down thereof).
Section 11.6 Limitation on Issuance of Capital Stock. Borrower will not
---------------------------------------
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of the following to any Person (other than Borrower or any of its Subsidiaries):
(a) any of its Capital Stock, (b) any securities exchangeable for or convertible
into or carrying any rights to acquire any of its Capital Stock, or (c) any
option, warrant, or other right to acquire any of its Capital Stock; provided,
--------
however, that any Subsidiary may issue qualifying shares to its directors if
- -------
required by applicable law.
Section 11.7 Transactions With Affiliates. Borrower will not, and will
----------------------------
not permit any other Loan Party to, enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate of Borrower or such other Loan Party (other
than Borrower and its wholly-owned Subsidiaries), except in the ordinary course
of and pursuant to the reasonable requirements of Borrower's or such other Loan
Party's business and upon fair and reasonable terms no less favorable to
Borrower or such other Loan Party than would be obtained in a comparable arms-
length transaction with a Person not an Affiliate of Borrower or such other Loan
Party.
Section 11.8 Disposition of Assets. Except for transactions described
---------------------
on Schedule 11.8 and for transactions permitted by Section 11.3(iv), Borrower
------------- ----------------
will not, and will not permit any other Loan Party to, sell, lease, assign,
transfer, or otherwise voluntarily dispose of: (a) any of its Receivables; (b)
any substantial portion of the consolidated assets of the Loan Parties; or (c)
any other Property, other than (i) dispositions of Inventory in the ordinary
course of business, (ii) dispositions of Equipment no longer used or useful in
such Person's business and (iii) dispositions of other Equipment to be replaced
(and such Equipment is so replaced) with other functionally equivalent Equipment
within one hundred twenty (120) days of the disposition thereof.
Section 11.9 Lines of Business. Borrower and its Subsidiaries will not
-----------------
engage in any line or lines of business activity other than the businesses in
which they are engaged on the date hereof or a business reasonably related
thereto.
Section 11.10 Limitations on Restrictions Affecting Subsidiaries. Neither
--------------------------------------------------
Borrower nor any other Loan Party shall enter into or assume any material
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its material properties or assets, whether now owned or
hereafter acquired (except for prohibitions against Liens on assets financed by
Debt secured by Liens permitted by subsections 11.2(a) or (g)). Except as
---------------------------
provided herein, Borrower will not, and will not permit any other Loan Party to,
directly or indirectly to create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the
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<PAGE>
ability of any Loan Party to: (a) pay dividends or make any other distribution
on any of such Loan Party's Capital Stock owned by any Loan Party; (b) pay any
Debt owed to any Loan Party; (c) make loans or advances to any Loan Party; or
(d) transfer any of its property or assets to any Loan Party.
Section 11.11 Environmental Protection. Borrower will not, and will not
------------------------
permit any other Loan Party to, (a) use (or permit any tenant to use) any of its
Properties for the handling, processing, storage, transportation, or disposal of
any Hazardous Material except in compliance with applicable Environmental Laws,
(b) generate any Hazardous Material except in compliance with applicable
Environmental Laws, (c) conduct any activity that is likely to cause a Release
or threatened Release of any Hazardous Material in violation of any
Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that in any material respect violates or is likely to
violate any Environmental Law or create any Environmental Liabilities for which
Borrower or any other Loan Party would be responsible that could reasonably be
expected to have a Material Adverse Effect with respect to any Loan Party.
Section 11.12 ERISA. Borrower will not, and will not permit any other
-----
Loan Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any action
which would cause, any unfunded or unreserved liability for benefits under
any Plan (exclusive of any Multiemployer Plan) to exist or to be created;
or
(b) with respect to any Multiemployer Plan, allow, or take (or permit
any ERISA Affiliate to take) any action which would cause, any unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or
to be created, either individually as to any such Plan or in the aggregate
as to all such Plans.
ARTICLE 12
Financial Covenants
-------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, it will perform and observe the following
financial covenants:
Section 12.1 Minimum Tangible Net Worth. At all times, Borrower shall
--------------------------
not permit its Tangible Net Worth to be less than Seventy-Six Million Five
Hundred Thousand Dollars ($76,500,000), plus (i) 75% of Borrower's positive
-----
Adjusted Net Income for each fiscal quarter of Borrower ending after the Closing
Date (no reductions to be made for any losses), plus (ii) 100% of the Net
----
Proceeds of the issuance by Borrower or any of its Subsidiaries of Capital Stock
(or receipt of any additional capital in respect of existing Capital Stock or
other Securities).
Section 12.2 Maximum Total Leverage Ratio. Borrower shall not permit its
----------------------------
Leverage Ratio at the end of any Fiscal Quarter to exceed 3.50 to 1.00 for any
Fiscal Quarter ending prior to December 25, 1999, 2.75 to 1.00 for its Fiscal
Quarters ending December 25, 1999, and March 25, 2000, or 2.50 to 1.00 for its
Fiscal Quarter ending June 24, 2000, or any Fiscal Quarter thereafter.
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<PAGE>
Section 12.3 Minimum Fixed Charge Coverage Ratio. As of the end of each
-----------------------------------
Fiscal Quarter, Borrower shall not permit the ratio of (a) its EBITDAR for the
four (4) Fiscal Quarter period then ending to (b) the sum of (i) Interest
Expense during such period and (ii) Rental Expense paid during such period to be
less than 2.50 to 1.00.
Section 12.4 Maximum Capital Expenditures . Borrower shall not permit
----------------------------
the aggregate amount of all Capital Expenditures of the Borrower and its
Subsidiaries made during any Fiscal Year to exceed Twenty Million Dollars
($20,000,000).
ARTICLE 13
Default
-------
Section 13.1 Events of Default. Each of the following shall be deemed
-----------------
an "Event of Default":
----------------
(a) Borrower shall fail to pay (i) when due any principal of, interest
on or fees payable in respect of any Loan or any Reimbursement Obligation
payable under any Loan Document or any part thereof or (ii) within two (2)
days after the date Borrower receives written notice of the failure to pay
when due, any other Obligation or any part thereof, or any indebtedness,
liability, or obligation due to any Lender under any Hedge Agreement.
(b) Any representation, warranty, or certification made or deemed made
by any Loan Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan Document shall be false,
misleading, or erroneous in any material respect when made or deemed to
have been made.
(c) Any Loan Party shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Section 10.1, Article 11 or
------------ ----------
Article 12 of this Agreement.
----------
(d) Any Loan Party shall fail to perform, observe, or comply with any
other agreement, or term contained in any Loan Document (other than
covenants described in subsections 13.1(a)-(c)) and such failure shall
------------------------
continue for a period of fifteen (15) days after the earlier of (i) the
date Administrative Agent provides Borrower with notice thereof or (ii) the
date Borrower should have notified Administrative Agent thereof in
accordance with subsection 10.1(g) hereof.
------------------
(e) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner, liquidator, or the like of itself or of all or a substantial part
of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy Code"),
---------------
(iv) institute any proceeding or file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, (vi) admit in writing its inability to, or
be generally unable to pay its debts as such debts
65
<PAGE>
become due, or (vii) take any corporate action for the purpose of effecting
any of the foregoing.
(f) A proceeding or case shall be commenced, without the application,
approval or consent of the applicable Loan Party in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement, or winding-up, or the composition or readjustment of its
debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator, or the like of such Loan Party or of all or any substantial
part of its Property, or (iii) similar relief in respect of such Loan Party
under any law relating to bankruptcy, insolvency, reorganization, winding-
up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment, or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) or more days; or an order for relief
against any Loan Party shall be entered in an involuntary case under the
Bankruptcy Code.
(g) Any Loan Party shall fail within a period of thirty (30) days
after the commencement thereof to discharge or obtain a stay of any
attachment, sequestration, forfeiture, or similar proceeding or proceedings
involving an aggregate amount in excess of Five Hundred Thousand Dollars
($500,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess
of Five Hundred Thousand Dollars ($500,000) in the aggregate (to the extent
not paid or fully covered by insurance acknowledged by a carrier reasonably
acceptable to Administrative Agent) shall be rendered by a court or courts
against any Loan Party and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof shall
not be procured, within thirty (30) days from the date of entry thereof and
the relevant Loan Party shall not, within said period of thirty (30) days,
or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal.
(i) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt (beyond the period of grace, if any) if the aggregate
principal amount of the affected Debt equals or exceeds Five Hundred
Thousand ($500,000) (other than the Obligations), or the maturity of any
such Debt shall have been accelerated, or any such Debt shall have been
required to be prepaid prior to the stated maturity thereof or any event
shall have occurred with respect to any Debt in the aggregate principal
amount equal to or in excess of Five Hundred Thousand ($500,000) that
permits any holder or holders of such Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof or require any
prepayment thereof.
(j) This Agreement or any Security Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party
or any Loan Party shall deny that it has any further liability or
obligation under any of the Loan Documents or any Lien created or purported
to be created by the Loan Documents shall for any reason cease to be or
fail to be a valid, first priority perfected Lien (except for Permitted
Liens, if any, which are expressly
66
<PAGE>
permitted by the Loan Documents to have priority over the Liens in favor of
Administrative Agent) upon any of the Collateral purported to be covered
thereby.
(k) Any of the following events shall occur or exist with respect to
any Loan Party or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that could reasonably be expected to constitute grounds
entitling the PBGC to institute proceedings under Section 4042 of ERISA for
the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v)
complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of any
Multiemployer Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected or
could in the reasonable opinion of Administrative Agent subject Borrower or
any of its Subsidiaries to any tax, penalty, or other liability to a Plan,
a Multiemployer Plan, the PBGC, or otherwise (or any combination thereof)
which in the aggregate could reasonably be expected to exceed Five Hundred
Thousand Dollars ($500,000).
(l) The occurrence of any event or condition which constitutes a
Material Adverse Effect with respect to Borrower or any other Loan Party
and thirty (30) days have passed since written notification thereof to
Borrower by Administrative Agent (therein reasonably identifying such event
or condition) without such event or condition having been remedied, cured
or waived.
(m) a Change of Control shall occur.
Section 13.2 Remedies. If any Event of Default shall occur and be
--------
continuing, Administrative Agent may (and if directed by Required Lenders,
shall) do any one or more of the following:
(a) Acceleration. By notice to Borrower, declare all outstanding
------------
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and payable,
without further notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities
of any kind, all of which are hereby expressly waived by Borrower except as
where required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Terminate the Commitments,
--------------------------
including, without limitation, the obligation of the Fronting Bank to issue
Letters of Credit, without notice to Borrower or any other Loan Party;
(c) Judgment. Reduce any claim to judgment;
--------
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<PAGE>
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted
-----------
to Administrative Agent, for the benefit of the Agents and each Lender to
secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; and
(e) Rights. Exercise any and all rights and remedies afforded by
------
the laws of the Commonwealth of Massachusetts, or any other jurisdiction
governing any of the Loan Documents, by equity, or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
- -------- -------
subsections 13.1(e) or subsection 13.1(f), the Commitments of all of the
- ------------------- -------------------
Lenders, and the obligation of the Fronting Bank to issue Letters of Credit,
shall automatically terminate and the outstanding principal of and accrued and
unpaid interest on the Notes and all other amounts payable by Borrower under the
Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by Borrower.
Section 13.3 Cash Collateral. If an Event of Default shall have
---------------
occurred and be continuing, Borrower shall, if requested by Administrative Agent
or the Required Lenders, pledge to Administrative Agent as security for the
Obligations, pursuant to agreements in form and substance satisfactory to
Administrative Agent, an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account by Administrative Agent without any right of withdrawal by
Borrower.
Section 13.4 Performance by Administrative Agent. Upon the occurrence
-----------------------------------
of a Default, if any Loan Party shall fail to perform any agreement in
accordance with the terms of the Loan Documents, Administrative Agent may, at
the direction of the Required Lenders, perform or attempt to perform such
agreement on behalf of such Loan Party. In such event, Borrower shall, at the
request of Administrative Agent, promptly pay any amount expended by
Administrative Agent or the Lenders in connection with such performance or
attempted performance, to Administrative Agent at the Principal Office together
with interest thereon at the Default Rate applicable to Base Rate Accounts from
and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agents nor any Lender shall have any liability or
responsibility for the performance of any obligation of any Loan Party under any
Loan Document.
Section 13.5 Set-off. If an Event of Default shall have occurred and be
-------
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to Borrower (any such notice being hereby expressly waived by
Borrower), to set-off and apply any and all deposits (general, time, demand,
provisional, or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Loan Party against any
and all of the obligations of such Loan Party now or hereafter existing under
any Loan Document, irrespective of whether or not Administrative Agent or such
Lender shall have made any demand under such Loan Documents and although such
obligations may be unmatured. Each Lender agrees promptly to notify Borrower
(with a copy to Administrative Agent) after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
- --------
such set-off and
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application. The rights and remedies of each Lender hereunder are in addition to
other rights and remedies (including, without limitation, other rights of set-
off) which such Lender may have.
Section 13.6 Continuance of Default. For purposes of all Loan Documents,
----------------------
a Default shall be deemed to have continued and exist until Administrative Agent
shall have actually received evidence satisfactory to Administrative Agent that
such Default shall have been remedied.
ARTICLE 14
Administrative Agent
--------------------
Section 14.1 Appointment, Powers, and Immunities. Each Lender hereby
-----------------------------------
irrevocably appoints and authorizes Bank of America to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Administrative Agent (which term as used in this
sentence and in Section 14.5 and the first sentence of Section 14.6 shall
------------ ------------
include its Affiliates (including NationsBanc Montgomery Securities LLC) and its
own and its Affiliates' officers, directors, employees, and agents): (a) shall
not have any duties or responsibilities except those expressly set forth in the
Loan Documents and shall not be a trustee or fiduciary for any Lender; (b) shall
not be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Loan Party or any other Person to perform any of its obligations thereunder;
(c) shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Affiliates; (d) shall not
be required to initiate or conduct any litigation or collection proceedings
under any Loan Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct. Administrative Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
Section 14.2 Reliance by Administrative Agent. Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any thereof by telephone
or telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Loan Party),
independent accountants, and other experts selected by Administrative Agent.
Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Administrative Agent receives
and accepts an Assignment and Acceptance executed in accordance with Section
-------
15.8. As to any matters not expressly provided for by this Agreement,
- ----
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions
of
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the Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that Administrative Agent shall not be required to
-------- -------
take any action that exposes Administrative Agent to personal liability or that
is contrary to any Loan Document or applicable law.
Section 14.3 Defaults. Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default unless Administrative Agent
has received written notice from a Lender or Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that
Administrative Agent receives such a notice of the occurrence of a Default,
Administrative Agent shall give prompt notice thereof to the Lenders.
Administrative Agent shall take such action with respect to such Default as it
shall deem appropriate or as shall reasonably be directed by the Required
Lenders.
Section 14.4 Rights as Lender. With respect to its Commitment and the
----------------
Loans made by it, Bank of America (and any successor acting as Administrative
Agent) in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include Administrative Agent in its
individual capacity. Bank of America (and any successor acting as Administrative
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other business with any
Loan Party or any of their respective Affiliates as if it were not acting as
Administrative Agent, and Bank of America (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Loan Party or any of their respective Affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
Section 14.5 Indemnification. THE LENDERS AGREE TO INDEMNIFY THE AGENTS
---------------
(TO THE EXTENT NOT REIMBURSED UNDER SECTION 15.1 OR SECTION 15.2, BUT WITHOUT
------------ ------------
LIMITING THE OBLIGATIONS OF BORROWER UNDER SUCH SECTIONS) RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES), OR
DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED
BY OR ASSERTED AGAINST ADMINISTRATIVE AGENT (INCLUDING BY ANY LENDER) IN ANY WAY
RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY OR ANY ACTION TAKEN OR OMITTED BY ADMINISTRATIVE AGENT UNDER ANY LOAN
DOCUMENT; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO
--------
THE EXTENT THEY ARE FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A
COURT OF COMPETENT JURISDICTION TO HAVE ARISEN FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF, THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY
PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
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SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE ADMINISTRATIVE
AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (CALCULATED BASED ON THE
COMMITMENT PERCENTAGES) OF ANY COSTS OR EXPENSES PAYABLE BY BORROWER UNDER
SECTION 15.1 TO THE EXTENT THAT ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED
- ------------
FOR SUCH COSTS AND EXPENSES BY BORROWER. IN THE CASE OF AN INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 14.5
------------
APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION,
LITIGATION OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR
CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON
AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 14.6 Non-Reliance on Agents and Other Lenders. Each Lender
----------------------------------------
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agents or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agents hereunder, the Agents shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of their Affiliates that may come into the possession of any Agent
or any of its Affiliates.
Section 14.7 Resignation of Administrative Agent. Administrative Agent
-----------------------------------
may resign at any time by giving notice thereof to the Lenders and Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Administrative Agent, which successor agent shall be subject to the
approval of Borrower if and so long as no Event of Default has occurred and is
continuing, which approval shall not be unreasonably withheld, conditioned, or
delayed. If no successor Administrative Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank organized under
the laws of the U.S. having combined capital and surplus of at least One Hundred
Million Dollars ($100,000,000), which successor agent shall be subject to the
approval of Borrower if no Event of Default has occurred and is continuing,
which approval shall not be unreasonably withheld, conditioned, or delayed.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring
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Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 14 shall continue in effect
----------
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Administrative Agent.
Section 14.8 Administrative Agent Fee. Borrower agrees to pay to
------------------------
Administrative Agent on the date hereof and on each anniversary of the date
hereof the administrative fee described in that certain letter dated January 13,
1999 from Bank of America and NationsBanc Montgomery Securities LLC to Borrower,
as the same may be amended from time to time.
Section 14.9 Several Commitments. The Commitments and other obligations
-------------------
of the Lenders under any Loan Document are several. The default by any Lender
in making a Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under any Loan Document. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. No Lender shall
be responsible for any act or omission of any other Lender.
ARTICLE 15
Miscellaneous
-------------
Section 15.1 Expenses. Borrower hereby agrees to pay promptly after
--------
presentation of supporting documentation without duplication: (a) all reasonable
costs and expenses of Administrative Agent arising in connection with the
preparation, negotiation, execution, and delivery of the Loan Documents and all
amendments or other modifications to the Loan Documents, including, without
limitation, the reasonable fees and expenses of legal counsel for Administrative
Agent; (b) all reasonable fees, costs, and expenses of Administrative Agent or
the Fronting Bank arising in connection with any Letter of Credit, including the
Fronting Bank's customary fees for amendments, transfers, and drawings on
Letters of Credit; (c) all reasonable costs and expenses of Administrative Agent
in connection with any Default and the enforcement of any Loan Document or
collection of the Obligations, including, without limitation, the fees and
expenses of legal counsel for Administrative Agent; (d) all reasonable fees,
costs, and expenses of any Lender arising in connection with an Event of Default
and the enforcement of any Loan Document or collection of the Obligations during
the continuance of an Event of Default; provided, however, that all Lenders
-------- -------
(other than Administrative Agent) shall be limited to the legal fees and
expenses of one counsel for all Lenders unless such representation shall result
in a conflict of interest, in which case Borrower shall pay the fees, costs, and
expenses of as many counsel as necessary to avoid conflicts among the Lenders;
(e) all transfer, stamp, documentary, or other similar taxes, assessments, or
charges (including, without limitation, the Taxes and any penalties or interest)
levied by any Governmental Authority in respect of any Loan Document or the
transactions contemplated thereby; (f) all reasonable costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or other Lien
contemplated by any Loan Document; and (g) all other reasonable costs and
expenses incurred by Administrative Agent in connection with any Loan Document.
The fees and expenses of legal counsel for Administrative Agent that Borrower
has agreed to pay hereunder include the fees and expenses of legal counsel for
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<PAGE>
Administrative Agent arising in connection with advice given to Administrative
Agent as to its rights and responsibilities hereunder. Notwithstanding the
foregoing, Borrower shall not be required to pay or reimburse Administrative
Agent or any Lender for (i) any fees, costs or expenses incurred by any of them
in connection with any litigation commenced by Borrower or any other Loan Party
against the Lenders or Administrative Agent which seeks enforcement of any of
the rights of Borrower or any other Loan Party hereunder or under any other Loan
Document and is determined adversely to the Lenders or Administrative Agent in a
final nonappealable judgment, or (ii) any fees, costs, or expenses found in a
final, non-appealable judgment rendered by a court of competent jurisdiction to
have arisen out of or resulted from any Lender's gross negligence or its willful
misconduct.
Section 15.2 Indemnification. BORROWER SHALL INDEMNIFY THE AGENTS, THE
---------------
FRONTING BANK, AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT
WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) ANY BREACH BY ANY LOAN
PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN
ANY OF THE LOAN DOCUMENTS, (B) THE PRESENCE, RELEASE, THREATENED RELEASE,
DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT,
WITHIN, OR AFFECTING ANY OF THE ASSETS OF BORROWER OR ANY OTHER LOAN PARTY, (C)
THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY
WITH RESPECT TO ANY LETTER OF CREDIT, (D) ANY AND ALL STAMP, FILING, OR SIMILAR
TAXES (INCLUDING, WITHOUT LIMITATION, THE "TAXES" AND ANY INTEREST OR PENALTY)
LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON ADMINISTRATIVE AGENT OR ANY LENDER IN
RESPECT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR (E)
ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING, THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY; PROVIDED THAT (1) THE FOREGOING INDEMNITY SHALL NOT APPLY
--------
TO LITIGATION COMMENCED BY BORROWER OR ANY OTHER LOAN PARTY AGAINST THE LENDERS
OR THE ADMINISTRATIVE AGENT OR THE SYNDICATION AGENT WHICH SEEKS ENFORCEMENT OF
ANY OF THE RIGHTS OF BORROWER OR ANY OTHER LOAN PARTY HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT AND IS DETERMINED ADVERSELY TO THE LENDERS OR THE AGENT OR
THE SYNDICATION AGENT IN A FINAL NONAPPEALABLE JUDGMENT AND (2) THAT THE PERSON
ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR
HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES) FOUND IN A FINAL, NON-
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APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION TO HAVE ARISEN
OUT OF OR RESULTED FROM ITS GROSS NEGLIGENCE OR ITS WILLFUL MISCONDUCT. WITHOUT
LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) ARISING OUT OF OR RESULTING
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. SUBJECT TO THE
LIMITATIONS SET FORTH ABOVE, IN THE CASE OF AN INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 15.2 APPLIES, SUCH
------------
INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION, OR
PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR CREDITORS OR
ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON AND WHETHER
OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 15.3 Limitation of Liability. None of the Agents, any Lender,
-----------------------
or any Affiliate, officer, director, employee, attorney, or agent thereof shall
have any liability with respect to Borrower, and, by the execution of the Loan
Documents to which it is a party, each other Loan Party, hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, consequential, remote, exemplary or punitive damages
suffered or incurred by any Loan Party in connection with, arising out of, or in
any way related to any of the Loan Documents, or any of the transactions
contemplated by any of the Loan Documents.
Section 15.4 No Duty. All attorneys, accountants, appraisers, and other
-------
professional Persons and consultants retained by any of the Agents or any Lender
shall have the right to act exclusively in the interest of the Agents and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to any Loan Party, any
shareholders of any Loan Party, or any other Person.
Section 15.5 No Fiduciary Relationship. The relationship between the
-------------------------
Loan Parties on the one hand and the Agents and each Lender on the other is
solely that of debtor and creditor, and neither any of the Agents nor any Lender
has any fiduciary or other special relationship with any Loan Parties, and no
term or condition of any of the Loan Documents shall be construed so as to deem
the relationship between the Loan Parties on the one hand and any of the Agents
and each Lender on the other to be other than that of debtor and creditor.
Section 15.6 Equitable Relief. Borrower recognizes that in the event
----------------
any Loan Party fails to pay, perform, observe, or discharge any or all of the
obligations under the Loan Documents, any remedy at law may prove to be
inadequate relief to the Agents and the Lenders. Borrower therefore agrees that
the Agents and the Lenders, if Administrative Agent or the Required Lenders so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
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Section 15.7 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 15.8 Successors and Assigns.
----------------------
(a) Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of the parties hereto and their respective successors and
assigns. Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of Administrative Agent and all of the Lenders.
(b) Assignment. Each Lender may assign to one or more Persons all
----------
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee. As
used herein, "Eligible Assignee" means (A) a Lender; (B) an Affiliate
-----------------
of a Lender or, with respect to any Lender that is a fund that invests
in bank loans, any other fund that invests in bank loans and is
managed by the same investment advisor as such Lender (herein a
"Related Fund"); and (C) any other Person approved by Administrative
------------
Agent and, provided no Default then exists, Borrower (such consent of
Borrower not to be required if a Default then exists and, in any
event, not unreasonable to be denied or delayed by Administrative
Agent or Borrower); provided, however, that neither Borrower nor an
-------- -------
Affiliate of Borrower shall qualify as an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement or an assignment by a Lender to one of its Related Funds,
any such partial assignment shall be in an amount at least equal to
Five Million Dollars ($5,000,000) and the assignee must have (after
giving effect to such assignment) Commitments of at least Ten Million
Dollars ($10,000,000);
(iii) the parties to such assignment shall execute and deliver
to Administrative Agent for its acceptance an Assignment and
Acceptance, together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Agreement. Upon the consummation of any assignment pursuant to this
Section, the assignor, Administrative Agent, and Borrower shall upon return
of the assignor's notes, if
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any, make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the U.S. or a state thereof, it shall
deliver to Borrower and Administrative Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 6.7.
