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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 29, 1996
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Wang Laboratories, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-5677 04-2192707
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(Commission File Number) (IRS Employer Identification No.)
600 Technology Park Drive, Billerica, Massachusetts 01821
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 967-5000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
-------------------------------------
On August 29, 1996 Wang Laboratories, Inc. (the "Company") completed
the acquisition pursuant to the Stock Purchase Agreement among the Company and
the other stockholders of I-NET, Inc. signatories thereto (the "Other
Stockholders") dated as of July 24, 1996, as amended on August 29, 1996, for all
of the common stock, par value $.0002 per share, of I-NET, Inc., Series A
preferred stock, par value $.001 per share, of I-NET, Inc. and Series C
preferred stock, par value $.001 per shares, of I-NET, Inc. In consideration
for the shares of I-NET, Inc. the Company paid the Other Stockholders (i)
$94,694,205 dollars in cash, and (ii) non-negotiable, non-interest bearing,
subordinated promissory notes, in the principal aggregate face amount of
$64,501,941 which mature one year from the date of closing (the "Promissory
Notes"). At the Company's option, 50% of the Promissory Notes can be paid in
common stock, par value $.01 per share, of the Company upon the maturity date.
The primary source of the cash portion of the purchase price was a loan from a
group of banks led by Bankers Trust Company. The acquisition will be accounted
for according to purchase accounting principles.
The foregoing is a brief summary of certain provisions of the Stock
Purchase Agreement, as amended, a copy of which is filed as an exhibit hereto.
This summary is qualified in its entirety by, and is subject to, the more
complete information set forth in the Stock Purchase Agreement attached hereto
as Exhibit 1.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
---------------------------------
(a) Financial Statements of Business Acquired
It is not practicable to provide the required financial statements
of I-NET, Inc. at the time of the filing of this Report. Accordingly, such
financial statements will be filed by an amendment to this Report, as soon as
practicable, but no later than November 12, 1996.
(b) Pro forma Financial Information
It is not practicable to provide the required pro forma financial
information of the Company at the time of the filing of this Report.
Accordingly, such pro forma financial information will be filed by an amendment
to this report, as soon as practicable, but no later than November 12, 1996.
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(c) Exhibits
Item Description
- ---- -----------
1. Stock Purchase Agreement
among the Company and the
other stockholders of I-NET,
Inc. signatories thereto,
as amended.
2. Amended and Restated Credit
Agreement among the Company,
Wang Federal, Inc., Wang Canada
Limited, I-NET, Inc., Dataserv
Computer Maintenance, Inc.,
certain Lenders, Co-Agents
and a Collateral Agent named
therein, and Bankers Trust
Company as Agent and Issuing
Bank dated as of August 29,
1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WANG LABORATORIES, INC.
Dated: September 12, 1996 By: /s/ Albert A. Notini
------------------ ------------------------
Albert A. Notini
Senior Vice President,
General Counsel and
Corporate Secretary
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
1. Stock Purchase Agreement
among the Company and the
other stockholders of I-NET,
Inc. signatories thereto,
as amended.
2. Amended and Restated Credit
Agreement among the Company,
Wang Federal, Inc., Wang Canada
Limited, I-NET, Inc., Dataserv
Computer Maintenance, Inc.,
certain Lenders, Co-Agents
and a Collateral Agent
named therein, and Bankers
Trust Company as Agent and
Issuing Bank dated as of
August 29, 1996.
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EXHIBIT 1
=========================================================
STOCK PURCHASE AGREEMENT
by and among
WANG LABORATORIES, INC.
and
THE OTHER STOCKHOLDERS SIGNATORIES HERETO
Dated as of July 24, 1996
=========================================================
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TABLE OF CONTENTS
PAGE
ARTICLE I Certain Definitions.................................. 1
ARTICLE II Purchases and Sales; Closing......................... 10
Section 2.1 Purchases and Sales......................... 10
Section 2.2 Time and Place of Closing................... 10
Section 2.3 Closing Deliveries.......................... 10
ARTICLE III Representations and Warranties
of the Sellers....................................... 12
Section 3.1 Authority; Organization; Valid
and Binding................................. 12
Section 3.2 Title to Shares............................. 13
Section 3.3 Organization and Qualification.............. 13
Section 3.4 Capitalization; Subsidiaries................ 14
Section 3.5 Conflicting Agreements and
Charter Provisions.......................... 15
Section 3.6 Financial Statements; Books and
Records; Inventories; Accounts
Receivable.................................. 16
Section 3.7 Changes Since December 31, 1995............. 19
Section 3.8 Liabilities................................. 21
Section 3.9 Taxes....................................... 22
Section 3.10 Litigation; Orders.......................... 24
Section 3.11 Employee Benefit Plans...................... 24
Section 3.12 Properties.................................. 28
Section 3.13 Intellectual Property Rights................ 29
Section 3.14 Contracts................................... 30
Section 3.15 Licenses; Consents;
Compliance with Laws........................ 34
Section 3.16 Insurance................................... 35
Section 3.17 Employees; Labor Relations.................. 36
Section 3.18 Environmental Matters....................... 37
Section 3.19 Relationships with Customers and
Suppliers................................... 38
Section 3.20 Governmental Contracts...................... 39
Section 3.21 Material Interests of Certain
Persons..................................... 44
Section 3.22 Certain Settlements......................... 44
Section 3.23 Brokers, Finders, Etc....................... 45
Section 3.24 Accredited Investor; Acquisition
for Investment.............................. 45
Section 3.25 Disclosure.................................. 46
Section 3.26 No Other Representations or
Warranties.................................. 46
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ARTICLE IV Representations and Warranties of Wang............... 47
Section 4.1 Organization and Qualification.............. 47
Section 4.2 Authority; Valid and Binding................ 47
Section 4.3 Capitalization.............................. 47
Section 4.4 Conflicting Agreements and
Charter Provisions.......................... 49
Section 4.5 Default..................................... 49
Section 4.6 Reports; Financial Statements............... 49
Section 4.7 Changes Since the Most Recent
Audited Financial Statements................ 50
Section 4.8 Litigation; Orders.......................... 50
Section 4.9 Licenses; Consents; Compliance
with Laws................................... 51
Section 4.10 Brokers, Finders, Etc....................... 52
Section 4.11 Accredited Investor;
Acquisition for Investment.................. 52
Section 4.12 Disclosure.................................. 53
Section 4.13 No Other Representations or
Warranties.................................. 53
ARTICLE V Covenants............................................ 53
Section 5.1 No Solicitations............................ 53
Section 5.2 Inspection of Property...................... 53
Section 5.3 Conduct of Business......................... 55
Section 5.4 Fulfillment of Conditions................... 56
Section 5.5 Consents.................................... 56
Section 5.6 Publicity................................... 57
Section 5.7 Expenses.................................... 57
Section 5.8 Advice of Changes........................... 58
Section 5.9 Bajaj Notes................................. 59
Section 5.10 Certain Settlement Agreements............... 59
Section 5.11 Certain Severance Protection
Agreements.................................. 59
Section 5.12 Stock Option Plans;
Employee Benefits........................... 61
Section 5.13 Indemnification; Directors
and Officers Insurance...................... 64
Section 5.14 Tax Refunds................................. 65
ARTICLE VI Indemnification...................................... 65
Section 6.1 Seller Indemnification...................... 65
Section 6.2 Wang Indemnification........................ 69
Section 6.3 Calculation of Losses....................... 70
Section 6.4 Procedures Relating to
Indemnification............................. 70
Section 6.5 Termination of Indemnification.............. 74
Section 6.6 Consideration for Payment of
Indemnification Obligations;
Right of Set-Off............................ 74
Section 6.7 Exclusive Remedy............................ 74
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ARTICLE VII Conditions to Obligations to Close................... 75
Section 7.1 Conditions to Wang's Obligation............. 75
Section 7.2 Conditions to the Sellers'
Obligations................................. 77
ARTICLE VIII Miscellaneous........................................ 79
Section 8.1 Termination................................. 79
Section 8.2 Effect of Termination....................... 80
Section 8.3 Severability................................ 80
Section 8.4 Entire Agreement............................ 80
Section 8.5 Counterparts................................ 81
Section 8.6 Notices..................................... 81
Section 8.7 Amendments.................................. 83
Section 8.8 Cooperation................................. 83
Section 8.9 Successors and Assigns...................... 84
Section 8.10 Survival Periods............................ 84
Section 8.11 Governing Law; Choice of Forum.............. 85
Section 8.12 Headings.................................... 85
Section 8.13 No Third-Party Beneficiaries................ 85
Exhibit A Company Shares and Consideration
Exhibit B Non-Negotiable Subordinated Promissory Note
Exhibit C Certain Percentages
Exhibit D Opinions of Sellers' Counsel
Exhibit D-1 Matters to be covered by Opinion of
Counsel to Bajaj, the Bajaj Trust and the Company
Exhibit D-2 Matters to be covered by Opinion of
Counsel to the Goldman/Omega Stockholders
Exhibit E Termination Agreement
Exhibit F Stockholder Release
Exhibit G Registration Rights Agreement
Exhibit H Noncompetition Agreement
Exhibit I Consulting Agreement
Exhibit J Spousal Release
Exhibit K Matters to be covered by Opinion of Counsel to Wang
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STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
July 24, 1996, is entered into by and among Wang Laboratories, Inc., a Delaware
corporation ("Wang"), and the other stockholders signatories hereto. Capitalized
terms not otherwise defined herein have the meanings set forth in Article I.
WHEREAS, the Sellers own all of the issued and outstanding shares
of Company Common Stock, Company Series A Stock and Company Series C Stock;
WHEREAS, Wang desires to purchase from the Sellers, and the
Sellers desire to sell to Wang, all of the issued and outstanding shares of
Company Common Stock, Company Series A Stock and Company Series C Stock; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Company is entering into an Employment Agreement, dated as of the
date hereof (the "Employment Agreement"), with Ken Bajaj.
NOW, THEREFORE, upon the terms and subject to the conditions set
forth herein, the parties hereto agree as follows:
ARTICLE I
Certain Definitions
-------------------
As used in this Agreement each of the following terms shall have the
following respective meanings.
"Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement).
"Associate" means, with respect to any Person, any corporation or
other business organization of which such Person is an officer or partner or is
the beneficial owner, directly or indirectly, of ten percent (10%) or more of
any class of equity securities, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity and any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person.
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"Bajaj" means Kaval Bajaj.
"Bajaj Notes" shall have the meaning specified in Section 3.8(b).
"Bajaj Trust" shall mean the Kavelle Bajaj Charitable Remainder
Unitrust, Agreement dated July 19, 1996.
"1996 Budget" shall mean the Company's 1996 capital budget and
operating budget attached as Exhibit A to the Securityholders' Agreement.
"Bylaws" shall mean the Bylaws of the Company as in effect from time
to time.
"Charter" shall mean the Articles of Incorporation of the Company as
in effect from time to time.
"Closing" shall have the meaning specified in Section 2.2(a).
"Closing Agreement" shall have the meaning specified in Section
3.9(i).
"Closing Date" shall have the meaning specified in Section 2.2(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall mean I-NET, Inc., a Maryland corporation.
"Company Balance Sheet" shall have the meaning specified in Section
3.6(a).
"Company Class E Stock" shall mean the Class E Common Stock, par
value $.0002 per share, of the Company.
"Company Common Stock" shall mean the Common Stock, par value $.0002
per share, of the Company
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(excluding, except as otherwise specified herein, the Company Class E Stock).
"Company Material Adverse Effect" shall mean a material adverse
effect on (i) the business, assets, liabilities, results of operations or
condition (financial or otherwise) of the Company, taken as a whole, (ii) the
ability of the Company to take (or, where applicable, refrain from taking) in
any material respect any action contemplated to be taken (or, where applicable,
to not be taken) by it under or with respect to, or in connection with the
consummation of the transactions contemplated by, this Agreement or (iii) the
ability of the Company to conduct its businesses and to own or lease its
properties and assets in substantially the same manner in which such businesses
were previously conducted and such assets and properties were previously owned
or leased, excluding any effects resulting from the loss of the Company's
eligibility to be awarded or to perform Contracts or Contract options of the
type or under the programs described in Section 3.14(a)(xi).
"Company Preferred Stock" shall mean the Preferred Stock, par value
$.001 per share, of the Company.
"Company Series A Stock" shall mean the Series A Convertible
Participating Preferred Stock, par value $.001 per share, of the Company.
"Company Series B Stock" shall mean the Series B Convertible
Participating Preferred Stock par value $.001 per share, of the Company.
"Company Series C Stock" shall mean the Series C Convertible
Participating Preferred Stock, par value $.001 per share, of the Company.
"Company Shares" shall mean shares of Company Common Stock, Company
Series A Stock or Company Series C Stock.
"Company Subsidiaries" shall have the meaning specified in Section
3.4(d).
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"Confidentiality Agreement" shall mean the Non-Disclosure Agreement
dated February 20, 1996 between the Company and Wang.
"Consents" shall have the meaning specified in Section 3.15(b).
"Contract" shall mean any written or, unless otherwise specified,
oral contract, license, agreement, instrument, commitment or other binding
arrangement.
"Employment Agreement" shall have the meaning specified in the
preamble.
"Environmental Laws" shall mean any and all United States federal,
state, local and foreign laws, rules or regulations and any orders or decrees,
in each case as now in effect, relating to the regulation or protection of human
health, safety or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Everett Settlement Agreement" shall have the meaning specified in
Section 3.22(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Final Determination" shall mean the final resolution of the
liability for any Tax Item for a taxable period, (i) by IRS Form 870 or 870-AD
(or any successor forms thereto), on the date of acceptance by or on behalf of
the IRS with respect to United States federal taxes, or by a comparable form
under the laws of other jurisdictions; except that a Form 870 or 870-AD or
comparable form that reserves (whether by its terms or by operation of law) the
right of the taxpayer to file a claim for refund and/or the right of the taxing
authority to assert a further deficiency for any Tax Item shall not constitute a
Final Determination for such Tax Item; (ii) by a decision, judgment, decree, or
other order by a court of competent jurisdiction, which has become final
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and unappealable; (iii) by a closing agreement or accepted offer in compromise
under Sections 7121 or 7122 of the Code, with respect to federal Taxes, or
comparable agreements as to other Taxes under the laws of other jurisdictions;
(iv) by an allowance of a refund or credit in respect of any overpayment of Tax,
but only after the expiration of all periods during which such refund may be
recovered by the Tax imposing jurisdiction; or (v) by any other final
disposition, including by reason of the expiration of the applicable statute of
limitations.
"Financial Statements" shall have the meaning specified in Section
3.6(b).
"GAAP" shall mean United States generally accepted accounting
principles applied on a consistent basis.
"Goldman Stockholders" shall mean GS Capital Partners, L.P., Bridge
Street Fund 1994, L.P. and Stone Street Fund 1994, L.P., each a Delaware limited
partnership.
"Goldman/Omega Stockholders" shall mean the Goldman Stockholders and
the Omega Stockholders.
"Hazardous Materials" shall mean, collectively, (a) any petroleum or
petroleum products, radioactive materials, asbestos, urea formaldehyde foam
insulation, and transformers or other equipment that contain polychlorinated
biphenyls, (b) any chemicals or other materials or substances that are now
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants,"
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now
prohibited, limited or regulated by any Environmental Law.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Intellectual Property" shall mean all patents and patent rights,
trademarks and trademark rights, trade
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names and trade name rights, service marks and service mark rights, trade dress,
business and product names, logos, slogans, brand names, copyrights and
copyright rights, trade secrets, industrial models, designs, methodologies,
inventions, processes, formulae, computer programs and databases (including all
object and source codes) and related documentation, technical information,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights, together
with all licenses and goodwill related to the foregoing.
"IRS" shall mean the Internal Revenue Service.
"KESOP" means the I-NET, Inc. Key Employee Stock Option Plan, as in
effect on the date hereof.
"Lamb Settlement Agreement" shall have the meaning ascribed to it in
Section 3.22(b).
"Licenses" shall have the meaning specified in Section 3.15(a).
"Lien" shall mean any lien, claim, charge, pledge, security
interest, mortgage or other legal or equitable interest or encumbrance.
"Loss" and "Losses" shall have the meaning specified in Section
6.1(a).
"New Incentive Options" shall have the meaning specified in Section
5.12(b).
"New KESOP Options" shall have the meaning specified in Section
5.12(a).
"Note" shall have the meaning specified in Section 2.3.
"Old Incentive Options" shall have the meaning specified in Section
5.12(b).
"Old KESOP Options" shall have the meaning specified in Section
5.12(a).
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"Omega Stockholders" shall mean Omega Institutional Partners, L.P.
and Omega Capital Partners, L.P., each a Delaware limited partnership.
"Option" shall have the meaning specified in Section 3.7(o).
"Ordinary Course Contract" means a Contract between the Company or
any of the Company Subsidiaries and any customer of the Company or such
subsidiary relating to the provision of goods or services by the Company or such
subsidiary to or on behalf of such customer.
"PBGC" shall have the meaning specified in Section 3.11(h).
"Person" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.
"Plans" shall have the meaning specified in Section 3.11(a).
"Pre-Closing Company Books and Records" shall have the meaning
specified in Section 5.2(b)(i).
"Pre-Closing Date Period" shall have the meaning specified in
Section 6.1(c).
"1994 Purchase Agreement" shall mean the Stock and Note Purchase
Agreement, dated as of August 10, 1994, by and among the Company, Bajaj, GS
Capital Partners, L.P., Omega Capital Partners, L.P. and Omega Institutional
Partners, L.P.
"1996 Purchase Agreement" shall mean the Stock Purchase Agreement,
dated as of April 15, 1996, by and among the Company, Wang, the Goldman
Stockholders and the Omega Stockholders.
"1996 Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of April 15, 1996, by and among the Company, Bajaj,
Wang, the Goldman Stockholders and the Omega Stockholders.
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"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
or through the environment.
"Reorganization Plan" shall have the meaning specified in Section
4.3(a).
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securityholders' Agreement" shall mean the Securityholders'
Agreement, dated as of April 15, 1996, by and among the Company, Bajaj, Wang,
the Goldman Stockholders and the Omega Stockholders.
"Seller Indemnified Persons" shall have the meaning specified in
Section 6.2(a).
"Sellers" shall mean Bajaj, the Bajaj Trust, the Goldman
Stockholders and the Omega Stockholders.
"Severance Protection Agreement" shall have the meaning specified in
Section 5.11(a).
"Stock Incentive Plan" shall mean the Amended and Restated I-NET,
Inc. 1996 Stock Incentive Plan, as in effect on the date hereof.
"Straddle Period" shall have the meaning specified in Section
6.1(d).
"Tax Item" shall mean any item of income, gain, loss, deduction,
credit, recapture of credit or any other item which increases or decreases Taxes
paid or payable, including an adjustment under Code Section 481 resulting from a
change in accounting method.
"Tax Loss" shall have the meaning specified in Section 6.1(c).
"Tax Returns" shall mean a report, return or other information
(including any attached schedules or any amendments to such report, return or
other information) required to be supplied to or filed with a governmental
entity with respect to any Tax, including an
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information return, claim for refund, amended return or declaration of estimated
Tax.
"Tax Ruling" shall have the meaning specified in Section 3.9(i).
"Taxes" shall mean any federal, state, local, foreign or provincial
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty imposed by any governmental entity.
"Wang" shall have the meaning specified in the preamble.
"Wang Common Stock" shall mean the Common Stock, par value $0.01 per
share, of Wang.
"Wang Indemnified Persons" shall have the meaning specified in
Section 6.1(a).
"Wang Material Adverse Effect" shall mean a material adverse effect
on (i) the business, assets, liabilities, results of operations or condition
(financial or otherwise) of Wang, taken as a whole, (ii) the ability of Wang to
perform in any material respect its obligations under or with respect to, or to
consummate the transactions contemplated by, this Agreement or (iii) the ability
of Wang to conduct its businesses and to own or lease its properties and assets
in substantially the same manner in which such businesses were previously
conducted and such assets and properties were previously owned or leased.
"Wang Preferred Stock" shall mean the Preferred Stock, par value
$0.01 per share, of Wang.
"Wang Reports" shall have the meaning specified in Section 4.6(a).
"Wang Series A Stock" shall mean the 4 1/2% Series A Cumulative
Convertible Preferred Stock, par value $0.01 per share, of Wang.
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"Wang Series B Stock" shall mean the 6 1/2% Series B Cumulative
Convertible Preferred Stock, par value $0.01 per share, of Wang.
"Wang Subsidiaries" shall have the meaning specified in Section
4.3(b).
"WARN Act" shall have the meaning specified in Section 3.17(c).
ARTICLE II
Purchases and Sales; Closing
----------------------------
Section 2.1 PURCHASES AND SALES. On the basis of the
representations, warranties, covenants and agreements and subject to the
satisfaction or waiver of the terms and conditions set forth herein, each Seller
shall sell to Wang at the Closing, and Wang shall purchase from each Seller at
the Closing, the number and type of Company Shares set forth under the heading
"Company Shares" opposite such Seller's name on Exhibit A hereto for the
consideration set forth under the heading "Consideration" opposite such Seller's
name on Exhibit A hereto.
Section 2.2 TIME AND PLACE OF CLOSING. (a) The closing of the
purchases and sales contemplated by Section 2.1 (the "Closing") shall take place
on August 30, 1996 at 10:00 A.M., local time; PROVIDED, HOWEVER, that if all of
the conditions set forth in Article VII shall not have been satisfied or waived
on or prior to such date, then the Closing shall take place on such later date
as may be agreed upon by the parties hereto, which shall in no event be later
than the fifth business day following satisfaction or waiver of such conditions
(the "Closing Date").
(b) The Closing shall take place at the offices of Skadden,
Arps, Slate, Meagher & Flom, One Beacon Street, Boston, Massachusetts or at such
other place as the parties may agree upon in writing.
Section 2.3 CLOSING DELIVERIES. (a) At the Closing, (i) each Seller
shall deliver to Wang certificates representing the number and type of Company
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Shares set forth under the heading "Company Shares" opposite such Seller's name
on Exhibit A hereto, accompanied by stock powers duly endorsed in blank or duly
executed instruments of transfer, and (ii) Wang shall (x) subject to Bajaj's
right of request provided for in Section 2.3(b) and to Section 5.10(a), deliver
to each Seller an amount in cash equal to the amount set forth under the
heading "Cash Consideration" opposite such Seller's name on Exhibit A hereto by
wire transfer of immediately available funds to an account designated by such
Seller, which account shall be designated by such Seller in writing at least
two business days prior to the Closing Date, and (y) deliver to each Seller a
Non-Negotiable Subordinated Promissory Note, substantially in the form of
Exhibit B hereto (individually, a "Note" and collectively, the "Notes"), in a
principal amount equal to the amount set forth under the heading "Principal
Amount of Note" opposite such Seller's name on Exhibit A hereto.