-----------
(c) Register. Administrative Agent shall maintain at the Principal
--------
Office a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Administrative Agent, and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note or Notes subject to
such assignment and payment of the processing fee, Administrative Agent
shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the
parties thereto.
(d) Participations. Each Lender may sell participations to one or
--------------
more Persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and its Loans);
provided, however, that (i) such Lender's obligations under this Agreement
-------- -------
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the
participant shall be entitled to the benefit of the yield protection
provisions contained in Article 6 (to the extent that the Lender selling
---------
such participation would have been entitled thereto) and the right of set-
off contained in Section 13.5, and (iv) Borrower shall continue to deal
------------
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of Borrower relating to its Loans
and to approve any amendment, modification, waiver, or consent of any
provision of any Loan Document (other than amendments, modifications,
waivers, or consents of the types referred to in Section 15.11(a)).
----------------
(e) Pledge to Federal Reserve. Notwithstanding any other provision
-------------------------
set forth in this Agreement, any Lender may at any time assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(f) Delivery of Information. Any Lender may furnish any information
-----------------------
concerning any Loan Party in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants) subject to such Persons agreeing to being bound by the
provisions of Section 15.22.
-------------
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Section 15.9 Survival. All representations and warranties made in any
--------
Loan Document or in any document, statement, or certificate furnished in
connection with any Loan Document shall survive the execution and delivery of
the Loan Documents and no investigation by Administrative Agent or any Lender or
any closing shall affect the representations and warranties or the right of
Administrative Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of Borrower hereunder, the obligations under
Article 6, Section 14.5, Section 15.1, and Section 15.2 shall survive repayment
- --------- ------------ ------------ ------------
of the Notes and termination of the Commitments and the Letters of Credit.
Section 15.10 Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE
----------------
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
Section 15.11 Amendments and Waivers. Any provision of any Loan
----------------------
Document may be amended or waived and any consent to any departure by any Loan
Party therefrom may be granted if, but only if, such amendment, waiver, or
consent is in writing and is signed by Borrower and the Required Lenders (and,
if Article 14 or the rights or duties of Administrative Agent are affected
----------
thereby, by Administrative Agent); provided that no such amendment, waiver, or
--------
consent applicable to:
(a) a Loan, Letter of Credit, or Commitment which has the effect of:
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such
Loan or any Reimbursement Obligation relating to such Letter of
Credit or any fees or other amounts payable hereunder to Lenders
generally with respect to such Loan, Letter of Credit, or
Commitment,
(iii) postponing any date fixed for the payment of any
scheduled installment of principal of or interest on such Loan or
any Reimbursement Obligation relating to such Letter of Credit or
any fees or other amounts payable hereunder with respect to such
Loan, Letter of Credit, or Commitment or changing any optional or
mandatory prepayment provision applicable to such Loan or Letter
of Credit, or
(iv) postponing any date fixed for termination of such
Commitment
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shall be effective unless also signed by each Lender holding (with respect
to Letters of Credit either directly or through a participation under
Section 2.7(a)) the Loan, Letter of Credit, or Commitment of the type being
--------------
modified; and
(b) any change (including a waiver) in:
(i) the definition of Required Lenders or the provisions
of this Section 15.11; or
-------------
(ii) the conditions specified in Article 8 hereof, or
---------
(iii) which has the effect of releasing any Loan Party in a
transaction which is not otherwise permitted hereby, or
(iv) releases of all or substantially all of the
Collateral, or
(v) releases of all or substantially all of the
Guaranties, or
(vi) changes the definition of "Borrowing Base" or changes
the advance rate under the Borrowing Base
shall not be effective unless signed by all Lenders.
Section 15.12 Maximum Interest Rate.
---------------------
(a) No interest rate specified in any Loan Document shall at any time
exceed the Maximum Rate. If at any time the interest rate (the "Contract
--------
Rate") for any Obligation shall exceed the Maximum Rate, thereby causing
----
the interest accruing on such Obligation to be limited to the Maximum Rate,
then any subsequent reduction in the Contract Rate for such Obligation
shall not reduce the rate of interest on such Obligation below the Maximum
Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been
in effect.
(b) No provision of any Loan Document shall require the payment or
the collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither Borrower
nor the sureties, guarantors, successors, or assigns of Borrower shall be
obligated to pay the excess amount of such interest or any other excess sum
paid for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event any Lender ever receives, collects, or applies as interest any
such sum, such amount which would be in excess of the maximum amount
permitted by applicable law shall be applied as a payment and reduction of
the principal of the Obligations; and, if the principal of the Obligations
has been paid in full, any remaining excess shall forthwith be paid to
Borrower. In determining whether or not the interest paid
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or payable exceeds the Maximum Rate, Borrower and each Lender shall, to the
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the Obligations so that interest
for the entire term does not exceed the Maximum Rate.
Section 15.13 Notices. All notices and other communications provided for
-------
in any Loan Document to which any Loan Party is a party shall be given or made
in writing (except as otherwise permitted by Section 5.3) and shall be
-----------
telecopied, electronically transferred, mailed by certified mail return receipt
requested, sent by overnight courier, or personally delivered to the intended
recipient in each case at the "Address for Notices" specified below its name on
the signature pages hereof or with respect to any Loan Party, at the "Address
for Notices" specified below Borrower's name on the signature pages hereof, or
with respect to a Lender not a party to this Agreement on the Closing Date, in
its Assignment and Acceptance, or, as to any party at such other address as
shall be designated by such party in a notice to each other party given in
accordance with this Section. Except as otherwise provided in any Loan
Document, all such communications shall be deemed to have been duly given in the
case of transmittal by telecopy or electronic transmission, when transmitted
(subject to telephone confirmation of receipt in either case), in the case of
personal delivery, when delivered, in the case of overnight courier, on the next
Business Day after delivery to the courier, and in the case of a mailed notice,
three (3) Business Days after being duly deposited in the mails, in each case
given or addressed as aforesaid; provided, however, notices to Administrative
-------- -------
Agent pursuant to Section 2.7 or Section 5.3 shall not be effective until
----------- -----------
received by Administrative Agent.
Section 15.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST
BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR FEDERAL COURT IN THE DISTRICT OF
NEW YORK. BORROWER IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS, AND (b) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY
BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION
-------
15.13 OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
- -----
SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ADMINISTRATIVE
AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR WITH
RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR
PROCEEDING BY ANY LOAN PARTY AGAINST
79
<PAGE>
ANY AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN DALLAS,
TEXAS.
Section 15.15 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 15.16 Severability. Any provision of any Loan Document held by
------------
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of such Loan Document and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 15.17 Headings. The headings, captions, and arrangements used
--------
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 15.18 Construction. Borrower, each Loan Party (by its execution
------------
of the Loan Documents to which it is a party), the Agents, and each Lender
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by the parties thereto.
Section 15.19 Independence of Covenants. All covenants under the Loan
-------------------------
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 15.20 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF ANY OF THE AGENTS OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
OR ENFORCEMENT THEREOF.
Section 15.21 Confidentiality. Each Lender agrees to keep confidential
---------------
any information obtained by it from any Loan Party or its agents or
representatives pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery in accordance with such Lender's
customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (a) to such Lender's officers, directors,
employees, representatives, attorneys, agents, or affiliates who are advised of
the confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source or as such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by law, regulation,
subpoena, or judicial order or process (provided that notice
80
<PAGE>
of such requirement or order shall be promptly furnished to Borrower unless such
notice is legally prohibited) or requested or required by bank regulators or
auditors or any administrative body, commission, or other Governmental Authority
to whose jurisdiction such Lender may be subject, (d) to assignees or
participants or potential assignees or participants or to professional advisors
or direct or indirect contractual counter parties in swap agreements provided in
each case such Person agrees to be bound by the provisions of this Section
-------
15.21, (e) to the extent required in connection with any litigation between any
- -----
Loan Party and any Lender with respect to the Loans or this Agreement and the
other Loan Documents, (f) to rating agencies, their employees, representatives,
attorneys, agents, or affiliates who are advised of the confidential nature of
such information and who agree to be subject to the provisions of this Section
-------
15.21, and (g) with Borrower's prior written consent.
- -----
Section 15.22 Currency Conversion. If for any purpose of this Agreement
-------------------
it is necessary to convert a sum in any currency to another currency, then the
rate of exchange which shall be applied shall be the Spot Rate.
Section 15.23 Amendment and Restatement. This Agreement shall constitute
-------------------------
an amendment and restatement in its entirety of the Original Revolving Credit
Agreement. From and after the Closing Date, all indebtedness, liabilities,
obligations, security interests and liens arising under the Original Revolving
Credit Agreement or any Loan Documents referred to therein are hereby deemed to
be renewed and continued, and not extinguished, discharged or satisfied, and are
hereafter evidenced by and governed in accordance with this Agreement and the
other Loan Documents. All references in the Loan Documents referred to in the
Original Revolving Credit Agreement to the Original Revolving Credit Agreement
shall be deemed to mean this Agreement, as an amendment and restatement of the
Original Revolving Credit Agreement.
81
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
RENAISSANCE WORLDWIDE, INC.
By: /s/ Richard L. Bugley
----------------------------------
Name: Richard L. Bugley
----------------------------------
Title: Vice President
---------------------------------
Address for Notices to Borrower
or any Loan Party:
-----------------
Renaissance Worldwide, Inc.
189 Wells Avenue
Newton, Massachusetts 02159
Attention: Joseph P. Fargnoli
Telephone: (617) 527-6886
Telecopier: (617) 332-4647
<PAGE>
BANK OF AMERICA, N.A.,
as Administrative Agent and as a Lender
By: /s/ Timothy M. O'Connor
----------------------------------
Name: Timothy M. O'Connor
----------------------------------
Title: Vice President
----------------------------------
Address for Notices:
-------------------
Bank of America, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Attention: Tim O'Connor
Telephone: (214) 508-9419
Telecopier: (214) 508-0980
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Otis Howard
Telephone: (214) 508-9253
Telecopier: (214) 508-2515
<PAGE>
BNY FACTORING, LLC
as Syndication Agent and as a Lender
By: /s/ Charles F. Soutar
----------------------------------
Name: Charles F. Soutar
----------------------------------
Title: Vice President
----------------------------------
Address for Notices:
-------------------
BNY Factoring LLC
Bank of New York
1290 Avenue of the Americas, 3rd Floor
New York, New York 10104
Attention: _______________
Telephone: (212) 408-____
Telecopier: (212) 408-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
BNY Factoring LLC
Bank of New York
1290 Avenue of the Americas, 3rd Floor
New York, New York 10104
Attention: _______________
Telephone: (212) 408-_____
Telecopier: (212) 408-_____
<PAGE>
CITIZENS BANK OF MASSACHUSETTS
By: /s/ William F. Granchelli
----------------------------------
Name: William F. Granchelli
----------------------------------
Title: Senior Vice President
----------------------------------
Address for Notices:
-------------------
Citizens Bank of Massachusetts
28 State Street, 15th Floor
Boston, Massachusetts 02109
Attention: _______________
Telephone: (617) 725-_____
Telecopier: (617) 725-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Citizens Bank of Massachusetts
28 State Street, 15th Floor
Boston, Massachusetts 02109
Attention: _______________
Telephone: (617) 725-_____
Telecopier: (617) 725-_____
<PAGE>
DEBIS FINANCIAL SERVICES, INC.
By: /s/ Michael L. Miller
----------------------------------
Name: Michael L. Miller
----------------------------------
Title: Managing Director
----------------------------------
Address for Notices:
-------------------
debis Financial Services, Inc.
89 Headquarters Plaza North, Suite 1444
Morristown, New Jersey 07960
Attention: _______________
Telephone: (973) 631-_____
Telecopier: (973) 631-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
debis Financial Services, Inc.
89 Headquarters Plaza North, Suite 1444
Morristown, New Jersey 07960
Attention: _______________
Telephone: (973) 631-_____
Telecopier: (973) 631-_____
<PAGE>
NATIONAL BANK OF CANADA
By: /s/ Timothy R. Tobin
----------------------------------
Name: Timothy R. Tobin
----------------------------------
Title: Vice President
----------------------------------
Address for Notices:
-------------------
National Bank of Canada
One Federal Street, 27th Floor
Boston, Massachusetts 02110
Attention: _______________
Telephone: (617) 350-_____
Telecopier: (617) 350-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
National Bank of Canada
One Federal Street, 27th Floor
Boston, Massachusetts 02110
Attention: _______________
Telephone: (617) 350-_____
Telecopier: (617) 350-_____
<PAGE>
FINOVA CAPITAL CORPORATION
By: /s/ Bruce Mettel
----------------------------------
Name: Bruce Mettel
----------------------------------
Title: Authorized Signer
----------------------------------
Address for Notices:
-------------------
Finova Capital Corporation
311 South Wacker Drive, Suite 4400
Chicago, Illinois 60606
Attention: _______________
Telephone: (312) 322-_____
Telecopier: (312) 322-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Finova Capital Corporation
311 South Wacker Drive, Suite 4400
Chicago, Illinois 60606
Attention: _______________
Telephone: (312) 322-_____
Telecopier: (312) 322-_____
<PAGE>
PNC BUSINESS CREDIT
By: /s/ Scott Carpenter
----------------------------------
Name: Scott Carpenter
----------------------------------
Title: Scott Carpenter
----------------------------------
Address for Notices:
-------------------
PNC Business Credit
PNC Bank, N.A.
125 High Street, 16th Floor
Boston, Massachusetts 02110
Attention: _______________
Telephone: (617) 443-_____
Telecopier: (617) 443-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
PNC Business Credit
PNC Bank, N.A.
125 High Street, 16th Floor
Boston, Massachusetts 02110
Attention: _______________
Telephone: (617) 443-_____
Telecopier: (617) 443-_____
<PAGE>
WEBSTER BANK
By: /s/ Charles C. Thomas
----------------------------------
Name: Charles C. Thomas
----------------------------------
Title: Vice President
----------------------------------
Address for Notices:
-------------------
Webster Bank
City Place II
185 Asylum Street
5th Floor, HFD 605
Hartford, CT 06103-3494
Attention: _______________
Telephone: (860) 692-_____
Telecopier: (860) 692-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Webster Bank
City Place II
185 Asylum Street
5th Floor, HFD 605
Hartford, CT 06103-3494
Attention: _______________
Telephone: (860) 692-_____
Telecopier: (860) 692-_____
<PAGE>
CIT GROUP / BUSINESS CREDIT, INC.
By: /s/ Neal T. Legan
----------------------------------
Name: Neal T. Legan
----------------------------------
Title: Neal T. Legan
----------------------------------
Address for Notices:
-------------------
CIT Group / Business Credit, Inc.
5420 LBJ Freeway, Suite 200
Dallas, Texas 75240
Attention: _______________
Telephone: (972) 455-_____
Telecopier: (972) 455-_____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
CIT Group / Business Credit, Inc.
5420 LBJ Freeway, Suite 200
Dallas, Texas 75240
Attention: _______________
Telephone: (972) 455-_____
Telecopier: (972) 455-_____
<PAGE>
Schedule 2.7
to
Renaissance Worldwide, Inc. Credit Agreement
Previously Issued Letters of Credit
-----------------------------------
None.
<PAGE>
Schedule 7.1
to
Renaissance Worldwide, Inc. Credit Agreement
Transfer Restrictions, Etc.
---------------------------
<PAGE>
Schedule 9.1
to
Renaissance Worldwide, Inc. Credit Agreement
Corporate Existence/Good Standing
---------------------------------
<PAGE>
Schedule 9.3
to
Renaissance Worldwide, Inc. Credit Agreement
Corporate Action/No Breach
--------------------------
<PAGE>
Schedule 9.4
to
Renaissance Worldwide, Inc. Credit
Operation of Business
---------------------
<PAGE>
Schedule 9.5
to
Renaissance Worldwide, Inc. Credit Agreement
Litigation and Judgments
------------------------
<PAGE>
Schedule 9.6
to
Renaissance Worldwide, Inc. Credit Agreement
Collateral Matters
------------------
(a) Real Properties of Borrower and its Subsidiaries:
(b) Intellectual Property of Borrower and its Subsidiaries:
(c) Location of Material Properties and identity of the Person holding title
thereto:
<PAGE>
Schedule 9.9
to
Renaissance Worldwide, Inc. Credit Agreement
Debt
----
<PAGE>
Schedule 9.12
to
Renaissance Worldwide, Inc. Credit Agreement
ERISA
-----
<PAGE>
Schedule 9.13
to
Renaissance Worldwide, Inc. Credit Agreement
Disclosure Documents
--------------------
<PAGE>
Schedule 9.14
to
Renaissance Worldwide, Inc. Credit Agreement
I. Subsidiaries; Capitalization
----------------------------
A. Borrower
Description of
State of Each Class and Number of Number of
Name Incorporation Series Authorized Issued Shares
- ---- ------------- ---------- -------------
(If Applicable) Shares
--------------- ------
B. Domestic Subsidiaries of Borrower
<TABLE>
<CAPTION>
Description of
State of Each Class and Number of Number of Name of Each Stockholder
Name Incorporation Series Authorized Issued Shares and No. of Shares Held
- ---- ------------- ---------- ------------- ----------------------
(If Applicable) Shares
--------------- ------
<S> <C> <C> <C> <C> <C>
</TABLE>
Page 1 of 2
<PAGE>
C. Foreign Subsidiaries of Borrower
<TABLE>
<CAPTION>
Description of Each Class and
State of Series Number of Number of Name of Each Stockholder
Name Incorporation (If Applicable) Authorized Shares Issued Shares and No. of Shares Held
- ---- ------------- --------------- ----------------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
Page 2 of 2
<PAGE>
Schedule 9.15
to
Renaissance Worldwide, Inc. Credit Agreement
Restrictions on Subsidiaries
----------------------------
<PAGE>
Schedule 9.19
to
Renaissance Worldwide, Inc. Credit Agreement
Environmental Matters
---------------------
<PAGE>
Schedule 9.21
to
Renaissance Worldwide, Inc. Credit Agreement
Employee Matters
----------------
<PAGE>
Schedule 9.22
to
Renaissance Worldwide, Inc. Credit Agreement
Solvency
--------
<PAGE>
Schedule 9.23
to
Renaissance Worldwide, Inc. Credit Agreement
Year 2000 Compliance
--------------------
<PAGE>
Schedule 11.2
to
Renaissance Worldwide, Inc. Credit Agreement
Liens
-----
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
JURISDICTION DEBTOR SECURED PARTY ORIGINAL FILE
NUMBER AND DATE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule 11.3
to
Renaissance Worldwide, Inc. Credit Agreement
Subsidiary Mergers, Dissolutions, Etc.
--------------------------------------
<PAGE>
Schedule 11.5
to
Renaissance Worldwide, Inc. Credit Agreement
Investments
-----------
<PAGE>
Schedule 7.1
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Transfer Restrictions, Etc.
---------------------------
See Schedule 9.3, Item 3.
<PAGE>
Schedule 9.1
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Corporate Existence/Good Standing
---------------------------------
(a)(iii): The following Loan Parties are not currently qualified to do business
as required in the state indicated:
Loan Party State
---------- -----
The Hunter Group, Inc. Arizona**
Illinois*
Renaissance Government Solutions, Inc. District of Columbia*
Renaissance Worldwide IT Consulting Services, Inc.+ Alabama**
District of Columbia*
Texas***
Renaissance Worldwide Strategy, Inc. Illinois*
* Corporation is not currently in good standing, and Borrower is preparing the
necessary paperwork to re-qualify.
** Corporation has not previously needed to qualify to do business as a foreign
corporation in this state. Borrower is preparing application for foreign
qualification.
***Corporation is not currently in good standing with the office of the
comptroller, and Borrower is preparing the necessary paperwork to cure this
deficiency.
+ F/k/a Triad Data, Inc. Foreign qualifications will be updated to reflect this
name change, which was effected on or about 1/11/99, after the planned
transaction described in Schedule 11.3(iv)(2).
<PAGE>
Schedule 9.3
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Corporate Action / No Breach
----------------------------
1. The pledges of the capital stock of the Domestic Subsidiaries and of 65% of
the capital stock of the Foreign Subsidiaries owned by Borrower or a
Domestic Subsidiary may violate non-assignment or change of control
provisions in certain leases of such Domestic Subsidiaries and Foreign
Subsidiaries. Borrower does not expect any such violations to constitute a
Material Adverse Effect upon Borrower and its subsidiaries, taken as a
whole.
2. Teaming Agreement dated as of June 23, 1998 between Renaissance Worldwide
Strategy, Inc. and Emergence, LLC may not be assigned without prior written
consent of Emergence, LLC.
3. Borrower may not assign, pursuant to the terms of the Amended and Restated
Operating Agreement of Emergence, LLC dated as August 11, 1998, its Units
evidencing its membership interest in Emergence, LLC, without the prior
written consent of the Manager. See Schedule 11.8.
<PAGE>
Schedule 9.4
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Operation of Business
---------------------
One or more of the Loan Parties have entered into the following acquisitions or
mergers since December 26, 1998:
Transactions with Third Parties Closing Date
------------------------------- ------------
Acquisition of assets of InfoSolutions.edu, January 9, 1999
L.L.C. by The Hunter Group, Inc.
Sale of substantially all the assets of the February 24, 1999
former Renaissance Technomic, Inc. by
Renaissance Worldwide Strategy, Inc., to
Technomic International, Inc., an Illinois
corporation.
Renaissance Technomic Limited, a limited February 24, 1999
company organized under the laws of Hong Kong
sold all of its assets with respect to its
business in Hong Kong and Shanghai to
Renaissance Technomic (HK) Limited, a limited
company organized under the laws of Hong Kong
which is wholly owned by Steven H. Ganster.
Neoglyphics Media Corporation, an Illinois May 28, 1999
corporation, sold substantially all of its
assets, and The Hunter Group, Inc., a
Maryland corporation, sold those of its
assets related to its Customer Management
Systems business, to ZEFER Corp., a Delaware
corporation.
<PAGE>
Transactions with Affiliates 89 Closing Date
---------------------------- ------------
Merger of C.M. Management Systems Ltd. Inc. into January 22, 1999
Renaissance Worldwide Strategy, Inc.
Dissolution of Renaissance Securities Corp. January 22, 1999
Merger of Cambridge Software Group, Inc. into The January 22, 1999
Registry, Inc. Network Consulting Practice.
Merger of Renaissance Technomic, Inc. into February 22, 1999
Renaissance Worldwide Strategy, Inc.
<PAGE>
Schedule 9.5
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Litigation and Judgments
------------------------
1. The Borrower is involved in litigation relating to claims arising out of its
operations in the ordinary course of business. The Borrower is not currently
involved in any legal proceedings which would reasonably be expected to have
a Material Adverse Effect. However, please be advised of the following
current litigation matters:
1. Vikas Rijsinghani. Claim by a terminated employee of Neoglyphics
Media Corporation ("Neoglyphics") that he is owed a substantial number
of stock options that were not dispersed to him, a performance bonus
and additional severance compensation, all of which are set forth in
his recent demand letter. The Company has responded with a denial of
these claims.
2. Gilbert Zoghlin. Ropes & Gray represents the Borrower, in an
action entitled Gilbert Zoghlin v. Renaissance Worldwide, Inc., in the
United States District Court for the Northern District of Illinois,
Civil Action No. 99C 1965. This action, commenced in March, 1999, is
brought by a group of shareholders who allege both federal and state-
law claims in connection with a transaction in which a wholly-owned
subsidiary of the Borrower, NGMC Acquisition Corp., merged with and
into Neoglyphics, a corporation owned by the plaintiff-shareholders.
The complaint alleges that, in connection with this transaction, an
officer of NGMC Acquisition Corp., acting on behalf of the Borrower,
denied knowledge of any information that would materially affect the
value of the Borrower stock or of the merger agreement; the complaint
further alleges that the officer did, in fact, have knowledge of such
information at the time. The plaintiffs claim that, by withholding
this information, the Borrower violated the Securities Exchange Act of
1934 ((S) 10(b) and Rule 10b-5), the Illinois Securities Laws (815
ILCS 5/1 et seq.), the Illinois Consumer Fraud and Deceptive Business
Practices Act (815 ILCS 505/1 et seq.), committed common law fraud,
and breached representations and warranties set forth in the Merger
Agreement. The case is in its earliest stage; only the Complaint has
been filed.
3. Douglas St. Clair. Ropes & Gray represents the Borrower in
defense of a civil action styled Douglas St. Clair, and all others
---------------------------------
similarly situated v. Renaissance Worldwide, Inc. and Mercury Computer
----------------------------------------------------------------------
Systems, Inc. (U.S. District Court for the District of Massachusetts
------------
No. 99-10832- RCL). The lawsuit has been brought by a former systems
administrator/computer consultant who worked for the Borrower between
December, 1997 and March 1998. In his Complaint, the plaintiff alleges
that he and others similarly situated to him have been improperly
denied overtime compensation to which they are entitled,
<PAGE>
in violation of the Fair Labor Standards Act, 29 U.S.C. (S) 201 et.
--
seq. The Borrower intends to assert counterclaims against the
---
plaintiff, to file cross-claims against its co-defendant, and in
general to contest the case vigorously.
<PAGE>
Schedule 9.6
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Collateral Matters
------------------
See Schedule 9.3. In addition, recent restructuring transactions involving
subsidiaries of the (see, e.g., Schedule 9.4) may have violated non-assignment
or change of control provisions in certain leases of such subsidiaries of
Borrower. Borrower does not expect any such violations to constitute a Material
Adverse Effect upon Borrower or any of its Subsidiaries, taken as a whole.
(a): Real Properties of Borrower and its Subsidiaries: None.
(b): Intellectual Property of Borrower and its Subsidiaries, registered with any
Governmental Authority:
Federally registered marks:
1. The Hunter Group, Inc. has federally registered, as of January 20,
1998, the mark "THE HUNTER GROUP" for use relating to employment
agency services (Registration Number 2,131,007).
2. Ficke and Associates, Inc. (now Renaissance Government Solutions,
Inc.) has federally registered, as of August 26, 1997, the mark "IPAT"
for use relating to computer consulting services, namely, design,
development and implementation of computerized systems to provide
access to public information (Registration Number 2,091,429).
3. Ficke and Associates, Inc. (now Renaissance Government Solutions,
Inc.) has federally registered, as of March 9, 1993, the mark "RIMS
RESPONSE INFORMATION MANAGEMENT SYSTEM and design" for uses relating
to computer programs that provide call routing, prerecorded customer-
specific information, access to customer's computer database(s) voice
message and document retrieval as well as corresponding information
presented on screens (Registration Number 1,756,559).
4. International Systems Services Corporation (now merged into
Renaissance Worldwide Strategy, Inc.) has federally registered, as of
April 20, 1993, the mark "ISS" for uses relating to acquisition and
merger consultation, computerized data base management, computer
consultation, computer programming, and computer software design
(Registration Number 1,766,145).
5. The Registry, Inc. (n/k/a Renaissance Worldwide, Inc.) has federally
registered the mark "R THE REGISTRY and design" as of September 14,
1993 for uses
<PAGE>
relating to personnel recruitment and placement services (Registration
Number 1, 792,872). This mark is to be assigned to Renaissance
Worldwide, Inc.
Applications to federally register marks:
1. Renaissance Worldwide, Inc. (through assignment from The Registry,
Inc.) has an application pending (Serial Number 75/414,444) to
federally register the mark "RENAISSANCE" for use relating to Computer
Software and Services.
2. Renaissance Worldwide, Inc. (through assignment from The Registry,
Inc.) has an application pending (Serial Number 75/414,445) to
federally register the mark "RENAISSANCE" for use relating to
management consulting.
3. Renaissance Worldwide, Inc. has filed an application (Serial Number
75/452,382) to federally register the mark "KNOWLEDGE ENABLED
SELLING" for use relating to information technology consulting and
general business management consulting. The application is pending.
4. The Hunter Group, Inc. has filed an application (Serial Number
75/391,185) to federally register the mark "CONCEPT TO COMPLETION" for
use relating to consulting services in the field of planning, design
and implementation of information systems. The application is
pending.
5. The Hunter Group, Inc. has filed an application (Serial Number
75/375,416) to federally register the mark "PERFORM" for use relating
to Consulting Services in the Field of Information Management
Consulting Services, Vision and Strategy. The application is pending.
6. The Hunter Group, Inc. has filed an application (Serial Number
75/235,220) to federally register the mark "THE HUNTER GROUP" for use
relating to consulting services in the field of information management
consulting services, vision and strategy. The application is pending.
7. Ficke and Associates, Inc. (now Renaissance Government Solutions,
Inc.) has filed an application (Serial Number 75/429,046) to federally
register the mark "ACCESSNET" for use relating to networked client-
server platform for public sector agencies. The application is
pending.
Marks registered with State Trademark Offices:
1. The McClain Group, Inc. (now Renaissance Worldwide Strategy, Inc.) has
registered "MGI" in the state of Virginia (Number VA3000000171).
(c): Location of material Properties and other places of business of the Loan
Parties and
<PAGE>
predecessor entities of Loan Parties:
1. See attached Exhibit A to Schedule 9.6(c) for locations of all offices
and other places of business of Loan Parties and the locations of all
the material Properties of such parties.
2. See attached Exhibit B to Schedule 9.6(c) for a history of
business/corporate names for Renaissance Worldwide, Inc. and its U.S.
subsidiaries and affiliates.
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ARI National 189 Wells Avenue None
Company Newton, MA 02459
(Middlesex County)
- ----------------------------------------------------------------------------------------
COBA Group, 200 Berkeley St. 100 Colony Square Fulton
U.S.A., Ltd. 22d Floor Suite 1414
Boston, MA 02116 Atlanta, GA 30361
(Suffolk County)
Fifteen Piedmont Center Fulton
3575 Piedmont Road, NE
Atlanta, GA 30305
- ----------------------------------------------------------------------------------------
The Hunter Group, 100 East Pratt St. Building A, Suite 103 Maricopa
Inc. Suite 1600 13402 N. Scottsdale Road
Baltimore, MD 21202 Scottsdale, AZ 85254
(Baltimore County)
2030 Main St. Orange
Suite 650
Irvine, CA 92614
44 Montgomery St. San Francisco
Suite 3360
San Francisco, CA 94104
595 Market St. San Francisco
Suite 1330
San Francisco, CA 94104
1200 Seventeenth St. Denver
Suite 1019
Denver, CO 80202
Ten Piedmont Center Fulton
Suite 900
3495 Piedmont Rd., NE
Atlanta, GA 30305
Fifteen Piedmont Center Fulton
3575 Piedmont Road, NE
Atlanta, GA 30305
Suite 400 Honolulu
500 Ala Moana Blvd.
Honolulu, HI 96813
8420 West Bryn Mawr Cook
Suite 1100
Chicago, IL 60631
The Hunter Group, Suite 306 Montgomery
Inc. (continued) Westmoreland Building
6430 Rockledge Drive
Bethesda, MD 20817
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
25 Burlington Mall Rd. Middlesex
4th Floor
Burlington, MA 01803
55 Old Bedford Rd. Middlesex
Lincoln, MA 01773
4001 Weston Parkway, Suite 300 Wake
Cary, NC 27513
125 Wolf Road Albany
Albany, NY 12205
101 East 52d Street New York
New York, NY 10022
401 City Avenue Montgomery
Bala Cynwyd, PA 19004
Citymark Dallas
3100 McKinnon St.
Suite 940
Dallas, TX 75201
4860 Cox Road Henrico
Suite 200
Glen Allen, VA 23060
901 Byrd St. Richmond
Suite 1340
Riverfront Plaza
Richmond, VA 23219
707 East Main St. Richmond
Suite 700
Richmond, VA 23219
Level 50, 101 Collins St.
Melbourne, VIC 3000
Australia
Lvl. 29, The Chifley Tower, 2 Chifley
Square
Sydney, NSW 2000
Australia
1405 Trans-Canada Highway
Suite 200
Dorval, Quebec H9P 2V9
Canada
- -----------------------------------------------------------------------------------------------------------------------
The Hunter Group, 130 Adelaide St., West, Suite 2116
Inc. (continued) Toronto, ON M5H 3P5
Canada
1300-666 Burranrd St.
Vancouver, BC V6C 3J8
Canada
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8 Shenton Way, #23-04 Temasek Tower
Singapore 068811
Singapore
One Curzon Street, 4th Floor
London W1Y 7FN
United Kingdom
The Hunter Group 189 Wells Avenue None
International, Newton, MA 02459
Inc. (Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
The Management 189 Wells Avenue None
Decisions Group, Newton, MA 02459
Inc. (Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
Neoglyphics Media 189 Wells Avenue 1735 North Paulina Street Cook
Corporation Newton, MA 02459 Suite 200
(Middlesex County) Chicago, IL 60622
210 East Third Street Oakland
Suite 2A
Royal Oak, MI 48067
- -----------------------------------------------------------------------------------------------------------------------
The Registry, 189 Wells Avenue 300 Montgomery St. San Francisco
Inc. Network Newton, MA 02459 Suite 200
Consulting (Middlesex County) San Francisco, CA 94104
Practice
8420 West Bryn Mawr Cook
Suite 1100
Chicago, IL 60631
101 Roger Street Middlesex
Suite 214
Cambridge, MA 02142
55 Old Bedford Road Middlesex
Lincoln, MA 01773
70 Wells Ave. Middlesex
Newton, MA 02459
11926 Arbor Street Douglas
Suite 120
Omaha, NE 68144
- -----------------------------------------------------------------------------------------------------------------------
The Registry, 11235 Davenport St. Douglas
Inc. Network Suite 109
Consulting Practice Omaha, NE 68154
(continued)
70 Court Street Rockingham
Portsmouth, NH 03801
101 East 52d Street New York
New York, NY 10022
1430 Spring Hill Road Fairfax
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Suite 510
McLean, VA 22102
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 189 Wells Avenue 7840 Madison Avenue Sacramento
Government Newton, MA 02459 Suite 185 - AENOPQR
Solutions, Inc. (Middlesex County) Fair Oaks, CA 95628
7844 Madison Avenue Sacramento
Suite 150
Fair Oaks, CA 95628
Sunrise Center Sacramento
5330 Primrose Drive, Suite 24L
Fair Oaks, CA 95628
111 Monument Circle Marion
Suite 862
Indianapolis, IN 46204
55 Old Bedford Road Middlesex
Lincoln, MA 01773
1 Hampton Road, Suite 306 Rockingham
Exeter, NH 03833
11311 Cornell Park Drive Hamilton
Cincinnati, OH 45242
4733 Cornell Road Hamilton
Cincinatti, OH 45242
11157 Kenwood Road, Suite 6B1 Hamilton
Cincinnati, OH 45242
701 W. 51st Street, Mailcode #C733 Travis
Austin, TX 78751
1420 Spring Hill Road Fairfax
Suite 210
McLean, VA 22102
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 189 Wells Avenue 70 Wells Avenue Middlesex
Worldwide, Inc. Newton, MA 02459 Newton, MA 02459
(Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 189 Wells Avenue None
Worldwide Newton, MA 02459
International (Middlesex County)
Holdings, Inc.
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 200 Berkeley Street Two Embarcadero Center San Francisco
Worldwide 22d Floor Suite 1780
Strategy, Inc. Boston, MA 02110 San Francisco, CA 94111
(Suffolk County)
100 First Stamford Pl. Fairfield
Stamford, CT 06902
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
209 South LaSalle St. Cook
Suite 501
Chicago, IL 60604
200 West Madison St. Cook
Suite 2450
Chicago, IL 60606
55 Old Bedford Road Middlesex
Lincoln, MA 01773
101 East 52d Street New York
New York, NY 10022
One Curzon Street, 4th Floor
London W1Y 7FN
United Kingdom
Kungsgatan 28
S-411 19 Goteborg
Sweden
- -----------------------------------------------------------------------------------------------------------------------
Sterling 189 Wells Avenue None
Information Newton, MA 02459
Group, Inc. (Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
Technomic 189 Wells Avenue None
Consultants, Inc. Newton, MA 02459
(Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
TRI Securities 189 Wells Avenue None
Corp. Newton, MA 02459
(Middlesex County)
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 189 Wells Avenue One Perimeter Park South Jefferson
Worldwide IT Newton, MA 02459 Suite 100N
Consulting (Middlesex County) Birmingham, AL 35243
Services, Inc.
- -----------------------------------------------------------------------------------------------------------------------
Renaissance 300 Montgomery St. San Francisco
Worldwide IT Suite 200
Consulting San Francisco, CA 94104
Services, Inc.
(continued)
4800 Great America Parkway Santa Clara
Suite 301
Santa Clara, CA 95054
2121 N. California Blvd. Contra Costa
Suite 1000
Walnut Creek, CA 94596
4600 S. Ulster St. Denver
Suite 270
Denver, CO 80237
100 First Stamford Place Fairfield
Stamford, CT 06902
</TABLE>
<PAGE>
1 Financial Plaza Broward
Suite 2200
Ft. Lauderdale, FL 33394
900 Summit Tower Blvd. Orange
Suite 810
Orlando, FL 32810
One Urban Centre Hillsborough
4830 W. Kennedy Blvd.
Suite 443
Tampa, FL 33609
4536 Chamblee-Dunwoody Fulton
Suite 150
Atlanta, GA 30338
250 One Premier Plaza Fulton
5605 Glenridge Drive
Atlanta, GA 30342
Fifteen Piedmont Center Fulton
3575 Piedmont Road, NE
Atlanta, GA 30305
1117 Perimiter Center West Fulton
Suite 114 North
Atlanta, GA 30338
400 Satellite Place Gwinnett
3235 Satellite Boulevard
Duluth, GA 30096
1640 Powers Ferry Road Cobb
Building 22
Marietta, GA 30067
- --------------------------------------------------------------------------------
Renaissance 8420 West Bryn Mawr Cook
Worldwide IT Suite 1100
Consulting Chicago, IL 60631
Services,Inc.
(continued)
3100 4th Avenue Rock Island
Suite 200
East Moline, IL 61244
800 36th Ave. Rock Island
Suite 101
Moline, IL 61265
410 Fayette Street Peoria
Suite 307
Peoria, IL 61602
208 2nd Avenue SE Linn
Cedar Rapids, IA 52406
3070 104th Street Polk
<PAGE>
Urbandale, IA 50322
9393 West 110th Street Johnson
Overland Park, KS 66210
7450 West 130th Street Johnson
Overland Park, KS 66213
100 East Pratt Street Baltimore
Suite 1600
Baltimore, MD 21202
6707 Democracy Blvd. Montgomery
Suite 304
Bethesda, MD 20817
225 Franklin St. Suffolk
17th Floor
Boston, MA 02110
70 Wells Avenue Middlesex
Newton, MA 02459
10411 Clayton Rd. St. Louis
Suite 210
St. Louis, MO 63131
2850 Metro Drive Hennepin
Suite 800
Bloomington, MN 55425
East Bridge Offices Hennepin
10 Second St. NE, Suite 104
Minneapolis, MN 55413
- --------------------------------------------------------------------------------
Renaissance 11235 Davenport St. Douglas
Worldwide IT Suite 109
Consulting Omaha, NE 68154
Services, Inc.
(continued)
1 Hampton Road Rockingham
Exeter, NH 03833
101 East 52d Street New York
New York, NY 10022
Reckson Park Westchester
6 International Drive
Suite 160
Rye Brook, NY 10573
4001 Weston Parkway, Suite 300 Wake
Cary, NC 27513
121 West Trade St. Mecklenburg
Interstate Tower #2525
Charlotte, NC 28202
Six Coliseum Centre Mecklenburg
<PAGE>
Suite 230
2815 Coliseum Centre Drive
Charlotte, NC 28217
628 Green Valley Rd. Guilford
Suite 302
Greensboro, NC 27408
445 Hutchinson Ave. Franklin
Suite 185
Columbus, OH 43235
Crown Centre Cuyahoga
5005 Rockside Rd.
Suite 315
Independence, OH 44131
180 Westminster Street Providence
Suite 400
Providence, RI 02903
1441 Main Street Richland
Suite 825
Columbia, SC 29201
Office Numbers 18 + 22 Richland
Your Office USA
8910 Two Notch Road
Suite 200
Columbia, SC 29223
- --------------------------------------------------------------------------------
Renaissance 1200 Woodruff Road Greenville
Worldwide IT Greenville, SC 29607
Consulting
Services, Inc.
(continued)
1717 West 6th Street, Suite 345 Travis
Austin, TX 78703
2435 N. Central Expressway Collin
Suite 870
Richardson, TX 75080
4265 San Felipe Harris
Suite 900
Houston, TX 77027
5215 N. O'Connor Blvd. Dallas
Suite 1820
Irving, TX 75039
4701 Cox Rd. Henrico
Suite 200
Glen Allen, VA 23060
1430 Spring Hill Road, Suite 510 Fairfax
McLean, VA 22101
Riverfront Plaza Richmond
<PAGE>
901 East Byrd St.
Suite 1340
Richmond, VA 23219
12011 N.E. 1st St. King
Suite 305
Bellevue, WA 98005
25 West Main Street, Suite 865 Dane
Madison, WI 53703
126 N. Jefferson St. Milwaukee
Milwaukee, WI 53202
Abbey Court, St. John's Road
Tunbridge Wells
Kent, TN4 9TQ
United Kingdom
<PAGE>
EXHIBIT B TO SCHEDULE 9.6(C)
History of Business/Corporate Names for Renaissance
Worldwide, Inc. and its U.S. Subsidiaries and Affiliates
America's Registry, Inc. (Massachusetts). This corporation has been merged into
Triad Data, Inc. (New York), which itself has been renamed Renaissance Worldwide
IT Consulting Services, Inc (see below).
This corporation filed a fictitious name in Florida for the name
Renaissance Worldwide and in Texas as America's Registry of Texas, Inc.
COBA Group U.S.A., Inc. (Georgia)
COBA Group U.S.A., Inc. was formed in Georgia on October 27, 1988. It
changed its name to COBA-M.I.D., Inc. on October 25, 1991 and then changed
its name back to COBA Group U.S.A., Inc. on August 27, 1996.
The Hunter Group, Inc. (Maryland)
Hunter Consulting Associates, Inc. was formed in Maryland on March 4, 1983.
It changed its name to The Hunter Group, Inc. on April 24, 1984.
The Hunter Group, Inc. is qualified in Illinois under the forced assumed
name of Hunter Consulting Associates. This was necessary because at the
time of qualification the corporation's name was not available. It has now
become available and The Hunter Group, Inc. is in the process of qualifying
under its actual name.
The Management Decisions Group, Inc. (Illinois)
The Management Decisions Group, Inc. was formed in Illinois on November 9,
1992.
Neoglyphics Media Corporation (Illinois)
Netmart Corp. was formed in Illinois on February 24, 1995. It changed its
name to Webmart Corp. on March 10, 1995 and then on May 4, 1995 it changed
its name to Neoglyphics Media Corporation.
The Registry, Inc. Network Consulting Practice (New Hampshire)
Jackson, Schindelar & Associates was formed in New Hampshire on December 6,
1991. It changed its name to Axiom Consulting Group, Inc. on April 3,
1992. On January 26, 1995 it changed its name to The Registry, Inc.
Network Consulting Practice.
<PAGE>
Renaissance Technomic, Inc. (Delaware)
COBA-TC, Inc. was formed in Delaware on July 17, 1997. It changed its name
to Renaissance Technomic, Inc. on May 13, 1998. Renaissance Technomic, Inc.
has subsequently been merged into Renaissance Worldwide Strategy, Inc., as
of February 22, 1999.
Renaissance Worldwide, Inc. (Massachusetts)
The Registry, Inc. was formed in Massachusetts on June 10, 1986. It
changed its name to Renaissance Worldwide, Inc. on January 7, 1998.
Renaissance Worldwide, Inc. qualified in California as The Registry, Inc.
transacting business in California as Registry Consulting, Inc.
Renaissance Worldwide, Inc. has subsequently withdrawn from California.
Renaissance Worldwide, Inc. qualified in Maryland as TRI Consulting, Inc.
a/k/a The Registry, Inc. Renaissance Worldwide, Inc. is in the process of
withdrawing from Maryland.
There are two d/b/a filings in Newton, Massachusetts: Renaissance
Worldwide, Inc. d/b/a Renaissance Worldwide- filed 2/5/98 - expires
2/5/2002 Renaissance Worldwide, Inc. d/b/a Renaissance - filed 2/5/98 -
expires 2/5/2002
Renaissance Worldwide International Holdings, Inc.
Registry International, Inc. was formed in Delaware on September 17, 1996.
It changed its name to Renaissance Worldwide International Holdings, Inc.
on June 3, 1998.
Renaissance Worldwide Professionals, Inc. (California). This corporation has
merged into Renaissance Worldwide IT Consulting Services, Inc. (formerly Triad
Data, Inc.) (New York).
Application Group Consulting Services, Inc. was formed in California on
August 9, 1993. It changed its name to Application Resources, Inc. on
September 23, 1994. On March 2,1998 it changed its name to Renaissance
Worldwide Professionals, Inc.
<PAGE>
Renaissance Worldwide Strategy, Inc. (Delaware)
Renaissance Strategy Group, Inc. was formed in Delaware on March 23, 1992.
It changed its name to Renaissance Solutions, Inc. on January 31, 1995.
Renaissance Worldwide, Inc. (then The Registry, Inc.) acquired Renaissance
Solutions, Inc. by means of its wholly-owned acquisition vehicle, Rain
Acquisition Corp. The corporation's name changed to Renaissance Worldwide
Strategy, Inc. on December 31, 1997 when McClain Group, Inc. was merged
into the corporation.
Renaissance Worldwide IT Consulting Services, Inc. (New York)
Triad Data, Inc. (New York) was formed in New York on August 2, 1985. On or
about December 24, 1998, Shamrock Computer Resources, Ltd., Renaissance
Worldwide Professionals, Inc., and America's Registry, Inc. merged into
Triad Data, Inc. It changed its name to Renaissance Worldwide IT
Consulting Services, Inc. on January 11, 1998.
Eligibility Management Solutions, Inc. (Florida)
Eligibility Management Solutions, Inc. was formed August 3, 1989. On
December 23, 1998, it merged into Renaissance Government Solutions, Inc.
Ficke & Associates, d/b/a International Public Access Technologies (Illinois)
Ficke & Associates, d/b/a International Public Access Technologies was
formed October 2, 1985. On December 23, 1998, it merged into Renaissance
Government Solutions, Inc.
International Systems Services Corporation
This corporation has been merged into Renaissance Worldwide Strategy, Inc.
<PAGE>
Schedule 9.9
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Debt
----
As of June 22, 1999:
2. Borrower owes approximately $100 million in principal to NationsBank, N.A.,
which will be repaid from the proceeds of the Loans.
3. Borrower owes approximately $1.5 million in connection with the acquisition
of Eligibility Management Systems, Inc.
4. Borrower includes in its consolidated financial statements approximately
$1.9 million that the real estate trust that owns the property at 189 Wells
Avenue, Newton, MA 02459 (189 Wells Avenue Realty Trust), of which the
president and significant stockholder of the Borrower is the sole
beneficiary and an officer of the Borrower is the trustee, owes to its
mortgagees.
5. Borrower has capital lease obligations of approximately $0.3 million.
6. The Hunter Group, Inc. owes approximately $2.5 million in connection with
its acquisition of substantially all of the assets of InfoSolutions.edu
LLC.
7. Renaissance Worldwide Professionals Limited owes approximately 500,000
British pounds under its line of credit facility.
8. Renaissance Worldwide Gmbh & Co. KG owes approximately $80,000 under its
line of credit facility.
9. Renaissance Worldwide S.A. owes approximately $165,000 under its line of
credit facility.
10. Renaissance Worldwide Strategy Limited owes $0 but has a line of credit
facility of $600,000 available to it.
11. Earn outs:
A large number of earnouts are structured on a contingent basis.
Maximum possible earnouts are as follows:
US $ 43.6325 million; plus
<PAGE>
For Renaissance Worldwide AB, there are two twelve month earnout periods.
In each period, earnouts are calculated as follows: Up to US $827,500 +
(1.5 * profits of Renaissance Worldwide AB in excess of $843,750 (for first
earnout year) or $1,625,000 (for second earnout year); plus
DM 2.232 million; plus
FF 12.6 million.
12. On May 12, 1998, in connection with a lease (101 E. 52d Street, New York,
NY 10022) from 600 Lexington Avenue Associates, BNY Financial Corporation
issued a letter of credit for the Borrower. The current amount is
approximately $326,000.
13. On July 6, 1998, in connection with a lease (401 City Avenue, Bala Cynwyd,
PA 19004) by The Hunter Group, Inc., BNY Financial Corporation issued a
letter of credit of approximately $199,000 for the benefit of The Equitable
Life Assurance Society of the United States.