(b) Bajaj may request, by notice to Wang not later than 20
business days prior to the Closing Date, that, at the Closing and in lieu of
delivering up to $30,000,000 of the amount in cash otherwise contemplated to be
delivered to her pursuant to Section 2.3(a)(ii)(x), Wang deliver to her one or
more non-negotiable (except as provided below) subordinated promissory notes
each of which will: (i) have a floating rate of interest equal to Wang's rate of
return on its cash, adjusted to reflect all costs of carry of such
non-negotiable subordinated promissory notes (including, without limitation, the
costs of the irrevocable standby letter of credit referred to below and any
adverse earnings or cash flow effect of such non-negotiable subordinated
promissory notes) such that such non-negotiable promissory notes are
financially (including, without limitation, from an earnings and cash flow point
of view) neutral to Wang; (ii) have a maturity date of January 2, 1998; (iii) be
secured by an irrevocable standby letter of credit; (iv) be pledgeable to a
commercial bank; and (v) have such other terms and conditions substantially
similar to the Notes as Bajaj and Wang shall mutually agree. If Bajaj so
requests, Wang shall, provided that Bajaj and her representatives cooperate
fully, use its commercially reasonable best efforts to accommodate Bajaj's
request, including with respect to
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minimizing the costs of carry of such non-negotiable subordinated promissory
notes.
ARTICLE III
Representations and Warranties of the Sellers
---------------------------------------------
Bajaj and the Bajaj Trust hereby represent and warrant, jointly and
severally, to Wang with respect to Sections 3.1(a), 3.2(a) and 3.5(b), each
Goldman/Omega Stockholder hereby represents and warrants, individually and not
jointly, to Wang with respect to Sections 3.1(b), 3.2(b) and 3.5(c), and each of
the Sellers hereby represents and warrants, severally and not jointly, to Wang
with respect to Sections 3.1(c), 3.3, 3.4, 3.5(a) and 3.6 through 3.26 as
follows:
Section 3.1 AUTHORITY; ORGANIZATION; VALID AND BINDING. (a) Bajaj
has full power and authority and is legally competent to execute and deliver,
and has duly and validly executed, this Agreement. The Bajaj Trust is a valid
trust created under the laws of the State of Maryland and Bajaj and Ken Bajaj,
as trustees of the Bajaj Trust, have full power and authority under the Bajaj
Trust to execute and deliver this Agreement. This Agreement constitutes a valid
and legally binding obligation of each of Bajaj and the Bajaj Trust enforceable
in accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally and,
as to enforceability, general equitable principles. Bajaj, the Bajaj Trust and
the Company have consulted with and been advised and represented by Goldman
Sachs and Co. as their financial advisor and Fried, Frank, Harris, Shriver &
Jacobson, Tucker, Flyer & Lewis, Jenner & Block and, as to the Company, the
General Counsel of the Company as their legal advisors in connection with the
transactions contemplated by this Agreement and each of Bajaj and the Bajaj
Trust believes the advice Bajaj, the Bajaj Trust and the Company have received
is sound based upon due inquiry.
(b) Such Goldman/Omega Stockholder is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Such Goldman/Omega Stockholder has full partnership power and
authority to own property and to carry on its
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business as it is now being conducted and to execute and deliver this Agreement.
Such Goldman/Omega Stockholder is duly authorized to execute and deliver, to
perform its obligations under and to consummate the transactions contemplated by
this Agreement and has duly and validly executed and delivered this Agreement.
This Agreement is a valid and legally binding agreement of such Goldman/Omega
Stockholder, enforceable against such Goldman/Omega Stockholder in accordance
with its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally and, as to
enforceability, general equitable principles.
(c) The transactions contemplated by this Agreement have been
unanimously approved by the Company's Board of Directors, and such approval
constitutes advance approval within the meaning of Section 3(a)(3)(ii) of any
Severance Protection Agreement listed on Schedule 3.1(c).
Section 3.2 TITLE TO SHARES. (a) Each of Bajaj and the Bajaj Trust
has, and upon consummation of the transactions contemplated by this Agreement,
Wang will acquire, good, valid and marketable title to the number and type of
Company Shares set forth under the heading "Company Shares" opposite their
respective names on Exhibit A hereto, free and clear of all Liens.
(b) Each Goldman/Omega Stockholder has, and upon consummation
of the transactions contemplated by this Agreement, Wang will acquire, good,
valid and marketable title to the number and type of Company Shares set forth
under the heading "Company Shares" opposite such Goldman/Omega Stockholder's
name on Exhibit A hereto, free and clear of all Liens.
Section 3.3 ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland and has the corporate power to own its properties and
to carry on its businesses as they are now being conducted. The Company is duly
qualified as a foreign corporation to do business and is in good standing in
those jurisdictions specified in Schedule 3.3, which are the only jurisdictions
in which the failure so to qualify would have a Company Material Adverse Effect.
The Company has furnished to Wang true
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and correct copies of the Charter and the Bylaws, each as in effect on the date
of this Agreement.
Section 3.4 CAPITALIZATION; SUBSIDIARIES. (a) As of the date of
this Agreement, the authorized capital stock of the Company consists of, and as
of the Closing Date the authorized capital stock of the Company will consist of,
(i) 2,250,000 shares of Company Preferred Stock, of which 1,000,000, 1,000,000
and 250,000 are designated as Company Series A Stock, Company Series B Stock,
and Company Series C Stock, respectively, and (ii) 15,000,000 shares of Company
Common Stock (including Company Class E Stock), of which 500,000 are designated
Common Class E Stock. As of the date of this Agreement, (i) 303,273, 243,000 and
172,850 shares of Company Series A Stock, Company Series B Stock and Company
Series C Stock were issued and outstanding, respectively, and no shares of
Company Preferred Stock were held in the treasury of the Company, (ii) 4,795,910
shares of Company Common Stock were issued and outstanding, and no shares of
Company Common Stock were held in the treasury of the Company and (iii) no
shares of Company Class E Stock were issued and outstanding or held in the
treasury of the Company. All of the issued and outstanding shares of Company
Series A Stock, Company Series B Stock, Company Series C Stock and Company
Common Stock are duly authorized, validly issued, fully paid and nonassessable
and, except as set forth on Schedule 3.4(a), free of preemptive rights. All the
outstanding shares of capital stock of each of the Company Subsidiaries have
been duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of each of the
Company Subsidiaries are owned by the Company either directly or through
wholly-owned Company Subsidiaries (except for directors' qualifying shares or as
set forth in Schedule 3.4(a)).
(b) Except as set forth in Schedule 3.4(b), there are not as
of the date hereof and will not be at any time through the Closing, any
outstanding subscriptions, options, warrants, calls, rights, agreements,
commitments, understandings or arrangements relating to the issuance, sale,
delivery, transfer or redemption of any capital stock of the Company or any of
the Company Subsidiaries (including any rights of conversion or exchange under
any outstanding securities or other instruments).
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(c) Except as set forth in Schedule 3.4(c), other than this
Agreement, the Securityholders' Agreement, the 1996 Registration Rights
Agreement, the 1994 Purchase Agreement and the 1996 Purchase Agreement, there
are no agreements, arrangements or understandings of the Company or any Seller
or, to the knowledge of the Sellers and the Company, of Ken Bajaj or any officer
or director of the Company relating to or otherwise affecting the shares of
capital stock of the Company or the holders of such shares in their capacity as
such or providing for registration or similar rights with respect to securities
of the Company.
(d) Except as set forth in Schedule 3.4(d), there are no
subsidiaries of the Company. Each of the subsidiaries of the Company listed on
Schedule 3.4(d) (the "Company Subsidiaries") is a corporation duly organized and
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to own its properties and to carry on
its businesses as they are now being conducted. Each of the Company Subsidiaries
is duly qualified as a foreign corporation to do business and is in good
standing in those jurisdictions specified in Schedule 3.4(d), which are the only
jurisdictions in which the failure so to qualify would have a Company Material
Adverse Effect.
Section 3.5 CONFLICTING AGREEMENTS AND CHARTER PROVISIONS. (a)
Except as set forth in Schedule 3.5(a) (and assuming the Consents set forth on
Schedule 3.15(b) have been duly made, given or obtained), none of (i) the
execution and delivery of this Agreement by the Sellers (or any of them), (ii)
the fulfillment of or compliance with the terms and provisions of this Agreement
by the Sellers (or any of them) or (iii) the consummation of any of the
transactions contemplated by this Agreement by the Sellers (or any of them),
will conflict with or result in a breach of the terms, conditions or provisions
of, or give rise to a right of termination under, or constitute a default under,
or result in the loss of any right or benefit under or result in any violation
of (in each case with or without the giving of notice or the passage of time or
both), the Charter or Bylaws or any mortgage, Contract, License, order,
arbitration award, judgment, decree, statute, law, rule or regulation to which
the Company is a party or it or any of its property is subject, except for such
conflicts, breaches, rights of
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<PAGE> 20
termination, defaults, losses or rights or benefits, or violations which,
individually or in the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement
by Bajaj and the Bajaj Trust will not violate, in the case of the Bajaj Trust,
the trust agreement establishing the Bajaj Trust, and in either case, any
material mortgage, Contract, order, arbitration award, judgment, decree,
statute, law, rule or regulation to which Bajaj or the Bajaj Trust is a party or
she or it or any of her or its property is subject, except where such violation
would not have a material adverse effect on the ability of Bajaj or the Bajaj
Trust to perform in any material respect her or its obligations under or with
respect to, or to consummate the transactions contemplated by, this Agreement.
(c) The execution, delivery and performance of this Agreement
by such Goldman/Omega Stockholder will not violate any provision of its
Certificate of Limited Partnership or Agreement of Limited Partnership or any
mortgage, Contract, order, arbitration award, judgment, decree, statute, law,
rule or regulation to which it is a party or it or any of its property is
subject, except where such violation would not have a material adverse effect on
the ability of such Goldman/Omega Stockholder to perform in any material respect
its obligations under or with respect to, or to consummate the transactions
contemplated by, this Agreement.
Section 3.6 FINANCIAL STATEMENTS; BOOKS AND RECORDS; INVENTORIES;
ACCOUNTS RECEIVABLE. (a) The Company has previously delivered to Wang true and
complete copies of (i) its audited consolidated balance sheets as of December
31, 1993, 1994 and 1995 and the related consolidated statements of operations,
stockholders' equity and cash flows and notes to consolidated financial
statements for each of the years then ended, along with the report of the
Company's independent auditors, KPMG Peat Marwick LLP, on such statements for
each of those years and (ii) its unaudited consolidated balance sheets as of
March 31, 1996 and the related consolidated statements of operations,
stockholders' equity and cash flows of the period then
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ended. (Such balance sheet as of December 31, 1995, the "Company Balance
Sheet").
(b) Except as set forth in Schedule 3.6(b), the financial
statements identified in Section 3.6(a) (the "Financial Statements") present
fairly the financial position, results of operations, stockholders' equity and
cash flows of the Company as of their respective dates or for the periods ended
on such dates, as applicable, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not and are not expected to be material in amount, and have been
prepared in accordance with GAAP.
(c) The books and records of the Company have, in all material
respects, been maintained in a manner adequate to permit the preparation of
Financial Statements in accordance with GAAP. The minute books and other similar
records of the Company as made available to Wang prior to the execution of this
Agreement contain a true and complete record, in all material respects, of all
action taken at all meetings and by all written consents in lieu of meetings of
the stockholders, the board of directors and committees of the board of
directors of the Company. The stock transfer ledgers and other similar records
of the Company as made available to Wang prior to the execution of this
Agreement accurately reflect all record transfers prior to the execution of this
Agreement in the capital stock of the Company.
(d) The inventories reflected on the Company Balance Sheet and
all such inventory acquired since December 31, 1995 are (i) in the case of
finished goods and products, of a quality and quantity saleable in the ordinary
course of business and, in the case of all other inventory, of a quality and
quantity usable in the ordinary course of business, (ii) fit and sufficient for
the purposes for which they were procured or manufactured, (iii) valued at the
lower of cost or market not in excess of the valuations of inventories computed
in accordance with GAAP and (iv) taking into account any customary amounts of
obsolete inventory consistent with past practice, expected to be sold in the
ordinary course of business at the amounts reflected on the Company Balance
Sheet (or in the case of inventory acquired since December 31, 1995 at the
amounts reflected on the
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Company's books and records). Except as disclosed in the notes to the Financial
Statements, all items included in the inventory of the Company are the property
of the Company, free and clear of any Liens (other than Liens arising by
operation of law), have not been pledged as collateral, are not held by the
Company on consignment from others and conform in all material respects to all
standards applicable to such inventory or its use or sale imposed by any
governmental authority.
(e) The receivables (whether billed or unbilled) of the
Company reflected on the Company Balance Sheet and all receivables (whether
billed or unbilled) arising or recorded by the Company on its books and records
subsequent to December 31, 1995, (i) arose from bona fide transactions in the
ordinary course of business and are payable on ordinary trade terms, (ii) are
not subject to valid set-offs or counterclaims, (iii) do not represent
obligations for goods sold on consignment, on approval or on a sale-or-return
basis and are not subject to any other repurchase or return arrangement and (iv)
are not the subject of any lawsuit, action or proceeding brought by or on behalf
of the Company or the obligor thereunder. The unbilled receivables of the
Company reflected on the Company Balance Sheet and all unbilled receivables
recorded by the Company on its books and records subsequent to December 31, 1995
attributable to revenues on fixed price Contracts recognized on the percentage
of completion method reflect the Company's good faith determination, as of the
time such revenue was recognized, of the total estimated costs of the Company's
performance of each such Contract, and the Company's good faith determination,
as of the date hereof and as of the Closing Date, of the total estimated costs
of the Company's performance of each such Contract is unchanged from the
estimate made at the time such revenue was recognized. Except as set forth in
Schedule 3.6(e), the receivables (whether billed or unbilled) of the Company
reflected on the Company Balance Sheet and all receivables (whether billed or
unbilled) recorded by the Company on its books and records subsequent to
December 31, 1995 are collectible in the ordinary course of business (not
exceeding 180 days from the date of billing), net of reserves, in the case of
receivables reflected on the Company Balance Sheet, reflected in the Company
Balance Sheet or, in the case of receivables recorded subsequent to December 31,
1995 by the Company
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on its books and records, established in the ordinary course of business
consistent with the reserve policies applied to the Company Balance Sheet.
Section 3.7 CHANGES SINCE DECEMBER 31, 1995. Except as set forth in
Schedule 3.7, since December 31, 1995, there has not been:
(a) any change, event or, occurrence (or, to the knowledge of
the Sellers and the Company, any threat thereof) which, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a
Company Material Adverse Effect, excluding any changes, events or effects
resulting from changes in economic, regulatory or political conditions or
changes in conditions generally applicable to the industry in which the Company
is involved;
(b) any material decrease in the total assets or any material
decrease in net worth of the Company from the amounts reflected on the Company
Balance Sheet, other than decreases resulting from depreciation in accordance
with accounting practices in effect as of the date of the Company Balance Sheet;
(c) any material change in the nature of the Company's
business, pricing, financial reporting or credit practice or policy, methods of
accounting or accounting practice (including methods of tax accounting), or
manner of conducting business;
(d) any damage, destruction or other casualty loss (whether
or not covered by insurance) in an amount in excess of $100,000;
(e) any change in the terms of employment with any officer or
other employee of the Company with an annual base salary of $100,000 or more, or
any bonus paid or any increase in the rate of compensation or in the benefits
payable or to become payable to any officer or other employee of the Company
over the levels in effect at December 31, 1995, other than normal bonuses and
merit increases paid or made in accordance with past practices and other changes
made in the ordinary course of business, or any adoption, entering into or
becoming bound by any Plan, employment-related contract or collective bargaining
agreement, or amendment,
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modification or termination (partial or complete) of any Plan,
employment-related contract or collective bargaining agreement, except to the
extent required by applicable law;
(f) any acquisition or disposition by the Company of, or
incurrence of any Lien (other than Liens which arise by operation of law) on,
any asset or group of assets, other than in the ordinary course of business,
which had a fair market value or net book value at the time of its acquisition
or disposition of $500,000 or more;
(g) any direct or indirect redemption, purchase or other
acquisition of any shares of capital stock of the Company or any declaration,
setting aside or payment of any dividend or other distribution on or in respect
of any shares of capital stock of the Company;
(h) (i) any incurrence by the Company of indebtedness (other
than indebtedness to vendors, suppliers and subcontractors incurred in the
ordinary course of business consistent with past practice) in an aggregate
principal amount exceeding $1,000,000 (net of any amounts discharged during such
period), or (ii) any voluntary purchase, cancellation, prepayment or complete or
partial discharge in advance of a scheduled payment date with respect to, or
waiver of any right of the Company under, any indebtedness of or owing to the
Company;
(i) any write-off or write-down of or any determination to
write off or write down any of the assets of the Company (including, without
limitation, receivables, by the establishment of reserves or otherwise) in an
aggregate amount exceeding $100,000;
(j) any amendment, modification, termination (partial or
complete) (other than any termination upon the expiration of the terms thereof
in accordance with the terms thereof) of, or waiver or Consent granted or given
under or with respect to, any Contract which is required (or had it been in
effect on the date hereof would have been required) to be disclosed in Schedule
3.14(a)(x) or (a)(xii) pursuant to Section 3.14(a)(x) or (a)(xii) or any
material License held by the Company, which amendment, modification,
termination,
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waiver or Consent has had or could reasonably be expected to have a material
adverse impact on the Company's rights or obligations under or with respect to
such Contract or License;
(k) capital expenditures or commitments therefor by the
Company in an aggregate amount exceeding $500,000 not contemplated in the 1996
Budget;
(l) any transaction by the Company with Bajaj, any Affiliate
or Associate of Bajaj or any Associate of any such Affiliate (i) outside the
ordinary course of business or (ii) other than on an arm's-length basis;
(m) any entering into by the Company of any operating lease
that involves the payment or potential payment of more than $150,000 annually by
the Company;
(n) any other material transaction entered into by the Company
not disclosed in any other schedule to this Agreement, other than in the
ordinary course consistent with past practice;
(o) except as set forth on Schedule 3.7(o), any action by or
on behalf of the Company's Board of Directors or any Committee thereof or any
event or occurrence which has resulted, or could result, in the acceleration of
the vesting or exercisability of, or the modification of any other term or
condition applicable to, any option to purchase any shares of capital stock of
the Company ("Option") granted under the KESOP or the Stock Incentive Plan; or
(p) any entering into by the Company of a Contract or
commitment to do or engage in any of the foregoing after the date hereof.
Section 3.8 LIABILITIES. (a) Except as disclosed in Schedule
3.8(a), the Company has no obligations or liabilities, whether direct or
indirect, joint or several, absolute or contingent, matured or unmatured, choate
or inchoate, secured or unsecured, other than (i) obligations or liabilities
disclosed or provided for in the Financial Statements; and (ii) obligations or
liabilities incurred in the ordinary
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course of business which, either individually or in the aggregate, have not had
and could not reasonably be expected to have a Company Material Adverse Effect.
(b) Schedule 3.8(b) sets forth the principal outstanding (and
the interest due thereon) under the Amended and Restated Floating Rate
Subordinated Unsecured Note, dated April 15, 1996, made by the Company and
payable to Bajaj and the Amended and Restated Floating Rate Subordinated
Unsecured Note, dated April 15, 1996, made by the Company and payable to Bajaj
(the "Bajaj Notes"), as of the date hereof.
Section 3.9 TAXES. (a) Except as set forth in Schedule 3.9(a), (i)
the Company has filed all Tax Returns (or such Tax Returns have been filed on
behalf of the Company) required to be filed by applicable law as of the date
hereof and the Company will timely file all Tax Returns (or such Tax Returns
will be filed on behalf of the Company) required to be filed by applicable law
as of the Closing Date, (ii) all Tax Returns filed by (or on behalf of) the
Company are (and, as to such Tax Returns for taxable years ending on or before
or including the Closing Date and not filed as of the date hereof, will be)
true, complete and correct in all material respects, and (iii) (x) the Company
has paid all Taxes that are due, or claimed or asserted by any taxing authority
to be due, from the Company for the periods covered by such Tax Returns or (y)
such Taxes are being contested in good faith and in a timely manner and the
Company has duly and fully provided reserves adequate to pay all such Taxes in
accordance with GAAP.
(b) Except as set forth in Schedule 3.9(b), the unpaid Taxes
of the Company (A) did not, as of the date of the Company Balance Sheet, exceed
the reserve for Taxes set forth on the face of the Company Balance Sheet and (B)
will not, as of the Closing Date, exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with GAAP.
(c) Except as set forth in Schedule 3.9(c), the Company has
complied (and until the Closing Date will comply) in all material respects with
all applicable laws, rules, and regulations relating to the payment and
withholding of Taxes (including withholding and reporting requirements under
Sections 1441 through
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1464, 3401 through 3406, 6041 and 6049 of the Code and similar provisions under
any other laws) and has, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper governmental
authorities all amounts required.
(d) Except as set forth in Schedule 3.9(d), the Company has
not requested (and there has not been requested on its behalf) any extension of
time within which to file any Tax Return.
(e) Except as set forth in Schedule 3.9(e), the Company has
not executed any outstanding waivers or comparable consents regarding the
application of the statute of limitations for any Taxes or Tax Returns, nor have
any waivers or consents been executed on its behalf.
(f) There are no material liens for Taxes on the assets of the
Company except for statutory liens for current Taxes not yet due and payable.
(g) Except as set forth in Schedule 3.9(g), (i) the statute of
limitations for the assessment of all Taxes has expired for all income Tax
Returns of the Company or those income Tax Returns have been examined by the
appropriate taxing authorities for all periods through 1995, (ii) no deficiency
for any Taxes has been proposed, asserted or assessed in writing against the
Company that has not been resolved and paid in full, and (iii) no audits or
other administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of the Company.
(h) Except as set forth in Schedule 3.9(h), no power of
attorney currently in force has been granted by the Company concerning any Tax
matter.
(i) Except as set forth in Schedule 3.9(i), the Company has
not received a Tax Ruling (as defined below) or entered into a Closing Agreement
(as defined below) with any taxing authority. For purposes hereof, "Tax Ruling"
shall mean a written ruling of a taxing authority relating to Taxes and "Closing
Agreement" shall mean a written and legally binding agreement with a taxing
authority relating to Taxes.
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(j) No property of the Company is property that the Company is
or will be required to treat as being owned by another person pursuant to the
provisions of Section 168(f)(8) of the Code (as in effect prior to its amendment
by the Tax Reform Act of 1986) or is "tax-exempt use property" within the
meaning of Section 168 of the Code.
(k) The Company is not required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by the Company and the IRS has not
proposed an adjustment or change in accounting method.
(l) Except as provided in Schedule 3.9(l), the Company is not
a party to any agreement, contract, or arrangement that could result, separately
or in the aggregate, in the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code.
Section 3.10 LITIGATION; ORDERS. Except as set forth in Schedule
3.10, there are no lawsuits, actions, administrative or arbitration or other
proceedings or governmental investigations pending or, to the knowledge of the
Sellers and the Company, threatened against any Seller or the Company or
otherwise involving any Seller or the Company which (a) could reasonably be
expected to result in the issuance of an order, judgment, injunction or decree
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or (b) if
adversely determined, could reasonably be expected to have a Company Material
Adverse Effect. Except as set forth in Schedule 3.10, there are no judgments or
outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency, or by arbitration) against any
Seller or the Company or against or effecting any of the Company's properties or
businesses which has had or could reasonably be expected to have a Company
Material Adverse Effect.
Section 3.11 EMPLOYEE BENEFIT PLANS. (a) Schedule 3.11(a) contains
a true and complete list of all plans, programs, agreements or arrangements
relating to
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deferred compensation, pension, profit sharing, money purchase or other
retirement benefits, stock purchase, stock grant, stock option, stock
appreciation rights, and other equity-based compensation or benefits, salary,
bonus, commission, incentive, severance, parachute or change in control payments
or benefits, health and welfare benefits, life, disability or other insurance
benefits, layoff or unemployment benefits, or any other employee benefits or
fringe benefits maintained or contributed to by the Company, or under which the
Company has any liabilities or obligations including, but not limited, to any
employee benefit plan within the meaning of Section 3(3) of ERISA (collectively
referred to as the "Plans"). For purposes of this Section 3.11, references to
the Company include any entity affiliated with the Company under Sections
414(b), (c) or (m) of the Code or Section 4001(b) of ERISA (excluding any
foreign affiliate of the Company). The Company is not required to contribute to,
and has no material liability under or with respect to, any multiemployer plan
within the meaning of Section 4001(a)(3) of ERISA.