14. On March 19, 1997, in connection with a lease (200 West Madison Street,
Suite 2450, Chicago, IL 60606) by The Hunter Group, Inc., Signet Bank (now
merged into First Union National Bank) issued a letter of credit of
approximately $49,000 for the benefit of Madison Park Venture, subsequently
assigned to Overseas Partners (Madison Plaza) LLC.
<PAGE>
Schedule 9.10
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Taxes
-----
1. As of the date hereof, there are no material tax returns required to be
filed by any Loan Party that have not been filed.
2. Tax returns of the Borrower for the periods ending May 31, 1996 and May 31,
1997 are currently under audit by the Internal Revenue Service. The audit
is limited in scope to such matters as travel expenses, entertainment
expenses and advertising costs.
3. The tax return of the Borrower for the fiscal year ending December 27, 1997
is currently under audit by the Internal Revenue Service. The audit is
limited in scope to such matters as travel expenses, entertainment
expenses, advertising costs and professional expenses incurred in
connection with acquisitions.
<PAGE>
Schedule 9.12
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
ERISA
-----
None.
<PAGE>
Schedule 9.13
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Disclosure Documents
--------------------
15. The Borrower's most recent filings with the Securities and Exchange
Commission furnished by the Borrower to the Administrative Agent.
<PAGE>
Schedule 9.14
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Subsidiaries; Capitalization
----------------------------
Borrower
- --------
<TABLE>
<CAPTION>
Description of Each Number of Name of Each
State of Class and Series Authorized Number of Stockholder and
Name Incorporation If Applicable Shares Issued Shares No. of Shares Held
---- ------------- ------------- ------ ------------- ------------------
<S> <C> <C> <C> <C> <C>
Renaissance Worldwide, Inc. Massachusetts Common, no par value 99,000,000 56,240,319* Publicly traded
Preferred $.10 par value 1,000,000 0 None
</TABLE>
* As of May 10, 1999, there were 56,240,319 shares of Common Stock, no par
value, outstanding, according to the most recent 10-Q Borrower has filed with
the Securities and Exchange Commission.
<PAGE>
Subsidiaries of Borrower Organized in the United States
- -------------------------------------------------------
<TABLE>
<CAPTION>
Description of Each Number of Name of Each
State of Class and Series Authorized Number of Stockholder and
Name Incorporation If Applicable Shares Issued Shares No. of Shares Held
---- ------------- ------------- ------ ------------- ------------------
<S> <C> <C> <C> <C> <C>
ARI National Company Massachusetts Common, $.01 par value Unlimited 100 Renaissance Worldwide IT
Consulting Services, Inc.: 100
CANAM, L.L.C. Delaware Limited Liability Company N/A N/A THG Consulting, Inc.: 99%
Interests Renaissance Worldwide, Inc.: 1%
COBA Group, U.S.A., Ltd. Georgia Common, $1.00 par value 100,000 2,500 Renaissance Worldwide Strategy:
2,000 COBA Consulting, Ltd.: 500
The Hunter Group, Inc. Maryland Common, No par value 500,000 1,000 Renaissance Worldwide, Inc.:
1,000
The Hunter Group
International, Inc. Delaware Common, $.01 par value 100,000 100 The Hunter Group, Inc.: 100
The Management Decisions
Group, Inc. Illinois Common, No par value 1,000 1,000 Renaissance Worldwide Strategy,
Inc.: 1,000
Neoglyphics Media
Corporation Illinois Common, No par value 18,000,000 1,000 Renaissance Worldwide, Inc.:
1,000
The Registry, Inc.
Network Consulting
Practice New Hampshire Common, No par value 300 100 Renaissance Worldwide, Inc.: 100
Renaissance Government
Solutions, Inc. Delaware Common, $.01 par value 3,000 1,000 Renaissance Worldwide, Inc.:
1,000
Renaissance Worldwide Delaware Common, $.01 par value 3,000 1,000 Renaissance Worldwide IT
International Holdings, Inc. Consulting Services, Inc.: 1,000
Renaissance Worldwide Delaware Common, $.01 par value 3,000 1,000 Renaissance Worldwide, Inc.:
Strategy, Inc. 1,000
Sterling Information Group, Delaware Common, $.01 par value 3,000 1,000 Renaissance Worldwide, Inc.:
Inc. 1,000
TRI Securities Corp. Massachusetts Common, $.01 par value 200,000 100 Renaissance Worldwide, Inc.: 100
Technomic Consultants, Inc. Illinois Common, No par value 1,000 1,000 Renaissance Worldwide Strategy,
Inc.: 1,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Description of Each Number of Number of Name of Each
State of Class and Series Authorized Issued Stockholder and
--------
Name Incorporation If Applicable Shares Shares No. of Shares Held
---- ------------- ------------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
1,000
Renaissance Worldwide IT New York Common, No par value 1,000 1,000 Renaissance Worldwide, Inc.: 1,000
Consulting Services, Inc.
</TABLE>
<PAGE>
Subsidiaries of Borrower Organized Outside the United States
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Description of Each Number of Number of Name of Each
State of Class and Series Authorized Issued Stockholder and
--------
Name Incorporation If Applicable Shares Shares No. of Shares Held
---- ------------- ------------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
1045795 Ontario, Inc. Canada Common Unlimited 1 Renaissance Worldwide Strategy, Inc.:
1
COBA Consulting, Ltd. United Kingdom Ordinary 107,000 107,000 Renaissance Worldwide Strategy, Inc.:
107,000
1997 "A" 82,780 82,780 Renaissance Worldwide Strategy, Inc.:
82,780
1997 "B" 17,220 17,220 Renaissance Worldwide Strategy, Inc.:
7,220
1998 "A" 82,780 82,780 Richard Peel: 10,246
Oliver Walker: 6,000
Reads Trustees Limited: 17,534
Graham Gould: 7,830
Robert House: 6,299
Mark Parry: 7,000
Christopher Green: 6,000
Alistair Rimmer: 6,000
Marni Hewitt: 170
Kristin Gould: 170
Clare House: 1,701
Nicholas Hewitt: 7,830
Jean Rollins: 6,000
1998 "B" 17,220 17,220 Dean Street Investments B.V.: 17,220
Hunter Consulting Associates United Kingdom Ordinary 100 2 Renaissance Worldwide Professionals
Limited Limited: 2
Hunter Consulting Associates Australia Ordinary 1,000,000 100 The Hunter Group, Inc.: 100
Pty. Limited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Description of Each Number of Number of Name of Each
State of Class and Series Authorized Issued Stockholder and
--------
Name Incorporation If Applicable Shares Shares No. of Shares Held
---- ------------- ------------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
"A" Class 50,000 0
"B" Class 50,000 0
"C" Class 50,000 0
"D" Class 50,000 0
"E" Class 50,000 0
"F" Class 50,000 0
"G" Class 50,000 0
"H" Class 50,000 0
"I" Class 50,000 0
"J" Class Redeemable 20,000 0
Preference
"K" Class Redeemable 20,000 0
Preference
"L" Class Redeemable 9,998 0
Preference
The Hunter Group (Singapore) Singapore Ordinary 100,000 50,002 The Hunter Group, Inc.: 50,002
Pte. Ltd.
International Systems Services United Kingdom Ordinary 1,000 2 Renaissance Worldwide Strategy, Inc.:
(UK) Limited* 2
Renaissance Management GmbH Germany Geschaftsanteil 1 1 The Hunter Group International, Inc.:
1
Renaissance Technomic Limited Hong Kong Ordinary 10,780 10,680 Renaissance Worldwide Strategy, Inc.:
10,679
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Description of Each Number of Number of Name of Each
State of Class and Series Authorized Issued Stockholder and
--------
Name Incorporation If Applicable Shares Shares No. of Shares Held
---- ------------- ------------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
Steven Ganster: 1
Renaissance Worldwide AB Sweden Equity shares 1,000 1,000 Renaissance Worldwide Strategy, Inc.:
1,00
Renaissance Worldwide B.V. Netherlands Ordinary 2,000 400 The Hunter Group International, Inc.:
400
Renaissance Worldwide India Equity shares Unlimited 12,643 Renaissance Worldwide International
Consulting Private Limited Holdings, Inc.: 12,641
Sanjiv Anand: 1
Dr. Anand: 1
Renaissance Worldwide Germany N/A (partnership N/A N/A Renaissance Management GmbH:
GmbH & Co. KG interests) general partner, with a capital
contribution of DM 225,000
Thersandros Vermogensverwaltungs
und Beteiligungs GmbH: limited
partner, with a capital
contribution of DM 3,570
Renaissance Worldwide Holding United Kingdom Ordinary 2,000,000 1,175,001 Renaissance Worldwide International
Limited Holdings, Inc.: 1,175,001
Renaissance Worldwide K.K. Japan Common 320 320 Renaissance Worldwide Strategy, Inc.:
320
Renaissance Worldwide Limited United Kingdom Ordinary 100 100 The Hunter Group, Inc.: 100
Renaissance Worldwide United Kingdom Ordinary 100 100 Renaissance Worldwide Holding
Professionals Limited Limited: 100
Renaissance Worldwide S.A. France Capital 2,500 2,500 The Hunter Group International, Inc.:
2,494
The Hunter Group, Inc.: 1
Renaissance Worldwide, Inc.: 1
Richard L. Bugley: 1
</TABLE>
145
<PAGE>
<TABLE>
<CAPTION>
Description of Each Number of Number of Name of Each
State of Class and Series Authorized Issued Stockholder and
--------
Name Incorporation If Applicable Shares Shares No. of Shares Held
---- ------------- ------------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
Terry Hunter: 1
Alain Thibiault: 1
Richard Wheeler: 1
Renaissance Worldwide Strategy United Kingdom Ordinary 100,000 40,000 Renaissance Worldwide Strategy, Inc.:
Limited 40,000
Thersandros Vermogensverwaltungs Germany Geschaftsanteil 1 1 The Hunter Group International, Inc.:
und Beteiligungs GmbH 1
THG Consulting, Inc. Canada Common Unlimited 100 The Hunter Group, Inc.: 100
Technomic Research Associates United Kingdom Ordinary 1,000 1,000 Renaissance Worldwide Strategy, Inc.:
Limited 1,000
</TABLE>
<PAGE>
Schedule 9.14
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Subsidiaries; Capitalization
----------------------------
(a): None.
(b): None.
<PAGE>
Schedule 9.15
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Agreements
----------
None.
<PAGE>
Schedule 9.19
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Environmental Matters
---------------------
(a)-(h): None.
<PAGE>
Schedule 9.21
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Employee Matters
----------------
(a) None.
(b) None.
(c) None.
<PAGE>
Schedule 9.22
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Solvency
--------
None.
<PAGE>
Schedule 9.23
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Year 2000 Compliance
--------------------
Borrower from time to time receives inquiries from clients regarding the Year
2000 status of Borrower with respect to both software consulting services that
it has provided to client and Borrower's internal hardware and software systems.
Such inquiries often ask for detailed responses, representations, warranties
and/or certifications as to such Year 2000 status. Borrower in response to such
inquiries issues the attached Year 2000 Readiness Disclosure letter.
Borrower since its inception has provided consulting services and/or source or
object code to numerous of its clients. Such services, source or object code may
not be Year 2000 compliant or capable. In addition, Borrower performs certain
Year 2000 assessment and remediation services for its clients. Such services or
any source or object code resulting therefrom may not be Year 2000 compliant or
capable.
<PAGE>
Schedule 11.2
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Permitted Liens
---------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
JURISDICTION DEBTOR SECURED PARTY ORIGINAL FILE DATE
NUMBER
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MA Secretary of the C.M. Management Vanguard Financial 449476 2/18/97
Commonwealth Systems, Ltd., Inc Service Corp.
- ----------------------------------------------------------------------------------------------
Boston City in C.M. Management Vanguard Financial 397190 2/21/97
Suffolk County, MA Systems, Ltd., Inc Service Corp.
- ---------------------------------------------------------------------------------------------
UCC Division, Technomic Eaton Financial Corp. 003286580 7/25/94
Secretary of Consultants
State, IL International Ltd.
- ---------------------------------------------------------------------------------------------
UCC Division, Technomic Bank of America 003619325 12/3/96
Secretary of Consultants Illinois
State, IL International LLC
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media Sun Microsystems 003487580 1/2/96
Secretary of Corp. Finance
State, IL
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media Sun Microsystems 003594085 10/2/96
Secretary of Corp. Finance
State, IL
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media AT&T Credit Corp. 003630384 12/23/96
Secretary of Corp.
State, IL
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media Mutual Bank 003694137 10/28/97
Secretary of Corp.
State, IL
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media American National 003489167 1/5/96
Secretary of Corp. Bank & Trust Co. of
State, IL Chicago
- ---------------------------------------------------------------------------------------------
UCC Division, Neoglyphics Media American National 003796438 2/2/98
Secretary of Corp. Bank & Trust Co. of
State, IL Chicago
- ---------------------------------------------------------------------------------------------
New York State Triad Data, Inc. Citicorp Leasing, Inc. 099614 5/1794
- ---------------------------------------------------------------------------------------------
New York State Triad Data, Inc. Northern Telecom 148018 7/20/94
Finance
- ---------------------------------------------------------------------------------------------
New York State Triad Data, Inc. AT&T Capital Leasing 014869 1/23/97
- ---------------------------------------------------------------------------------------------
New York State Triad Data, Inc. Tokai Financial 100730 5/15/97
Services, Inc.
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MA Secretary of the Renaissance BancBoston Leasing, 98-532223 2/27/98
Commonwealth Worldwide, Inc. Inc. Assigned to The
Fifth Third Leasing
Co.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-555583 6/8/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-560415 6/29/98
Commonwealth Worldwide, Inc. Inc. Assigned to
Metlife Capital LP.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98560416 6/29/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-560471 6/29/98
Commonwealth Worldwide, Inc. Inc. Assigned to
Metlife Capital Corp.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-560961 6/30/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-560963 6/30/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98560964 6/30/98
Commonwealth Worldwide, Inc. Inc. Assigned to
Metlife Capital
Corporation.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-568218 7/31/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-568748 8/3/98
Commonwealth Worldwide, Inc. Inc. Assigned to The
Fifth Third Leasing
Company.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance Stamford Computer 98-573696 8/25/98
Commonwealth Worldwide, Inc. Group, Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-589263 11/9/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-007190 3/18/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
MA Secretary of the Renaissance BancBoston Leasing, 98-564016 7/13/98
Commonwealth Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
Boston City in Renaissance BancBoston Leasing, 408866 6/30/98
Suffolk County, MA Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
Boston City in Renaissance BancBoston Leasing, 412160 11/10/98
Suffolk County, MA Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
Secretary of State, The Hunter Group, Charter Financial, 97-00040215 3/6/97
State of Texas Inc. Inc.
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UCC Division, The Hunter Group, Summit Bank 25581487 6/24/96
Department of State, PA Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division of The Hunter Group, General Electric 376828 3/21/96
State, PA Inc. Capital Corporation
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 452795 3/6/97
Secretary of the Inc.
Commonwealth, MA
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 452796 3/6/97
Secretary of the Inc.
Commonwealth, MA
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 480077 7/1/97
Secretary of the Inc.
Commonwealth, MA
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 517402 12/17/97
Secretary of the Inc.
Commonwealth, MA
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 003776703 12/17/97
Secretary of State, IL Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Signet Leasing and 9612860728 5/6/96
Secretary of State, CA Inc. Financial Corp.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Summit Bank 9617860956 6/24/96
Secretary of State, CA Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 9709360577 4/2/97
Secretary of State, CA Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 9709360622 4/2/97
Secretary of State, CA Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 9718460935 7/1/97
Secretary of State, CA Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial Inc. 9735261001 12/17/97
Secretary of State, CA Inc.
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Business Credit 112838143 10/10/91
Assessments and Inc. Leasing, Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department The Hunter Group, Maryland National Bank 103528188 12/18/90
of Assessments and Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, CoreStates Bank, N.A. 102418160 8/29/90
Assessments and Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MD St. Department of The Hunter Group, Chesapeake Industrial 73217644 11/17/87
Assessments and Inc. Leasing Co., Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Heritage Savings 122117468 7/29/92
Assessments and Inc. Association
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Northfield Federal 122467014 9/2/92
Assessments and Inc. Savings and Loan
Taxation Association
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Signet Bank/Maryland 122667844 11/25/92
Assessments and Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department The Hunter Group, Chesapeake Federal 130907045 3/31/93
of Assessments and Inc. Savings & Loan
Taxation Association
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Chesapeake Federal 130907046 3/31/93
Assessments and Inc. Savings & Loan
Taxation Association
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Chesapeake Federal 130967264 4/6/93
Assessments and Inc. Savings & Loan
Taxation Association
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Chesapeake Federal 132397501 8/27/93
Assessments and Inc. Savings & Loan
Taxation Association
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Northfield Federal 132537092 9/10/93
Assessments and Inc. Savings & Loan
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Nelco LTD 151728283 6/21/95
Assessments and Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, National Westminster 151788009 6/26/95
Assessments and Inc. Bank USA
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, National Westminster 152428002 8/30/95
Assessments and Inc. Bank USA
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Nelco LTD. 162417710 8/27/96
Assessments and Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Renaissance 1463271 6/12/98
Assessments and Inc. Worldwide, Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MD St. Department of The Hunter Group, Renaissance 1000011825 7/6/98
Assessments and Inc. Worldwide, Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
MD St. Department of The Hunter Group, Renaissance 1000011826 7/6/98
Assessments and Inc. Worldwide, Inc.
Taxation
- -----------------------------------------------------------------------------------------------------
New York State The Hunter Group, Nelco Ltd. 127282 6/22/95
Inc.
- -----------------------------------------------------------------------------------------------------
New York State The Hunter Group, General Electric 057351 3/21/96
Inc. Capital Corp.
- -----------------------------------------------------------------------------------------------------
New York State The Hunter Group, Stamford Computer 045911 3/6/97
Inc. Group, Inc.
- -----------------------------------------------------------------------------------------------------
New York State The Hunter Group, Stanford Computer 136013 7/1/97
Inc. Group, Inc.
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial 2968 11/17/87
Department of Inc. Leasing Co., Inc. 2158
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Signet Leasing and 3266 8/29/90
Department of Inc. Financial Corporation 1243
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Maryland National Bank 3293 12/18/90
Department of Inc. 0741
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Business Credit 3365 10/10/91
Department of Inc. Leasing, Inc. 0194
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Heritage Savings, 3436 7/29/92
Department of Inc. Association 2784
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Northfield Federal 3445 9/2/92
Department of Inc. Savings & Loan Assn. 1135
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3449 9/22/92
Department of Inc. Savings & Loan Assn 0429
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3497 3/31/93
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. Savings & Loan Assn. 2638
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3497 3/31/93
Department of Inc. Savings & Loan Assn. 2639
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3504 4/6/93
Department of Inc. Savings & Loan Assn. 2372
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3538 8/27/93
Department of Inc. Savings & Loan Assn. 1001
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Northfield Federal 3541 9/10/93
Department of Inc. Savings & Loan 2216
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Equitable Motor 3541 9/10/93
Department of Inc. Transport Inc. 2059
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Sanwa Leasing Corp. 3560 11/19/93
Department of Inc. 1619
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Sanwa Leading Corp. 3567 12/20/93
Department of Inc. 1059
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Eaton Financial 3578 1/27/94
Department of Inc. Corporation 0388
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3592 3/14/94
Department of Inc. Savings 1673
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Northfield Federal 3592 3/14/94
Department of Inc. Savings 1678
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Sharp Electronic Credit 3592 3/17/94
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. Co. 2527
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Federal 3597 3/25/94
Department of Inc. Savings & Loan 1036
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Northfield Federal 3605 5/4/94
Department of Inc. Savings 0871
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3609 5/18/94
Department of Inc. Bank 0565
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3622 7/12/94
Department of Inc. Bank 0043
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3626 7/27/94
Department of Inc. Bank 1479
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3640 9/8/94
Department of Inc. Bank 0072
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3647 9/20/94
Department of Inc. Bank 1266
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3651 10/13/94
Department of Inc. Bank 0007
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3657 11/2/94
Department of Inc. Bank 2173
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3657 11/2/94
Department of Inc. Bank 2420
Assessments &
Taxation, MD
- -----------------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3670 12/21/94
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Department of Inc. Bank 0859
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Bank of Glen Burnie 3689 2/15/95
Department of Inc. 2393
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, G.E. Capital 3717 6/6/95
Department of Inc. 2324
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco. Ltd. 3720 6/21/95
Department of Inc. 2564
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, National Wesminster 3723 6/26/95
Department of Inc. Bank USA 1304
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3729 7/13/95
Department of Inc. Bank 1293
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3737 8/17/95
Department of Inc. 1099
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, National Wesminster 3741 8/30/95
Department of Inc. Bank USA 0344
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3777 1/10/96
Department of Inc. 0669
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3777 1/10/96
Department of Inc. 0681
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3777 1/10/96
Department of Inc. 0684
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3788 2/20/96
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. 0927
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3790 3/1/96
Department of Inc. 2638
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, General Electric 3796 3/22/96
Department of Inc. Capital Corporation 1007
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3797 3/27/96
Department of Inc. Bank 0349
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, G.E. Capital 3801 4/12/96
Department of Inc. 0378
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Norwest Equipment 3804 4/25/96
Department of Inc. Finance 2424
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Signet Leasing and 3807 5.1.96
Department of Inc. Financial Corporation 2038
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3820 6/17/96
Department of Inc. Bank 1655
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, MFP Technology 3826 6/24/96
Department of Inc. Services, Inc. 0866
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, MFP Technology Illegible. 6/26/96
Department of Inc. Services, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco Ltd. Illegible. 8/27/96
Department of Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, MFP Technology Illegible. 9/13/96
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. Services, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 9/23/96
Department of Inc. Leasing Co. Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 9/23/96
Department of Inc. Leasing Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 9/30/96
Department of Inc. Leasing Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 11/20/96
Department of Inc. Leasing Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 12/3/96
Department of Inc. Leasing Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, MicroTech Leasing Corp Illegible. 12/20/96
Department of Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Chesapeake Industrial Illegible. 12/26/96
Department of Inc. Leasing Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Stamford Computer Illegible. 3/6/97
Department of Inc. Group, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Stamford Computer Illegible. 3/6/97
Department of Inc. Group, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Stamford Computer Illegible. 3/6/97
Department of Inc. Group, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Stamford Computer Illegible. 3/6/97
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. Group, Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, MicroTech Leasing Illegible. 4/22/97
Department of Inc. Co., Inc.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, General Electric Illegible. 6/2/97
Department of Inc. Capital Corp.
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3848 8/27/96
Department of Inc. 1474
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Nelco, Ltd. 3848 8/27/96
Department of Inc. 1475
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3855 9/23/96
Department of Inc. Bank 2668
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3855 9/23/96
Department of Inc. Bank 2669
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3858 9/30/96
Department of Inc. Bank 0833
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3871 11/20/96
Department of Inc. Bank 0072
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Commercial & Farmers 3876 12/03/96
Department of Inc. Bank 1110
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Summit Bank 3883 12/20/96
Department of Inc. 0787
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Carollton Bank 3884 12/26/96
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. 0022
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial, 3906 3/6/97
Department of Inc. Inc. 0196
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial, 3906 3/6/97
Department of Inc. Inc. 0227
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial, 3906 3/6/97
Department of Inc. Inc. 0432
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial, 3906 3/6/97
Department of Inc. Inc. 0438
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, CoreStates Bank, NA 3918 4/22/97
Department of Inc. 1664
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, General Electric 3930 6/2/97
Department of Inc. Capital Corp. 1354
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Norwest Equipment 3940 6/24/97
Department of Inc. Finance 1308
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial 3942 7/3/97
Department of Inc. 1172
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, CoreStates Bank, NA 3949 7/24/97
Department of Inc. 2888
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Micro Tech Leasing 3975 10/2/97
Department of Inc. Corp. 2465
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Digital Financial 3977 11/07/97
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Department of Inc. Services 0537
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, General Electric 3994 12/8/97
Department of Inc. Capital Corporation 2596
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, Charter Financial, 4000 12/17/97
Department of Inc. Inc. 1057
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, BancBoston Leasing, 0010 6/12/98
Department of Inc. Inc. 0671
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, BancBoston Leasing, 0013 7/6/98
Department of Inc. Inc. 1889
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
UCC Division, The Hunter Group, BancBoston Leasing, 0014 7/6/98
Department of Inc. Inc. 0059
Assessments &
Taxation, MD
- ---------------------------------------------------------------------------------------------
Burlington Town in The Hunter Group, Charter Financial, 653 12/17/97
Middlesex County, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Burlington Town The Hunter Group, Charter Financial, 337 7/2/97
Middlesex Count Inc, Inc.
MA
- ---------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, Pullman Bank and 007-98-007752 10/23/97
Inc. Trust Co.
077-97-007531
- ---------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, Pullman Bank and 007-97-00782 11/5/97
Inc. Trust Co.
- ---------------------------------------------------------------------------------------------
Fulton County, GA Renaissance Charter Financial, 8/28/98
Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group BancBoston Leasing, 007-98-005280 7/1/98
Inc.