(b) Except as set forth in Schedule 3.11(b), all material
obligations of the Company existing on or prior to the date hereof, whether
arising by operation of law, by contract or by past custom, for payments to
trusts or other funds or to any governmental agency or to or in respect of any
Plan have been paid, or adequate accruals for such payments have been made by
the Company on its books of account.
(c) Except as set forth in Schedule 3.11(c), each Plan has
been administered and operated in all material respects in accordance with its
terms and applicable law. Each Plan intended to be "qualified" within the
meaning of Section 401(a) of the Code is so qualified and each related trust is
exempt from tax under Section 501(a) of the Code. Except for required
contributions, benefit accruals, and administrative expenses, or as set forth in
Schedule 3.11(c), no material liability under ERISA or the Code or the terms of
a Plan has been incurred or, based upon existing facts, may reasonably be
expected to be incurred by the Company with respect to any Plan except for any
such liabilities that have been fully settled and discharged. None of the Plans,
nor any trust created thereunder, has engaged in any non-exempt material
"prohibited
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transaction" as such term is defined in Section 4975 of the Code and Section 406
of ERISA, which involves the Company.
(d) Each of the Plans is, and in administering each of the
Plans, the Company is, in material compliance with all applicable laws
including, without limitation, ERISA and the Code. The Company has not incurred
any material liability under Title IV of ERISA, Section 412 of the Code or
Section 302 of ERISA, and, to the knowledge of the Sellers and the Company,
there exist no facts, conditions or circumstances which would make it reasonable
to anticipate that the Company will incur any such liability.
(e) The projected benefit obligation, within the meaning of
Statement of Financial Accounting Standards No. 87 of the Financial Accounting
Standards Board, under each Plan which is subject to Title IV of ERISA,
determined as of each such Plan's latest valuation date on the basis of
actuarial assumptions used under each such Plan as of the most recent actuarial
valuation date for such Plan does not exceed the then current value of all of
the assets of such Plan.
(f) Except as set forth in Schedule 3.11(f), all reports
relating to the Plans required to be filed with or furnished to any governmental
body, agency or court, Plan participants or beneficiaries prior to the date
hereof have been timely filed or furnished in accordance with applicable law.
(g) There are no actions, suits or claims pending (other than
routine claims for benefits), or, to the knowledge of the Sellers and the
Company, threatened against any of the Plans or against the assets of any of
such Plans or otherwise involving any Plan.
(h) The Company (i) has not experienced any reportable event
within the meaning of ERISA or other event or condition which presents a
material risk of the termination of any pension Plan by the Pension Benefit
Guaranty Corporation ("PBGC"), (ii) has not had any Tax imposed on it by the IRS
for any violation under Section 4975 of the Code and (iii) has not engaged in
any transaction which could reasonably be expected to subject
26
<PAGE> 31
the Company or any Plan to any liability for any Tax under Section 4975 of the
Code.
(i) To the knowledge of the Sellers and the Company, there is
no matter involving any Plan maintained or established for employees of the
Company which is pending before the IRS, the Department of Labor or any other
governmental agency or court.
(j) As to any Plan subject to Title IV of ERISA, (i) there has
been no reportable event within the meaning of Section 4043 of ERISA, (ii) no
notice of intent to terminate the Plan has been given under Section 4041 of
ERISA, (iii) no proceeding has been instituted under Section 4042 of ERISA to
terminate any Plan and (iv) no liability to the PBGC has been incurred (other
than PBGC insurance premiums). As to any Plan intended to be qualified under
Section 401 of the Code, to the knowledge of the Sellers and the Company, there
has been no termination or partial termination of any such Plan within the
meaning of Section 411(d)(3) of the Code.
(k) To the knowledge of the Sellers and the Company, no act,
omission or transaction has occurred which could reasonably be expected to
result in imposition on the Company of (i) a breach of fiduciary duty liability
under Section 409 of ERISA or (ii) a civil penalty assessed pursuant to
subsections (c), (i) or (l) of Section 502 of ERISA.
(l) Each Plan which is a "welfare plan" (as defined in Section
(3)(1) of ERISA) is either (i) unfunded or (ii) funded through insurance
contracts.
(m) Except as set forth in Schedule 3.11(m), the Company does
not provide medical or life insurance benefits to or in respect of employees
beyond the date of retirement or other termination of employment, other than as
required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or other applicable law, nor does it have any current or projected
liability for any unfunded post-retirement medical or life insurance benefits in
respect of any employee or former employee.
(n) Except as set forth in Schedule 3.11(n), no Plan
(including any agreement with any
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employee or former employee) provides for benefits by reason of severance or
change in control. Except as and to the extent set forth on Schedule 3.11(n),
the consummation of the transactions contemplated under this Agreement will not
cause the payment, acceleration, vesting, funding or increase in the amount of
any compensation, benefit or other entitlement with respect to any employee of
the Company under any Plan.
(o) No employer securities or other employer property is
included in the assets of any Plan.
(p) Except as set forth in Schedule 3.11(p), the Company is
not a party to any written or oral deferred or incentive compensation,
employment, severance, consulting or other similar contract, arrangement or
policy or labor contracts or collective bargaining agreements relating to its
employees that would result in any Company Material Adverse Effect or a material
adverse effect on the business, assets, liabilities, results of operations or
condition (financial or otherwise) of the Company's outsourcing business, taken
separately.
(q) No awards other than Options have been granted under the
KESOP or the Stock Incentive Plan. Except as set forth on Schedule 3.11(q), all
Options granted under the KESOP or the Stock Incentive Plan have been granted
pursuant to agreements substantially in the form of the stock option agreements
for the KESOP and the Stock Incentive Plan, respectively, set forth on Schedule
3.11(q).
Section 3.12 PROPERTIES. (a) Except as set forth in Schedule
3.12(a), the Company has good, valid and marketable title to the assets
reflected in the Company Balance Sheet, free and clear of any Liens except (i)
Liens for Taxes not yet due or being contested in good faith, for which
appropriate and adequate reserves have been provided, (ii) minor imperfections
of title or encumbrances, if any, which do not materially detract from the value
or interfere with the use of such assets for the purposes for which they are
presently used or (iii) Liens constituting purchase money security interests in
personal property.
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(b) The Company is in possession of and has good title to, or
has valid leasehold interests in or valid rights under contract to use, all
furniture, machinery, equipment, fixtures and other tangible personal property
which are material to the operations of the Company as currently conducted; and
such furniture, machinery, equipment, fixtures and other tangible personal
property are in good condition and repair (excepting ordinary wear and tear) and
are suitable for the uses for which they are intended.
(c) The Company does not own any real property. Schedule
3.12(c) contains a true and correct list of each parcel of real property leased
by the Company and the principal terms of each lease therefor. The Company has a
valid and subsisting leasehold estate in and the right to quiet enjoyment of
each such parcel of real property for the full term of the lease thereof. Each
lease listed in Schedule 3.12(c) is a legal, valid and binding agreement,
enforceable in accordance with its terms, of the Company and, to the knowledge
of the Sellers and the Company, of each other Person that is a party thereto,
and there is no, and the Company has not received notice of any, default (or any
condition or event which, after notice or lapse of time or both, would
constitute a default) thereunder. The improvements on the real property
identified in Schedule 3.12(c) are in all material respects in good operating
condition and in a state of good maintenance and repair, ordinary wear and tear
excepted, are adequate and suitable for the purposes for which they are
presently being used and, to the knowledge of the Sellers and the Company, there
are no condemnation or appropriation proceedings pending or threatened against
any of such real property or the improvements thereon.
Section 3.13 INTELLECTUAL PROPERTY RIGHTS. Schedule 3.13 contains
a true and complete list of all (i) copyright registrations and applications,
and material unregistered copyrights; (ii) trademark registrations and
applications, and material unregistered trademarks, service marks and trade
names, (iii) patents and patent applications; and (iv) all material licenses and
agreements relating to the foregoing to which the Company is a party, including
but not limited to computer software licenses other than for off-the-shelf
applications. Except as disclosed in Schedule 3.13, the
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Company either has all right, title and interest in and to, free and clear of
any Liens or a valid and binding right under written licenses or other documents
to use, all Intellectual Property (i) used in or necessary for the conduct of
the Company's business as currently conducted or as currently contemplated to be
conducted, (ii) used in or necessary to operate the Company's enterprise service
centers as currently operated or as currently contemplated to be operated or
(iii) material to the Company's ability to perform through completion of any
material Contract. Except as disclosed in Schedule 3.13, (i) all registrations
with and applications to governmental or regulatory authorities in respect of
Intellectual Property owned by the Company are held in the name of the Company
and are valid and in full force and effect and to the best knowledge of the
Sellers and the Company, all other Intellectual Property owned by or used by the
Company is valid and enforceable, (ii) the Company is not, nor has it received
any notice that it is, in default (or with the giving of notice or the passage
of time or both, would be in default) under any Contract to use such
Intellectual Property, (iii) the Company is using all Intellectual Property
owned by a third party in accordance in all material respects with the terms and
conditions under any Contract to use such Intellectual Property or other
arrangement with such third parties, (iv) to the knowledge of the Sellers and
the Company, such Intellectual Property is not being infringed by any other
Person and (v) the conduct of the business of the Company does not infringe upon
the proprietary rights of any other Person. Neither the Company nor any Seller
has received written notice that (i) the Company has infringed or is infringing
any Intellectual Property of any other Person in connection with the conduct of
the business of the Company, or (ii) any of the Intellectual Property is invalid
or unenforceable, and no claim is pending, threatened or has been made to such
effect that has not been resolved. The consummation of the transactions
contemplated herein will not result in the loss or impairment of the Company's
rights to own or use any material Intellectual Property.
Section 3.14 CONTRACTS. (a) Schedule 3.14(a) (with paragraph
references corresponding to those set forth below) contains a true and complete
list of each of the following Contracts to which the Company is a party or by
which any of its assets and properties is bound:
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(i) (A) all Contracts (excluding Plans) providing for a
commitment of employment or consultation services for a specified or
unspecified term or otherwise relating to employment or the termination of
employment, together with the name, position and rate of compensation of
each Person party to such a contract and the expiration date of each such
contract and (B) any written or unwritten representations, commitments,
promises, communications or courses of conduct (excluding Plans and any
such Contracts referred to in clause (A)), involving in the case of either
clause (A) or clause (B) an obligation of the Company to make payments in
any year to any Person exceeding $100,000 or any group of Persons
exceeding $250,000 in the aggregate;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company to engage in
any business activity or compete with any Person or prohibiting or
limiting the ability of any Person to compete with the Company (except for
any teaming agreement or proposal entered into or made in the ordinary
course of business);
(iii) all partnership, joint venture (except for any teaming
agreement or proposal entered into or made in the ordinary course of
business), stockholders' or other similar Contracts with any Person;
(iv) all Contracts relating to or evidencing indebtedness of
the Company in excess of $500,000 (other than indebtedness to vendors,
suppliers or subcontractors incurred in the ordinary course of business
consistent with past practice);
(v) all material Contracts with distributors, dealers,
manufacturer's representatives, sales agencies or franchisees for or of
the Company;
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(vi) all Contracts relating to (A) any past or future
disposition or acquisition of any assets and properties by or to the
Company for consideration (including the assumption of liabilities) in
excess of $500,000, other than dispositions or acquisitions in the
ordinary course of business consistent with past practice or (B) merger
consolidation or combination involving the Company or to which the Company
is a party;
(vii) all Contracts (excluding Plans and Contracts described
under Section 3.14(a)(i)) between or among the Company, on the one hand,
and Bajaj, any officer, director, Affiliate or Associate of the Company or
any Affiliate or Associate of Bajaj or such officer or director, on the
other hand;
(viii) all collective bargaining or similar labor Contracts;
(ix) all Contracts that (A) limit or contain restrictions on
the ability of the Company to declare or pay dividends on, to make any
other distribution in respect of or to sell or otherwise issue or
purchase, redeem or otherwise acquire its capital stock, to incur
indebtedness, to incur or suffer to exist any Lien, to purchase or sell or
otherwise dispose of any assets and properties or to change the lines of
business in which it participates or engages or to engage in any merger
consolidation or combination or (B) require the Company to maintain
specified financial ratios or levels of net worth or other quantitative
indicia of financial condition;
(x) all non-United States Government customer Contracts that
can reasonably be expected to generate revenues for the Company in excess
of $10,000,000 over the term of such Contract (assuming the exercise of
all unexercised options to extend the term of such Contract), provided
that this Section 3.14(x) does not constitute a representation as
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to the amount of revenues that such Contract will generate for the
Company;
(xi) all Contracts with (A) the United States Government
awarded to the Company (x) under or in connection with a total or partial
"set aside" for small businesses as described in Subpart 19.5 of the
Federal Acquisition Regulation; (y) under or in connection with the
program for disadvantaged small business concerns established pursuant to
Section 8(a) of the Small Business Act, 15 U.S.C. 637(a); or (z) under or
in connection with any other statute, regulation, rule, or policy which
limited or restricted the contract award to a small business,
disadvantaged small business or a minority-owned small business or (B) any
government of any of the states constituting the United States of America
under or in connection with any statute, regulation, rule, or policy which
limited or restricted the contract award to a small business,
disadvantaged small business or a minority-owned small business; and
(xii) all other Contracts (other than Plans, insurance
policies listed in Schedule 3.16, customer Contracts not required to be
disclosed pursuant to Section 3.14(a)(x) and Contracts with vendors,
suppliers or subcontractors entered into in the ordinary course of
business consistent with past practice) that (A) involve the payment or
potential payment, pursuant to the terms of any such Contract, by the
Company of more than $100,000 annually or to the Company of more than
$1,000,000 annually or (B) cannot be terminated by the Company within
sixty (60) days after giving notice of termination without resulting in
any material cost or penalty to the Company.
(b) Each Contract required to be listed in Schedule 3.14(a) is
in full force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of the Company and, to the knowledge
of the Sellers and the Company, of
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each other party thereto subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally and,
as to enforceability, general equitable principles; and, except as set forth in
Schedule 3.14(b), neither the Company nor any other party to such Contract is,
or has received notice that it is, in violation or breach of or default under
any such Contract (or with the giving of notice or the passage of time or both,
would be in violation or breach of or default under any such Contract) in any
material respect.
(c) Except as set forth in Schedule 3.14(c), the Company is
not a party to or bound by any Contract (other than an Ordinary Course Contract
and whether or not listed or required to be listed on Schedule 3.14(a)) that,
individually or in the aggregate with any other similar or related Contracts,
has had, or could reasonably be expected to have, a Company Material Adverse
Effect.
Section 3.15 LICENSES; CONSENTS; COMPLIANCE WITH LAWS. (a) Schedule
3.15(a) contains a true and complete list of all governmental licenses, permits,
approvals or other authorizations used in and material to the business or
operations of the Company ("Licenses") (and all pending applications for any
such Licenses), setting forth the grantor, the grantee, the function and the
expiration and renewal date of each. The Company owns or validly holds all
Licenses that are material to its business or operations and each License listed
in Schedule 3.15(a) is valid, binding and in full force and effect. No
proceeding is pending or, to the knowledge of the Sellers and the Company,
threatened, seeking the revocation or limitation of any of such Licenses and, to
the knowledge of the Sellers and the Company, there is no basis or ground for
any such revocation or limitation. No such License will cease to remain in full
force and effect in accordance with its terms by reason of the consummation of
any of the transactions contemplated by this Agreement.
(b) Schedule 3.15(b) contains a list of all registrations,
filings, applications, notices, transfers, assignments, consents, approvals,
permits, orders, qualifications, waivers, novations and other actions of any
kind (collectively, "Consents") required
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to be made or given to, or obtained from, any Person by any Seller or the
Company under the Charter or Bylaws or any mortgage, written Contract involving
the payment or potential payment by the Company of more than $500,000 annually
or to the Company of more than $500,000 annually, License, order, arbitration
award, judgment, decree, statute, law, rule or regulation to which any Seller or
the Company is a party or any of their respective property is subject or
otherwise in connection with the execution and delivery of this Agreement by the
Sellers (or any of them), the fulfillment of or compliance with the terms and
provisions of this Agreement by the Sellers (or any of them) or the consummation
of the transactions contemplated by this Agreement by the Sellers (or any of
them).
(c) The businesses of the Company are being and have been
conducted in compliance in all material respects with the Charter and Bylaws,
and with all applicable laws, statutes, ordinances, rules and regulations of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state or political subdivision thereof, or any foreign
jurisdiction, all Licenses and all applicable court decrees, awards, orders,
writs, injunctions, permits and judgments (except for violations, which could
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect or which have been cured).
Section 3.16 INSURANCE. Schedule 3.16 contains a true and complete
list (including the names of the insurers, the names of the Persons to whom such
policies have been issued, the expiration dates thereof, the annual premiums and
payment terms thereof, whether it is a "claims made" or an "occurrence" policy
and a brief description of the interests insured thereby) of all liability,
property, workers' compensation, life, directors' and officers' liability and
other insurance policies currently in effect that insure the Company or its
business, operations, officers, directors or employees, or affect or relate to
the ownership, use or operation of any of the assets and properties of the
Company and that (a) have been issued to the Company or (b) have been issued to
any Person (other than the Company) for the benefit of the Company. The
insurance coverage provided by any of the policies described in
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clause (a) above will not terminate or lapse by reason of the transactions
contemplated by this Agreement. Each policy listed in Schedule 3.16 is valid and
binding and in full force and effect, no premiums due thereunder have not been
paid and neither the Company nor the Person to whom such policy has been issued
has received any notice of cancellation or termination in respect of any such
policy or is in default thereunder. Such insurance policies are placed with
financially sound and reputable insurers and are in amounts and have coverages
that are reasonable and customary for Persons engaged in businesses and
operations comparable to those of the Company and having assets and properties
comparable to those of the Company. Neither the Company nor the Person to whom
such policy has been issued has received notice that any insurer under any
policy referred to in this Section 3.16 is denying liability with respect to a
claim thereunder or defending under a reservation of rights clause.
Section 3.17 EMPLOYEES; LABOR RELATIONS. (a) Schedule 3.17(a)
contains a list of the name of each officer and employee of the Company having
an annual base salary or wages of at least $100,000 at the date hereof, together
with each such person's position or function, annual base salary or wages and
any incentive or bonus arrangement with respect to such person in effect on such
date.
(b) There is not currently pending or, to the knowledge of the
Sellers and the Company, threatened against the Company, nor has there been in
the last two years, any labor strike, work slowdown, work stoppage, lockout or
other concerted action by any of its employees, their representatives or any
labor union. Except as set forth in Schedule 3.17(b), none of the Company's
employees are unionized and, to the knowledge of the Sellers and the Company,
there is currently no effort to unionize the Company's employees. Except as set
forth in Schedule 3.17(b), during the last two years, there have been no pending
or, to the knowledge of the Sellers and the Company, threatened (i) unfair labor
practice charge against the Company before the National Labor Relations Board or
any comparable state, local or foreign agency or (ii) complaints, charges
lawsuits or other proceedings against the Company in any forum by or on behalf
of any present or former employee of the Company, any applicant
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for employment or classes of the foregoing alleging discriminatory, wrongful or
tortious conduct in connection with the employment relationship or the
termination thereof. The Company is in compliance in all material respects with
all applicable labor and employment laws.
(c) Since the enactment of the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN Act"), the Company has not
effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any
site of employment or one or more facilities or operating units within any site
of employment or facility of the Company or (ii) a "mass layoff" (as defined in
the WARN Act) affecting any site of employment or facility of the Company; nor
has the Company been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state or local law. Except as set forth in Schedule 3.17(c), none of the
Company's employees has suffered an "employment loss" (as defined in the WARN
Act) since six (6) months prior to the date of this Agreement.
Section 3.18 ENVIRONMENTAL MATTERS. The Company has obtained all
material environmental, health and safety permits, licenses and other
authorizations required under all Environmental Laws to carry on its business as
now being conducted. Each of such permits, licenses and authorizations is in
full force and effect and the Company is in compliance in all material respects
with the terms and conditions thereof, and is also in compliance in all material
respects with all applicable Environmental Laws and all judgments, injunctions,
notices or demand letters issued, entered, promulgated or approved thereunder.
Except as set forth on Schedule 3.18, no notice, notification, demand, request
for information, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and, to the knowledge of the Sellers
and the Company, no investigation or review is pending or threatened by any
governmental or other entity against the Company, with respect to any alleged
failure by the Company to have any environmental, health or safety permit,
license or other authorization required under any Environmental Law in
connection with the conduct of the business of the Company or with respect to
any generation, treatment, storage,
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recycling, transportation, handling, discharge or disposal, or any Release of
any Hazardous Materials.
Section 3.19 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS. (a)
Schedule 3.19(a) lists (i) the ten (10) largest governmental customers of the
Company with respect to which the Company is the prime contractor, determined on
the basis of revenues for the Company's 1995 fiscal year, (ii) the ten (10)
largest non-governmental customers of the Company (other than non-governmental
outsourcing customers referred to in clause (iii)) with respect to which the
Company is the prime contractor, determined on the basis of revenues for the
Company's 1995 fiscal year, (iii) the ten (10) largest non-governmental
outsourcing customers of the Company with respect to which the Company is the
prime contractor, determined on the basis of revenues for the Company's 1995
fiscal year, (iv) the ten (10) largest prime contractors for which the Company
is serving as subcontractor, determined on the basis of revenues for the
Company's 1995 fiscal year and (v) the ten (10) largest suppliers of the
Company, on the basis of cost of goods or services purchased (or licensed) for
the Company's 1995 fiscal year. Except as disclosed in Schedule 3.19(a) and
except in the ordinary course of business and consistent with the Company's past
experience or pursuant to any termination upon the expiration of the terms of
any Contract with any such customer or supplier in accordance with the terms
thereof, no such customer or supplier has ceased or materially reduced its
purchases from, use of the services of, sales to or provision of services to the
Company since January 1, 1996, or, to the knowledge of the Sellers and the
Company, has threatened to cease or materially reduce such purchases, use, sales
or provision of services after the date hereof. Except as disclosed in Schedule
3.19(a), to the knowledge of the Sellers and the Company, no such customer or
supplier is threatened with bankruptcy or insolvency.
(b) Schedule 3.19(b) lists the largest sources of referral
business, determined on the basis of revenues for the Company's 1995 fiscal
year. Except as disclosed in Schedule 3.19(b), no such source of referral
business has ceased or materially reduced its referral of business to the
Company since January 1, 1996 or, to the knowledge of the Sellers and the
Company, has threatened
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to cease or materially reduce its referral of business to the Company after the
date hereof.