- ---------------------------------------------------------------------------------------------
Fulton, GA The Hunter Group, General Electric Illegible. 1/9/982
Inc. Capital Corporation
- ---------------------------------------------------------------------------------------------
Fulton, GA The Hunter Group, Charter Financial, Illegible. 12/18/97
Inc.
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inc.
- ------------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, MicroTech Leasing 007-97-007873 11/5/97
Inc. Corp.
- ------------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, MicroTech Leasing 007-97-007872 11/5/97
Inc. Corp.
- ------------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, MicroTech Leasing 007-97-007531 10/23/97
Inc. Corp.
- ------------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, MicroTech Leasing 007-97-007059 10/2/97
Inc. Corp.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton The Hunter Group, Charter Financial Inc. Illegible. 8/5/97
County Inc. Stamford Computer
Group, Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton The Hunter Group, Norwest Equipment Illegible. 7/28/97
County Inc. Finance
- ------------------------------------------------------------------------------------------------
Barrow County, GA The Hunter Group, CoreStates Banks, N.A. 007-97-004977 7/11/97
Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Hunter Group, Inc. Summit Bank 060199618128 4/2/97
County
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Hunter Group, Inc. Summit Bank 060199612292 4/2/97
County
- ------------------------------------------------------------------------------------------------
Fulton County, GA The Hunter Group, Charter Financial Inc. Illegible. 3/6/97
Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton The Hunter Group, Charter Financial, Illegible. 3/6/97
County Inc. Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Hunter Group, Inc. MFP Technology 960199611970 9/19/96
County Services Inc.
- ------------------------------------------------------------------------------------------------
Georgia Fulton Hunter Group, Inc. MFP Technology 06199612292 9/18/96
County Services Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Hunter Group, Inc. MFP Technology Illegible. 6/26/96
County Services Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Hunter Group, Inc. MFP Technology Illegible. 6/24/96
County Services Inc.
- ------------------------------------------------------------------------------------------------
Georgia, Fulton The Hunter Group, Signet Leasing and Illegible. 5/10/96
County Inc. Financial Corporation
- ------------------------------------------------------------------------------------------------
Georgia, Fulton The Hunter Group, Norwest Equipment Illegible. 4/29/96
County Inc. Finance
- ------------------------------------------------------------------------------------------------
Georgia, Fulton Triad Data Aaron Rents, Inc. Illegible. 7/2/97
County
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York County, NY Triad Data, Inc. Citicorp Leasing, Inc. 94PN22486 5/12/94
- ---------------------------------------------------------------------------------------------
New York County, NY Triad Data, Inc. Northern Telecom 94PN34379 7/26/94
- ---------------------------------------------------------------------------------------------
New York County, Triad Data, Inc. Tokai Financial 97PN22790 5/22/97
New York Services, Inc.
- ---------------------------------------------------------------------------------------------
New York County, NY The Hunter Group Nelco LTD 95PN27014 6/22/95
- ---------------------------------------------------------------------------------------------
New York County, NY The Hunter Group General Electric 96PN13274 3/27/96
Capital Corporation
- ---------------------------------------------------------------------------------------------
New York County, NY The Hunter Group General Electric 96PN13275 3/27/96
Capital Corporation
- ---------------------------------------------------------------------------------------------
New York County, NY The Hunter Group Charter Financial, 97PN11852 3/19/97
Inc.
- ---------------------------------------------------------------------------------------------
New York County, NY The Hunter Group Charter Financial, 97PN32144 7/15/97
Inc.
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 131-98 3/5/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 389-98 5/15/98
Middlesex County, Worldwide, Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 455-98 7/10/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 456-98 7/10/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 457-98 7/10/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 461-98 7/10/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 462-98 7/10/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing Inc 463-98 7/10/98
Middlesex County, Worldwide, Inc.
MA
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Newton City in Renaissance BancBoston Leasing 535-98 8/04/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 537-98 8/04/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance Charter Financial, 620-98 8/26/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in Renaissance BancBoston Leasing 854-98 11/17/98
Middlesex County, Worldwide, Inc. Inc.
MA
- ---------------------------------------------------------------------------------------------
Texas Secretary of America's Registry, Phoenixcor, Inc. 94-00214131 11/4/94
State Inc.
- ---------------------------------------------------------------------------------------------
Texas Secretary of America's Registry, Phoenixcor, Inc. 95-00152322 8/7/95
State Inc.
- ---------------------------------------------------------------------------------------------
Texas Secretary of America's Registry, Advanta Business 96-00038960 2/28/96
State Inc. Services Corp.
- ---------------------------------------------------------------------------------------------
Westchester County, America's Registry, Phoenixcor, Inc. 95-06657 8/11/95
NY Inc.
- ---------------------------------------------------------------------------------------------
State of California America's Registry, Phoenixcor, Inc. 9432560259 11/4/94
Inc.
- ---------------------------------------------------------------------------------------------
State of California America's Registry, Phoenixcor, Inc. 9522260022 8/7/95
Inc.
- ---------------------------------------------------------------------------------------------
Montgomery County - The Hunter Group, Summit Bank 261426 4/03/97
County Inc.
Prothonotary, PA
- ---------------------------------------------------------------------------------------------
State of North Renaissance BancBoston Leasing 0199840800 6/30/98
Carolina Worldwide, Inc. Inc.
- ---------------------------------------------------------------------------------------------
Lincoln Town in Renaissance Green Tree Vendor BK31 10/07/97
Middlesex County, Solutions, Inc. Services Corp. PG37
MA
- ---------------------------------------------------------------------------------------------
Lincoln Town in Renaissance Green Tree Vendor BK31 11/5/97
Middlesex County, Solutions, Inc. Services Corp. PG44
MA
- ---------------------------------------------------------------------------------------------
Lincoln Town in Renaissance UST Leasing BK31 1/28/98
Middlesex County, Solutions, Inc. Corporation PG59
MA
- ---------------------------------------------------------------------------------------------
UCC Division, America's Registry, Phoenixcor, Inc. 160171 8/7/95
Department of Inc.
State, NY
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Secretary of State America's Registry, Phoenixcor, Inc. 003325135 11/3/94
of Illinois Inc.
- ---------------------------------------------------------------------------------------------
Secretary of State America's Registry, Phoenixcor, Inc. 003432502 8/7/95
of Illinois Inc.
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Phoenixcor, Inc. 9522260307 8/7/95
Secretary of
State, CA
- ---------------------------------------------------------------------------------------------
New York County, NY America's Registry, Phoenixcor, Inc. 95PN34516 8/14/95
Inc.
- ---------------------------------------------------------------------------------------------
Franklin County, OH America's Registry, Phoenixcor, Inc. 04480E08 8/7/95
Inc.
- ---------------------------------------------------------------------------------------------
UCC Division, America's Registry, Phoenixcor, Inc. 271571 11/4/94
Secretary of the Inc.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, America's Registry, The Fifth Third 564015 7/13/98
Secretary of the Inc. Leasing Company
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
Newton City in America's Registry, Phoenixcor, Inc. 562-94 11/7/94
Middlesex County, Inc.
MA
- ---------------------------------------------------------------------------------------------
Newton City in America's Registry, The Fifth Third 132-98 7/6/98
Middlesex County, Inc. Leasing Company
MA
- ---------------------------------------------------------------------------------------------
Boston city in Renaissance NTFC Capital 404852 1/12/98
Suffolk County, MA Solutions, Inc. Corporation
- ---------------------------------------------------------------------------------------------
UCC Division, Renaissance Green Tree Vendor 501909 10/8/97
Secretary of the Solutions, Inc. Services Group
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, Renaissance Green Tree Vendor 506667 10/28/97
Secretary of the Solutions, Inc. Services Group
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, Renaissance NTFC Capital 522416 1/12/98
Secretary of the Solutions, Inc. Corporation
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, Renaissance UST Leasing 525333 1/26/98
Secretary of the Solutions, Inc. Corporation
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Phoenixcor, Inc. 271752 11/4/94
Secretary of the
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Phoenixcor, Inc. 271753 11/4/94
Secretary of the
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Phoenixcor, Inc. 330395 8/7/95
Secretary of the
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Business Credit 336961 11/8/95
Secretary of the Leasing
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Data Comm Associates, 343697 10/11/95
Secretary of the Inc.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Data Comm Associates, 366914 2/01/96
Secretary of the Inc.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Boston Private Bank & 567470 7/29/98
Secretary of the Trust Company
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Sharp Electronic 378089 3/27/96
Secretary of the Credit Co.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Sharp Electronic 390031 5/15/96
Secretary of the Credit Co.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
UCC Division, The Registry,Inc. Sharp Electronic 387162 5/3/96
Secretary of the Credit Co.
Commonwealth, MA
- ---------------------------------------------------------------------------------------------
Cuyahoga County, America's Registry, Phoenixcor, Inc. 1320148 8/7/95
OH Inc.
- ---------------------------------------------------------------------------------------------
Cuyahoga County, America's Registry, BNY Financial 1337438 3/6/96
OH Inc. Corporation
- ---------------------------------------------------------------------------------------------
Fulton County, GA America's Registry, Phoenixcor, Inc. 060-95-006266 4/17/95
Inc.
- ---------------------------------------------------------------------------------------------
Fulton County, GA America's Registry, Sanwa Business Credit 060-96-008877 5/8/96
Inc. Corporation
- ---------------------------------------------------------------------------------------------
Fulton County, GA America's Registry, Sanwa Business Credit 060-97-004226 3/5/97
Inc. Corporation
- ---------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Phoenixcor, Inc. 560-94 11/7/94
Middlesex County,
MA
- ---------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Phoenixcor, Inc. 561-94 11/7/94
Middlesex County,
MA
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Phoenixcor, Inc. 347-95 8/7/95
Middlesex County,
MA
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Data Comm Associates, 310-95 10/10/95
Middlesex County, Inc.
MA
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Data Comm Associates, 81-96 2/2/96
Middlesex County, Inc.
Ma
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Sharp Electronic 167-96 4/2/96
Middlesex County, Credit Co.
Ma
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Sharp Electronic 268-96 5/17/96
Middlesex County, Credit Co.
Ma
- ----------------------------------------------------------------------------------------------
Newton City in The Registry, Inc. Boston Private Bank 252-98 4/14/98
Middlesex County, and Trust Co., Inc.
Ma
- ----------------------------------------------------------------------------------------------
UCC Division, America's Registry, Phoenixcor, Inc. 940000228099 11/9/94
Secretary of Inc.
State, FL
- ----------------------------------------------------------------------------------------------
UCC Division, America's Registry, Phoenixcor, Inc. 950000181679 9/11/95
Secretary of Inc.
State, FL
- ----------------------------------------------------------------------------------------------
Mecklenburg County, America's Registry, Phoenixcor, Inc. 95-10932 8/7/95
NC Inc.
- ----------------------------------------------------------------------------------------------
UCC Division, The Registry, Inc. Phoenixcor, Inc. 37340758 8/7/95
Department of
Assessments and
Taxation, MD
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Scot Leasing Co. 6665 1/18/95
162
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Vanguard Financial 6889 10/23/95
Service Corp. 343
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Tele-Communications, 7086 6/24/96
Inc. 716
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates The Fifth Third 7254 1/21/97
Leasing Company 496
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Fifth Third Leasing 7353 5/21/97
Company 1805
- ----------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Citizens Banc Leasing 7667 6/4/98
976
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Hamilton County, OH Ficke & Associates Summit Funding Group, 7845 12/31/98
Inc. 1136
- ---------------------------------------------------------------------------------------------
Durham County, NC America's Registry, Phoenixcor, Inc. BK 95 8/7/95
Inc. PG 2024
- ---------------------------------------------------------------------------------------------
Durham County, NC America's Registry, Phoenixcor, Inc. 1251418 8/7/95
Inc.
- ---------------------------------------------------------------------------------------------
Guilford County, NC America's Registry, Phoenixcor, Inc. 438829 8/7/95
Inc.
- ---------------------------------------------------------------------------------------------
Fulton County, GA America's Registry, Phoenixcor, Inc. 060-95-006266 4/17/95
Inc.
- ---------------------------------------------------------------------------------------------
Mecklenburg County, America's Registry, Phoenixcor, Inc. 95-10932 8/7/95
NC Inc.
- ---------------------------------------------------------------------------------------------
UCC Division, Dept. The Registry, Inc. Phoenixcor, Inc. 3734 8/7/95
of Assessments & 0758
Taxation, MD
- ---------------------------------------------------------------------------------------------
State of OH UCC Ficke & Associates, Citizens Banc Leasing AP0055674 5/26/98
Inc.
- ---------------------------------------------------------------------------------------------
State of OH UCC Ficke & Associates, Summit Funding Group, AP0106892 12/14/98
Inc. Inc.
- ---------------------------------------------------------------------------------------------
State of MN UCC Shamrock Computer Norwest Bank 1703426 9/20/94
Resources, Ltd. Minnesota National
Association
- ---------------------------------------------------------------------------------------------
</TABLE>
In addition to the liens listed above, a lien in favor of a landlord exists on
the deposit made by Borrower to secure its lease of London office space, as
described in Schedule 11.5 (i).
<PAGE>
Schedule 11.3(iv)
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Subsidiary Mergers, Dissolutions, Etc.
--------------------------------------
1. The Borrower has contemplated merging The Registry, Inc. Network Consulting
Practice into Renaissance Worldwide IT Consulting Services, Inc. Currently,
however, no firm plans are in place to carry out this merger.
16. The Borrower intends to form a new Delaware subsidiary named Renaissance
Worldwide IT Consulting Services, Inc. ("New RWITCS"), and to merge
Renaissance Worldwide IT Consulting Services, Inc., a New York corporation,
with and into New RWITCS.
17. As part of an on-going legal restructuring designed to simplify and reduce
corporate structure, the Borrower has contemplated merging one or more of
the Subsidiaries into one another.
<PAGE>
Schedule 11.5
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Investments
-----------
(i)
18. Borrower has invested in an entity called Emergence, LLC d/b/a Renaissance,
LLC, a Delaware limited liability company, which is not a Subsidiary of
Borrower. See Schedule 11.8.
19. Currently, the Borrower has US $9.3 million on deposit at Bank of New York
to secure the lease of London office space at 1 Curzon Street, London by
the borrower in favor of the landlord.
20. Renaissance Worldwide Strategy, Inc. holds a note (original principal
amount of $640,000) from Technomic International, Inc., an Illinois
company, as a result of its sale of substantially all the assets of the
former Renaissance Technomic, Inc. (which itself was merged into
Renaissance Worldwide Strategy on February 23, 1999), and two notes
(original principal amounts of $250,000 and $130,000) from Renaissance
Technomic (HK) Limited, as a result of its sale of substantially all the
international assets related to the business of the former Renaissance
Technomic, Inc.
21. The Installment Note.
<PAGE>
Schedule 11.8
to
Renaissance Worldwide, Inc. Amended and Restated Credit Agreement
Disposition of Assets
---------------------
The Borrower intends to sell to Emergence, LLC d/b/a Renaissance, LLC, a
Delaware limited liability company ("Emergence"), its membership interest in
Emergence. Emergence will pay the Borrower pursuant to a promissory note
(anticipated to be a sixty month note bearing interest at 8.0% per annum). In
connection with this transaction, the Borrower will release four of its
employees (Ralph Trombetta, Jack Bickel, Tom Gignac and Gary Romantz) from their
non-competition and non-solicitation agreements with the Borrower, for
consideration of Three Hundred Thousand Dollars ($300,000) to be paid in two
equal installments, one on September 24, 1999 and one of December 24, 1999, by
Emergence. Emergence shall retain certain rights to use the name "Renaissance"
and to represent itself as a "Renaissance Worldwide, Inc. Partner."
<PAGE>
Exhibit 10.10
PLEDGE AND SECURITY AGREEMENT
-----------------------------
(Renaissance Worldwide, Inc.)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of July 15,
---------
1999, is between RENAISSANCE WORLDWIDE, INC., a corporation duly organized and
validly existing under the laws of the Commonwealth of Massachusetts ("Debtor"),
------
and BANK OF AMERICA, N.A. (formerly NationsBank, N.A.), as Administrative Agent
for the Lenders referred to below (in such capacity, the "Secured Party").
-------------
R E C I T A L S:
- - - - - - - -
A. Debtor has entered into that certain Amended and Restated Credit
Agreement dated as of July 15, 1999, with the lenders party thereto (each
individually a "Lender" and collectively, the "Lenders"), Secured Party, as
------ -------
Administrative Agent for the Lenders and BNY Factoring LLC, as Syndication Agent
(such agreement as it may be amended, restated or otherwise modified from time
to time is referred to herein as the "Credit Agreement").
----------------
B. The execution and delivery of this Agreement is required by the Credit
Agreement as a condition to the Lenders' obligations under the Credit Agreement.
C. Terms defined in the Credit Agreement, and not otherwise defined
herein, are used herein with their meanings so defined.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt, and sufficiency of which are
hereby acknowledged, and in order to induce Secured Party and the Lenders to
make Loans and issue Letters of Credit pursuant to the Credit Agreement, the
parties hereto hereby agree as follows:
ARTICLE I.
Definitions
-----------
Section A. Definitions. As used in this Agreement, the following terms
-----------
have the following meanings:
"Account" means any "account," as such term is defined in Article or
-------
Chapter 9 of the UCC, now owned or hereafter acquired by Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by Debtor: (a) all rights of Debtor
to payment for goods sold or leased, services rendered or the license of
Intellectual Property, whether or not earned by performance; (b) all
accounts receivable of Debtor; (c) all rights of Debtor to receive any
payment of money or other form of consideration; (d) all security pledged,
assigned, or granted to or held by Debtor to secure any of the foregoing;
(e) all guaranties of, or indemnifications with respect to, any of the
foregoing; (f) all rights of Debtor as an unpaid seller of goods or
services, including, but not limited to, all rights of stoppage in transit,
replevin, reclamation, and resale; and (g) all rights to brokerage
commissions.
<PAGE>
"Amendment" means any amendment of this Agreement between Debtor and
---------
Secured Party required hereby or entered into pursuant to the terms of the
Credit Agreement, including, without limitation, any amendment in the form
of Exhibit A hereto.
---------
"Capital Stock" means corporate stock and any and all shares,
-------------
partnership interests, equity interests, rights, securities or other
equivalent evidences of ownership (however designated) issued by any entity
(whether a corporation, partnership, limited liability company, limited
partnership or other type of entity).
"Chattel Paper" means any "chattel paper," as such term is defined in
-------------
Article or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
---------- -----------
Agreement.
"Copyright License" means any written agreement now or hereafter in
-----------------
existence granting to Debtor any right to use any Copyright, including,
without limitation, the agreements identified on Schedule 3.5.
------------
"Copyrights" means all of the following: (a) all copyrights, works
----------
protectable by copyright, copyright registrations, and copyright
applications, including, without limitation, those identified on Schedule
--------
3.5; (b) all renewals, extensions, and modifications thereof; (c) all
---
income, royalties, damages, profits, and payments relating to or payable
under any of the foregoing; (d) the right to sue for past, present, or
future infringements of any of the foregoing; and (e) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor.
"Copyright Security Agreement" means a copyright security agreement to
----------------------------
be executed and delivered by Debtor to Secured Party, substantially in the
form of Exhibit B hereto and otherwise in form and substance satisfactory
---------
to Secured Party, for the purpose of recording such agreement with any
copyright office of a Governmental Authority, as such agreement may be
amended, restated, or otherwise modified from time to time.
"Deposit Accounts" means any and all deposit accounts, certificates of
----------------
deposit, or other bank accounts now owned or hereafter acquired or opened
by Debtor, and any account which is a replacement or substitute for any of
such accounts including, without limitation, those deposit accounts
identified on Schedule 3.2.
------------
"Document" means any "document," as such term is defined in Article or
--------
Chapter 9 of the UCC, now owned or hereafter acquired by Debtor, including,
without limitation, all documents of title and all receipts covering,
evidencing, or representing goods now owned or hereafter acquired by
Debtor.
"Equipment" means any "equipment," as such term is defined in Article
---------
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor and, in
any event, shall include,
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 2
<PAGE>
without limitation, all machinery, furniture, trailers, rolling stock,
vessels, aircraft, and vehicles now owned or hereafter acquired by Debtor
and any and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments, components,
parts, equipment, and accessories installed thereon or affixed thereto.
"Financial Assets" means any "financial asset," as such term is
----------------
defined in Article or Chapter 8 of the UCC.
"Fixtures" means any "fixtures," as such term is defined in Article or
--------
Chapter 9 of the UCC, now owned or hereafter acquired by Debtor and in any
event shall include, without limitation, all plant fixtures, business
fixtures, other fixtures, and storage office facilities, wherever located,
and all additions and accessions thereto and replacements therefor.
"General Intangibles" means any "general intangibles," as such term is
-------------------
defined in Article or Chapter 9 of the UCC, now owned or hereafter acquired
by Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by Debtor: (a) all of
Debtor's Intellectual Property together with all of Debtor's trade secrets,
proprietary information, customer lists, designs, and inventions; (b) all
of Debtor's books, records, data, plans, manuals, computer software,
computer tapes, computer disks, computer programs, source codes, object
codes, and all rights of Debtor to retrieve data and other information from
third parties; (c) all of Debtor's contract rights (including, without
limitation, all of Debtor's right, title, and interest in and to the Loan
Documents), which include, without limitation, (i) all rights of Debtor to
receive moneys due and to become due under or pursuant to such agreements,
(ii) all rights of Debtor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to such agreements, (iii) all claims of
Debtor for damages arising out of or for breach of or default under such
agreements, (iv) all rights of Debtor to terminate such agreements, to
perform thereunder, and to compel performance and otherwise exercise all
rights and remedies thereunder, and (v) any rights to Liens securing
Pledged Collateral, Accounts, or obligations arising under any Loan
Document, (d) all rights or interests of Debtor in any partnership or joint
venture; (e) all rights of Debtor to payment under letters of credit and
similar agreements; (f) all tax refunds and tax refund claims of Debtor;
(g) all choses in action and causes of action of Debtor (whether arising in
contract, tort, or otherwise and whether or not currently in litigation)
and all judgments in favor of Debtor; (h) all rights and claims of Debtor
under warranties and indemnities; and (i) all rights of Debtor under any
insurance, surety, or similar contract or arrangement, including, without
limitation, all claims under governmental health care programs and claims
under private insurance to which Debtor is entitled or which have been
assigned to it.
"Instrument" means any "instrument," as such term is defined in
----------
Article or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor,
and, in any event, shall include all promissory notes, drafts, bills of
exchange, and trade acceptances, whether now owned or hereafter acquired by
Debtor.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 3
<PAGE>
"Intellectual Property" means the Copyrights, Copyright Licenses,
---------------------
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
"Inventory" means any "inventory," as such term is defined in Article
---------
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by Debtor: (a) all goods and other
personal property that are held for sale or lease or to be furnished under
any contract of service; (b) all raw materials, work-in-process, finished
goods, inventory, supplies, and materials; (c) all wrapping, packaging,
advertising, and shipping materials; (d) all goods that have been returned
to, repossessed by, or stopped in transit by Debtor; and (e) all Documents
evidencing any of the foregoing.
"Investment Property" means any "investment property" as such term is
-------------------
defined in Article or Chapter 9 of the UCC, now owned or hereafter acquired
by Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired: (a) any security,
whether certificated or uncertificated; (b) any security entitlement; (c)
any securities account (including, without limitation, those described on
Schedule 3.2); (d) any commodity contract; and (e) any commodity account
------------
(including, without limitation, those identified on Schedule 3.2).
------------
"Obligations" means and includes the "Obligations" as such term is
-----------
defined in the Credit Agreement.
"Patent License" means any written agreement now or hereafter in
--------------
existence granting to Debtor any right to use any invention on which a
Patent is in existence, including, without limitation, the agreements
identified on Schedule 3.5.
------------
"Patents" means any and all of the following: (a) all patents, patent
-------
applications, and patentable inventions, including, without limitation,
those identified on Schedule 3.5, and all of the inventions and
------------
improvements described and claimed therein; (b) all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing; (c) all income,
royalties, profits, damages, awards, and payments relating to or payable
under any of the foregoing; (d) the right to sue for past, present, and
future infringements of any of the foregoing; and (e) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor.
"Patent Security Agreement" means a patent security agreement to be
-------------------------
executed and delivered by Debtor to Secured Party, substantially in the
form of Exhibit C hereto and otherwise in form and substance satisfactory
---------
to Secured Party, for the purpose of recording such agreement with any
copyright office of a Governmental Authority, as such agreement may be
amended, restated, or otherwise modified from time to time.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 4
<PAGE>
"Pledged Collateral" means the Pledged Shares and the Instruments
------------------
evidencing the obligations of Subsidiaries to Debtor described in Section
-------
2.1(c).