Section 3.20 GOVERNMENTAL CONTRACTS. (a) The Company is not, and,
except as set forth in Schedule 3.20(a), the execution and delivery of this
Agreement by the Sellers (or any of them) and the consummation of the
transactions contemplated by this Agreement by the Sellers (or any of them) will
not result in any material violation, breach or default of any term or provision
of (i) any Contract with the United States Government, (ii) any subcontract
issued at any tier under a prime Contract with the United States Government, or
(iii) any bid, proposal or quotation relating to a Contract with the United
States Government or a subcontract issued under a Contract with the United
States Government. For the purposes of Section 3.14(a)(xi)(A) and this Section
3.20, the term "United States Government" includes all departments and agencies
of any branch of the United States Government, all independent agencies or
instrumentalities and all non-appropriated fund activities within the United
States Government and United States Government corporations. The Company is not,
and, except as set forth in Schedule 3.20(a), the execution and delivery of this
Agreement by the Sellers (or any of them) and the consummation of the
transactions contemplated by this Agreement by the Sellers (or any of them) will
not result in any material violation, breach or default of any provision of any
federal order, statute, rule or regulation governing any Contract, subcontract,
bid, proposal, quote, arrangement or transaction of any kind with the United
States Government.
(b) Schedule 3.20(b) sets forth descriptions of all material
audit reports, final decisions, claims, consent orders in effect, outstanding
Forms 1, ongoing Government investigations, prosecutions, civil or
administrative proceedings or settlement negotiations or internal investigations
conducted by or initiated by the Company, with respect to Contracts with the
United States Government or subcontracts under Contracts with the United States
Government and identifies any corrective action, restitution or disciplinary
action initiated or taken by the Company relating in any sense to the subjects
listed below in this Section 3.20(b). Except as set forth in Schedule
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3.20(b), with respect to, or relating in any way to, Contracts with the United
States Government or subcontracts under Contracts with the United States
Government, the Company has not engaged in and has not been charged with,
received or been advised, in writing, of a claim or allegation related to,
conducted or initiated any internal investigation, or made a voluntary
disclosure or, to the knowledge of the Sellers and the Company, been under
investigation, with regard to any of the following, within the past five (5)
years: (i) defective pricing within the meaning of the Truth in Negotiations
Act, as amended; (ii) failure to correct accounting, estimating, inventory,
material requirements planning, material management and accounting systems,
government property records, or purchasing system deficiencies; (iii)
mischarging of direct and/or indirect costs in connection with Contracts with
the United States Government or subcontracts under Contracts with the United
States Government; (iv) delivery to the United States Government or to a United
States Government prime or subcontractor of material, components, items or
services that do not or did not meet specifications or standards therefor, or
delivery to the United States Government or to a United States Government prime
or subcontractor of foreign-made material, components or items where
domestic-made material, components or items were required; (v) improperly
soliciting, obtaining, attempting to solicit or obtain or making or attempting
to make any payment for any non-public proprietary or source selection
information; (vi) unallowable costs, including unallowable direct or indirect
costs; (vii) failure to abide by the terms of Contracts with the United States
Government or subcontracts under Contracts with the United States Government; or
(viii) violations of (A) the False Statements Act (18 U.S.C. 1001), (B) the
False Claims Act (18 U.S.C. 287), (C) the False Claims Act (31 U.S.C. 3729), (D)
the Bribery, Gratuities and Conflicts of Interest Act (18 U.S.C. 201 and 5
U.S.C. 7353), (E) the Anti-Kickback Act (41 U.S.C. 51, 54), (F) the
Anti-Kickback Enforcement Act of 1986 (Pub. L. 99-634), (G) the Arms Export
Control Act (22 U.S.C. 277 et seq), (H) the Foreign Corrupt Practices Act (15
U.S.C. 78 m, 78 dd-1, 78 ff), (I) the Export Administration Act (Pub. L. 99-64),
(J) the War and National Defense Act (18 U.S.C. 793), (K) the Racketeer
Influenced and Corrupt Organizations Act (18 U.S.C. 1961-68) or of any statute
the violation of which would constitute "racketeering
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activity" within the meaning of such act, (L) Conspiracy to Defraud the
Government Act (18 U.S.C. 371), (M) the Program Fraud Civil Remedies Act (Pub.
L. 99-509), (N) the Byrd Amendment, Pub. L. 101-121, [Section] 319, (O)
"revolving door" legislation (37 U.S.C. 801, 41 U.S.C. 423, 18 U.S.C. 207, 18
U.S.C. 208, 18 U.S.C. 218, 18 U.S.C. 281, 10 U.S.C. 2397, 10 U.S.C. 2397a, 10
U.S.C. 2397b, 10 U.S.C. 2397), (P) the Defense Production Act (50 U.S.C. App.
2061), (Q) United States antiboycott laws (the Ribicoff Amendment to the 1976
Tax Reform Act, and the 1979 Export Administration Act), (R) the Defense
Industrial Regulation (DoD 5220.22-R) or National Industrial Security Program
Operating Manual (DoD 5220.22-M), or any agreement with the Defense
Investigative Service, (S) Federal Acquisition Regulations, any applicable
supplements thereto, alternative regulations applicable in lieu thereof, or
applicable predecessor regulations, (T) Service Contract Act of 1965, as
amended, (U) Cost Accounting Standards, (V) Treasury Department embargo and
sanctions regulations, 31 C.F.R. Part 500 ET. SEQ., (W) Small Business Act, as
amended, (X) Executive Order 11246, as amended, and corresponding Department of
Labor regulations, (Y) Anti-Assignment Act, 41 U.S.C. [Section] 15, (Z)
Davis-Bacon Act, as amended, (AA) Fair Labor Standards Act, as amended, (BB)
Walsh-Healey Act, as amended, or (CC) Drug-Free Workplace Act, as amended.
(c) The Company has not been suspended or debarred from
bidding on contracts or subcontracts with the United States Government in
connection with the conduct of its business; no such suspension or debarment has
been initiated or, to the knowledge of the Sellers and the Company, threatened,
and neither the Sellers nor the Company has any reasonable basis to believe that
one will be. The Company has not received notice of, and neither the Sellers nor
the Company has any reasonable basis to believe that any basis exists for,
Termination for Default (as provided in 48 C.F.R. Ch. 1 [Sections] 52.249-8,
52.249-9 or similar sections) with respect to any Contract with the United
States Government or subcontract under a Contract with the United States
Government.
(d) All test and inspection results and reports and
certifications that the Company has provided pursuant to, or in pursuit of, any
Contract with the United States Government or subcontract under a Contract
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with the United States Government, or as a part of the delivery to the United
States Government or to any United States Government prime contractor or
subcontractor of any article or system designed, engineered, manufactured, or
sold by the Company, were true, complete and correct except where any inaccuracy
or omission does not, and will not, have a Company Material Adverse Effect.
Except as set forth in Schedule 3.20(d), the Company has provided all material
test and inspection results and reports and certifications to the United States
Government as required by law or pursuant to Contracts with the United States
Government or subcontracts under Contracts with the United States Government, or
as may have been required by law or Contracts with the United States Government
or subcontracts as a part of the delivery of any article or system designed,
engineered, manufactured or sold by the Company.
(e) Except as set forth on Schedule 3.20(e), all equipment and
fixtures loaned, bailed, delivered or otherwise furnished to or held by the
Company for use with or in conjunction with its business, by or on behalf of the
United States Government, have been maintained in all material respects in the
condition they were when loaned, bailed, delivered or otherwise furnished to the
Company, ordinary wear and tear excepted, and where applicable the Company has
complied in all material respects with the Government Property provisions of the
Federal Acquisition Regulation and any agency supplements thereto.
(f) Except for the "data" items described in Schedule 3.20(f),
the United States Government has no rights with respect to any "technical data"
or "computer software" that are material to the Company's business. For each
data item referred to therein, Schedule 3.20(f) describes (i) the contract
number and the United States Government agency, (ii) the Contract Data
Requirements List Item Number of the technical data and computer software which
have been delivered to or may be required to be delivered to the United States
Government and (iii) the type of rights (including "unlimited rights," "limited
rights," "restricted rights," and "Government purpose license rights") obtained
or to be obtained by the United States Government in such data. For data items
identified in Schedule 3.20(f), the Company has complied with all applicable
regulations and contract
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requirements for the restrictive markings on such deliverables to be valid and
enforceable. Except as set forth in Schedule 3.20(f), neither any Seller nor the
Company has any reason to believe the United States Government intends to treat
restrictively marked technical data or computer software as unlimited rights
data or software. For purposes of this Section 3.20(f), the terms first used in
quotation marks have the meanings as defined in the applicable Federal
Acquisition Regulation and its supplements.
(g) Schedule 3.20(g) sets forth all security clearances held
by the Company and any of its officers, directors, managers or employees.
(h) The Company was eligible for award of Contracts under the
program for disadvantaged small business concerns established pursuant to
Section 8(a) of the Small Business Act, 15 U.S.C. 637(a), at all times during
the period beginning January 1, 1990, through March 31, 1994.
(i) The Company is not, and, except as set forth in Schedule
3.20(i), the execution and delivery of this Agreement by the Sellers (or any of
them) and the consummation of the transactions contemplated by this Agreement by
the Sellers (or any of them) will not result, in any material violation, breach
or default of any term or provision of (i) any Contract with the government of
any of the states constituting the United States of America, (ii) any
subcontract issued at any tier under a prime Contract with any such government
or (iii) any bid, proposal or quotation relating to a Contract with any such
government or a subcontract issued under a Contract with any such government.
For the purposes of Section 3.14(a)(xi)(B) and this Section 3.20(i), the term
"government of any of the states constituting the United States of America"
includes all departments and agencies of any branch of any such government,
including all independent establishments or instrumentalities within any such
government. The Company is not, and, except as set forth in Schedule 3.20(i),
the execution and delivery of this Agreement by the Sellers (or any of them) and
the consummation of the transactions contemplated by this Agreement by the
Sellers (or any of them) will not result, in any material violation, breach or
default of any provision of any order, statute, rule or regulation
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governing any Contract, subcontract, bid, proposal, quote, arrangement, or
transaction of any kind with any such government. Schedule 3.20(i) sets forth
descriptions of all material audit reports, final decisions, claims, consent
orders in effect, ongoing investigations, prosecutions, civil or administrative
proceedings or settlement negotiations or internal investigations conducted by
or initiated by the Company, with respect to Contracts with any such government
or subcontracts under Contracts with any such government.
Section 3.21 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set
forth in Schedule 3.21 or as disclosed in the Financial Statements, or the notes
thereto, since January 1, 1994, none of (a) Bajaj (or any other stockholder of
the Company), (b) any of the officers or directors of the Company, (c) any
persons with which Bajaj (or any other stockholder of the Company) or any
officer or director of the Company has any relationship by blood, marriage or
adoption or (d) any Affiliate or Associate of any of the foregoing, has (i)
engaged in any transaction with the Company or (ii) has or has had any interest
in (A) any Contract with, or relating to the business or operations of, the
Company, (B) any property (real or personal), tangible or intangible, used or
intended to be used in, or pertaining to, the business of the Company or (C) any
business or entity which competes with, or is a customer or supplier of, the
Company.
Section 3.22 CERTAIN SETTLEMENTS. (a) By virtue of the execution
and delivery of the Agreement of Settlement, Accord, Satisfaction and Mutual
Release, dated August 10, 1994, among the Company, Gary O. Everett, Sandra E.
Everett, Bajaj and Ken Bajaj, and the releases attached as exhibits thereto
(collectively, the "Everett Settlement Agreement"), (i) Gary O. Everett and
Sandra E. Everett fully released the Company from all claims of any kind which
were the subject of the litigation referred to in the Everett Settlement
Agreement and (ii) other than the specific rights of Gary O. Everett (and his
attorneys, Coates & Davenport) and Sandra E. Everett to the performance by the
Company of its express covenants and obligations under the Everett Settlement
Agreement, neither such persons nor their assignees or transferees (if any) have
nor will have, directly or indirectly, any rights, claims or entitlement
(whether
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heretofore known or unknown, asserted or unasserted, choate or inchoate) against
or with respect to the Company or any of its Affiliates or with respect to any
shares of capital stock of the Company.
(b) By virtue of the execution and delivery of the Agreement
of Settlement and Release, dated September 18, 1995, among the Company, Bajaj,
Ken Bajaj and Sandra Lamb, and the releases attached as exhibits thereto
(collectively, the "Lamb Settlement Agreement"), (i) Sandra Lamb fully released
the Company from all claims of any kind which were between Sandra Lamb and the
other parties to the Lamb Settlement Agreement of every nature and description,
whether or not then enumerated or alleged in any action at law or in equity and
(ii) other than the specific rights of Sandra Lamb to the performance by the
Company of its express covenants and obligations under the Lamb Settlement
Agreement, neither Sandra Lamb nor her assignees or transferees (if any) have
nor will have, directly or indirectly, any rights, claims or entitlement
(whether heretofore known or unknown, asserted or unasserted, choate or
inchoate) against or with respect to the Company or any of its Affiliates or
with respect to any shares of capital stock of the Company.
Section 3.23 BROKERS, FINDERS, ETC. Except for Goldman, Sachs &
Co., whose fees and expenses will be paid by the Sellers at the Closing, neither
the Company nor any of the Sellers has employed, or is subject to the claim of,
any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who might, directly or indirectly,
be entitled to a fee or commission from the Company or any of the Sellers in
connection with the consummation of the transactions contemplated by this
Agreement.
Section 3.24 ACCREDITED INVESTOR; ACQUISITION FOR INVESTMENT. Each
Seller acknowledges that it (a) has such knowledge and experience in business
and financial matters and with respect to investments in securities to enable it
to understand and evaluate the risks of such investment and form an investment
decision with respect thereto and is able to bear the risk of such investment
for an indefinite period and to afford a complete loss thereof and (b) is an
"accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act and
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(c) has had the opportunity to (i) ask such questions as it has deemed necessary
of, and to receive answers from, representatives of Wang concerning the terms of
its purchase of the Wang Common Stock which may be issued by Wang in partial
payment of the Notes and the merits and risks of investing in such securities
and (ii) to obtain such additional information which Wang possesses or can
acquire without unreasonable effort or expense. Each Seller acknowledges that it
is purchasing the Wang Common Stock which may be issued by Wang in partial
payment of the Notes pursuant to a private sale exemption from registration
under the Securities Act, and that the Wang Common Stock has not been registered
under the Securities Act and may not be offered or sold within the United States
or to, or for the benefit of, U.S. persons without registration under the
Securities Act except pursuant to an exemption from the registration
requirements of the Securities Act. The representations and warranties contained
in this Section 3.24 shall have no effect on the representations, warranties,
covenants or agreements of Wang contained in this Agreement and shall not in any
way limit the rights or remedies of any of the Sellers with respect to any
breach of any such representation, warranty, covenant or agreements.
Section 3.25 DISCLOSURE. All facts relating to any Seller or the
Company and its capital stock and which are material to the determination by
Wang to enter into this Agreement and to consummate the transactions
contemplated hereby have been disclosed to Wang in or in connection with this
Agreement. No representation or warranty contained in this Agreement, and no
statement contained in the Schedules or in any certificate, list or other
writing furnished to Wang by any Seller pursuant to this Agreement (including
without limitation the Financial Statements) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.
Section 3.26 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of Wang contained in Article IV of this
Agreement, Wang has not made, and the Sellers are not relying on, any
representation or warranty with respect to Wang or the transactions contemplated
by this Agreement.
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ARTICLE IV
Representations and Warranties of Wang
--------------------------------------
Wang represents and warrants to the Sellers as follows:
Section 4.1 ORGANIZATION AND QUALIFICATION. Wang is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Wang has full corporate power to own its properties and to
carry on its businesses as they are now being conducted. Wang is duly qualified
to do business and in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary and where the failure so to qualify would have a Wang Material Adverse
Effect.
Section 4.2 AUTHORITY; VALID AND BINDING. Wang has full corporate
power to execute and deliver this Agreement and the Notes. Wang is duly
authorized to execute and deliver, to perform its obligations under and to
consummate the transactions contemplated by this Agreement and has duly and
validly executed and delivered this Agreement. Wang is duly authorized to
execute and deliver and to perform its obligations under the Notes. This
Agreement is (and each of the Notes when executed and delivered by Wang in
accordance with this Agreement will be) a valid and legally binding agreement of
Wang, enforceable against Wang in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally and, as to enforceability, general
equitable principles.
Section 4.3 CAPITALIZATION. (a) As of the date of this Agreement,
the authorized capital stock of Wang consists of (i) 5,000,000 shares of Wang
Preferred Stock, of which 90,000 shares are designated as Wang Series A Stock
and 143,750 shares are designated as Wang Series B Stock, and (ii) 100,000,000
shares of Wang Common Stock. As of June 30, 1996, (i) 90,000 and 143,750 shares
of Wang Series A Stock and Wang Series B Stock were issued and outstanding,
respectively, and no shares of Wang Preferred Stock were held in the treasury of
Wang, and (ii) 36,386,191 shares of Wang Common Stock
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were issued and outstanding (2,832,291 of which remained in a disputed claims
reserve established pursuant to (A) the reorganization plan of Wang pursuant to
Chapter 11 of the United States Bankruptcy Code that was approved by the United
States Bankruptcy Court for the District of Massachusetts on September 20, 1993,
(B) the disclosure statement used to solicit consents to such reorganization
plan and (C) the signed confirmation order with respect to such reorganization
plan (the documents referred to in clauses (A), (B) and (C) being referred to
hereinafter collectively as the "Reorganization Plan")) and no shares of Wang
Common Stock were held in the treasury of Wang. As of the date of this
Agreement, all issued and outstanding shares of Wang Series A Stock, Wang Series
B Stock and Wang Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights, and there is no outstanding
subscription, option, warrant, call, right, agreement, commitment, understanding
or arrangement relating to the issuance, sale, delivery, transfer or redemption
of any capital stock of Wang (including, except as set forth on Schedule 4.3(a),
any right of conversion or exchange under any outstanding security or other
instrument) other than, in the case of Wang Common Stock, in each case as of
June 30, 1996, up to 12,500,000 shares which may be issued upon the conversion
of intercompany convertible instruments issued or issuable to subsidiaries of
Wang pursuant to the Reorganization Plan, 7,500,000 shares which may be issued
upon exercise of common stock purchase warrants issued or issuable to former
stockholders of Wang pursuant to the Reorganization Plan, up to 8,137,000 shares
issuable to employees of Wang pursuant to Wang's Employees' Stock Purchase Plan,
1995 Employees' Stock Purchase Plan, 1993 Stock Incentive Plan and 1994
Employees' Stock Incentive Plan and 260,000 shares issuable upon the exercise of
stock options granted and to be granted to the directors of Wang pursuant to
Wang's 1993 Directors' Stock Option Plan and 1995 Directors' Stock Option Plan.
(b) All the outstanding shares of capital stock of each
subsidiary of Wang listed on Exhibit 21 to its Form 10-K for its fiscal year
ended June 30, 1995 (the "Wang Subsidiaries") have been duly and validly
authorized and issued and are fully paid and nonassessable, and all outstanding
shares of capital stock of each of the Wang Subsidiaries are owned by Wang
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either directly or through wholly-owned Wang Subsidiaries (except for directors'
qualifying shares or as set forth in Schedule 4.3(b)).
(c) If Wang issues any shares of Wang Common Stock in partial
payment of the Notes, such shares when so issued will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
Section 4.4 CONFLICTING AGREEMENTS AND CHARTER PROVISIONS. Except
as set forth in Schedule 4.4, none of (a) the execution and delivery of this
Agreement by Wang, (b) the fulfillment of or compliance with the terms and
provisions hereof by Wang or (c) the consummation of any of the transactions
contemplated hereby by Wang will conflict with or result in a breach of the
terms, conditions or provisions of, or give rise to a right of termination
under, or constitute a default under, or result in the loss of any right or
benefit under or result in any violation of (in each case with or without the
giving of notice or the passage of time or both), the certificate of
incorporation or bylaws of Wang or any mortgage, Contract, License, order,
arbitration award, judgment, decree, statute, law, rule or regulation to which
Wang is a party or it or any of its property is subject, except for such
conflicts, breaches, rights of termination, defaults, losses or rights or
benefits, or violations which, individually or in the aggregate, could not
reasonably be expected to have a Wang Material Adverse Effect.
Section 4.5 DEFAULT. No default exists and no event has occurred
which with notice, lapse of time, or both, would constitute a default, in the
due performance and observance of any term, covenant or condition of any
indenture or other agreement or instrument to which Wang or any of its
subsidiaries is a party or by which it or any of them is bound, except such
defaults which would not have a Wang Material Adverse Effect.
Section 4.6 REPORTS; FINANCIAL STATEMENTS. (a) Since January 1,
1994, Wang has filed all forms, reports and documents with the Commission
required to be filed by it pursuant to the Securities Act or the Exchange Act
(collectively, the "Wang Reports"), all of which complied at the time of filing
in all material respects with all then applicable requirements of the
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Securities Act or the Exchange Act. None of such forms, reports or documents,
including, without limitation, any financial statements or schedules included
therein, at the time filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The consolidated financial statements included in the
forms, reports and documents referred to in Section 4.6(a) present fairly the
financial position, results of operations, stockholders' equity and cash flows
of Wang as of their respective dates or for the periods then ended, as
applicable, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not and are not
expected to be material in amount, and have been prepared in conformity with
GAAP.
Section 4.7 CHANGES SINCE THE MOST RECENT AUDITED FINANCIAL
STATEMENTS. Except as set forth on Schedule 4.7, since the date of the most
recent audited financial statements of Wang and through and as of the date of
this Agreement, there has not been any change, event or occurrence (or, to the
knowledge of Wang, any threat thereof) which individually or in the aggregate,
has resulted in, or could reasonably be expected to result in, a Wang Material
Adverse Effect.
Section 4.8 LITIGATION; ORDERS. Except as set forth in Schedule 4.8
or the Wang Reports, there are no lawsuits, actions, administrative or
arbitration or other proceedings or governmental investigations pending or, to
the knowledge of Wang, threatened against Wang or otherwise involving Wang which
(a) could reasonably be expected to result in the issuance of an order,
judgment, injunction or decree restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the transactions contemplated by
this Agreement or (b) if adversely determined, could have a Wang Material
Adverse Effect. Except as set forth in the Wang Reports, there are no judgments
or outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency, or by arbitration) against Wang or
against or affecting any of Wang's properties or businesses which has had or
could
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reasonably be expected to have a Wang Material Adverse Effect.
Section 4.9 LICENSES; CONSENTS; COMPLIANCE WITH LAWS. (a) Schedule
4.9(a) contains a list of all Consents required to be made or given to, or
obtained from, any Person by Wang under the certificate of incorporation or
bylaws of Wang, or any mortgage, Contract, License, order, arbitration award,
judgment, decree, statute, law, rule, regulation or other restriction of any
kind or character to which Wang is a party or any of its property is subject to
or otherwise in connection with the execution and delivery of this Agreement by
Wang, the fulfillment of or compliance with the terms and provisions of this
Agreement by Wang, or the consummation of the transactions contemplated by this
Agreement by Wang.
(b) The businesses of Wang are being and have been conducted
in compliance in all material respects with the certificate of incorporation and
bylaws of Wang, and with all applicable laws, statutes, ordinances, rules and
regulations of any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable court decrees, awards,
orders, writs, injunctions permits and judgments (except for violations, which
could not, individually or in the aggregate, reasonably be expected to have a
Wang Material Adverse Effect or which have been cured).
(c) Wang and each of its subsidiaries have received and are
operating in compliance with all Consents, licenses, authorizations, approvals,
orders, certificates and permits of and from, and have made or will have made,
as the case may be, all declarations and filings with, all federal, state, local
and other governmental authorities, all self regulatory organizations and all
courts and other tribunals, as are required to own, lease, license and use their
respective properties and assets and to conduct their respective businesses, in
the manner and to the extent described in Wang Reports, except to the extent
that the failure to obtain or file would not have a Wang Material Adverse
Effect.
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Section 4.10 BROKERS, FINDERS, ETC. Except for Morgan Stanley & Co.
Incorporated and Curtis A. Hessler, whose fees and expenses will be paid by
Wang, Wang has not employed, and Wang is not subject to the claim of, any
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement who might, directly or indirectly, be entitled to
a fee or commission from any Seller in connection with the consummation of the
transactions contemplated by this Agreement.
Section 4.11 ACCREDITED INVESTOR; ACQUISITION FOR INVESTMENT. Wang
acknowledges that it (a) has such knowledge and experience in business and
financial matters and with respect to investments in securities to enable it to
understand and evaluate the risks of such investment and form an investment
decision with respect thereto and is able to bear the risk of such investment
for an indefinite period and to afford a complete loss thereof and (b) is an
"accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act and (c) has had the opportunity to (i) ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms of its purchase of Company Shares contemplated
hereby and the merits and risks of investing in such securities and (ii) to
obtain such additional information which the Company possesses or can acquire
without unreasonable effort or expense. Wang acknowledges that it is purchasing
the Company Shares pursuant to a private sale exemption from registration under
the Securities Act, and that the Company Shares have not been registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the benefit of, U.S. persons without registration under the
Securities Act except pursuant to an exemption from the registration
requirements of the Securities Act. The representations and warranties contained
in this Section 4.11 shall have no effect on the representations, warranties,
covenants or agreements of any of the Sellers contained in this Agreement and
shall not in any way limit the rights or remedies of Wang with respect to any
breach of any such representation, warranty, covenant or agreements.
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Section 4.12 DISCLOSURE. No representation or warranty contained in
this Agreement, and no statement contained in the Schedules or in any
certificate, list or other writing furnished to any Seller by Wang pursuant to
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading.
Section 4.13 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties of the Sellers contained in Article III of this
Agreement, the Sellers have not made, and Wang is not relying on, any
representation or warranty with respect to the Sellers, the Company or the
transactions contemplated by this Agreement.
ARTICLE V
Covenants
---------
Section 5.1 NO SOLICITATIONS. From the date of this Agreement to
the Closing Date, none of the Sellers will, directly or indirectly, and the
Sellers will cause the Company not to, directly or indirectly: (a) initiate,
solicit, negotiate or encourage, or continue or hold discussions with respect
to, any offer, inquiry or proposal for, or make any information concerning the
Company available to any Person for the purpose of or with respect to, the sale
or disposition of the Company or any of its capital stock (including, without
limitation, the Company Shares) or assets or businesses or any merger,
consolidation or combination involving the Company or (b) reach any agreement or
understanding with any Person with respect to the foregoing. If any Seller or
the Company (or any Person acting for or on any of their or its behalf) receives
from any Person any offer, inquiry or proposal involving any of the foregoing,
the Company will promptly advise such Person, by written notice, of the terms of
this Section 5.1 and will promptly, orally and in writing, advise Wang of such
offer, proposal or inquiry and deliver a copy of such notice to Wang.
Section 5.2 INSPECTION OF PROPERTY. (a) From the date of this
Agreement through the Closing Date, the
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Sellers will cause the Company to afford Wang's employees and designated
representatives reasonable access, at Wang's expense, to any of the properties
of the Company, to examine the corporate books and records (including without
limitation Contracts and Plans) and make copies or extracts therefrom and to
discuss the affairs, finances and accounts of the Company with the appropriate
officers and employees of the Company, all at such reasonable times and as often
as Wang may reasonably request. All information obtained by Wang pursuant to
this Section 5.2 shall be kept confidential in accordance with the
Confidentiality Agreement.
(b) For a period of six years from the Closing Date:
(i) Wang shall not, and shall cause the Company not to,
dispose of or destroy any of the books and records of the Company relating
to periods prior to the Closing (collectively, the "Pre-Closing Company
Books and Records") without first offering to turn over possession of the
Pre-Closing Company Books and Records to the Sellers by written notice to
the Sellers at least thirty days prior to the proposed date of such
disposition or destruction;
(ii) Wang shall, subject to reasonable advance notice given by
the Sellers, afford the Sellers and their employees and designated
representatives reasonable access, at Sellers' expense, to the Pre-Closing
Company Books and Records during normal working hours at the principal
place of business of the Company or at any location where any Pre-Closing
Company Books and Records are stored, and the Sellers shall have the
right, at Sellers' expense, to make copies of any of the Pre-Closing
Company Books and Records; and
(iii) Wang shall, and shall cause the Company to, subject to
reasonable advance notice given by the Sellers, make available to the
Sellers upon written request (A) copies of any of the Pre-Closing Books
and Records and (B) the personnel of Wang and the Company to
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assist the Sellers in locating and obtaining any of the Pre-Closing
Company Books and Records. The Sellers shall reimburse Wang for the
reasonable out-of-pocket expenses incurred by it in performing the
covenants contained in this Section 5.2(b).
Section 5.3 CONDUCT OF BUSINESS. From the date of this Agreement
through the Closing Date, except as otherwise explicitly contemplated by this
Agreement or consented to in writing in advance by Wang, the Sellers will cause
the Company to conduct its businesses, operations and activities only in the
ordinary course and in the manner presently conducted. Without limitation of the
foregoing, from the date of this Agreement through the Closing Date, except as
otherwise explicitly contemplated by this Agreement or consented to in writing
in advance by Wang, the Sellers will cause the Company to:
(a) use its reasonable best efforts to (i) preserve intact the
present business organization and reputation of the Company; (ii) keep available
(subject to dismissals and retirements in the ordinary course of business) the
services of the present officers, employees and consultants of the Company;
(iii) maintain the assets of the Company in good working order and condition,
ordinary wear and tear excepted; (iv) maintain the good will of customers,
suppliers, lenders and other Persons to whom the Company sells goods or provides
services or with whom the Company otherwise has significant business
relationships; (v) continue all current sales, marketing and promotional
activities relating to the business and operations of the Company; (vi) cause
the books and records of the Company to be maintained in the usual, regular and
ordinary manner; (vii) not permit any material change in any pricing, financial
reporting or credit practice or policy, methods of accounting or accounting
practice of the Company (including methods of tax accounting); and (viii)
comply, in all material respects, with all laws and orders applicable to the
business and operations of the Company, and promptly following receipt thereof
give Wang copies of any notice received from any governmental or regulatory
authority or other Person alleging any violation of any such law or order; and
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(b) not take any action or effect any transaction which would
require the prior approval of the holders of the outstanding shares of the
Company Series A Stock or the Company Series C Stock, voting separately as a
class, or the Company Series B Stock, voting separately as a class, pursuant to
Article III of the Securityholders' Agreement or pursuant to the terms of the
Company Series A Stock, the Company Series B Stock or the Company Series C
Stock.
Section 5.4 FULFILLMENT OF CONDITIONS. Each of the Sellers will and
will cause the Company to, and Wang will, take all commercially reasonable steps
necessary or desirable and proceed diligently and in good faith to satisfy the
conditions set forth in Article VII and will not take or fail to take any action
that could reasonably be expected to result in the nonfulfillment of any such
condition.
Section 5.5 CONSENTS. (a) The Sellers will use their respective
reasonable best efforts to, and will use their respective reasonable best
efforts to cause the Company to use its reasonable best efforts to, promptly
make, give or obtain, as the case may be, or to cause to be promptly made, given
or obtained, as the case may be, all Consents required to be made or given to,
or obtained from, any Person by any Seller or the Company in connection with the
execution and delivery of this Agreement by the Sellers (or any of them), the
fulfillment of or compliance with the terms and provisions of this Agreement by
the Sellers (or any of them) or the consummation of the transactions
contemplated by this Agreement by the Sellers (or any of them) (including,
without limitation, the Consents listed in Schedule 3.15(b)).
(b) Wang will use its commercially reasonable best efforts to
promptly make, give or obtain, as the case may be, all Consents required to be
made or given to, or obtained from, any Person by Wang in connection with the
execution and delivery of this Agreement by Wang, the fulfillment of or
compliance with the terms and provisions of this Agreement by Wang or the
consummation of the transactions contemplated by this Agreement by Wang
(including, without limitation, the Consents listed in Schedule 4.9(a)).
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(c) Each of the Sellers, on the one hand, and Wang, on the
other hand, will assist and cooperate with each other in obtaining all Consents
required to be made, given or obtained by the Company, any Seller or Wang in
connection with the execution, delivery or performance of this Agreement.
(d) The Sellers will use their respective reasonable best
efforts to, and will use their respective reasonable best efforts to cause the
Company to use its reasonable best efforts to, promptly after the date hereof,
request that any contracting agency under any Contract of the type or under the
programs described in Section 3.14(a)(xi) request a waiver of the termination of
such Contract due to the "relinquishment of ownership or control" of the Company
resulting from the consummation of the transactions contemplated by this
Agreement. Following the Closing, each of the Sellers will use its reasonable
best efforts to assist and cooperate with Wang in seeking to cause any such
contracting agency to obtain the waiver described in the immediately preceding
sentence.
Section 5.6 PUBLICITY. The Sellers will not and will cause the
Company not to, and Wang will not, issue any press release or make any public
statement concerning this Agreement or any of the transactions contemplated
hereby without the prior consent of the other parties hereto. This Section 5.6
shall not apply, however, to any press release or statement required to be made
by law or the regulations of any federal or state governmental agency or any
stock exchange, except that the party required to make such announcement shall,
whenever practicable, consult with the other party concerning the timing and
content of such announcement before such announcement is made.
Section 5.7 EXPENSES. If the transactions contemplated by this
Agreement are consummated, all fees or expenses incurred in connection with this
Agreement or the transactions contemplated hereby (including investment
bankers', financial advisors' and attorneys' fees) shall be paid by the party
incurring such expenses (it being understood that the Sellers (or certain of
them) are (and the Company is not) incurring the fees and expenses of the
advisors referred to in Section 3.1(a) and Milbank, Tweed, Hadley & McCloy). If
the
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transactions contemplated by this Agreement are not consummated, the Company
shall pay such fees or expenses incurred by any of the Sellers in connection
with this Agreement or the transactions contemplated hereby, and Wang shall bear
the fees and expenses incurred by it in connection with this Agreement or the
transactions contemplated hereby.
Section 5.8 ADVICE OF CHANGES. (a) The Sellers will promptly advise
Wang in writing of any event or condition that becomes known to any of them or
the Company subsequent to the date of this Agreement that causes or will cause
any covenant or agreement of any of them contained in this Agreement to be
breached or that renders or would render any representation or warranty of any
of them contained in this Agreement untrue or inaccurate in any material
respect, whether as of the date hereof or as of the Closing Date. The Sellers
will notify Wang in writing of, and will use their respective reasonable best
efforts to cure, before the Closing, any violation or breach, as soon as
practicable after it becomes known to any of them or the Company, of any
representation, warranty, covenant or agreement made by any of them in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section 5.8(a) shall have any effect
on the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein.
(b) Wang will promptly advise the Sellers in writing of any
event or condition that becomes known to Wang subsequent to the date of this
Agreement that causes or will cause any covenant or agreement of Wang contained
in this Agreement to be breached or that renders or would render any
representation or warranty of Wang contained in this Agreement untrue or
inaccurate in any material respect, whether as of the date hereof or as of the
Closing Date. Wang will notify the Sellers in writing of, and will use its
reasonable best efforts to cure, before the Closing, any violation or breach, as
soon as practicable after it becomes known to Wang, of any representation,
warranty, covenant or agreement made by Wang in this Agreement, whether
occurring or arising before, on or after the date of this Agreement. No notice
given pursuant to this Section 5.8(b) shall have
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any effect on the representations, warranties, covenants or agreements contained
in this Agreement for purposes of determining satisfaction of any condition
contained herein.
Section 5.9 BAJAJ NOTES. Simultaneously with the Closing, Wang will
cause the Company to (and, if necessary, supply the Company with the funds to)
pay to Bajaj the principal outstanding under the Bajaj Notes set forth on
Schedule 3.8(b) and interest accrued thereon in accordance with the Bajaj Notes
through the Closing Date.
Section 5.10 CERTAIN SETTLEMENT AGREEMENTS. (a) The amount of cash
to be delivered to each of the Sellers at the Closing shall be reduced by such
Seller's share of the amount due under the Everett Settlement Agreement, such
share to be determined by multiplying the total amount due thereunder by the
percentage set forth under the heading "Certain Settlement Percentages" opposite
such Seller's name on Exhibit C hereto.
(b) Each of the Sellers shall reimburse the Company, in cash
(or provide Wang with written notice of its election to exercise the right of
set-off pursuant to the last sentence of this Section 5.10(b)), for its share of
the amount due under the Lamb Settlement Agreement, such share to be determined
by multiplying (i) the aggregate market value of the shares of Company Common
Stock issued pursuant to the Lamb Settlement Agreement or (ii) if the Company
repurchases the shares of Company Common Stock issued pursuant to the Lamb
Settlement Agreement, the amount of cash paid pursuant to the Lamb Settlement
Agreement to repurchase such shares by the percentage set forth under the
heading "Certain Settlement Percentages" opposite such Seller's name on Exhibit
C hereto, not later than five business days after the date on which the Company
notifies such Seller of such Seller's share. Any Seller obligated to reimburse
Wang for any amounts paid by Wang pursuant to this Section 5.10(b) may elect, by
written notice to Wang, to have Wang offset such reimbursement obligation
against the principal amount of any Note held by such Seller and such Seller's
obligation shall be satisfied to, and only to, the extent of such offset.
Section 5.11 CERTAIN SEVERANCE PROTECTION AGREEMENTS. (a) Each
Seller shall reimburse the Company,
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in cash (or provide Wang with written notice of its election to exercise the
right of set-off pursuant to Section 5.11(c)), for its share of any amounts paid
by the Company pursuant to any of the severance protection agreements listed on
Schedule 5.11(a) (each, a "Severance Protection Agreement") as a result of the
termination of the employment of any of the executives party to a Severance
Protection Agreement by any such executive (i) during the 90 day period after
the date of the occurrence of any event or condition constituting Good Reason
pursuant to Section 2.15(a)(1) of such Severance Protection Agreement or (ii)
during the 90 day period commencing six months after the occurrence of the
Change in Control (as defined in such Severance Protection Agreements) resulting
from the consummation of the transactions contemplated by this Agreement, such
share to be determined by multiplying the amount paid by the Company pursuant to
such Severance Protection Agreement by the percentage set forth under the
heading "Certain Severance Protection Agreement Percentages" opposite such
Seller's name on Exhibit C hereto, not later than five business days after the
date on which the Company notifies such Seller of such Seller's share.
(b) Each Seller shall reimburse Wang or the Company, as the case may
be, in cash (or provide Wang with written notice of its election to exercise the
right of set-off pursuant to Section 5.11(c)), for its share of any amounts paid
in cash by Wang or the Company, as the case may be, to any executive party to
any of the Severance Protection Agreements, attributable to such executive's
relinquishment of his or her rights under his or her Severance Protection
Agreement in connection with any such executive entering into a new employment
or severance agreement with Wang or the Company, as the case may be, such share
to be determined by multiplying (x) the lesser of (A) the cash amount so paid by
Wang or the Company, as the case may be, to such executive to relinquish such
rights or (B) the maximum amount payable under such executive's Severance
Protection Agreement upon termination of the employment of such executive under
circumstances described in Section 5.11(a) by (y) the percentage set forth under
the heading "Certain Severance Protection Agreement Percentages" opposite such
Seller's name on Exhibit C hereto, not later than five business days after the
Company has notified such Seller of such Seller's share.
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(c) Any Seller obligated to reimburse Wang for any amounts paid by
Wang pursuant to Section 5.11(a) or 5.11(b) may elect, by written notice to
Wang, to have Wang offset such reimbursement obligation against the principal
amount of any Note held by such Seller and such Seller's obligation shall be
satisfied to, and only to, the extent of such offset.
Section 5.12 STOCK OPTION PLANS; EMPLOYEE BENEFITS.
(a) Prior to the Closing, the Board of Directors of the
Company (or, if appropriate, any committee administering the KESOP) shall adopt
such resolutions or take such other actions as are necessary to amend, subject,
if necessary, to obtaining consents of the holders thereof, the terms of all
outstanding options to purchase shares of Company Class E Stock theretofore
granted under the KESOP (the "Old KESOP Options") to provide for the amendment
of the Old KESOP Options as set forth in this Section 5.12(a). Except to the
extent that the holder of an Old KESOP Option elects to receive cash as provided
in Section 5.12(e), each Old KESOP Option outstanding immediately prior to the
Closing shall automatically become an option to purchase shares of Wang Common
Stock (a "New KESOP Option"), such that the New KESOP Option (i) shall be
exercisable for that number of shares of Wang Common Stock equal to the number
of shares of Company Class E Stock covered by the Old KESOP Option immediately
prior to Closing multiplied by the Exchange Ratio (as defined in Section
5.12(d)) (rounded to the nearest whole share), (ii) shall have an exercise price
per share equal to exercise price per share of the Old KESOP Option immediately
prior to Closing divided by the Exchange Ratio (rounded to the nearest whole
cent), (iii) shall be exercisable to the extent vested, (iv) shall terminate on
the 30th day following the termination of employment of the holder, (v) shall
have such other customary terms and conditions as Wang may reasonably request
and (vi) shall otherwise remain subject to the terms and conditions of the
KESOP.
(b) Prior to the Closing, the Board of Directors of the
Company (or, if appropriate, any committee administering the Stock Incentive
Plan) shall adopt such resolutions or take such other actions as are necessary
to amend, subject, if necessary, to obtaining con-
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sents of the holders thereof, the terms of all outstanding options to purchase
shares of Company Class E Stock theretofore granted under the Stock Incentive
Plan (the "Old Incentive Options") to provide for the amendment of the Old
Incentive Options as set forth in Section 5.12(b). Except to the extent that the
holder of an Old Incentive Option elects to receive cash as provided in Section
5.12(e), each Old Incentive Option outstanding immediately prior to the Closing
shall automatically become an option to purchase shares of Wang Common Stock (a
"New Incentive Option"), such that the New Incentive Option (i) shall be
exercisable for that number of shares of Wang Common Stock equal to the number
of shares of Company Class E Stock covered by the Old Incentive Option
immediately prior to Closing multiplied by the Exchange Ratio (rounded to the
nearest whole share), (ii) shall have an exercise price per share equal to
exercise price per share of the Old Incentive Option immediately prior to the
Closing divided by the Exchange Ratio (rounded to the nearest whole cent), (iii)
shall vest one-third, one-third and one-third on the first, second and third
anniversaries of the Closing Date, (iv) shall be exercisable to the extent
vested, (v) shall terminate on the 30th day following the termination of
employment of the holder, (vi) shall have such other customary terms and
conditions as Wang may reasonably request and (vii) shall otherwise remain
subject to the terms and conditions of the Stock Incentive Plan.
(c) The Sellers will use their respective reasonable best
efforts to, and will use their respective reasonable best efforts to cause the
Company and its officers (including, without limitation, specifically its
General Counsel) to use its and their reasonable best efforts to obtain any
consents of the holders of Old KESOP Options or Old Incentive Options necessary
to effect the amendment and modification of the Old KESOP Options and the Old
Incentive Options contemplated by Sections 5.12(a) or (b), respectively, prior
to the Closing. The Sellers shall cause the Company's General Counsel to report
not less than weekly to Wang's General Counsel (or his designee) as to the
consents obtained as of the date of the report, the consents remaining to be
obtained as of the date of the report and the steps being taken to obtain the
consents remaining to be obtained as of the date of the report.
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(d) For purposes of these Sections 5.12(a) and (b), the
"Exchange Ratio" shall equal (i) $24.87 divided by (ii) the average of the
closing price of Wang Common Stock reported by the NASDAQ National Market System
for the twenty (20) trading days immediately preceding the Closing Date.
(e) Immediately prior and subject to the Closing, the Company
shall pay to each holder of an Old KESOP Option or Old Incentive Option who (i)
has consented to the amendment of such options contemplated by Section 5.12(a)
or (b), in a manner satisfactory to Wang, and (ii) so elects, an amount in cash
equal to (x) the number of vested shares covered by such option (whether or not
currently exercisable) multiplied by (y) the excess of $24.87 over the per share
exercise price of such option. Any holder of an Old KESOP Option or Old
Incentive Option who elects to receive cash in lieu of such holder's vested Old
KESOP Options or Old Incentive Options shall be deemed to have exercised such
option to that extent immediately prior to the Closing. Wang shall (i) reserve
for issuance the number of shares of Wang Common Stock that will become issuable
upon the exercise of the New KESOP Options or the New Incentive Options pursuant
to this Section 5.12(a) or (b), (ii) as soon as practicable after the Closing,
execute and deliver option agreements evidencing the New KESOP Options and the
New Incentive Options to the holders thereof and (iii) as soon as practicable
after the Closing, Wang shall file a registration statement on Form S-8 (or any
successor form), or another appropriate form with respect to the shares of Wang
Common Stock subject to the New KESOP Options and the New Incentive Options to
the holders thereof.
(f) It is intended that the actions contemplated by Sections
5.12(a) or (b) shall be undertaken in a manner that will not constitute a
"modification" as defined in Section 424 of the Code, as to any Old KESOP Option
or Old Incentive Option which is an incentive stock option.
(g) For a period of not less than two years following the
Closing Date, subject to applicable law, Wang will cause the Company to provide
benefits to the Company's employees which will, in the aggregate, be no less
favorable than (i) those provided by the Company
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and the Company Subsidiaries to their employees immediately prior to the Closing
Date or (ii) those provided by Wang to its similarly situated employees from
time to time. If any salaried employee of the Company becomes a participant in
any employee benefit plan, practice or policy of Wang or any Wang Subsidiary,
such employee shall, to the extent permitted by applicable law, be given credit
under such plan for all service prior to the Closing Date with the Company (to
the extent such credit was given by the Company) and prior to the time such
employee becomes such a participant, for purposes of eligibility and vesting but
not for purposes of any other benefit accrual.
(h) Wang hereby agrees that consummation of the transactions
contemplated by this Agreement constitutes a "Change in Control" for purposes of
the Severance Protection Agreements set forth on Schedule 5.12(h).
Section 5.13 INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE. For
three years from and after the Closing Date, Wang agrees to indemnify and hold
harmless all past and present officers and directors of the Company or the
Company Subsidiaries to the same extent such persons are indemnified as of the
date of this Agreement by the Company pursuant to the Charter and the Bylaws for
acts or omissions occurring at or prior to the Closing Date. Wang shall provide,
or shall cause the Company to provide, for an aggregate period of not less than
two years from and after the Closing Date, the Company's current directors and
officers with directors' and officers' liability insurance coverage for events
occurring prior to the Closing Date that is no less favorable than the Company's
existing directors' and officers' liability insurance policy in terms of
coverage and amounts; PROVIDED, HOWEVER, that if Wang elects to provide such
coverage under Wang's directors' and officers' liability insurance policy, the
Company's current directors and officers shall provide Wang with such
representations as Wang's directors' and officers' liability insurance carrier
may request; and PROVIDED FURTHER, HOWEVER, that the annual cost to Wang, or the
Company, of such coverage shall not exceed 200 percent of the Company's fiscal
1995 annual premium for its directors' and officers' liability insurance policy
(it being understood that in any such case Wang shall provide, or shall cause
the Company to provide, for as much
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coverage as possible for such 200 percent premium amount). The provisions of
this Section 5.13 are intended to be for the benefit of, and shall be
enforceable by, each past and present officer and director of the Company and
the Company Subsidiaries, and their heirs and representatives.