------
"Pledged Shares" means the Capital Stock identified on Schedule 1.1
-------------- ------------
attached hereto, which constitutes 100% of the Capital Stock of each of the
direct Domestic Subsidiaries of Debtor and 65% of the Capital Stock of each
of the direct Foreign Subsidiaries of Debtor, or on Schedule 1 to an
----------
Amendment (all of which shall not, in any event, include more than 65% of
the Capital Stock of any direct Foreign Subsidiary).
"Proceeds" means any "proceeds," as such term is defined in Article or
--------
Chapter 9 of the UCC and, in any event, shall include, but not be limited
to, (a) any and all proceeds of any insurance, indemnity, warranty, or
guaranty payable to Debtor from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure, or forfeiture of all or any part of
the Collateral by any Governmental Authority (or any Person acting, or
purporting to act, for or on behalf of any Governmental Authority), and (c)
any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Trademark License" means any written agreement now or hereafter in
-----------------
existence granting to Debtor any right to use any Trademark, including,
without limitation, the agreements identified on Schedule 3.5.
------------
"Trademarks" means all of the following: (a) all trademarks, trade
----------
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers,
prints and labels on which any of the foregoing appear, all registrations
and recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings, and applications
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any state thereof or any other country or
any political subdivision thereof, including, without limitation, those
identified in Schedule 3.5; (b) all reissues, extensions, and renewals
------------
thereof; (c) all income, royalties, damages, and payments now or hereafter
relating to or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of
the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; (e) all rights corresponding to any
of the foregoing throughout the world; and (f) all goodwill associated with
and symbolized by any of the foregoing; in each case, whether now owned or
hereafter acquired by Debtor.
"Trademark Security Agreement" means a trademark security agreement to
----------------------------
be executed and delivered by Debtor to Secured Party, substantially in the
form of Exhibit D hereto and otherwise in form and substance satisfactory
---------
to Secured Party, for the purpose of
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 5
<PAGE>
recording such agreement with any copyright office of a Governmental
Authority, as such agreement may be amended, restated, or otherwise
modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the
---
Commonwealth of Massachusetts and/or any other jurisdiction the laws of
which may be applicable to or in connection with the creation, perfection
or priority of any Lien on any Collateral.
Section B. Other Definitional Provisions. References to "Sections,"
-----------------------------
"subsections," "Exhibits," and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All references
to statutes and regulations shall include any amendments of the same and any
successor statutes and regulations. References to particular sections of the UCC
should be read to refer also to parallel sections of the Uniform Commercial Code
as enacted in each state or other jurisdiction where any portion of the
Collateral is or may be located. Terms used herein, which are defined in the
UCC, unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE II.
Security Interest
-----------------
Section A. Security Interest. As collateral security for the prompt
-----------------
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), Debtor hereby pledges and assigns to
Secured Party, and grants to Secured Party a continuing lien on and security
interest in, all of Debtor's right, title, and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located (the
"Collateral"):
----------
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in addition, all
instruments evidencing indebtedness from time to time owed to Debtor
by any Person, and all interest, cash, and other property from time to
time received, receivable, or otherwise distributed or distributable
in respect of or in exchange for any or all of such Instruments;
(d) all General Intangibles;
(e) all Documents;
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 6
<PAGE>
(f) all Equipment;
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including, without
limitation, or in addition, the following:
(1) all of the Pledged Shares and the certificates (if any)
representing the Pledged Shares, and all dividends, cash,
Instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in respect
of or in exchange for any or all of the Pledged Shares;
(2) all additional Capital Stock from time to time owned or acquired
by Debtor in any manner, and all dividends, cash, Instruments,
and other property from time to time received, receivable, or
otherwise distributed or distributable in respect of or in
exchange for any or all of such Capital Stock; provided, no more
than 65% of the Capital Stock of a Foreign Subsidiary shall be
required to be pledged and no Capital Stock owned by a Foreign
Subsidiary shall be required to be pledged; and
(j) all of Debtor's Deposit Accounts and all funds, certificates,
Documents, Instruments, checks, drafts, wire transfer receipts, and
other earnings, profits, or other Proceeds from time to time
representing, evidencing, deposited into, or held in the Deposit
Accounts;
(k) all other goods and personal property of Debtor of any kind or
character, whether tangible or intangible, including, without
limitation, any and all rights in and claims under insurance policies,
judgments and rights thereunder, and tort claims; and
(l) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing clauses (a) through (k).
-----------------------
Section B. Excluded Property. Notwithstanding Section 2.1, the payment
----------------- -----------
and performance of the Obligations shall not be secured by:
(a) any contract, license, permit or franchise that unconditionally and
validly, to the extent permitted by applicable law and otherwise not
prohibited by the Loan Documents, prohibits the creation by Debtor of
a Lien in such contract, license, permit or franchise (or in any
rights or property obtained by Debtor under such contract, license,
permit or franchise); provided, however, that, notwithstanding the
-------- -------
provisions of this Section 2.2, the Liens created or arising pursuant
-----------
to this Agreement
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 7
<PAGE>
shall, in any case, extend to the Proceeds and/or products of such
contract, license, permit or franchise (or such rights or property) or
to the monetary value of the good will and other General Intangibles
of Debtor relating thereto;
(b) any rights or property to the extent that any valid and enforceable
law or regulation applicable to such rights or property
unconditionally prohibits the creation of a Lien therein; provided,
--------
however, that, notwithstanding the provisions of this Section 2.2, the
------- -----------
Liens created or arising pursuant to this Agreement shall, in any
case, extend to the Proceeds and/or products of such rights or
property or to the monetary value of the good will and other General
Intangibles of Debtor relating thereto;
(c) more than 65% of the Capital Stock of any direct Foreign Subsidiary;
or
(d) the Installment Note.
In addition, in the event Debtor disposes of assets of third parties in a
transaction permitted by Section 11.8 of the Credit Agreement, such assets shall
------------
be released from any Lien on such assets arising pursuant to this Agreement;
provided, however, that the Liens arising pursuant to this Agreement shall, in
- -------- -------
any case, extend to the Proceeds and/or products of any such assets.
Section C. Debtor Remains Liable. Notwithstanding anything to the contrary
---------------------
contained herein, (a) Debtor shall remain liable under the documentation
included in the Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by Secured Party of any of its rights or
remedies hereunder shall not release Debtor from any of its duties or
obligations under such documentation, (c) Secured Party shall not have any
obligation under any of such documentation included in the Collateral by reason
of this Agreement, and (d) Secured Party shall not be obligated to perform any
of the obligations of Debtor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
ARTICLE III.
Representations and Warranties
------------------------------
To induce Secured Party and the Lenders to enter into this Agreement and
the Credit Agreement, Debtor represents and warrants as follows:
Section A. Location of Equipment, Fixtures, and Inventory; Third Parties
-------------------------------------------------------------
in Possession. All of the Equipment, Fixtures and Inventory are located in the
- -------------
jurisdictions and at the places specified in Schedule 3.1.
------------
Section B. Deposit, Commodity, and Securities Accounts. Schedule 3.2
------------------------------------------- ------------
correctly identifies all deposit, commodity, and securities accounts owned by
Debtor and the institutions holding such accounts. No Person other than Debtor
has control over any Investment Property.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 8
<PAGE>
Section C. Office Locations; Fictitious Names; Tax I.D. Number. The
---------------------------------------------------
principal place of business and the chief executive office of Debtor is
identified on Schedule 3.1. Schedule 3.1 also sets forth all other places where
------------ ------------
Debtor keeps its books and records and all other locations where Debtor has a
place of business. Debtor does not do business and has not done business during
the past five (5) years under any trade-name or fictitious business name except
as disclosed on Schedule 3.3. Debtor's United States Federal Income Tax
------------
Identification Number is set forth on Schedule 3.3.
------------
Section D. Delivery of Collateral. Except as provided by Section 4.3
---------------------- -----------
hereof and Section 8.1 (a)(xi) of the Credit Agreement, Debtor has delivered to
-------------------
Secured Party all Collateral the possession of which is necessary to perfect the
security interest of Secured Party therein. All certificates of title evidencing
Equipment have been delivered to Secured Party to the extent required to perfect
the security interest of Secured Party therein.
Section E. Intellectual Property. All of Debtor's Intellectual Property
---------------------
that is registered with or for which an application for registration has been
filed with any Governmental Authority is identified on Schedule 3.5, and such
------------
information is true, correct, and complete.
ARTICLE IV.
Covenants
---------
Debtor covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment under the Credit
Agreement, Debtor will perform and observe each of the following covenants:
Section A. Accounts. Debtor shall, in accordance with its customary
--------
business practices, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing
under such Accounts. Without the prior written consent of Secured Party, which
will not be unreasonably delayed or withheld, Debtor shall not, except in the
ordinary course of business and in no event when any Default exists, (a) grant
any extension of time for any payment with respect to any of the Accounts beyond
one hundred twenty (120) days after such payment's due date, (b) compromise,
compound, or settle any of the Accounts for less than the full amount thereof,
(c) release, in whole or in part, any Person liable for payment of any of the
Accounts, (d) allow any credit or discount for payment with respect to any
Account other than trade or other customary discounts granted in the ordinary
course of business, or (e) release any Lien or guaranty securing any Account
unless the Account has been paid.
Section B. Further Assurances; Exceptions to Perfection. At any time and
--------------------------------------------
from time to time, upon the reasonable request of Secured Party, and at the sole
expense of Debtor, Debtor shall promptly execute and deliver all such further
agreements, documents, and instruments and take such further action as Secured
Party may reasonably deem necessary or appropriate to preserve and
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 9
<PAGE>
perfect its security interest in the Collateral and carry out the provisions and
purposes of this Agreement or to enable Secured Party to exercise and enforce
its rights and remedies hereunder with respect to any of the Collateral. Without
limiting the generality of the foregoing, Debtor shall upon reasonable request
by Secured Party (a) execute and deliver to Secured Party such financing
statements as Secured Party may from time to time require, (b) take such action
during the continuance of an Event of Default as Secured Party may request to
permit Secured Party to have control over any Investment Property or any Deposit
Account, (c) except as provided by Section 8.1 (a)(xi) of the Credit Agreement,
-------------------
deliver to Secured Party all Collateral the possession of which is necessary to
perfect the security interest therein, duly endorsed and/or accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party; except that, at all times other than during the
------
continuance of an Event of Default, Debtor may: (i) retain for collection in the
ordinary course of business checks representing Proceeds of Accounts received in
the ordinary course of business; (ii) retain any letters of credit received in
the ordinary course of business; (iii) retain and utilize in the ordinary course
of business all dividends, interest and other amounts paid in respect to any of
the Pledged Collateral or any other Investment Property; and (iv) retain any
Documents received and further negotiated in the ordinary course of business,
(d) deliver any and all certificates of title, applications for title or similar
evidence of ownership of Equipment and cause Secured Party to be named as
lienholder thereon, and (e) execute and deliver to Secured Party such other
agreements, documents, and instruments as Secured Party may reasonably require
to perfect and maintain the validity, effectiveness, and priority of the Liens
intended to be created by this Agreement or any other Loan Document.
Section C. Third Parties in Possession of Collateral. Debtor shall not
-----------------------------------------
permit any third Person (including any warehouseman, bailee, agent, consignee,
or processor) to hold any Collateral, unless Debtor shall: (i) notify such third
Person of the security interests created hereby; (ii) instruct such Person to
hold all such Collateral for Secured Party's account subject to Secured Party's
instructions; and (iii) take all other actions Secured Party reasonably deems
necessary to perfect and protect its and Debtor's interests in such Collateral
pursuant to the requirements of the UCC of the applicable jurisdiction where
such warehouseman, bailee, consignee, agent, processor, or other third Person is
located (including the filing of financing statements in the proper
jurisdictions naming the applicable third Person as debtor and Debtor as secured
party and notifying the third Person's secured lenders of Debtor's interest in
such Collateral before the third Person receives possession of the Collateral in
question).
Section D. Corporate Changes. Debtor shall not change its name, identity,
-----------------
corporate structure, or its United States Tax Identification Number in any
manner that might make any financing statement filed in connection with this
Agreement seriously misleading unless Debtor shall have given Secured Party not
less than thirty (30) days prior written notice thereof and shall have taken all
action reasonably deemed necessary or desirable by Secured Party to protect its
Liens with the perfection and priority thereof required by the Loan Documents.
Debtor shall not change its principal place of business, chief executive office,
or the place where it keeps its books and records unless it shall have given
Secured Party not less than thirty (30) days prior written notice thereof and
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 10
<PAGE>
shall have taken all action deemed necessary or desirable by Secured Party to
cause its security interest in the Collateral to be perfected with the priority
required by the Loan Documents.
Section E. Equipment, Fixtures, and Inventory. Debtor shall keep the
----------------------------------
Equipment, Fixtures, and Inventory in (or in transit to) any of the
jurisdictions specified on Schedule 3.1 hereto or, upon not less than thirty
------------
(30) days prior written notice to Secured Party, at such other places within the
United States of America where all actions required to perfect Secured Party's
security interest in such Collateral with the priority required by the Loan
Documents shall have been taken.
Section F. Warehouse Receipts Non-Negotiable. Debtor agrees that if and
---------------------------------
warehouse receipt or receipt in the nature of a warehouse receipt is issued in
respect of any portion of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC) unless such warehouse receipt or receipt in the nature thereof
is delivered to Secured Party.
Section G. Voting Rights; Distributions, Etc. So long as no Event of
----------------------------------
Default shall have occurred and be continuing, Debtor shall be entitled to
exercise any and all voting and other consensual rights (including, without
limitation, the right to give consents, waivers, and notifications) pertaining
to any of the Pledged Collateral or any other Investment Property; provided,
--------
however, that without the prior written consent of Secured Party no vote shall
- -------
be cast or consent, waiver, or ratification given or action taken which would be
inconsistent with or violate any provision of this Agreement or any other Loan
Document.
Section H. Transfers and Other Liens; Additional Investments. Except as
-------------------------------------------------
provided otherwise by the Credit Agreement or this Agreement, Debtor agrees that
it will (i) cause each issuer of any of the Pledged Collateral not to issue any
Capital Stock, notes, or other securities or instruments in addition to or in
substitution for any of the Pledged Collateral, (ii) pledge hereunder,
immediately upon its acquisition thereof, any and all such Capital Stock, notes,
or other securities or instruments, and (iii) promptly (and in any event within
three (3) Business Days) deliver to Secured Party an Amendment, duly executed by
Debtor, in respect of such Capital Stock, notes, or other securities or
instruments, together with all certificates, notes, or other securities or
instruments representing or evidencing the same. Debtor hereby (i) authorizes
Secured Party to attach each Amendment to this Agreement, and (ii) agrees that
all such Capital Stock, notes, or other securities or instruments listed on any
Amendment delivered to Secured Party shall for all purposes hereunder constitute
Pledged Collateral.
Section I. Intellectual Property Covenants. If, before the Obligations
-------------------------------
are paid in full, Debtor obtains any new Intellectual Property or rights thereto
or becomes entitled to the benefit of any Intellectual Property, Debtor shall
give to Secured Party prompt written notice thereof, and shall, upon the request
of Secured Party, execute and deliver, in form and substance reasonably
satisfactory to Secured Party, a Copyright Security Agreement, Patent Security
Agreement, or Trademark Security Agreement, as applicable, describing any such
new Intellectual Property. Debtor shall (a) prosecute diligently any copyright,
patent, or trademark application at any time pending which is necessary for the
conduct of Debtor's business, (b) make application on all new copyrights,
patents,
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 11
<PAGE>
and trademarks as reasonably deemed appropriate by Debtor, (c) preserve and
maintain all rights in the Intellectual Property that is necessary for the
conduct of Debtor's business, and (d) upon and after the occurrence and during
the continuance of an Event of Default, use its reasonable efforts to obtain any
consents, waivers, or agreements necessary to enable Secured Party to exercise
its remedies with respect to the Intellectual Property. Debtor shall not,
without the prior written consent of Secured Party, which will not be
unreasonably withheld, abandon any pending copyright, patent, or trademark
application, or Copyright, Patent, Trademark, or any other Intellectual Property
which is necessary for the conduct of Debtor's business.
Section J. Deposit, Commodity, and Security Accounts. Debtor shall not
-----------------------------------------
open any new deposit, commodity, or securities account or otherwise utilize any
such account other than the accounts identified on Schedule 3.2 unless Debtor
------------
shall have given Secured Party not less than thirty (30) days prior written
notice thereof and shall have taken all action deemed reasonably necessary or
desirable by Secured Party to cause its security interest therein to be
perfected with the priority required by the Loan Documents. Prior to the
occurrence and continuance of any Event of Default, Debtor may make purchases
and sales of Investment Property or Financial Assets in accordance with the
restrictions on investment set out in the Credit Agreement. After the occurrence
and during the continuance of an Event of Default, Debtor shall not be
authorized to make purchases and sales of the Investment Property or Financial
Assets and Debtor shall take such steps as Secured Party may reasonably request
to give Secured Party control over all Investment Property and Financial Assets.
Except as permitted by this Agreement or the other Loan Documents, Debtor will
not give any party control over any Investment Property or Financial Assets.
ARTICLE V.
Rights of Secured Party
-----------------------
Section A. Power of Attorney. DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND
-----------------
APPOINTS SECURED PARTY AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE NAME OF DEBTOR OR IN ITS OWN NAME, TO TAKE, WHEN AN
EVENT OF DEFAULT EXISTS, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND ALL
DOCUMENTS AND INSTRUMENTS WHICH SECURED PARTY AT ANY TIME AND FROM TIME TO TIME
REASONABLY DEEMS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, DEBTOR HEREBY GIVES SECURED
PARTY THE POWER AND RIGHT ON BEHALF OF DEBTOR AND IN ITS OWN NAME TO DO ANY OF
THE FOLLOWING AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT WITHOUT THE CONSENT OF DEBTOR, SUBJECT TO APPLICABLE LAW:
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 12
<PAGE>
(a) to demand, sue for, collect, or receive, in the name of Debtor or
in Secured Party's own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and, in
connection therewith, endorse checks, notes, drafts, acceptances, money
orders, documents of title, or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances levied or
placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of Debtor's mail to an address designated by Secured Party and to
receive, open, and dispose of mail addressed to Debtor;
(d) (i) to direct account debtors and any other parties liable for
any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to Secured Party or as
Secured Party shall direct (Debtor agrees that if any Proceeds of any
Collateral (including payments made in respect of Accounts) shall be
received by Debtor after the occurrence and during the continuance of an
Event of Default, upon notice, Debtor shall promptly deliver such Proceeds
to Secured Party with any necessary endorsements, and until such Proceeds
are delivered to Secured Party, such Proceeds shall be held in trust by
Debtor for the benefit of Secured Party and shall not be commingled with
any other funds or property of Debtor); (ii) to receive payment of and
receipt for any and all monies, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (iii) to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
proxies, stock powers, verifications, and notices in connection with
accounts and other documents relating to the Collateral; (iv) to commence
and prosecute any suit, action, or proceeding at law or in equity in any
court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action, or proceeding brought against Debtor with respect
to any Collateral; (vi) to settle, compromise, or adjust any suit, action,
or proceeding described above and, in connection therewith, to give such
discharges or releases as Secured Party may deem appropriate; (vii) to
exchange any of the Collateral for other property upon any merger,
consolidation, reorganization, recapitalization, or other readjustment of
the issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer agent, registrar, or
other designated agency upon such terms as Secured Party may determine;
(viii) to add or release any guarantor, indorser, surety, or other party to
any of the Collateral; (ix) to renew, extend, or otherwise change the terms
and conditions of any of the Collateral; (x) to grant or issue any
exclusive or nonexclusive license under or with respect to any of the
Intellectual Property (subject to the rights of third parties under pre-
existing licenses); (xi) to endorse Debtor's name on all applications,
documents, papers, and instruments reasonably necessary or desirable in
order for Secured Party to use any of the Intellectual Property; (xii) to
make, settle, compromise, or adjust any claims under or
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 13
<PAGE>
pertaining to any of the Collateral (including claims under any policy of
insurance); and (xiii) to sell, transfer, pledge, convey, make any
agreement with respect to, or otherwise deal with any of the Collateral as
fully and completely as though Secured Party were the absolute owner
thereof for all purposes, and to do, at Secured Party's option and Debtor's
expense, at any time, or from time to time, all acts and things which
Secured Party reasonably deems necessary or desirable to protect, preserve,
maintain, or realize upon the Collateral and Secured Party's security
interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11
------------
HEREOF. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so that is not grossly negligent
nor an instance of willful misconduct. Neither Secured Party nor any Person
designated by Secured Party shall be liable for any act or omission or for any
error of judgment or any mistake of fact or law, except any of the same
resulting from its or their gross negligence or willful misconduct. This power
of attorney is conferred on Secured Party solely to protect, preserve, maintain,
and realize upon its security interest in the Collateral. Secured Party shall
not be responsible for any decline in the value of the Collateral not caused by
Secured Party's gross negligence or willful misconduct and shall not be required
to take any steps to preserve rights against prior parties or to protect,
preserve, or maintain any Lien given to secure the Collateral.
Section B. Assignment by Secured Party. Secured Party and each Lender may
---------------------------
at any time assign or otherwise transfer all or any portion of their rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, to the extent
permitted by, and upon the conditions contained in, the Credit Agreement, and
such Person shall thereupon become vested with all the benefits thereof granted
to Secured Party or the Lenders, as applicable, herein or otherwise.
Section C. Possession; Reasonable Care. Except to the extent prohibited
---------------------------
by applicable law that cannot be waived, Secured Party may, from time to time,
in its sole discretion, appoint one or more agents to hold physical custody, for
the account of Secured Party, of any or all of the Collateral that Secured Party
has a right to possess. Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property, it being understood that Secured
Party shall not have any responsibility for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders, or other
matters relative to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 14
<PAGE>
ARTICLE VI.
Default
-------
Section A. Rights and Remedies. If an Event of Default shall have
-------------------
occurred and be continuing, Secured Party shall have the following rights and
remedies (except to the extent prohibited by applicable law that cannot be
waived):
(a) In addition to all other rights and remedies granted to Secured
Party in this Agreement or in any other Loan Document or by applicable law,
Secured Party shall have all of the rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected Collateral).
Without limiting the generality of the foregoing, Secured Party may (i)
without demand or notice to Debtor or any other person, collect, receive,
or take possession of the Collateral or any part thereof and for that
purpose Secured Party may enter upon any premises on which the Collateral
is located and remove the Collateral therefrom or render it inoperable,
and/or (ii) sell, lease, or otherwise dispose of the Collateral, or any
part thereof, in one or more parcels at public or private sale or sales, at
Secured Party's offices or elsewhere, for cash, on credit, or for future
delivery, and upon such other terms as Secured Party may deem commercially
reasonable or otherwise as may be permitted by law. Secured Party shall
have the right at any public sale or sales, and, to the extent permitted by
applicable law, at any private sale or sales, to bid (which bid may be, in
whole or in part, in the form of cancellation of indebtedness) and become a
purchaser of the Collateral or any part thereof free of any right or equity
of redemption on the part of Debtor, which right or equity of redemption is
hereby expressly waived and released by Debtor. Upon the request of Secured
Party, Debtor shall assemble the Collateral and make it available to
Secured Party at any place designated by Secured Party that is reasonably
convenient to Debtor and Secured Party. Debtor agrees that Secured Party
shall not be obligated to give more than ten (10) days prior written notice
of the time and place of any public sale or of the time after which any
private sale may take place and that such notice shall constitute
reasonable notice of such matters. Secured Party shall not be obligated to
make any sale of Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of Collateral may have been given. Secured
Party may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at
the time and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so adjourned.
Debtor shall be liable for all reasonable expenses of retaking, holding,
preparing for sale, or the like, and all reasonable attorneys' fees, legal
expenses, and other costs and expenses incurred by Secured Party in
connection with the collection of the Obligations and the enforcement of
Secured Party's rights under this Agreement. Debtor shall remain liable for
any deficiency if the Proceeds of any sale or other disposition of the
Collateral applied to the Obligations are insufficient to pay the
Obligations in full. Secured Party may apply the Collateral against the
Obligations as provided in the Credit Agreement. Debtor waives all rights
of marshaling, valuation, and appraisal in respect of the Collateral. Any
cash held by Secured Party as
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 15
<PAGE>
Collateral and all cash proceeds received by Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured
Party as Collateral for, and then or at any time thereafter, shall be
applied in whole or in part by Secured Party against, the Obligations in
the order permitted by the Credit Agreement. Any surplus of such cash or
cash proceeds and interest accrued thereon, if any, held by Secured Party
and remaining after payment in full of all the Obligations shall be
promptly paid over to Debtor or to whomsoever may be lawfully entitled to
receive such surplus; provided that Secured Party shall have no obligation
--------
to invest or otherwise pay interest on any amounts held by it in connection
with or pursuant to this Agreement.