Section 5.14 TAX REFUNDS. Any refunds (including refunds for
interest or penalties paid by the Company), together with any interest thereon,
that are received by Wang or the Company that relate to Taxes paid by the
Company with respect to Tax periods of the Company or portions thereof ending on
or before the Closing Date, and that are in excess of refunds shown as an asset
or assets on the Company Balance Sheet as adjusted for the passage of time
through the Closing Date in accordance with GAAP, shall be for the account of
the Sellers, and Wang or the Company shall pay over to the Sellers in
immediately available funds such refund within fifteen (15) days after receipt
of such refund from the IRS or other taxing authority.
ARTICLE VI
Indemnification
---------------
Section 6.1 SELLER INDEMNIFICATION. (a) In accordance with this
Article VI and in addition to the indemnification provided for in Section
6.1(c), the Sellers will indemnify and hold Wang and its Affiliates (including
the Company after the consummation of the transactions contemplated hereby) and
the respective officers, directors, employees, agents and representatives of
each of the foregoing (collectively, the "Wang Indemnified Persons") harmless
from and against any and all costs, expenses, losses, claims, damages,
penalties, fines, liabilities and obligations whenever arising or incurred
(including, without limitation, amounts paid in settlement, reasonable costs of
investigation and attorneys' fees and expenses) (individually, a "Loss," and
collectively, "Losses") incurred by any Wang Indemnified Person arising out of
or relating to, directly or indirectly, (i) any breach of any representation or
warranty of any Seller in Article III of this Agreement (other than the
representations and warranties in Section 3.9), (ii) any breach of any covenant
or agreement of any
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Seller in this Agreement, (iii) any claim by any Person with respect to any
obligation or commitment, or alleged obligation or commitment, of the Company to
issue or grant to such Person (or any Affiliate or Associate of such Person) any
shares of capital stock of the Company or any options, warrants or other rights
to acquire any shares of capital stock of the Company or (iv) the Everett
Settlement Agreement or the Lamb Settlement Agreement.
(b) The obligations of the Sellers under Section 6.1(a)(i)
shall be (i) joint and several obligations of Bajaj and the Bajaj Trust with
respect to Bajaj's or the Bajaj Trust's breaches of any representation or
warranty in Sections 3.1(a), 3.2(a) or 3.5(b), (ii) individual and not joint
obligations of each Goldman/Omega Stockholder with respect to such Goldman/Omega
Stockholder's breach of any representation or warranty in Sections 3.1(b),
3.2(b) or 3.5(c) and (iii) several and not joint obligations of all Sellers with
respect to any Seller's breach of any representation or warranty in Sections
3.1(c), 3.3, 3.4, 3.5(a) or 3.6 through 3.26. The obligations of the Sellers
under Sections 6.1(a)(ii), 6.1(a)(iii), 6.1(a)(iv) and 6.1(c) shall be several
and not joint for all Sellers. Individual and not joint obligations of the
Sellers under Section 6.1(a)(i) shall be borne in their entirety solely by the
Seller having such obligation; several and not joint obligations of the Sellers
under Sections 6.1(a)(i), 6.1(a)(ii), 6.1(a)(iii), 6.1(a)(iv) or 6.1(c) shall be
borne by the Sellers having such obligations in proportion to their respective
percentage of the aggregate consideration received pursuant to this Agreement by
the Sellers having such obligations as set forth on Exhibit A hereto (provided,
however, that any obligation under Section 6.1(a) with respect to the
investigation of the General Accounting Office during 1995 referred to in
Schedule 3.20(b) shall be borne by Bajaj or the Bajaj Trust). Notwithstanding
anything in this Agreement to the contrary, Bajaj and the Bajaj Trust shall be
jointly and severally liable for all obligations of Bajaj and the Bajaj Trust
arising under this Article VI. Notwithstanding anything herein to the contrary:
(i) no Seller shall have any obligation to indemnify any Wang Indemnified
Persons for Losses pursuant to Section 6.1(a)(i) unless and until the aggregate
amount of such Losses exceeds $500,000, and then only to the extent such
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Losses exceed $500,000; (ii) the aggregate liability of the Sellers pursuant to
Section 6.1(a)(i) for Losses incurred by the Wang Indemnified Persons with
respect to breaches of representations and warranties in Sections 3.4(d), 3.5,
3.6, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19, 3.20
(to the extent such Loss does not result from an administrative, civil or
criminal penalty or fine, a criminal conviction or a suspension, debarment or
termination (other than any termination for convenience or termination of a
Contract of the type referred to in Section 3.14(a)(xi) as a result of the
transactions contemplated hereby)), 3.24 (the second sentence), 3.25 or 3.26
shall be limited to $8,333,150 (provided, however, that, notwithstanding the
foregoing $8,333,150 limit, the Sellers, on the one hand, and the Wang
Indemnified Parties, on the other hand, shall share dollar for dollar the first
$8,333,150 of Losses exceeding the foregoing limit involving any Loss arising
out of or relating to, directly or indirectly, any breach of any representation
or warranty in Section 3.20, including, without limitation, any Loss which may,
in accordance with the terms of a Contract, result in a direct or indirect
reduction in Contract price, including interest thereon, to be repaid by the
Company or any Contract modification resulting in an ongoing reduction in
Contract price); (iii) the aggregate liability of the Sellers pursuant to
Section 6.1(a)(i) for Losses incurred by the Wang Indemnified Persons with
respect to breaches of representations and warranties in Section 3.20 to the
extent such Loss results from an administrative, civil or criminal penalty or
fine, a criminal conviction or a suspension, debarment or termination (other
than any termination for convenience or termination of a Contract of the type
referred to in Section 3.14(a)(xi) as a result of the transactions contemplated
hereby) shall be limited to $41,657,500; (iv) the aggregate liability of the
Sellers pursuant to Section 6.1(a)(i) for Losses incurred by the Wang
Indemnified Parties with respect to all breaches of representations and
warranties in Article III is limited to $166,630,000; and (v) the aggregate
liability of the Sellers pursuant to Section 6.1(c) is limited to $166,630,000.
(c) In accordance with this Article VI and in addition to the
indemnification provided for in Section 6.1(a), the Sellers will indemnify and
hold the Wang Indemnified Persons harmless from and against (i)
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all unpaid liability for Taxes of the Company for all taxable periods ending on
or prior to the Closing Date and the portion for the period which is treated
pursuant to Section 6.2(1) as ending on the Closing Date (the "Pre-Closing Date
Period"), (ii) any liability for Taxes imposed pursuant to Treasury Regulations
[Section] 1.1502-6 (or a comparable provision under state or local Tax law) for
any Pre-Closing Date Period and (iii) liabilities, costs, expenses (including,
without limitation, reasonable expenses of investigation and reasonable
attorney's fees and expenses) arising out of or incident to the imposition,
assertion or assessment of any Tax (including those incurred in the contest in
good faith in appropriate proceedings relating to the imposition, assertion or
assessment of any Tax for any Pre-Closing Date Period (the sum of (i) through
(iii) being referred to as a "Tax Loss"); PROVIDED, HOWEVER, that the amount of
any Tax Loss shall be reduced to the extent such Tax Loss was specifically
identified and reserved against (as to amount, type of Tax and Tax year) on the
Company Balance Sheet as adjusted for the passage of time through the Closing
Date in accordance with GAAP. The parties agree that, except to the extent
otherwise required by law, the Company shall be entitled to claim any
deductions attributable to cash payments made under Section 5.12(e) in the
final consolidated federal income Tax Return on which the Company is the common
parent. In the case of a Straddle Period, the Company shall also be entitled to
claim in the Pre-Closing Date Period any deductions for such payments for
state, local and foreign purposes.
(d) In the case of any taxable period that includes (but does
not end on) the Closing Date (a "Straddle Period"), the Taxes of the Company
attributable to the Pre-Closing Date Period shall be:
(i) in the case of Taxes that are either (x) based upon
or related to income or receipts, or (y) except for Taxes imposed as
a result of the transactions contemplated hereby, imposed in
connection with any sale or other transfer or assignment of property
(real or personal), tangible or intangible, deemed to be equal to
the amount which would be payable if the taxable year ended with and
included the Closing Date; and
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(ii) in the case of Taxes not described in subparagraph
(i) that are imposed on a periodic basis and measured by the level
of any item, the amount of such Taxes for the entire period (or, in
the case of such Taxes determined on an arrears basis, the amount of
such Taxes for the immediately preceding period) multiplied by a
fraction, the numerator of which is the number of calendar days in
the period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire period; PROVIDED,
HOWEVER, that the Sellers shall have no indemnification obligation
with respect to any Taxes incurred in a Straddle Period attributable
to assets contributed to the Company by Wang after the Closing Date.
(e) To the extent that the Sellers indemnify the Wang
Indemnified Persons for a Tax Item that produces a Tax benefit in any period
after the Closing Date, the Sellers' indemnification obligation under Section
6.1(c) shall be decreased. To the extent that the Sellers' indemnification
obligation is reduced by a Tax Item that produces a Tax detriment to Wang or the
Company in any period after the Closing Date, the Sellers' indemnification
obligation under Section 6.1(c) shall be increased. The amount of such Tax
benefit or Tax detriment shall be calculated on a "with-or-without" basis when
actually realized.
(f) Notwithstanding anything to the contrary in Section
6.1(c), the Sellers shall not indemnify the Wang Indemnified Persons for any
Taxes which arise from Wang making an election under Section 338 of the Code in
connection with this transaction.
Section 6.2 WANG INDEMNIFICATION. (a) In accordance with this
Article VI, Wang will indemnify and hold each of the Sellers and their
respective Affiliates and the respective officers, directors, employees, agents
and representatives of each of the foregoing (collectively, the "Seller
Indemnified Persons") harmless from and against any and all Losses incurred by
any Seller Indemnified Person arising out of or relating to, directly or
indirectly, (i) any breach of any representation or warranty of Wang in Article
IV this Agreement or (ii) any
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breach of any covenant or agreement of Wang in this Agreement.
(b) Notwithstanding anything herein to the contrary: (i) Wang
shall have no obligation to indemnify any Seller Indemnified Person for Losses
pursuant to Section 6.2(a)(i) unless and until the aggregate amount of such
Losses exceeds $500,000, and then only to the extent such Losses exceed
$500,000; (ii) the aggregate liability of Wang pursuant to Section 6.2(a)(i) for
Losses incurred by Seller Indemnified Persons with respect to breaches of
representations and warranties in Sections 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.11
(the second sentence), 4.12 and 4.13 shall be limited to $3,331,500; (iii) the
aggregate liability of Wang pursuant to Section 6.2(a)(i) for Losses incurred by
Seller Indemnification Persons with respect to all breaches of representations
and warranties in Article IV shall be limited to $66,630,000.
Section 6.3 CALCULATION OF LOSSES. For purposes of this Article VI,
(a) the amount of any Loss shall be calculated net of insurance proceeds
received by the indemnified party in connection with such Loss, (b) the amount
of any Loss shall be calculated taking into account any Tax benefit or detriment
actually realized, on a "with-or-without" basis, by the indemnifying party or
the indemnified party as a result of or in connection with either the matter,
event or condition giving rise to such Loss and (c) the amount of any Loss shall
be reduced to the extent such Loss was specifically identified and reserved
against (as to type of Loss and amount) on the Company Balance Sheet as adjusted
for the passage of time through the Closing Date in accordance with GAAP.
Section 6.4 PROCEDURES RELATING TO INDEMNIFICATION. (a) An
indemnified party under this Article VI shall give prompt written notice to the
indemnifying party (when and to the extent that the indemnified party has actual
knowledge thereof) of any condition, event or occurrence or the commencement of
any action, suit or proceeding for which indemnification may be sought, and the
indemnifying party, through counsel of its own choosing and reasonably
satisfactory to the indemnified party, shall assume the defense thereof or other
indemnification obligation with respect thereto; PROVIDED, HOWEVER, that (i) any
indemnified party shall be entitled to partici-
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pate in any such action, suit or proceeding with counsel of its own choice but
at its own expense and (ii) any indemnified party shall be entitled to
participate in any such action, suit or proceeding with counsel of its own
choice at the expense of the indemnifying party, if, in the good faith
determination of the indemnified party's counsel, representation by the
indemnifying party's counsel may present a conflict of interests. The failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Article VI, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In any event, if the indemnifying party fails to assume the defense
within a reasonable time, the indemnified party may assume such defense or other
indemnification obligation and the reasonable fees and expenses of its attorneys
will be covered by the indemnity provided for in this Article VI. No action,
suit or proceeding for which indemnification may be sought shall be compromised
or settled in any manner which might materially and adversely affect the
interests of the indemnifying party without the prior written consent of such
indemnifying party (which shall not be unreasonably withheld). Notwithstanding
anything (other than Section 6.4(b)) in this Article VI to the contrary, the
indemnifying party shall not, without the written consent of the indemnified
party, (i) settle or compromise any action, suit or proceeding or consent to the
entry of any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the indemnified party of a written
release from all liability in respect of such action, suit or proceeding or (ii)
settle or compromise any action, suit or proceeding in any manner that may
materially and adversely affect the indemnified party. The indemnifying party
shall pay all expenses, including attorneys' fees, that may be incurred by any
indemnified party in enforcing the indemnity provided for in this Article VI. If
the indemnifying party assumes the defense or settlement of any claim or demand,
the indemnified party will give the indemnifying party and its counsel
reasonable access to, during normal business hours, the business records and
other documents of the Company relating to such claim or demand, and shall
permit them to consult, during normal business hours, with employees of the
Company having information regarding such claim or demand.
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Regardless of which person assumes the defense of any claim, each party shall
cooperate in the defense thereof.
(b) Notwithstanding anything in this Article VI to the
contrary, the Sellers, at their own expense, shall have the exclusive authority
to represent the Company before the IRS or any other governmental agency or
authority or before any court with respect to any matter affecting the Tax
liability of the Company for any Pre-Closing Date Period (not including the
Straddle Period) for which the Sellers might be obligated to indemnify the Wang
Indemnified Persons. Such representation shall include, but shall not be limited
to, exclusive control over (i) any response to any examination of any such Tax
Returns and (ii) any contest through a Final Determination of any issue included
in any such Tax Return, including, but not limited to, (A) whether and in what
forum to conduct such contest, and (B) whether and on what basis to settle such
contest; provided, however, that the Sellers shall not settle any contest if
such settlement would increase the Tax liability of Wang or the Company in any
period after the Closing Date without the consent of Wang or the Company, as the
case may be, which consent shall not be unreasonably withheld. Any Tax
controversy relating to the Company for a Straddle Period shall be controlled by
Wang, at its own expense; PROVIDED, HOWEVER, that Wang shall keep the Sellers
informed of all material developments relating to such controversy and the
Sellers, at their own expense, shall have the right to participate in (but not
control) the defense of any such controversy relating to any Tax Item subject to
indemnification pursuant to Section 6.1(c); PROVIDED, FURTHER, that Wang shall
not have the right to settle any Tax controversy to the extent such settlement
would increase the Sellers' indemnification obligation under Section 6.1(c)
without the consent of the Sellers, which consent shall not be unreasonably
withheld.
(c) Notwithstanding anything in this Agreement to the
contrary, the Sellers may appoint a representative (the "Sellers'
Representative") to act on their behalf pursuant to, and to follow the
procedures set forth in, this Section 6.4. If the Sellers appoint a Sellers'
Representative, so long as such appointment shall be in effect, Wang shall be
entitled, but shall under no circumstances be obligated, to deal exclusively
with the Sellers' Representative in respect of all mat-
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ters under this Section 6.4, including, without limitation, the giving of all
notices pursuant to this Section 6.4. The Sellers hereby designate the authority
to Bajaj and the Goldman Stockholders to select the Sellers' Representative and
to provide written notice to Wang of such selection.
(d) The Sellers and Wang shall negotiate in good faith to
determine the amount of the Losses incurred by one party arising out of or
relating to, directly or indirectly, any breach of any representation, warranty,
covenant or agreement of the other party contained in this Agreement. If the
Sellers and Wang cannot agree to the amount of the Losses, the Sellers and Wang
shall settle their disagreement by arbitration in the City of New York, State of
New York, before three arbitrators in accordance with the then prevailing Rules
of Commercial Arbitration of the American Arbitration Association. Either Wang
or any Seller may initiate this procedure by so informing the other parties. The
date of such communication shall be deemed to be the time the disagreement arose
(the "Disagreement Date"). The Sellers shall select one arbitrator. Wang shall
select one arbitrator. The two arbitrators so selected shall select a third
arbitrator. If one party has not selected its arbitrator within 20 days of the
Disagreement Date, or if the two arbitrators so selected have not selected a
third arbitrator within 40 days of the Disagreement Date, the one arbitrator or
the two arbitrators, as the case may be, shall apply for the appointment of a
second or third arbitrator, as the case may be, by a justice then sitting in a
special term part of the Supreme Court of the State of New York: New York
County. If the three arbitrators have not addressed and resolved any such
disagreements within 180 days of the Disagreement Date, the parties shall be
entitled to their remedies at law or in equity, if any, and any such
disagreements shall not then be resolved by arbitration under this Section
6.4(d). Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction. The cost of arbitration shall be borne one-half
by Wang and one-half by the Sellers participating therein in proportion to their
respective percentage of the aggregate consideration received pursuant to this
Agreement by the Sellers participating therein as set forth in Exhibit A hereto.
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Section 6.5 TERMINATION OF INDEMNIFICATION. No indemnified party
under this Article VI shall be entitled to indemnification under this Article VI
with respect to any breach of any representation or warranty or covenant or
agreement after the termination thereof pursuant to Section 8.10, except for
breaches with respect to which notice was given to the indemnifying party
pursuant to Section 6.4 prior to termination of the representation or warranty
or covenant or agreement to which it relates.
Section 6.6 CONSIDERATION FOR PAYMENT OF INDEMNIFICATION
OBLIGATIONS; RIGHT OF SET-OFF. With respect to any indemnification obligation
under this Article VI, such obligation shall be satisfied by means of a payment
in cash by the indemnifying party to the applicable indemnified party in an
amount equal to the Loss incurred by such indemnified party; provided, however,
that: (a) Wang may, at its option and in addition to any other rights it may
have, offset any Loss incurred by any Wang Indemnified Person against the
principal amount of any Note held by any Seller obligated to indemnify such Wang
Indemnified Person against such Loss and such Seller's obligation shall be
satisfied to, and only to, the extent of such offset; and (b) any Seller
obligated to indemnify any Wang Indemnified Person for any Loss may elect, by
written notice to Wang, to have Wang offset such Loss against the principal
amount of any Note held by such Seller and such Seller's obligation shall be
satisfied to, and only to, the extent of such offset.
Section 6. 7 EXCLUSIVE REMEDY. If the transactions contemplated by
this Agreement are consummated, the indemnification provisions of this Article
VI shall be the sole and exclusive remedy of the parties against one another
with respect to any Loss under this Agreement.
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ARTICLE VII
Conditions to Obligations to Close
----------------------------------
Section 7.1 CONDITIONS TO WANG'S OBLIGATION. The obligation of
Wang to consummate the transactions contemplated hereby at the Closing is
subject to the satisfaction on or prior to the Closing Date of all of the
following conditions (any of which may be waived by Wang):
(a) each of the representations and warranties contained in
Article III shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date and Wang shall have received a certificate
to that effect from each of the Sellers signed by, in the case of Bajaj, by
Bajaj, and in the case of the other Sellers, each Seller's trustee, general
partner or the chief executive or financial officer or vice president of
Seller's general partner, as the case may be;
(b) each of the covenants, agreements and obligations of the
Company hereunder to be complied with or performed on or before the Closing Date
shall have been duly complied with or performed in all material respects and
Wang shall have received a certificate to that effect from each of the Sellers
signed, in the case of Bajaj, by Bajaj, and in the case of the other Sellers, by
each Seller's trustee, general partner or the chief executive or financial
officer or vice president of Seller's general partner, as the case may be;
(c) Wang shall have received the written opinions, dated the
Closing Date, of (i) Fried, Frank, Harris, Shriver & Jacobson, counsel to Bajaj,
the Bajaj Trust and the Company (and other counsel reasonably acceptable to
Wang, it being understood that Tucker, Flyer & Lewis and Sherry L. Rhodes are
acceptable to Wang), and (ii) Milbank, Tweed, Hadley & McCloy, counsel to the
Goldman/Omega Stockholders (and other counsel reasonably acceptable to Wang),
covering in substance the matters set forth on Exhibits D-1 and D-2,
respectively;
(d) each of the Sellers and the Company shall have duly
executed and delivered to Wang the
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Termination Agreement, and each of the Sellers shall have duly executed and
delivered the Stockholder Release substantially in the form of Exhibits E and F
hereto, respectively;
(e) each of the Sellers shall have duly executed and delivered
to Wang the Registration Rights Agreement, substantially in the form of Exhibit
G hereto;
(f) Bajaj shall have duly executed and delivered the
Noncompetition Agreement and the Consulting Agreement, substantially in the form
of Exhibits H and I hereto, respectively;
(g) Consents under Contracts listed in Schedule 7.1(g)
representing 80% of the revenues projected in the 1996 Budget to be received by
the Company under the Contracts listed in Schedule 7.1(g) shall have been made,
given or obtained, as the case may be, in each case upon terms and conditions
reasonably satisfactory to Wang;
(h) effective as of the Closing, Ken Bajaj shall be employed
by the Company under the terms of the Employment Agreement (except for
non-employment resulting from his death or disability);
(i) Ken Bajaj shall have duly executed and delivered to Wang
the Spousal Release, substantially in the form of Exhibit J hereto;
(j) the waiting periods under the HSR Act applicable to the
transactions contemplated by this Agreement shall have expired or been
terminated;
(k) no action, suit, proceeding or investigation shall have
been instituted by any person or entity, or threatened by any governmental
agency or body, before a court or governmental body, to restrain or prevent the
consummation of the transactions contemplated by, or the performance by any of
the parties hereto of their respective obligations under or with respect to,
this Agreement and there shall be no injunction, restraining order or decree of
any nature of any court or governmental agency or body in effect which restrains
or prohibits the consummation of the transactions contemplated by this
Agreement;
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(l) no change, event or occurrence shall have occurred which,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a material adverse effect (i) on the business, assets,
liabilities, results of operations or condition (financial or otherwise) of the
Company, taken as a whole, or, if the Closing shall not have occurred on or
before September 6, 1996, the Company's outsourcing business, taken separately,
(ii) on the ability of the Company to take (or, where applicable, refrain from
taking) in any material respect any action contemplated to be taken (or, where
applicable to not be taken) under or with respect to, or in connection with the
consummation of the transactions contemplated by, this Agreement or (iii) on the
ability of the Company to conduct its businesses and to own or lease its
properties and assets in substantially the same manner in which such businesses
were previously conducted and such assets and properties were previously owned
or leased, excluding, in each case, (x) any effects resulting from the matters
disclosed in paragraph (a) of Schedule 3.7, (y) any effects resulting from the
loss of the Company's eligibility to be awarded or to perform Contracts or
Contract options of the type or under the programs described in Section
3.14(a)(xi) and (z) any changes, events or occurrences resulting from changes in
economic, regulatory or political conditions or changes in conditions generally
applicable to the industry in which the Company is involved, and Wang shall have
received a certificate to that effect signed by the Company's chief financial
officer; and
(m) the Company shall have received a consent and waiver under
the Revolving Credit and Term Loan Agreement, dated as of March 14, 1994, as
amended, among the Company, Crestar Bank, as agent and the banks named therein
providing that (including, without limitation, that such credit facility shall
not be terminated upon, and shall remain in full force and effect after, the
consummation of the transactions contemplated by this Agreement), on terms and
conditions reasonably acceptable to Wang.