(b) Secured Party may cause any or all of the Collateral held by it
to be transferred into the name of Secured Party or the name or names of
Secured Party's nominee or nominees.
(c) Secured Party may exercise any and all rights and remedies of
Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of Debtor to demand or otherwise require
payment of any amount under, or performance of any provision of, any of the
Collateral and any and all voting rights and corporate powers in respect of
the Collateral. Debtor shall execute and deliver (or cause to be executed
and delivered) to Secured Party all such proxies and other instruments as
Secured Party may reasonably request for the purpose of enabling Secured
Party to exercise the voting and other rights which it is entitled to
exercise pursuant to this clause (c) and to receive the dividends,
----------
interest, and other distributions which it is entitled to receive
hereunder.
(d) Secured Party may collect or receive all money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(e) On any sale of the Collateral, Secured Party is hereby authorized
to comply with any limitation or restriction with which compliance is
necessary, in the view of Secured Party's counsel, in order to avoid any
violation of applicable law or in order to obtain any required approval of
the purchaser or purchasers by any applicable Governmental Authority.
(f) For purposes of enabling Secured Party to exercise its rights and
remedies under this Section 6.1 and enabling Secured Party and its
-----------
successors and assigns to enjoy the full benefits of the Collateral in each
case as Secured Party shall be entitled to exercise its rights and remedies
under this Section 6.1, Debtor hereby grants to Secured Party an
-----------
irrevocable, nonexclusive license (exercisable without payment of royalty
or other compensation to Debtor) to use, assign, license, or sublicense any
of the Intellectual Property, including in such license reasonable access
to all media in which any of the licensed items may be recorded or stored
and all computer programs used for the completion or printout thereof and
further including in such license such rights of quality control and
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 16
<PAGE>
inspection as are reasonably necessary to prevent the Trademarks included
in such license from claims of invalidation. This license shall also inure
to the benefit of all successors, assigns, and transferees of Secured
Party.
Section B. Private Sales. Debtor recognizes that Secured Party may be
--------------
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "Securities Act") and applicable state securities laws, but may be
--------------
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall, to the extent permitted by law, be
deemed to have been made in a commercially reasonable manner. Neither Secured
Party nor the Lenders shall be under any obligation to delay a sale of any of
the Collateral for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States, under the Securities Act, or under any applicable
state securities laws, even if such issuer would agree to do so. Debtor further
agrees to do or cause to be done, to the extent that Debtor may do so under
applicable law, all such other reasonable acts and things as may be necessary to
make such sales or resales of any portion or all of the Collateral valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees, or awards of any and all courts, arbitrators, or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at Debtor's expense.
ARTICLE VII.
Miscellaneous
-------------
Section A. No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section B. Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of Debtor and Secured Party and their respective
successors and assigns, except that Debtor may not assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party, and Secured Party may not appoint a successor as Secured Party except in
accordance with the Credit Agreement.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 17
<PAGE>
Section C. Amendment; Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN
---------------------------
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS
AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY
THE PARTIES HERETO.
Section D. Notices. All notices and other communications provided for in
-------
this Agreement shall be given or made in accordance with the Credit Agreement.
Section E. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
Section F. Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section G. Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made in this Agreement or in any certificate delivered pursuant
hereto shall survive the execution and delivery of this Agreement, and no
investigation by Secured Party shall affect the representations and warranties
or the right of Secured Party to rely upon them.
Section H. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section I. Waiver of Bond. In the event Secured Party seeks to take
--------------
possession of any or all of the Collateral by judicial process, Debtor hereby
irrevocably waives any bonds and any surety or security relating thereto that
may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.
Section J. Severability. Any provision of this Agreement which is
------------
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 18
<PAGE>
Section K. Termination. If all of the Obligations shall have been paid
-----------
and performed in full and all Commitments of Secured Party and the Lenders shall
have expired or terminated, Secured Party shall, upon the written request of
Debtor, execute and deliver to Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to Debtor (without recourse
and without any representation or warranty) such of the Collateral as may be in
the possession of Secured Party and has not previously been sold or otherwise
applied pursuant to this Agreement; notwithstanding anything to the contrary
contained in this Agreement, if the payment of any amount of the Obligations is
rescinded, voided or must otherwise be refunded by Secured Party or any Lender
upon the insolvency, bankruptcy or reorganization of Debtor or any other Loan
Party or otherwise for any reason whatsoever, then the security interests
created by this Agreement will be automatically reinstated and become
automatically effective and in full force and effect, all to the extent that and
as though such payment so rescinded, voided or otherwise refunded had never been
made and such release and termination of such security interest had never been
given.
Section L. Amendment and Restatement. This Agreement shall constitute an
-------------------------
amendment, restatement and renewal of that certain Pledge and Security
Agreement, dated as of February 24, 1999, between Debtor and Secured Party (the
"Interim Security Agreement"), but not an extinguishment, discharge,
--------------------------
satisfaction or novation of any indebtedness, liabilities and/or obligations of
Debtor arising under the Interim Security Agreement. All Liens created under
and/or evidenced by the Interim Security Agreement shall continue to be created
under and/or evidenced by this Agreement, with the same perfection and priority
under this Agreement as existed under the Interim Security Agreement.
[Remainder of page intentionally left blank]
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
DEBTOR:
------
RENAISSANCE WORLDWIDE, INC.
By: /s/ Richard L. Bugley
---------------------------------------
Name: Richard L. Bugley
---------------------------------------
Title: VP and General Counsel
---------------------------------------
SECURED PARTY:
-------------
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By: /s/ Timothy M. O'Connor
---------------------------------------
Name: Timothy M. O'Connor
---------------------------------------
Title: Vice President
---------------------------------------
PLEDGE AND SECURITY AGREEMENT (Renaissance Worldwide, Inc.) - Page 20
<PAGE>
Schedule 1.1
TO
PLEDGE AND SECURITY AGREEMENT
Pledged Shares
--------------
<TABLE>
<CAPTION>
Description of
Each Class and
State of Series Number of Number of
Name Incorporation (If Applicable) Par Value Issued Shares Pledged Shares/1/
- ---- --------------- ----------------- ------------- ------------- --------------------
<S> <C> <C> <C> <C> <C>
The Hunter Group, Inc. Maryland Common No par value 1,000 1,000
Neoglyphics Media Corporation Illinois Common No par value 1,000 1,000
The Registry, Inc. Network New Hampshire Common No par value 100 100
Consulting Practice
Renaissance Government Solutions, Delaware Common $.01 1,000 1,000
Inc.
Renaissance Worldwide IT New York Common No par value 1,000 1,000
Consulting Services
Renaissance Worldwide Strategy, Delaware Common $.01 1,000 1,000
Inc.
Sterling Information Group, Inc. Delaware Common $.01 1,000 1,000
TRI Securities Corp. Massachusetts Common $.01 100 100
</TABLE>
______________________
/1/ 100% for Domestic Subsidiaries; 65% for first tier Foreign Subsidiaries;
subject to Section 8.1(a)(xi) of the Credit Agreement.
Schedule 1.1, Solo Page
<PAGE>
SCHEDULE 3.1
TO
PLEDGE AND SECURITY AGREEMENT
Locations
---------
Address Landlord/Mortgagee
------- ------------------
I. Principal Place of Business
---------------------------
189 Wells Avenue
Newton, MA 02459
(Middlesex County)
II. Other Locations
---------------
70 Wells Avenue
Newton, MA 02459
(Middlesex County)
Schedule 3.1, Solo Page
<PAGE>
SCHEDULE 3.2
TO
PLEDGE AND SECURITY AGREEMENT
Deposit, Commodity, and Securities Accounts
-------------------------------------------
Company Account
- ------- -------
Renaissance Worldwide, Inc. Boston 1784 Funds - 4000209471
Boston 1784 Funds - 400309605
Schedule 3.2, Solo Page
<PAGE>
SCHEDULE 3.3
TO
PLEDGE AND SECURITY AGREEMENT
Trade and Other Names; Tax Identification Number
------------------------------------------------
I. Trade and Other Names:
The Registry, Inc. was formed in Massachusetts on June 10, 1986. It
changed its name to Renaissance Worldwide, Inc. on January 7, 1998.
Renaissance Worldwide, Inc. qualified in Maryland as TRI Consulting, Inc.
a/k/a The Registry, Inc. Renaissance Worldwide, Inc. is in the process of
withdrawing from Maryland.
There are two d/b/a filings in Newton, Massachusetts: Renaissance
Worldwide, Inc. d/b/a Renaissance Worldwide - filed 2/5/98 - expires
2/5/2002 Renaissance Worldwide, Inc. d/b/a Renaissance - filed 2/5/98 -
expires 2/5/2002
II. United States Income Tax Identification Number:
Renaissance Worldwide, Inc. 04-2920563
Schedule 3.3, Solo Page
<PAGE>
SCHEDULE 3.5
TO
PLEDGE AND SECURITY AGREEMENT
Intellectual Property
---------------------
<TABLE>
<CAPTION>
===================================================================================================================================
COPYRIGHTS
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Owner of Record Country of Registration Copyright Applications or Registration or Expiration Title
Registration Filing Date Date
No.
None
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=============================================================================================================================
COPYRIGHT LICENSES
=============================================================================================================================
<S> <C> <C>
Name of Agreement Patent Date of Agreement
=============================================================================================================================
None
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
PATENTS
<S> <C> <C> <C> <C> <C> <C>
Owner of Record After Patent Application or Registration or Issue Date Expiration
Assignment Agreements are Filed Country of Origin Identification Registration No. Filing Date (if known) Date
None
===================================================================================================================================
</TABLE>
Page 1 of 2
<PAGE>
<TABLE>
<CAPTION>
PATENT LICENSES
=========================================================================================================================
<S> <C> <C> <C>
Name of Agreement Patent Date of Agreement
=========================================================================================================================
None
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TRADEMARKS
==============================================================================================================================
Application or
Owner of Record Country of Registration Trademark Registration No.
==============================================================================================================================
<S> <C> <C> <C>
The Registry, Inc. (n/k/a USA "R THE REGISTRY Reg. No. 1,792,872
Renaissance Worldwide, Inc.) and design"
==============================================================================================================================
Renaissance Worldwide, Inc. USA "RENAISSANCE" Appl. No. 75/414,444
(through assignment from The
Registry, Inc.)
==============================================================================================================================
Renaissance Worldwide, Inc. USA "RENAISSANCE" Appl. No. 75/414,445
(through assignment from The
Registry, Inc.)
==============================================================================================================================
Renaissance Worldwide, Inc. USA "KNOWLEDGE Appl. No. 75/452,382
ENABLED SELLING"
==============================================================================================================================
<CAPTION>
===================================================================================================================================
Filing Expiration
Owner of Record Date Date Goods
===================================================================================================================================
<S> <C> <C> <C>
The Registry, Inc. (n/k/a 9/14/93 9/14/2003 Uses relating to personnel recruitment and placement
Renaissance Worldwide, Inc.) services.
===================================================================================================================================
Renaissance Worldwide, Inc. 1/6/98 1/6/08 Uses relating to computer software and services.
(through assignment from The
Registry, Inc.)
===================================================================================================================================
Renaissance Worldwide, Inc. 1/6/98 1/6/08 Uses relating to management consulting.
(through assignment from The
Registry, Inc.)
===================================================================================================================================
Renaissance Worldwide, Inc. 3/18/89 3/18/08 Information technology and general business
management consulting.
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===========================================================================================================================
TRADEMARK LICENSES
===========================================================================================================================
<S> <C> <C>
Name of Agreement Parties Date of Agreement
None
===========================================================================================================================
</TABLE>
Page 2 of 2
<PAGE>
Exhibit 10.11
FIRST AMENDMENT TO
------------------
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
---------
effective as of September 25, 1999, is among RENAISSANCE WORLDWIDE, INC.
("Borrower"), a Massachusetts corporation, each of the banks or other lending
--------
institutions which is a party hereto (individually, each a "Lender", and
------
collectively the "Lenders") and BANK OF AMERICA, N.A., as administrative agent
-------
for the Lenders (in such capacity, the "Administrative Agent").
--------------------
RECITALS:
Borrower, the Administrative Agent and the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of July 15, 1999 (as
amended, restated, or modified from time to time, the "Credit Agreement").
----------------
Borrower, Administrative Agent and the Lenders now desire to amend the Credit
Agreement as set forth herein.
NOW, THEREFORE, BE IT RESOLVED, THAT, in consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Definitions
-----------
1.1 Definitions. Capitalized terms used in this Amendment, to the extent
-----------
not otherwise defined herein, shall have the same meanings as in the
Credit Agreement, as amended hereby.
ARTICLE 2
Amendments
----------
1.2 Amendment to Section 4.2.
-------------------------
(A) The first sentence of Section 4.2 of the Credit Agreement and the
table set forth therein are hereby amended to read in their entirety as
follows:
Section 4.2 Prior to the receipt of the Applicable Rate Certificate
-----------
to be delivered with Borrower's financial statements for the Fiscal Quarter
ending December 25, 1999, the margins identified in Section 4.1 and the
-----------
Commitment Fee Rate shall be as follows: (i) the Libor Rate Margin shall be
three and one-half percent (3.50%); (ii) the Base Rate Margin shall be two
and one-quarter percent (2.25%); and (iii) the Commitment Fee Rate shall be
five-eighths of one percent (0.625%); thereafter, the Libor Rate Margin,
the Base Rate Margin, and the Commitment Fee Rate shall be determined in
accordance with the following table:
<PAGE>
========================================================================
LIBOR RATE BASE RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN FEE RATE
========================================================================
Less than 0.75 to 1.00 1.50% 0.25% 0.375%
------------------------------------------------------------------------
Greater than or equal to 2.00% 0.75% 0.50%
0.75 to 1.00 but less
than 1.75 to 1.00
------------------------------------------------------------------------
Greater than or equal to 2.50% 1.25% 0.50%
1.75 to 1.00 but less
than 2.75 to 1.00
------------------------------------------------------------------------
Greater than or equal to 3.00% 1.75% 0.50%
2.75 to 1.00 but less
than 3.5 to 1.00
------------------------------------------------------------------------
Greater than or equal to 3.50% 2.25% 0.625%
3.5 to 1.00
========================================================================
(B) The penultimate sentence of Section 4.2 of the Credit Agreement
is hereby amended to read in its entirety as follows:
If Borrower fails to deliver such Applicable Rate Calculation with
respect to any Fiscal Quarter which sets forth the Leverage Ratio within
the period of time required by subsection 10.1(c): (i) the Libor Rate
------------------
Margin (for Interest Periods commencing after the applicable Adjustment
Date) shall automatically be adjusted to three and one-half percent (3.50%)
per annum; (ii) the Base Rate Margin shall automatically be adjusted to two
and one-quarter percent (2.25%) per annum; and (iii) the Commitment Fee
Rate shall automatically be adjusted to five-eighths of one percent
(0.625%) per annum.
1.3 Amendment to Section 11.4. Subsection 11.4(iii) of the Credit
-------------------------
Agreement is hereby amended and restated to read in its entirety as
follows:
(iii) Borrower may purchase or redeem stock, stock rights, options or
similar rights not to exceed Fifteen Million Dollars ($15,000,000) in the
aggregate from the Closing Date through the Termination Date; provided, in
--------
each instance, that (i) after giving effect to any such purchase or
redemption Borrower will have at least Fifteen Million Dollars
($15,000,000) of borrowing availability under both the Borrowing Base and
the aggregate Revolving Commitments, and (ii) Borrower's Leverage Ratio at
such time (as evidenced by the Compliance Certificate most recently
delivered as required by subsection 10.1(c)) is less than 2.50 to 1.00,
-------------------
provided, however, that if Borrower fails to provide a Compliance
-------- -------
Certificate within the period required by subsection 10.1(c), Borrower's
------------------
Leverage Ratio shall be
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 2
<PAGE>
deemed to exceed 2.50 to 1.00 until a Compliance Certificate demonstrating
that such Leverage Ratio is less than 2.50 to 1.00 is delivered to the
Administrative Agent.
1.4 Amendment to Section 12.2. Section 12.2 of the Credit Agreement is
-------------------------
hereby amended and restated to read in its entirety as follows:
Section 12.2 Maximum Total Leverage Ratio. Borrower shall not permit
------------ ----------------------------
its Leverage Ratio at the end of any Fiscal Quarter to exceed (i) 3.95 to
1.00 for its Fiscal Quarter ending September 25, 1999; (ii) 3.00 to 1.00
for its Fiscal Quarter ending December 25, 1999; (iii) 3.25 to 1.00 for its
Fiscal Quarter ending March 25, 2000; (iv) 3.5 to 1.00 for its Fiscal
Quarter ending June 24, 2000; (v) 3.00 to 1.00 for its Fiscal Quarter
ending September 30, 2000; or (vi) 2.50 to 1.00 for its Fiscal Quarter
ending December 28, 2000, or any Fiscal Quarter thereafter. Further, for
any period that Borrower's Leverage Ratio equals or exceeds 3.00 to 1.00,
Borrower shall pledge to the Administrative Agent as security for the
Obligations, pursuant to agreements in form and substance satisfactory to
the Administrative Agent, an amount in immediately available funds equal to
the amount by which the Outstanding Revolving Credit of all of the Lenders
exceeds an amount equal to (i) the Borrowing Base (calculated as if the
advance rate for Eligible Receivables were 80% rather than 85%) minus (ii)
-----
the outstanding principal amount of the Term Loan, such funds to be held in
a cash collateral account by the Administrative Agent without any right of
withdrawal by Borrower unless and until Borrower's Leverage Ratio is less
than 3.00 to 1.00.
1.5 Amendment to Section 12.3. Section 12.3 of the Credit Agreement is
-------------------------
hereby amended and restated to read in its entirety as follows:
Section 12.3 Minimum Fixed Charge Coverage Ratio. As of the end of
------------ -----------------------------------
each Fiscal Quarter, Borrower shall not permit the ratio of (a) its EBITDAR
for the four (4) Fiscal Quarter period then ending to (b) the sum of (i)
Interest Expense during such period and (ii) Rental Expense paid during
such period to be less than (i) 1.50 to 1.00 for the four (4) Fiscal
Quarter period ending September 25, 1999; (ii) 1.75 to 1.00 for each of the
four (4) Fiscal Quarter periods ending December 25, 1999, March 25, 2000,
and June 24, 2000; (iii) 2.00 to 1.00 for the four (4) Fiscal Quarter
period ending September 30, 2000; or (iv) 2.50 to 1.00 for the four (4)
Fiscal Quarter period ending December 28, 2000, or any four (4) Fiscal
Quarter period ending thereafter.
ARTICLE 3
Conditions Precedent
--------------------
1.6 Conditions. The effectiveness of this Amendment is subject to the
----------
satisfaction of the following conditions precedent:
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 3
<PAGE>
(a) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and correct in all
material respects as of the date hereof as if made on the date hereof,
except for such representations and warranties limited by their terms to a
specific date;
(b) No Default or Event of Default shall have occurred and be
continuing;
(c) Borrower shall have delivered to the Administrative Agent an
executed original copy of this Amendment;
(d) Borrower shall have delivered to the Administrative Agent, in
form satisfactory to the Administrative Agent, a revised audit of its
Borrowing Base;
(e) Borrower shall have paid to the Administrative Agent and each
Lender executing this Amendment all fees, costs and expenses owed to and/or
incurred by each of the Administrative Agent and each such Lender arising
in connection with this Amendment, including, without limitation, (i) an
amendment fee to each such Lender in an amount equal to twenty-two and one-
half (22.5) basis points of the amount of each such Lender's Commitments,
and (ii) the reasonable fees, costs and expenses of the Administrative
Agent's legal counsel, Jenkens & Gilchrist, a Professional Corporation; and
(f) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documentation and other legal
matters incident thereto shall be satisfactory to (i) the Administrative
Agent, (ii) the Required Lenders and (iii) the Administrative Agent's legal
counsel, Jenkens & Gilchrist, a Professional Corporation.
ARTICLE 4
Ratifications, Representations and Warranties
---------------------------------------------
1.7 Ratifications. The terms and provisions set forth in this Amendment
-------------
shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and
superseded by this Amendment, the terms and provisions of the Credit
Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower, the Administrative
Agent and the Lenders agree that the Credit Agreement as amended
hereby and the other Loan Documents shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.
1.8 Representations and Warranties. Borrower hereby represents and
------------------------------
warrants to the Administrative Agent and the Lenders that (i) the
execution, delivery and performance of this Amendment and any and all
other Loan Documents executed and/or delivered in connection herewith
have been authorized by all requisite action on the part of Borrower
and will not violate the articles of incorporation or bylaws of
Borrower; (ii) the representations and warranties contained in the
Credit
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 4
<PAGE>
Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the
date hereof (except to the extent that such representations and
warranties were expressly, in the Credit Agreement, made only in
reference to a specific date); (iii) after giving effect to this
Amendment, no Default or Event of Default has occurred and is
continuing; and (iv) Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby,
and the other Loan Documents.
ARTICLE 5
Miscellaneous
-------------
1.9 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made in this Amendment or any other Loan Document including
any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other
Loan Documents, and no investigation by the Administrative Agent or
any Lender shall affect the representations and warranties or the
right of the Administrative Agent or any Lender to rely upon them.
1.10 Reference to Credit Agreement. Each of the Loan Documents, including
-----------------------------
the Credit Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Credit Agreement as
amended hereby, are hereby amended so that any reference in such Loan
Documents to the Credit Agreement shall mean a reference to the Credit
Agreement as amended hereby.
1.11 Severability. Any provision of this Amendment held by a court of
------------
competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or
unenforceable.
1.12 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
1.13 Successors and Assigns. This Amendment is binding upon and shall
----------------------
inure to the benefit of the Administrative Agent, the Lenders, and
Borrower and their respective successors and assigns, except Borrower
may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of all the Lenders.
1.14 Counterparts. This Amendment may be executed in one or more
------------
counterparts, and on telecopy counterparts each of which when so
executed shall be deemed to be an original, but all of which when
taken together shall constitute one and the same agreement.
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 5
<PAGE>
1.15 Effect of Waiver. No consent or waiver, express or implied, by the
----------------
Administrative Agent or any Lender to or for any breach of or
deviation from any covenant, condition or duty by Borrower or any Loan
Party shall be deemed a consent or waiver to or of any other breach of
the same or any other covenant, condition or duty.
1.16 Headings. The headings, captions, and arrangements used in this
--------
Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
1.17 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS
----------------
AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING
TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
[Remainder of this page intentionally left blank]
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as of the date first written above.
BORROWER:
--------
RENAISSANCE WORLDWIDE, INC.
By: /s/ Richard L. Bugley
------------------------------------------
Name: Richard L. Bugley
----------------------------------------
Title: VP and General Counsel
---------------------------------------
LENDERS:
-------
BANK OF AMERICA, N.A.,
as the Administrative Agent and as a Lender
By: /s/ Fred L. Thorne
------------------------------------------
Name: Fred L. Thorne
----------------------------------------
Title: Managing Director
---------------------------------------
GMAC COMMERCIAL CREDIT LLC (formerly
BNY Factoring LLC),
as the Syndication Agent and as a Lender
By: /s/ Frank Imperato
------------------------------------------
Name: Frank Imperato
----------------------------------------
Title:_______________________________________
CITIZENS BANK OF MASSACHUSETTS
By: /s/ William F. Granchelli
------------------------------------------
Name: William F. Granchelli
----------------------------------------
Title: Senior Vice President
---------------------------------------
THE CIT GROUP / BUSINESS CREDIT, INC.
By: /s/ Eric Maloy
------------------------------------------
Name: Eric Maloy
----------------------------------------
Title: AVP/AE
---------------------------------------
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 7
<PAGE>
DEBIS FINANCIAL SERVICES, INC.
By: /s/ James M. Vandervalk
------------------------------------------
Name: James M. Vandervalk
----------------------------------------
Title: President, ABL Division
---------------------------------------
FINOVA CAPITAL CORPORATION
By: /s/ Brian Rujawitz
------------------------------------------
Name: Brian Rujawitz
----------------------------------------
Title: AVP
---------------------------------------
NATIONAL BANK OF CANADA
By: /s/ A. Keith Broyles
------------------------------------------
Name: A. Keith Broyles
----------------------------------------
Title: Vice President & Manager
---------------------------------------
PNC BUSINESS CREDIT
By: /s/ Wing C. Louie
------------------------------------------
Name: Wing C. Louie
----------------------------------------
Title: Vice President
---------------------------------------
WEBSTER BANK
By: /s/ Charles C. Thomas
------------------------------------------
Name: Charles C. Thomas
----------------------------------------
Title: Vice President
---------------------------------------
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 8
<PAGE>
REAFFIRMATION OF GUARANTY AND PLEDGE AND SECURITY AGREEMENT
-----------------------------------------------------------
Each of the undersigned hereby (i) consents to the execution and delivery
of the First Amendment to Amended and Restated Credit Agreement to which this
Reaffirmation of Guaranty and Pledge and Security Agreement is attached (the
"Amendment") by the parties thereto, (ii) agrees that the Amendment shall not
---------
limit or diminish the obligations of each of the undersigned under that certain
Subsidiary Guaranty dated as of July 15, 1999 (as amended, the "Guaranty"), or
--------
under that certain Pledge and Security Agreement dated as of July 15, 1999 (as
amended, the "Pledge and Security Agreement"), executed or joined in by each of
-----------------------------
the undersigned and delivered to the Administrative Agent, (iii) reaffirms its
obligations under each of the Guaranty and the Pledge and Security Agreement,
and (iv) agrees that each of the Guaranty and the Pledge and Security Agreement
remains in full force and effect and is hereby ratified and confirmed.
Dated effective as of September 30, 1999.
COBA GROUP, U.S.A., LTD.
THE HUNTER GROUP, INC.
THE HUNTER GROUP INTERNATIONAL, INC.
THE MANAGEMENT DECISIONS GROUP, INC.
NEOGLYPHICS MEDIA CORPORATION
RENAISSANCE GOVERNMENT SOLUTIONS, INC.
THE REGISTRY INC. NETWORK CONSULTING PRACTICE
RENAISSANCE WORLDWIDE INTERNATIONAL HOLDINGS, INC.
RENAISSANCE WORLDWIDE IT CONSULTING SERVICES, INC.
RENAISSANCE WORLDWIDE STRATEGY, INC.
STERLING INFORMATION GROUP, INC.
TECHNOMIC CONSULTANTS, INC.
TRI SECURITIES CORP.
By: /s/ Richard L. Bugley
------------------------------------------------
Name: Richard L. Bugley
----------------------------------------------
Title: Vice President and General Counsel for
each of the foregoing
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 9
<PAGE>
ARI NATIONAL COMPANY
By: /s/ Richard L. Bugley
-----------------------------------------------
Name: Richard L. Bugley
---------------------------------------------
Title: Sole Trustee
This Reaffirmation of Guaranty and Pledge and
Security Agreement is executed on behalf of ARI
National Company by its sole trustee as sole
trustee and not individually, and the obligations
of ARI National Company hereunder are not binding
upon any of ARI National Company's sole trustee,
officers or shareholders or any of them
individually but are binding only upon the assets
and property of ARI National Company. The
Agreement and Declaration of Trust of ARI National
Company is on file with the Secretary of the
Commonwealth of Massachusetts.
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 10
<PAGE>
Exhibit 10.12
SECOND AMENDMENT TO
-------------------
THE AMENDED AND RESTATED CREDIT AGREEMENT
-----------------------------------------
THIS SECOND AMENDMENT TO THE AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated effective as of February 25, 2000, is among RENAISSANCE
---------
WORLDWIDE, INC. ("Borrower"), a Massachusetts corporation, each of the banks or
--------
other lending institutions which is a party hereto (individually, each a
"Lender", and collectively the "Lenders") and BANK OF AMERICA, N.A., as
------ -------
administrative agent for the Lenders (in such capacity, the "Administrative
--------------
Agent").
- -----
RECITALS:
Borrower, the Administrative Agent and the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of July 15, 1999 (as
amended, restated, or modified from time to time, the "Credit Agreement").
----------------
Borrower, Administrative Agent and the Lenders now desire to amend the Credit
Agreement as set forth herein.
NOW, THEREFORE, BE IT RESOLVED, THAT, in consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions. Capitalized terms used in this Amendment, to the
-----------
extent not otherwise defined herein, shall have the same meanings as in the
Credit Agreement, as amended hereby.
ARTICLE 2
Amendments
----------
Section 1.2 Amendment to Definition of EBITDA. The definition of "EBITDA"
---------------------------------
appearing in Section 1.1 of the Credit Agreement is hereby amended and restated
to read in its entirety as follows:
"EBITDA" means, for any period and any Person, the total of the
------
following calculated without duplication for such person on a
consolidated basis for such period: (a) Adjusted Net Income; plus (b)
----
any provision for (or less any benefit from) income or franchise
taxes deducted in determining Adjusted Net Income; plus (c) Interest
----
Expense deducted in determining Adjusted Net Income; plus (d)
----
amortization and depreciation expense deducted in determining
Adjusted Net Income; plus (e) charges actually taken during the
----
fourth Fiscal Quarter of the 1999 Fiscal Year associated with the
write-off of good will not to exceed the amount of Six Million
Dollars ($6,000,000) in such fourth Fiscal Quarter, deducted in
determining Adjusted Net Income; plus (f) transaction costs during
----
any subsequent
<PAGE>
Fiscal Quarter associated with acquisitions completed during such
Fiscal Quarter deducted in determining Adjusted Net Income.
Section 1.3 Addition of Business Strategy Group Purchase Agreement
------------------------------------------------------
Definition: Section 1.1 of the Credit Agreement is hereby amended by adding
- ----------
thereto in proper alphabetical order a definition of "Business Strategy Group
Purchase Agreement" to read in its entirety as follows:
"Business Strategy Group Purchase Agreement" means the Stock
------------------------------------------
Purchase Agreement among Renaissance Worldwide Strategy, Inc.,
Renaissance Worldwide, Inc., Rome Acquisition Corp., and Behrman
Capital II, L.P., dated February 29, 2000, a final copy of which as
executed has been delivered to the Administrative Agent.
Section 1.4 Amendment to Section 11.8. Section 11.8 of the Credit
-------------------------
Agreement is hereby amended and restated to read in its entirety as follows:
Section 11.8 Disposition of Assets. Except for transactions
---------------------
described on Schedule 11.8 and for transactions permitted by Section
------------- -------
11.3(iv), Borrower will not, and will not permit any other Loan Party
--------
to, sell, lease, assign, transfer, or otherwise voluntarily dispose
of: (a) any of its Receivables; (b) any substantial portion of the
consolidated assets of the Loan Parties; or (c) any other Property,
other than (i) dispositions of Inventory in the ordinary course of
business, (ii) dispositions of Equipment no longer used or useful in
such Person's business, (iii) dispositions of other Equipment to be
replaced (and such Equipment is so replaced) with other functionally
equivalent Equipment within one hundred twenty (120) days of the
disposition thereof, (iv) disposition of Renaissance Worldwide
Strategy, Inc., its Subsidiaries and certain related Property, all as
described in the Business Strategy Group Purchase Agreement, to
Behrman Capital II, L.P., on or prior to March 31, 2000, for Net
Proceeds of no less than Forty-Five Million Dollars ($45,000,000) to
be applied immediately in prepayment of the Loans as provided in
Section 5.4(a)(ii) and (iv), provided that concurrently with such
----------------- ---- -------- ----
mandatory prepayment the remaining principal of and accrued interest
on the Term Loans are prepaid in full and the Revolving Commitment
shall be permanently reduced by an amount equal to any Net Proceeds
from such disposition in excess of Fifty Million Dollars
($50,000,000), (v) the transfer of certain subsidiaries and Property
of Renaissance Worldwide Strategy, Inc. and its Subsidiaries to the
Borrower and to its other Subsidiaries in anticipation of the closing
of the Business Strategy Group Purchase Agreement and (vi) the
disposition of Renaissance Worldwide Professionals, Ltd. (fka James
Duncan Associates) and Renaissance Worldwide A.B. (Sweden).
and, upon a disposition permitted by clause (iv) or clause (v) of such amended
and restated Section 11.8, the Administrative Agent shall release its Lien on
the Property being disposed of as provided
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 2
<PAGE>
in Section 7.5 of the Credit Agreement, and Renaissance Worldwide Strategy, Inc.
shall be released from its Guaranty.
Section 1.5 Amendment to Section 12.2. Section 12.2 of the Credit
-------------------------
Agreement is hereby amended and restated to read in its entirety as follows:
Section 12.2 Maximum Total Leverage Ratio. Borrower shall not
----------------------------
permit its Leverage Ratio at the end of any Fiscal Quarter to exceed
3.00 to 1.00 for its Fiscal Quarter ending December 25, 1999 or 2.50
to 1.00 for its Fiscal Quarter ending March 25, 2000 or any Fiscal
Quarter thereafter.
Section 1.6 Amendment to Section 12.3. Section 12.3 of the Credit
-------------------------
Agreement is hereby amended and restated to read in its entirety as follows:
Section 12.3 Maximum Fixed Charge Coverage Ratio. As of the
-----------------------------------
end of each Fiscal Quarter, Borrower shall not permit the ratio of
(a) its EBITDAR to (b) the sum of (x) Interest Expense during the
period specified below and (y) Rental Expense paid during such period
to be less than (i) 1.75 to 1.00 for the four (4) Fiscal Quarter
periods ending December 25, 1999; (ii) 1.75 to 1.00 for the one (1)
Fiscal Quarter period ending March 25, 2000; (iii) 1.75 to 1.00 for
the two (2) Fiscal Quarter periods ending June 24, 2000; (iv) 2.00 to
1.00 for the three (3) Fiscal Quarter periods ending September 30,
2000; or (v) 2.50 to 1.00 for the four (4) Fiscal Quarter period
ending December 28, 2000, or any four (4) Fiscal Quarter period
ending thereafter.
ARTICLE 3
Conditions Precedent
--------------------
Section 1.7 Conditions. The effectiveness of this Amendment is subject to
----------
the satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and correct in all
material respects as of the date hereof as if made on the date hereof,
except for such representations and warranties limited by their terms to a
specific date;
(b) No Default or Event of Default shall have occurred and be
continuing;
(c) Borrower shall have delivered to the Administrative Agent an
executed original copy of this Amendment;
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 3
<PAGE>
(d) Borrower shall have delivered to the Administrative Agent, in
form satisfactory to the Administrative Agent, a final copy of the Business
Strategy Group Purchase Agreement, such sale shall be consummated
concurrently with the effectiveness of this Amendment, the Net Proceeds
thereof, not less than Forty-Five Million Dollars ($45,000,000), shall be
applied in accordance with Section 5.4 of the Credit Agreement, as amended
pursuant to this Amendment, and the Term Loan shall be paid in full.
(e) Borrower shall have paid to the Administrative Agent the
reasonable fees, costs and expenses of the Administrative Agent's legal
counsel, Jenkens & Gilchrist, a Professional Corporation; and
(f) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documentation and other legal
matters incident thereto shall be satisfactory to (i) the Administrative
Agent, (ii) the Required Lenders and (iii) the Administrative Agent's legal
counsel, Jenkens & Gilchrist, a Professional Corporation.
ARTICLE 4
Ratifications, Representations and Warranties
---------------------------------------------
Section 1.8 Ratifications. The terms and provisions set forth in this
-------------
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Credit Agreement and the
other Loan Documents are ratified and confirmed and shall continue in full force
and effect. Borrower, the Administrative Agent and the Lenders agree that the
Credit Agreement as amended hereby and the other Loan Documents shall continue
to be legal, valid, binding and enforceable in accordance with their respective
terms.
Section 1.9 Representations and Warranties. Borrower hereby represents
------------------------------
and warrants to the Administrative Agent and the Lenders that (i) the execution,
delivery and performance of this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith have been authorized by all
requisite action on the part of Borrower and will not violate the articles of
incorporation or bylaws of Borrower; (ii) the representations and warranties
contained in the Credit Agreement, as amended hereby, and any other Loan
Document are true and correct on and as of the date hereof as though made on and
as of the date hereof (except to the extent that such representations and
warranties were expressly, in the Credit Agreement, made only in reference to a
specific date); (iii) after giving effect to this Amendment, no Default or Event
of Default has occurred and is continuing; (iv) Borrower is in full compliance
with all covenants and agreements contained in the Credit Agreement, as amended
hereby, and the other Loan Documents; and (v) the sale of Borrower's Business
Strategy Group will produce Net Proceeds for application in prepayment of the
Loans of not less than Forty-Five Million Dollars ($45,000,000), and Borrower
has delivered
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 4
<PAGE>
to the Administrative Agent a true, correct and complete copy of the final
executed Business Strategy Group Purchase Agreement and an accurate and
substantially correct memorandum identifying the Property not owned by
Renaissance Worldwide Strategy, Inc. or its Subsidiaries included in the
Property being sold as part of the Business Strategy Group Purchase Agreement;
such Property (other than Receivables generated by the Business Strategy Group
referred to in such Purchase Agreement) has an aggregate net book value of less
than $1,000,000.00.
ARTICLE 5
Miscellaneous
-------------
Section 1.10 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in this Amendment or any other Loan Document
including any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by the Administrative Agent or any Lender shall
affect the representations and warranties or the right of the Administrative
Agent or any Lender to rely upon them.
Section 1.11 Reference to Credit Agreement. Each of the Loan Documents,
-----------------------------
including the Credit Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Credit Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Credit Agreement
shall mean a reference to the Credit Agreement as amended hereby.
Section 1.12 Severability. Any provision of this Amendment held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 1.13 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 1.14 Successors and Assigns. This Amendment is binding upon and
----------------------
shall inure to the benefit of the Administrative Agent, the Lenders, and
Borrower and their respective successors and assigns, except Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of all the Lenders.
Section 1.15 Counterparts. This Amendment may be executed in one or more
------------
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 5
<PAGE>
Section 1.16 Effect of Waiver. No consent or waiver, express or implied,
----------------
by the Administrative Agent or any Lender to or for any breach of or deviation
from any covenant, condition or duty by Borrower or any Loan Party shall be
deemed a consent or waiver to or of any other breach of the same or any other
covenant, condition or duty.
Section 1.17 Headings. The headings, captions, and arrangements used in
--------
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 1.18 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
----------------
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as of the date first written above.
BORROWER:
--------
RENAISSANCE WORLDWIDE, INC.
By: /s/ Richard L. Bugley
------------------------------------------
Name: Richard L. Bugley
----------------------------------------
Title: VP and General Counsel
---------------------------------------
LENDERS:
-------
BANK OF AMERICA, N.A.,
as the Administrative Agent and as a Lender
By: /s/ Fred L. Thorne
------------------------------------------
Name: Fred L. Thorne
----------------------------------------
Title: Managing Director
---------------------------------------
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 6
<PAGE>
GMAC COMMERCIAL CREDIT LLC (formerly BNY
Factoring LLC),
as the Syndication Agent and as a Lender
By: /s/ JM Frango
------------------------------------------
Name:________________________________________
Title:_______________________________________
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Gregory R. Ryan
------------------------------------------
Name: Gregory R. Ryan
----------------------------------------
Title: Asst. Vice President
---------------------------------------
THE CIT GROUP / BUSINESS CREDIT, INC.
By: /s/ Eric Maloy
------------------------------------------
Name: Eric Maloy
----------------------------------------
Title: AVP/AE
---------------------------------------
DEBIS FINANCIAL SERVICES, INC.
By: /s/ James M. Vandervalk
------------------------------------------
Name: James M. Vandervalk
----------------------------------------
Title: Pres., ABL Division
---------------------------------------
FINOVA CAPITAL CORPORATION
By: /s/ Brian Rujawitz
------------------------------------------
Name: Brian Rujawitz
----------------------------------------
Title:_______________________________________
NATIONAL BANK OF CANADA
By: /s/ A. Keith Broyles
------------------------------------------
Name: A. Keith Broyles
----------------------------------------
Title: Vice President & Manager
---------------------------------------
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 7
<PAGE>
PNC BUSINESS CREDIT
By: /s/ Wing C. Louie
------------------------------------------
Name: Wing C. Louie
----------------------------------------
Title: Vice President
---------------------------------------
WEBSTER BANK
By: /s/ Charles C. Thomas
------------------------------------------
Name: Charles C. Thomas
----------------------------------------
Title: Vice President
---------------------------------------
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 8
<PAGE>
REAFFIRMATION OF GUARANTY AND PLEDGE AND SECURITY AGREEMENT
-----------------------------------------------------------
Each of the undersigned hereby (i) consents to the execution and delivery
of the Second Amendment to Amended and Restated Credit Agreement to which this
Reaffirmation of Guaranty and Pledge and Security Agreement is attached (the
"Amendment") by the parties thereto, (ii) agrees that the Amendment shall not
---------
limit or diminish the obligations of each of the undersigned under that certain
Subsidiary Guaranty dated as of February 24, 1999 (as amended, the "Guaranty"),
--------
or under that certain Pledge and Security Agreement dated as of February 24,
1999 (as amended, the "Pledge and Security Agreement"), executed or joined in by
-----------------------------
each of the undersigned and delivered to the Administrative Agent, (iii)
reaffirms its obligations under each of the Guaranty and the Pledge and Security
Agreement, and (iv) agrees that each of the Guaranty and the Pledge and Security
Agreement remains in full force and effect and is hereby ratified and confirmed.
Dated effective as of February 25, 2000.
THE HUNTER GROUP, INC.
THE HUNTER GROUP INTERNATIONAL, INC.
THE MANAGEMENT DECISIONS GROUP, INC.
NEOGLYPHICS MEDIA CORPORATION
RENAISSANCE GOVERNMENT SOLUTIONS, INC.
RENAISSANCE WORLDWIDE INTERNATIONAL
HOLDINGS, INC.
RENAISSANCE WORLDWIDE IT CONSULTING
SERVICES, INC.
STERLING INFORMATION GROUP, INC.
TRI SECURITIES CORP.
By: /s/ Richard L. Bugley
--------------------------------------------
Name: Richard L. Bugley
------------------------------------------
Title: Vice President for each of the foregoing
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 9
<PAGE>
ARI NATIONAL COMPANY
By: /s/ Richard L. Bugley
----------------------------------------------------
Name: Richard L. Bugley
--------------------------------------------------
Title: Sole Trustee
This Reaffirmation of Guaranty and Pledge and Security
Agreement is executed on behalf of ARI National Company
by its sole trustee as sole trustee and not
individually, and the obligations of ARI National
Company hereunder are not binding upon any of ARI
National Company's sole trustee, officers or
shareholders or any of them individually but are
binding only upon the assets and property of ARI
National Company. The Agreement and Declaration of
Trust of ARI National Company is on file with the
Secretary of the Commonwealth of Massachusetts.
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Page 10
<PAGE>
EXHIBIT 21
RENAISSANCE WORLDWIDE, INC.
LIST OF SUBSIDIARIES:
<TABLE>
<CAPTION>
State/Country of
Company Organization
------- ----------------
<S> <C>
ARI National Company........................................ Massachusetts
CANAM, L.L.C................................................ Delaware
GovConnect.com, Inc......................................... Delaware
Hunter Consulting Associates Pty. Limited................... Australia
The Hunter Group, Inc....................................... Maryland
The Hunter Group International, Inc......................... Delaware
Neoglyphics Media Corporation............................... Illinois
The Management Decisions Group, Inc......................... Illinois
Renaissance II, Inc......................................... Delaware
Renaissance III, Inc........................................ Delaware
Renaissance Government Solutions, Inc....................... Delaware
Renaissance Worldwide B.V................................... Netherlands
Renaissance Worldwide Consulting Pvt. Ltd................... India
Renaissance Worldwide Gmbh & Co. KG......................... Germany
Renaissance Worldwide Holding Limited....................... U.K.
Renaissance Worldwide International Holdings, Inc........... Delaware
Renaissance Worldwide IT Consulting Services, Inc........... Delaware
Renaissance Worldwide K.K................................... Japan
Renaissance Worldwide Limited............................... Hong Kong
Renaissance Worldwide Limited............................... U.K.
Renaissance Worldwide Professionals Limited................. U.K.
Renaissance Worldwide Singapore Pte. Ltd.................... Singapore
Renaissance Worldwide S.A................................... France
Sterling Information Group, Inc............................. Delaware
The Registry.com, Inc....................................... Delaware
THG Consulting, Inc......................................... Canada
TRI Securities Corp......................................... Massachusetts
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-17565, 333-33475, 333-44371, 333-66863, 333-
93747) of Renaissance Worldwide, Inc. of our report dated March 14, 2000,
appearing in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
March 24, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference on Registration
Statements Nos. 333-17565, 333-33475, 333-44371, 333-66863, and 333-93747 on
Form S-8 of Renaissance Worldwide, Inc., of our report dated March 12, 1998,
on Neoglyphics Media Corporation as of December 31, 1997 and for the year then
ended, appearing in this Form 10-K.
/s/ Katch, Tyson & Company
Katch, Tyson & Company
Certified Public Accountants
March 24, 2000
<PAGE>
EXHIBIT 23.3
INDEPENDENT ACCOUNTANT'S CONSENT
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-17565, 333-33475, 333-44371, 333-66863 and
333-93747) of Renaissance Worldwide, Inc. (formerly The Registry, Inc.) of our
report dated February 27, 1998, on the financial statements of Triad Data,
Inc. appearing in this Form 10-K.
/s/ Goldstein Golub Kessler LLP
Goldstein Golub Kessler LLP
March 24, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-25-1999 DEC-25-1999 DEC-25-1999 DEC-25-1999
<PERIOD-START> DEC-27-1998 DEC-27-1998 DEC-27-1998 DEC-27-1998
<PERIOD-END> DEC-25-1999 MAR-27-1999 JUN-26-1999 SEP-25-1999
<CASH> 10,605 0 0 0
<SECURITIES> 0 0 0 0
<RECEIVABLES> 166,128 0 0 0
<ALLOWANCES> 10,344 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 193,172 0 0 0
<PP&E> 44,303 0 0 0
<DEPRECIATION> 14,629 0 0 0
<TOTAL-ASSETS> 338,644 0 0 0
<CURRENT-LIABILITIES> 97,253 0 0 0
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 4,725 0 0 0
<OTHER-SE> 176,632 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 338,644 0 0 0
<SALES> 0 0 0 0
<TOTAL-REVENUES> 742,584 198,171 400,196 581,095
<CGS> 0 0 0 0
<TOTAL-COSTS> 522,462 138,766 278,537 405,143
<OTHER-EXPENSES> 215,766 54,448 110,007 162,756
<LOSS-PROVISION> 11,659 0 0 0
<INTEREST-EXPENSE> 9,498 0 0 0
<INCOME-PRETAX> (4,980) 2,410 7,382 6,267
<INCOME-TAX> 362 989 3,116 2,851
<INCOME-CONTINUING> (5,342) 1,421 4,266 3,416
<DISCONTINUED> 3,419 280 1,195 3,187
<EXTRAORDINARY> 833 0 833 833
<CHANGES> 0 0 0 0
<NET-INCOME> (1,090) 1,701 6,294 7,436
<EPS-BASIC> (.02) .03 .11 .13
<EPS-DILUTED> (.02) .03 .11 .13
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-26-1998 DEC-26-1998 DEC-26-1998 DEC-26-1998
<PERIOD-START> DEC-28-1997 DEC-28-1997 DEC-28-1997 DEC-28-1997
<PERIOD-END> DEC-26-1998 MAR-28-1998 JUN-27-1998 SEP-26-1998
<CASH> 10,957 0 0 0
<SECURITIES> 0 0 0 0
<RECEIVABLES> 205,806 0 0 0
<ALLOWANCES> 9,616 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 241,400 0 0 0
<PP&E> 46,067 0 0 0
<DEPRECIATION> 14,910 0 0 0
<TOTAL-ASSETS> 372,065 0 0 0
<CURRENT-LIABILITIES> 182,870 0 0 0
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 4,725 0 0 0
<OTHER-SE> 175,060 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 372,065 0 0 0
<SALES> 0 0 0 0
<TOTAL-REVENUES> 710,156 157,539 334,376 523,374
<CGS> 0 0 0 0
<TOTAL-COSTS> 482,733 107,025 225,009 350,708
<OTHER-EXPENSES> 205,950 40,320 91,186 143,068
<LOSS-PROVISION> 12,703 0 0 0
<INTEREST-EXPENSE> 6,342 0 0 0
<INCOME-PRETAX> 15,970 9,231 16,100 25,726
<INCOME-TAX> 12,992 5,083 14,405 18,146
<INCOME-CONTINUING> 2,978 4,148 1,695 7,580
<DISCONTINUED> (34,324) 1,315 3,329 3,045
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> (31,346) 5,463 5,024 10,625
<EPS-BASIC> (.57) .10 .09 .19
<EPS-DILUTED> (.54) .09 .08 .18
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> DEC-27-1997 JUN-28-1997
<PERIOD-START> JUN-29-1997 JUN-30-1996
<PERIOD-END> DEC-27-1997 JUN-28-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 283,076 444,504
<CGS> 0 0
<TOTAL-COSTS> 196,100 314,074
<OTHER-EXPENSES> 77,895 106,077
<LOSS-PROVISION> 1,274 902
<INTEREST-EXPENSE> 1,495 1,446
<INCOME-PRETAX> 7,919 27,620
<INCOME-TAX> 5,009 14,074
<INCOME-CONTINUING> 2,910 13,546
<DISCONTINUED> (7,141) 3,628
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,231) 17,174
<EPS-BASIC> (.08) .34
<EPS-DILUTED> (.07) .31
</TABLE>