Section 7.2 CONDITIONS TO THE SELLERS' OBLIGATIONS. The obligations
of the Sellers to consummate the transactions contemplated hereby at the Closing
are subject to the satisfaction on or prior to
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the Closing Date of all of the following conditions (any of which may be waived
by the Sellers):
(a) each of the representations and warranties contained in
Article IV shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date and the Sellers shall have received a
certificate to that effect from Wang signed by Wang's chief executive or
financial officer;
(b) each of the covenants, agreements and obligations of Wang
hereunder to be performed on or before the Closing Date shall have been duly
performed in all material respects and the Sellers shall have received a
certificate to that effect from Wang signed by Wang's chief executive or
financial officer;
(c) the Sellers shall have received the written opinion, dated
the Closing Date, of Skadden, Arps, Slate, Meagher & Flom, special counsel to
Wang, (and other counsel reasonably acceptable to the Sellers, it being
understood that Albert A. Notini is acceptable to the Sellers), covering in
substance the matters set forth on Exhibit K hereto;
(d) Wang shall have duly executed and delivered to the Sellers
the Termination Agreement, substantially in the form of Exhibit E hereto;
(e) Wang shall have duly executed and delivered to the Sellers
the Registration Rights Agreement, substantially in the form of Exhibit G
hereto;
(f) the waiting periods under the HSR Act applicable to the
transactions contemplated by this Agreement shall have expired or been
terminated;
(g) no action, suit or proceeding shall have been instituted
by any person or entity, or threatened by any governmental agency or body,
before a court or governmental body, to restrain or prevent the consummation of
the transactions contemplated by, or the performance by any of the parties
hereto of their respective obligations under or with respect to, this Agreement
and there shall be no injunction, restraining
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order or decree of any nature of any court or governmental agency or body in
effect which restrains or prohibits the consummation of the transactions
contemplated by this Agreement; and
(h) no change, event or occurrence shall have occurred which,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Wang Material Adverse Effect and the Sellers shall have
received a certificate to that effect from Wang signed by Wang's chief executive
or financial officer.
ARTICLE VIII
Miscellaneous
-------------
Section 8.1 TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual consent of all of the Sellers, on the one hand,
and Wang, on the other hand;
(b) by Bajaj and the Goldman Stockholders, on behalf of all of
the Sellers, if the Closing shall not have occurred on or before November 1,
1996, provided that Bajaj and the Goldman Stockholders, on behalf of all of the
Sellers, shall not be entitled to (i) terminate this Agreement pursuant to this
Section 8.1(b) if the delay in the Closing is the result of a breach of any
covenant, obligation, representation or warranty of any Seller contained herein
or (ii) terminate this Agreement pursuant to this Section 8.1(b) prior to
December 1, 1996 if such delay in Closing is the result of the nonsatisfaction
of the condition in Section 7.1(g) with respect to Consents listed on Schedule
7.1(g);
(c) by Wang if the Closing shall not have occurred on or
before November 15, 1996, provided that Wang shall not be entitled to terminate
this Agreement pursuant to this Section 8.1(c) if the delay in the Closing is
the result of a breach of any covenant, obligation, representation or warranty
of Wang contained herein; or
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(d) by Bajaj and the Goldman Stockholders, on behalf of all of
the Sellers, on the one hand, or Wang, on the other hand, if any court of
competent jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, decree, ruling or other action shall have become final
and nonappealable.
Section 8.2 EFFECT OF TERMINATION. In the event this Agreement is
validly terminated pursuant to Section 8.1 hereof, this Agreement will forthwith
become null and void and no party shall have any liability or further obligation
hereunder except as provided in the next succeeding sentence and except that the
provisions of Section 5.7 will continue to apply following any such termination.
Notwithstanding the foregoing, a party will remain liable to the other parties
hereto if such termination was the result of such party's willful breach of this
Agreement or such party's fraud, bad faith or willful misconduct.
Section 8.3 SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable by any court or governmental agency
or with competent jurisdiction, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (iii) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and
(iv) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
Section 8.4 ENTIRE AGREEMENT. This Agreement (together with the
documents attached as exhibits hereto and any documents or agreements
specifically contemplated hereby) supersedes all prior discussions and
agreements
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among any of the parties hereto (except for the Confidentiality Agreement, which
shall remain in full force and effect) (and their Affiliates) with respect to
the subject matter hereof and contains the entire understanding of the parties
with respect to the subject matter hereof.
Section 8.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall be effective when one or more of the counterparts have been signed by
each party and delivered to the other parties or their representatives, it being
understood that all parties need not sign the same counterpart.
Section 8.6 NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be in writing and
shall be deemed to have been duly given if mailed, by first class or registered
mail, three (3) business days after deposit in the United States Mail, or if
telexed or telecopied, sent by telegram, or delivered by hand or reputable
overnight courier, when confirmation is received by the sending party, in each
case addressed as follows:
If to Wang, to:
Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821-4130
Attn: Albert A. Notini, Esq.
Telecopy: 508-967-0436
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, MA 02108
Attn: David T. Brewster, Esq.
Telecopy: 617-573-4822
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If to Bajaj or to the Bajaj Trust, to:
Kaval Bajaj
10201 Norton Road
Potomac, MD 20854
Telecopy: 301-299-2000
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W.
Suite 800
Washington, D.C. 20004
Attn: Richard A. Steinwurtzel, Esq.
Telecopy: 202-639-7003
and
Tucker, Flyer & Lewis
Suite 400
1615 L Street, N.W.
Washington, D.C. 20036-5601
Attn: Stefan F. Tucker
Telecopy: 202-429-3231
If to any Goldman/Omega Stockholder, to:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Attn: Joseph H. Gleberman
Telecopy: 212-902-3000
and
Omega Advisors, Inc.
Wall Street Plaza
88 Pine Street
31st Floor
New York, NY 10005
Attn: Leon Cooperman
Telecopy: 212-495-5236
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With a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Attn: Lawrence Lederman, Esq.
Telecopy: 212-530-5219
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Nothing in this Section 8.6 shall be
deemed to constitute consent to the manner and address for service of process in
connection with any legal proceeding (including litigation arising out of or in
connection with this Agreement), which service shall be effected as required by
applicable law.
Section 8.7 AMENDMENTS. Any waiver, change, modification or
discharge of the provisions of this Agreement shall require the written consent
of Wang and each of the Sellers, provided, however, that Bajaj and the Goldman
Stockholders, without the consent of the Bajaj Trust or the Omega Stockholders,
may terminate this Agreement pursuant to Section 8.1(b) or 8.1(d).
Section 8.8 COOPERATION. The Sellers and Wang each agree to take,
or cause to be taken, all such further or other actions as shall reasonably be
necessary to make effective and consummate the transactions contemplated by this
Agreement. In addition, each of the Sellers agrees to use its reasonable best
efforts to obtain for Wang from the Company's auditors (i) any consents
necessary for purposes of inclusion or incorporation by reference of the reports
of such auditors on the historical audited financial statements for periods
prior to the Closing Date in any registration statement subsequently filed by
Wang with the Commission and (ii) any manually signed reports of such auditors
which may be necessary to complete Wang's filings under the Exchange Act. Each
of the Sellers will also use its reasonable best efforts to cause the auditors
to make available its workpapers related to its audits of the Company's
financial statements to Wang's auditors to the extent considered necessary by
Wang's auditors, as is customary and normal between predecessor and successor
auditors.
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Section 8.9 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns; PROVIDED, HOWEVER, that neither this
Agreement nor any right hereunder shall be assigned by any of the parties hereto
without the prior written consent of the other parties (except that Wang may
assign its rights (but not its obligations hereunder) to any wholly-owned
subsidiary without the consent of the other parties).
Section 8.10 SURVIVAL PERIODS. The representations and warranties
in Sections 3.1, 3.2, 3.4(a), 3.4(b), 3.4(c), 3.21, 3.22, 3.23, 3.24 (other than
the second sentence thereof), 4.2, 4.3, 4.10 and 4.11 (other than the second
sentence thereof) shall survive the Closing without limitation as to time. The
representations and warranties in Section 3.20 to the extent the breach thereof
could result in a Loss resulting from administrative, civil or criminal
penalties or fines, criminal convictions or suspensions, debarments or
terminations (other than any termination for convenience or termination of a
Contract of the type referred to in Section 3.14(a)(xi) as a result of the
transactions contemplated hereby) shall survive the Closing for three years and
shall otherwise survive the Closing for two years, and, except as provided in
Section 6.5, in each case, such representations and warranties shall terminate
and cease to be of further force or effect as of the end of the applicable
survival periods. The representations and warranties in Section 3.9 shall
terminate and cease to be of further force or effect as of the Closing Date. The
representations and warranties in this Agreement (other than those referred to
in the three immediately preceding sentences) shall survive the Closing for
eighteen months, and, except as provided in Section 6.5, such representations
and warranties shall terminate and cease to be of further force or effect as of
the end of such survival period. The covenants and agreements in this Agreement
shall survive the Closing and shall be fully effective and enforceable for the
periods therein indicated (as of the end of which period, except as provided in
Section 6.5, they shall terminate and cease to be of further force or effect)
or, where not indicated, without limitation as to time.
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Section 8.11 GOVERNING LAW; CHOICE OF FORUM. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New York (without reference to its choice of law principles). The
parties hereto expressly submit themselves to the non-exclusive jurisdictions of
the state and federal courts of the State of New York in any action or
proceeding relating to this Agreement or any of the transactions contemplated
hereby or thereby. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such action, suit or proceeding brought in such a court and
any claim that any such action, suit or proceeding brought in such a court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
any party to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the other parties in any other
jurisdiction.
Section 8.12 HEADINGS. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 8.13 NO THIRD-PARTY BENEFICIARIES. This Agreement, except
for the provisions of Section 5.13 and Article VI, is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date and year first above written.
WANG LABORATORIES, INC.
By: /s/ Joseph M. Tucci
-----------------------------------
Name: Joseph M. Tucci
Title: Chairman of the Board and
Chief Executive Officer
/s/ Kaval Bajaj
---------------------------------------
Kaval Bajaj
GS CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: GS Advisors, L.P., its general
partner
By: GS Advisors, Inc., its general
partner
By: /s/ Joseph Gleberman
-----------------------------------
Name: Joseph Gleberman
Title: Vice President
BRIDGE STREET FUND 1994, L.P.,
a Delaware limited partnership
By: Stone Street Funding Corp.,
its general partner
By: /s/ C.H. Skodinski
-----------------------------------
Name: C.H. Skodinski
Title: Vice President
STONE STREET FUND 1994, L.P.,
a Delaware limited partnership
By: Stone Street Funding Corp.,
its general partner
By: /s/ C.H. Skodinski
-----------------------------------
Name: C.H. Skodinski
Title: Vice President
<PAGE> 91
OMEGA INSTITUTIONAL PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Charles A. Leeds, Jr.
-----------------------------------
Name: Charles A. Leeds, Jr.
Title: General Partner
OMEGA CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Charles A. Leeds, Jr.
-----------------------------------
Name: Charles A. Leeds, Jr.
Title: General Partner
KAVELLE BAJAJ CHARITABLE
REMAINDER UNITRUST,
AGREEMENT DATED JULY 19, 1996
By: /s/ Kaval Bajaj
-----------------------------------
Name: Kaval Bajaj
Title: Co Trustee
By: /s/ Ken S. Bajaj
-----------------------------------
Name: Ken S. Bajaj
Title: Co Trustee
<PAGE> 92
EXECUTION COPY
--------------
AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT (this
"Amendment No. 1 to the Stock Purchase Agreement") is being entered into as of
August 29, 1996 by and among Wang Laboratories, Inc., a Delaware corporation
("Wang"), and the other signatories hereto (the "Sellers").
WHEREAS, Wang and the Sellers are parties to a Stock Purchase
Agreement, dated as of July 24, 1996 (the "Stock Purchase Agreement"), pursuant
to which Wang has agreed to purchase from the Sellers, and the Sellers have
agreed to sell to Wang, all of the issued and outstanding shares of capital
stock of I-NET, Inc., a Maryland corporation (the "Company"), owned by the
Sellers;
WHEREAS, by letter dated August 19, 1996 attached as Exhibit A
hereto (the "Sellers' Letter"), the Sellers gave Wang notice of certain events
or conditions which have occurred since the date of the Stock Purchase
Agreement;
WHEREAS, by letter dated August 23, 1996 attached as Exhibit B
hereto ("Wang's Letter"), Wang responded to the Sellers' Letter;
WHEREAS, Wang and the Sellers desire to resolve the matters at issue
in the Sellers' Letter and Wang's Letter so that they can, simultaneously with
such resolution, consummate the transactions contemplated by the Stock
Purchase Agreement; and
WHEREAS, Wang and the Sellers are entering into this Amendment No. 1
to the Stock Purchase Agreement to resolve the matters at issue in the Sellers'
Letter and Wang's Letter;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants contained herein and the consummation of the transactions
contemplated by the Stock Purchase Agreement, Wang and the Sellers agree to
amend the Stock Purchase Agreement as follows (with capitalized terms used and
not defined herein having their respective meanings set forth in the Stock
Purchase Agreement):
<PAGE> 93
Section 1. ADJUSTMENT OF NOTES. To resolve the write-off of $742,000
on the ArPerCen contract disclosed in paragraph 3 of the Sellers' Letter (the
"ArPerCen Write-Off"), the operating reserve of $900,000 with respect to the CIT
equipment lease costs disclosed in paragraph 4 of the Sellers' Letter (the "CIT
Reserve") and the write-off of $460,000 of obsolete equipment having no future
economic usefulness disclosed in paragraph 5 of the Sellers' Letter (the
"Equipment Write-Off"), the aggregate principal amount of the Note or Notes to
be delivered at the Closing by Wang to each Seller pursuant to Section
2.3(a)(ii)(y) of the Stock Purchase Agreement shall be reduced by the amount set
forth under the heading "Adjustment for Certain Write-Offs and Reserves"
opposite such Seller's name on Exhibit C hereto.
Section 2. ADDITIONAL SELLER INDEMNIFICATION; COMMERCIALLY
REASONABLE BEST EFFORTS TO RECOVER RESERVES. (a) To resolve the reserve of
$962,000 on the FAA contract disclosed in paragraph 3 of the Sellers' Letter
(the "FAA Reserve") and the reserve of $360,000 on undepreciated cost of
equipment in use disclosed in paragraph 5 of the Sellers' Letter (the "Equipment
Reserve"), the Sellers, subject to this Section 2(a), will indemnify and hold
the Wang Indemnified Persons harmless from and against (i) the amount, if any,
of the FAA Reserve not determined by the Company, in the ordinary course of
business consistent with past practice and on or prior to May 15, 1997, to be
unnecessary (and thus reversed) through improved operational effectiveness,
contract modifications or other steps or to be unnecessary (and thus reversed)
for any other reason (and such amount shall be a Loss within the meaning of the
Stock Purchase Agreement) or (ii) the amount, if any, of the Equipment Reserve
not determined by the Company, in the ordinary course of business consistent
with past practice and on or prior to May 15, 1997, to be unnecessary (and thus
reversed) through use of the related assets in imaging contracts or to be
unnecessary (and thus reversed) for any other reason (and such amount shall be
a Loss within the meaning of the Stock Purchase Agreement); provided, however,
that the Sellers will not have any obligation to indemnify the Wang Indemnified
Persons for Losses pursuant to this Section 2(a) unless and until the aggregate
amount of such Losses exceeds $322,000; provided, further, however, that if
the aggregate amount of such Losses exceeds $322,000, the immediately preceding
proviso shall be disregarded and the Sellers, subject to this Section 2(a), will
indemnify the Wang Indemnified Persons for all of such Losses. Article VI of the
Stock Purchase Agreement shall apply to the indemnification
2
<PAGE> 94
provided for in this Section 2(a), and, among other things, the indemnification
provided for in this Section 2(a) shall be considered an obligation of the
Sellers under Section 6.1(a)(i) of the Stock Purchase Agreement with respect to
breaches of representations and warranties in Section 3.7 of the Stock
Purchase Agreement for purposes of the application of Section 6.1(b) of the
Stock Purchase Agreement and any Losses with respect to which the Wang
Indemnified Persons are entitled to be indemnified pursuant to this Section 2(a)
shall be considered Losses incurred by the Wang Indemnified Persons with
respect to breaches of representations and warranties in Section 3.7 of the
Stock Purchase Agreement for purposes of the application of Section 6.1(b) of
the Stock Purchase Agreement.
(b) Until May 15, 1997, Wang shall cause the Company to use
its commercially reasonable best efforts to recover (x) the FAA Reserve through
improved operational effectiveness, contract modifications or other steps and
(y) the Equipment Reserve through use of the related assets in imaging
contracts.
Section 3. ADJUSTMENT OF INDEMNIFICATION CAPS. The amount of
$8,333,150 appearing in three places in clause (ii) of the fourth sentence of
Section 6.1(b) of the Stock Purchase Agreement is hereby amended to be
$8,250,550 in each such place. The amount of $41,657,500 appearing in clause
(iii) of the fourth sentence of Section 6.1(b) of the Stock Purchase Agreement
is hereby amended to be $41,574,900. The amount of $166,630,000 appearing in
clauses (iv) and (v) of the fourth sentence of Section 6.1(b) of the Stock
Purchase Agreement is hereby amended to be $166,547,400. The amount of
$3,331,500 appearing in clause (ii) of Section 6.2(b) of the Stock Purchase
Agreement is hereby amended to be $3,248,900. The amount of $66,630,000
appearing in clause (iii) of Section 6.2(b) of the Stock Purchase Agreement is
hereby amended to be $66,547,400.
Section 4. CALCULATION OF LOSSES. The amount of any Losses incurred
by any Wang Indemnified Person shall not be reduced pursuant to Section 6.3(c)
of the Stock Purchase Agreement by the amount of the ArPerCen Write-Off, the CIT
Reserve, the Equipment Write-Off, the FAA Reserve or the Equipment Reserve.
Section 5. NO ADMISSION. The Sellers' execution and delivery of
this Amendment No. 1 to the Stock Purchase Agreement shall not be construed as
an admission that the events or conditions disclosed in the Sellers' Letter,
individually or in the aggregate, constituted a
3
<PAGE> 95
breach of any representation or warranty or covenant or agreement of any Seller
in the Stock Purchase Agreement.
Section 6. NO WAIVER. Wang's execution and delivery of this
Amendment No. 1 to the Stock Purchase Agreement shall not be construed as a
waiver, and Wang hereby reserves its rights with respect to, any other
write-offs, reserves or other changes or events relating to the ArPerCen
contract, the FAA contract, the CIT equipment lease or assets of the Company
other than the equipment the subject of the Equipment Write-Off or the Equipment
Reserve.
Section 7. CLOSING CERTIFICATES. Because the events or conditions
disclosed in the Sellers' Letter have been resolved in this Amendment No. 1 to
the Stock Purchase Agreement, neither the exception taken with respect to the
Sellers' Letter in the certificates of each of the Sellers being delivered to
Wang at the Closing pursuant to Section 7.1(a) of the Stock Purchase Agreement
or in the certificate of the Company's chief financial officer being delivered
to Wang at the Closing pursuant to Section 7.1(l) of the Stock Purchase
Agreement, nor Wang's acceptance of such certificates with such exception, shall
have any effect on the rights or obligations of the parties to the Stock
Purchase Agreements after the Closing, except as provided in this Amendment
No. 1 to the Stock Purchase Agreement.
Section 8. SCOPE OF THIS AMENDMENT NO. 1 TO THE STOCK PURCHASE
AGREEMENT. Except as expressly provided in this Amendment No. 1 to the Stock
Purchase Agreement, the Stock Purchase Agreement shall remain in full force and
effect.
Section 9. CLOSING DOCUMENTS. All references to the Stock Purchase
Agreement in the documents being delivered at the Closing shall be deemed to be
to the Stock Purchase Agreement as amended by this Amendment No. 1 to the Stock
Purchase Agreement.
4
<PAGE> 96
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1
to the Stock Purchase Agreement to be duly executed as of the date and year
first above written.
WANG LABORATORIES, INC.
By: /s/ Joseph M. Tucci
----------------------------------
Name: Joseph M. Tucci
Title: Chairman of the Board and
Chief Executive Officer
/S/ Kaval Bajaj
---------------------------------------
Kaval Bajaj
GS CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: GS Advisors, L.P., its general
partner
By: GS Advisors, Inc., its general
partner
By: /s/ C.H. Skodinski
-----------------------------------
Name: C.H. Skodinski
Title: Vice President
BRIDGE STREET FUND 1994, L.P.,
a Delaware limited partnership
By: Stone Street Funding Corp.,
its general partner
By: /s/ C.H. Skodinski
-----------------------------------
Name: C.H. Skodinski
Title: Vice President
<PAGE> 97
STONE STREET FUND 1994, L.P.,
a Delaware limited partnership
By: Stone Street Funding Corp.,
its general partner
By: /s/ C.H. Skodinski
-----------------------------------
Name: C.H. Skodinski
Title: Vice President
OMEGA INSTITUTIONAL PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Charles A. Leeds, Jr.
-----------------------------------
Name: Charles A. Leeds, Jr.
Title: General Partner
OMEGA CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Charles A. Leeds, Jr.
-----------------------------------
Name: Charles A. Leeds, Jr.
Title: General Partner
KAVELLE BAJAJ CHARITABLE
REMAINDER UNITRUST,
AGREEMENT DATED JULY 19, 1996
By: /s/ Kaval Bajaj
-----------------------------------
Name: Kaval Bajaj
Title: Co-Trustee
By: /s/ Ken Bajaj
-----------------------------------
Name: Ken Bajaj
Title: Co-Trustee
<PAGE> 1
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 29, 1996
Among
WANG LABORATORIES, INC.,
WANG FEDERAL, INC. (FORMERLY KNOWN AS HFS INC.,),
WANG CANADA LIMITED,
I-NET, INC.,
and
DATASERV COMPUTER MAINTENANCE, INC.,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO, TOGETHER WITH
THOSE ASSIGNEES PURSUANT TO SECTION 10.8 HEREOF,
as Lenders,
BANKERS TRUST COMPANY,
as Agent and Issuing Bank,
BT COMMERCIAL CORPORATION,
as Collateral Agent,
and
BAYBANK,
FLEET NATIONAL BANK,
LEHMAN COMMERCIAL PAPER INC.,
and
RIGGS BANK N.A.,
as Co-Agents
================================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. General Definitions.......................................... 2
SECTION 1.2. Accounting Terms and Determinations.......................... 32
SECTION 1.3. Other Terms; Headings........................................ 32
SECTION 1.4. Computation of Time Periods.................................. 32
ARTICLE II
REVOLVING LOANS
SECTION 2.1. Revolving Credit Commitments................................. 33
SECTION 2.2. Borrowing of Revolving Loans................................. 33
SECTION 2.3. Disbursement of Revolving Loans.............................. 34
SECTION 2.4. Notices of Borrowing......................................... 35
SECTION 2.5. Same Day Settlement of Lender Advances....................... 35
SECTION 2.6. Periodic Settlement of Agent Advances and Repayments......... 35
SECTION 2.7. Sharing of Payments.......................................... 36
SECTION 2.8. Defaulting Lenders........................................... 37
SECTION 2.9. Mandatory and Voluntary Payment; Mandatory and Voluntary
Reduction of Commitments.................................... 38
SECTION 2.10. Maintenance of Loan Account; Statements of Account........... 39
SECTION 2.11. Payment Procedures.......................................... 39
SECTION 2.12. Collections ............................................... 39
SECTION 2.13. Application of Payments..................................... 41
ARTICLE III
LETTERS OF CREDIT
SECTION 3.1. Issuance of Letters of Credit................................ 41
SECTION 3.2. Terms of Letters of Credit................................... 42
SECTION 3.3. Lenders' Participation....................................... 43
SECTION 3.4. Notice of Issuance........................................... 43
SECTION 3.5. Payment of Amount Drawn Under Letters of Credit.............. 44
SECTION 3.6. Payment by Lenders........................................... 45
SECTION 3.7. Nature of Issuing Bank's Duties.............................. 45
SECTION 3.8. Obligations Absolute......................................... 46
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IV
INTEREST, FEES AND EXPENSES
SECTION 4.1. Interest on Prime Rate Loans................................. 47
SECTION 4.2. Interest on Eurodollar Rate Loans............................ 47
SECTION 4.3. Interest and Letter of Credit Fees After Event of Default.... 47
SECTION 4.4. Letter of Credit Fees........................................ 48
SECTION 4.5. Unused Line Fee.............................................. 48
SECTION 4.6. Other Fees and Expenses...................................... 48
SECTION 4.7. Calculations................................................. 48
SECTION 4.8. Special Provisions Relating to Eurodollar Rate Loans......... 49
SECTION 4.9. Indemnification in Certain Events............................ 52
SECTION 4.10. Net Payments................................................. 53
SECTION 4.11. Affected Lenders............................................. 57
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions to Initial Loans and Letters of Credit............ 58
SECTION 5.2. Conditions Precedent to All Loans and Letters of Credit...... 61
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of the Borrowers.............. 61
ARTICLE VII
COVENANTS OF THE BORROWERS
SECTION 7.1. Affirmative Covenants........................................ 73
SECTION 7.2. Negative Covenants........................................... 84
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default............................................ 98
SECTION 8.2. Acceleration and Cash Collateralization......................100
SECTION 8.3. Rescission of Acceleration...................................101
SECTION 8.4. Remedies.....................................................101
SECTION 8.5. Right of Setoff..............................................102
SECTION 8.6. License for Use of Software and Other Intellectual Property..102
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
SECTION 8.7. No Marshalling; Deficiencies; Remedies Cumulative............102
ARTICLE IX
THE AGENT AND THE COLLATERAL AGENT
SECTION 9.1. Appointment of Agent and Collateral Agent....................103
SECTION 9.2. Nature of Duties of Agent....................................103
SECTION 9.3. Lack of Reliance on Agent....................................104
SECTION 9.4. Certain Rights of the Agent..................................104
SECTION 9.5. Reliance by Agent............................................104
SECTION 9.6. Indemnification of Agent.....................................105
SECTION 9.7. The Agent in Its Individual Capacity.........................105
SECTION 9.8. Holders of Revolving Notes...................................105
SECTION 9.9. Successor Agent..............................................105
SECTION 9.10. Collateral Matters...........................................106
SECTION 9.11. Actions with Respect to Defaults.............................107
SECTION 9.12. Delivery of Information......................................107
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Governing Law...............................................108
SECTION 10.2. Submission to Jurisdiction..................................108
SECTION 10.3. Service of Process..........................................108
SECTION 10.4. Jury Trial..................................................109
SECTION 10.5. Limitation of Liability.....................................109
SECTION 10.6. Delays; Partial Exercise of Remedies........................109
SECTION 10.7. Notices.....................................................109
SECTION 10.8. Assignments and Participations..............................110
SECTION 10.9. Confidentiality.............................................113
SECTION 10.10. Indemnification; Reimbursement of Expenses of Collection....113
SECTION 10.11. Amendments and Waivers......................................114
SECTION 10.12. Nonliability of Agent, Collateral Agent, Co-Agents
and Lenders................................................116
SECTION 10.13. Independent Nature of Lenders' Rights.......................116
SECTION 10.14. Counterparts................................................116
SECTION 10.15. Effectiveness...............................................117
SECTION 10.16. Severability................................................117
SECTION 10.17. Maximum Rate................................................117
SECTION 10.18. Entire Agreement; Successors and Assigns....................118
SECTION 10.19. Judgment....................................................118
SECTION 10.20. Waiver of Immunities........................................118
SECTION 10.21. Interest Act (Canada).......................................118
</TABLE>
-iii-
<PAGE> 5
Schedules
- ---------
Schedule 1 - List of Lenders, Lending Offices and
Commitments
Schedule 2 - Existing Indebtedness
Schedule 3.2 - Existing Letters of Credit
Schedule 5.1(c) - List of Closing Documents
Schedule 6.1(a) - Jurisdictions in which the Borrowers and
the Subsidiaries are Qualified to do
Business
Schedule 6.1(k) - Location of Offices, Records and
Inventory
Schedule 6.1(l)(i) - List of Subsidiaries
Schedule 6.1(l)(ii) - 100% Owned Subsidiaries
Schedule 6.1(l)(iii) - Proxies with respect to Stock of
Subsidiaries
Schedule 6.1(m) - Pending Litigation, etc.
Schedule 6.1(p) - Labor Contracts
Schedule 6.1(r) - Pension Plans
Schedule 6.1(t) - Environmental Actions
Schedule 6.1(u) - Real Property
Schedule 6.1(v) - Material Contracts
Schedule 6.1(w) - Intellectual Property
Schedule 6.1(x) - Tax Deficiencies
Schedule 6.1(y) - Fictitious Names
Schedule 6.1(ab) - Affiliate Transactions
Schedule 6.1(ad) - Foreign Subsidiaries
Schedule 6.1(ae) - Assignment of Claims Act Assignments
Schedule 7.1(t) - Cash Management Agreements
Schedule 7.2(a) - Permitted Liens
Schedule 7.2(d) - Assets Held for Sale
Schedule 7.2(e)(vi) - Existing Investments
Schedule 7.2(e)(vii) - Certain Investments in Subsidiaries
Schedule 7.2(p) - Lockbox and Concentration Banks and Bank
Accounts
-iv-
<PAGE> 6
Exhibits
- --------
Exhibit A - Revolving Note
Exhibit B - Borrowing Base Certificate
Exhibit C - Notice of Borrowing
Exhibit D - Notice of Continuation
Exhibit E - Notice of Conversion
Exhibit F - Letter of Credit Request
Exhibit G - Wang Security Agreement
Exhibit H - Wang Intellectual Property Security
Agreement
Exhibit I - Wang Canada Intellectual Property
Security Agreement
Exhibit J - Guaranty
Exhibit K - Wang Canada Security Agreement
Exhibit L - INET Subordinated Note
Exhibit M - Compliance Certificate
Exhibit N - Assignment and Assumption Agreement
Exhibit O - Hypothec
Exhibit P - Contribution Agreement
Exhibit Q - Consent to Collateral Assignment
Exhibit R - Dataserv Security Agreement
Exhibit S - Dataserv Intellectual Property Security
Agreement
Exhibit T - Wang Software Security Agreement
Exhibit U - Wang Software Intellectual Property
Security Agreement
Exhibit V - Amendment to Mortgage
Exhibit W - Amendment to Environmental Indemnity
Agreement
-v-
<PAGE> 7
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of August 29, 1996, among WANG LABORATORIES, INC., a Delaware corporation
("WANG"), WANG FEDERAL, INC., a Delaware corporation formerly known as HFS Inc.
("WFI"), WANG CANADA LIMITED, a corporation organized and existing under the
laws of the Province of Ontario, Canada ("WANG CANADA"), I-NET, INC., a Maryland
corporation ("INET"), DATASERV COMPUTER MAINTENANCE, INC., a Minnesota
corporation ("DATASERV"), each of those financial institutions identified as
Lenders on Schedule 1 hereto (together with each of their successors and
assigns, referred to individually as a "LENDER" and collectively as the
"LENDERS"), BANKERS TRUST COMPANY, acting in the manner and to the extent
described in Article IX (in such capacity, the "AGENT") and acting as issuer of
letters of credit (in such capacity, the "ISSUING BANK"), BT COMMERCIAL
CORPORATION, as collateral agent (in such capacity, the "COLLATERAL AGENT"), and
BAYBANK, FLEET NATIONAL BANK (formerly known as Fleet National Bank of
Massachusetts), LEHMAN COMMERCIAL PAPER INC. and RIGGS BANK N.A. (formerly known
as The Riggs National Bank of Washington, D.C.), as co-agents (collectively, the
"CO-AGENTS").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Wang, WFI, the financial institutions party thereto
as lenders (the "EXISTING LENDERS"), BTCC, as agent, BTCo, as issuing bank, and
Fleet National Bank (formerly known as Fleet National Bank of Massachusetts) and
BayBank, as co-agents, are parties to the Credit Agreement, dated as of January
30, 1995 (as heretofore amended, the "EXISTING CREDIT AGREEMENT");
WHEREAS, Wang has requested BTCC and the Existing Lenders to
amend and restate the Existing Credit Agreement to, among other things, add Wang
Canada, INET and Dataserv as borrowers and increase the aggregate commitments to
$225,000,000;
WHEREAS, the Agent and the Lenders are willing to amend and
restate the Existing Credit Agreement on the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, the Borrowers, the Lenders, the Issuing Bank,
the Agent, the Collateral Agent, the Co-Agents and the other parties whose names
appear on the signature pages hereto agree that the Existing Credit Agreement
shall be and hereby is amended and restated as follows:
-1-
<PAGE> 8
ARTICLE I
DEFINITIONS
SECTION 1.1. GENERAL DEFINITIONS. As used herein, the
following terms shall have the meanings herein specified (to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCEPTANCE DATE" is defined in Section 10.8(b).
"ACCOUNTS" is defined in the Security Agreements.
"ACCOUNTS BORROWING BASE" means, on any day, an amount up to
80% of the outstanding Eligible Accounts Receivable of the Borrowers on
such day.
"ACQUIRED INET STOCK" means all of the issued and outstanding
shares of capital stock of INET acquired by Wang pursuant to the INET
Purchase Agreement.
"ACQUISITION" means the acquisition of stock, Indebtedness of
a Person, all or substantially all of the assets of a Person or any
business or line of business of a Person, excluding purchases of
inventory, equipment, real estate or intellectual property in the
ordinary course of business.
"ACQUISITION NOTIFICATION LAWS" means, collectively, HSR and
the Exon-Florio Amendment to the Omnibus Trade and Competitiveness Act
of 1988.
"ADJUSTED EURODOLLAR RATE" means, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate obtained by
dividing (i) the Eurodollar Rate for such Interest Period by (ii) a
percentage equal to 1 minus the stated maximum rate (stated as a
decimal) of all reserves, if any, required to be maintained against
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States
office of any Lender to United States residents).
"ADJUSTED NET INCOME" means, in any fiscal period, Net Income
plus or minus (as the case may be) losses or gains from extraordinary
items and from sales of assets, other than sales of Inventory in the
ordinary course of business.
-2-
<PAGE> 9
"AFFILIATE" of a Person means another Person who directly or
indirectly controls, is controlled by, is under common control with or
is a director or officer of such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of
the power to vote ten percent (10%) or more of the securities having
ordinary voting power for the election of directors or the direct or
indirect power to direct the management and policies of a business.
"AGENT" means BTCO as provided in the preamble to this Credit
Agreement or any successor to BTCO.
"AGENT ADVANCES" is defined in Section 2.2.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Loan, and such Lender's Domestic Lending Office in the
case of a Prime Rate Loan.
<TABLE>
"APPLICABLE MARGIN" means a percentage per annum determined by
reference to EBITDA for the most recently ended four fiscal quarters as
set forth below:
<CAPTION>
EBITDA For
Last Four Prime Eurodollar Letter of Unused
Fiscal Quarters Rate Loans Rate Loans Credit Fee Line Fee
- --------------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Level I 1.25% 2.25% 2.25% .50%
- -------
less than
$125,000,000
Level II 1.00% 2.00% 2.00% .375%
- --------
$125,000,000 or
greater, but less
than $150,000,000
Level III .75% 1.75% 1.75% .375%
- ---------
$150,000,000 or
greater, but less
than $175,000,000
Level IV .50% 1.50% 1.50% .375%
- --------
$175,000,000 or
greater, but less
than $200,000,000
Level V .25% 1.25% 1.25% .25%
- -------
$200,000,000 or
greater
</TABLE>
The Applicable Margin for each Prime Rate Loan shall be determined by
reference to EBITDA in effect from time to time and the Applicable
Margin for each Eurodollar Rate Loan
-3-
<PAGE> 10
shall be determined by reference to EBITDA in effect on the first day
of each Interest Period for such Loan; PROVIDED, HOWEVER, that (i) no
change in the Applicable Margin shall be effective until three (3)
Business Days after the date on which the Agent receives the relevant
Financial Statements and a duly executed Compliance Certificate
demonstrating such EBITDA and (ii) if the Agent notifies Wang in
writing, the Applicable Margin shall be at Level I for so long as the
Agent has not received the information described in clause (i) of this
proviso as and when required under Section 7.1(a)(i), (iii) or (iv), as
the case may be.
"ASSET SALE" means, for any Person, any sale, transfer or
other disposition or series of sales, transfers or other dispositions
(including, without limitation, by merger or consolidation or by
exchange of assets and whether by casualty, loss, operation of law or
otherwise) made by such Person or any of its Subsidiaries to any Person
of any assets (excluding Inventory and Accounts) of such Person or any
of its Subsidiaries including, without limitation, assets consisting of
any capital stock or other securities held by such Person or any of its
Subsidiaries (other than capital stock of such Person), and any capital
stock issued by any Subsidiary of such Person, PROVIDED that a sale,
transfer or other disposition by a Person to its wholly owned
Subsidiary or a sale, transfer or other disposition by a Subsidiary to
Wang or to another Subsidiary shall not be considered an Asset Sale.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" is defined in
Section 10.8(b).
"AUDITORS" means a nationally recognized firm of independent
public accountants selected by Wang and satisfactory to the Agent in
its sole discretion. For purposes of this Credit Agreement, Wang's
current firm of independent public accountants, Ernst & Young, shall be
deemed to be satisfactory to the Agent.
"AUTHORIZED OFFICER" means the Chief Executive Officer,
the President, the Chief Financial Officer, the Vice President-
Treasurer, the Vice President-Controller or the Assistant Treasurer of
Wang.
"AVAILABLE EXCESS CASH FLOW AMOUNT" means at any time of
determination, Excess Cash Flow determined as of the end of the fiscal
quarter most recently ended, reduced by the cumulative amount of
additional cash Investments made pursuant to Section 7.2(e)(viii)(b)
and additional cash Capital Expenditures made pursuant to Section
7.2(q)(b), in each case on or prior to the time of determination.
-4-
<PAGE> 11
"BASE AMOUNT" is defined in Section 7.2(q).
"BASE INVESTMENT AMOUNT" is defined in Section
7.2(e)(viii).
"BENEFIT PLAN" means a "defined benefit plan" as defined in
Section 3(35) of ERISA for which Wang, any Subsidiary or any ERISA
Affiliate has been an "employer" as defined in Section 3(5) of ERISA
within the past six years.
"BORROWERS" means the collective reference to Wang, WFI, Wang
Canada, INET and Dataserv.
"BORROWING" means a borrowing consisting of a Revolving Loan
of the same Type made on the same day by the Lenders.
"BORROWING BASE" means, on any day, an amount equal to the sum
of (a) the Accounts Borrowing Base on such day and (b) the Supplemental
Amount on such day.
"BORROWING BASE CERTIFICATE" is defined in Section 7.1(b)(i).
"BT ACCOUNT" is defined in Section 2.12(a)
"BTCC" means BT Commercial Corporation, in its individual
capacity.
"BTCO" means Bankers Trust Company, in its individual
capacity.
"BULL ACQUIRED ASSETS" means all of the capital stock and
assets acquired by Wang pursuant to the Bull Purchase Agreement,
including without limitation, the U.S. based Customer Services
Operations of Bull HN, WFI, the Worldwide Imaging and Workflow Business
of Bull, S.A. and the Australian, New Zealand, Canadian and Mexican
subsidiaries of Bull HN.
"BULL HN" means Bull HN Information Systems Inc., a Delaware
corporation.
"BULL PURCHASE AGREEMENT" means the collective reference to
(a) the Asset and Stock Purchase Agreement dated as of December 30,
1994 by and between Wang and Bull HN, as such agreement may be amended,
modified or supplemented from time to time and (b) the Stock Purchase
Agreement dated as of December 30, 1994 by and among Wang, Compagnie
Des Machines Bull and Bull S.A., as such agreement may be amended,
modified or supplemented from time to time.
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"BULL SUBORDINATED NOTE" means the unsecured subordinated
promissory note dated January 31, 1995 in the original principal amount
of $27,230,000 (subject to adjustments pursuant to Section 5.12 of the
agreement described in clause (a) of the definition of Bull Purchase
Agreement which adjustments may take the form of an exchange of the
Bull Subordinated Note) made by Wang and payable to Bull HN, as
amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Credit Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which commercial banks in New York, New York or Boston,
Massachusetts are required or permitted by law to close. When used in
connection with Eurodollar Rate Loans, this definition will also
exclude any day on which commercial banks are not open for dealing in
Dollar deposits in the London (England, U.K.) interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum of all
expenditures for property, plant and equipment and software capitalized
for financial statement purposes in accordance with GAAP (whether
payable in cash or other property or accrued as a liability), including
the principal amount of any debt (including the capitalized portion of
capital leases) assumed or incurred in connection with any such
expenditures. Capital Expenditures shall exclude (i) proceeds of a
Casualty Loss applied to the repair or replacement of the property
affected by the Casualty Loss, (ii) that portion of Investments
allocable to property, plant or equipment, (iii) expenditures in
connection with the acquisition of the Acquired INET Stock, (iv) an
amount equal to the proceeds (including the value received in any
exchange or trade) of a sale or other disposition of an asset permitted
under the terms of this Credit Agreement or applied to the replacement
or purchase of property, plant, equipment or software and (v)
expenditures payable solely in shares of capital stock of Wang.
"CASH EQUIVALENTS" means (i) securities issued, guaranteed or
insured by the United States or any of its agencies with maturities of
not more than one year from the date acquired; (ii) certificates of
deposit with maturities of not more than one year from the date
acquired, issued by a U.S. federal or state chartered commercial bank
of recognized standing, which has capital and unimpaired surplus in
excess of $200,000,000 and which bank or its holding company has a
short-term commercial paper rating of at least A-1 or the equivalent by
Standard & Poor's Corporation or at least P-1 or the equivalent by
Moody's Investors Service, Inc.; (iii) repurchase agreements and
reverse repurchase agreements with terms of not more than
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seven days from the date acquired, for securities of the type described
in (i) above and entered into only with commercial banks having the
qualifications described in (ii) above; (iv) commercial paper, other
than commercial paper issued by Wang or any of its Affiliates, issued
by any Person incorporated under the laws of the United States or any
state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof
by Moody's Investors Service, Inc., in each case with maturities of not
more than one year from the date acquired; (v) investments in money
market funds registered under the Investment Company Act of 1940, which
have net assets of at least $200,000,000 and at least eighty-five
percent (85%) of whose assets consist of securities and other
obligations of the type described in clauses (i) through (iv) above;
and (vi) other instruments, commercial paper or investments reasonably
acceptable to the Agent in its sole discretion.
"CASUALTY LOSS" is defined in Section 7.1(g).
"CERTIFICATES OF DESIGNATION" means the 4 1/2% Preferred
Certificate of Designation and the 6 1/2% Preferred Certificate of
Designation.
"CHANGE OF CONTROL" means one or more of the following
events:
(a) less than a majority of the members of Wang's
board of directors shall be persons who either (i) were serving as
directors on the Closing Date or (ii) were nominated as directors and
approved by the vote of the majority of the directors who are directors
referred to in clause (i) above or this clause (ii); or
(b) the stockholders of Wang shall approve any plan
or proposal for the liquidation or dissolution of Wang; or
(c) a Person or group of Persons acting in concert
(other than the direct or indirect beneficial owners of the capital
stock of Wang as of the Closing Date) shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases
or otherwise, have become the direct or indirect beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended from time to time) of securities of Wang representing
more than thirty-five percent (35%) of the combined voting power of the
outstanding voting securities for the election of directors or shall
have the right to elect a majority of the Board of directors of Wang.
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"CLOSING DATE" means the date of execution and delivery of
this Credit Agreement.
"CO-AGENTS" means BayBank, Fleet National Bank (formerly known
as Fleet National Bank of Massachusetts), Lehman Commercial Paper Inc.
and Riggs Bank N.A. (formerly known as The Riggs National Bank of
Washington, D.C.) or any successors thereto.
"CODE" is defined in Section 1.3.
"COLLATERAL" means the Accounts, Inventory, the Intellectual
Property Collateral and the other property identified as security for
any or all of the Obligations under the Collateral Documents.
"COLLATERAL ACCESS AGREEMENTS" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgment agreement
of any warehouseman or processor in possession of Inventory, in each
case substantially in the form of Exhibit M to the Existing Credit
Agreement.
"COLLATERAL AGENT" means BTCC as provided in the preamble to
this Credit Agreement or any successor to BTCC.
"COLLATERAL DOCUMENTS" means all contracts, instruments and
other documents now or hereafter executed and delivered in connection
with this Credit Agreement, pursuant to which liens and security
interests are granted to the Collateral Agent in the Collateral for the
benefit of the Lenders, including without limitation, the Security
Agreements, the Hypothec and the Mortgages and any amendments,
supplements or modifications thereto.
"COLLECTION ACCOUNT" is defined in Section 2.12(a).
"COLLECTIONS" means all cash, funds, checks, notes,
instruments and any other form of remittance tendered by account
debtors in payment of Accounts.
"COMMITMENT" of any Lender means its commitment to make
Revolving Loans and to participate in Letters of Credit, up to the
amount set forth opposite its name on Schedule 1, as such amount may be
reduced from time to time in accordance with the terms of this Credit
Agreement.
"COMPLIANCE CERTIFICATE" is defined in Section 7.1(a)(i).
"CONCENTRATION ACCOUNT" is defined in Section 2.12(a).
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"CONCENTRATION ACCOUNT AGREEMENTS" is defined in Section
2.12(a).
"CONCENTRATION BANK" is defined in Section 2.12(a).
"CONSENT TO COLLATERAL ASSIGNMENT" means the Consent to
Collateral Assignment to be made by the Sellers party to the INET
Purchase Agreement, substantially in the form of Exhibit R, as amended,
supplemented or otherwise modified from time to time.
"CONSOLIDATED NET WORTH" means the consolidated assets of Wang
and its consolidated Subsidiaries minus their consolidated liabilities,
all as reflected on the Financial Statements; PROVIDED that such
amounts shall not include (a) foreign currency translation adjustments
or (b) any loss resulting from a retirement of the 4 1/2% Preferred
Stock, including accretions, at a premium over the book value thereof.
"CONTINGENT OBLIGATION" means any direct, indirect, contingent
or non-contingent guaranty or obligation for the Indebtedness of
another, except endorsements in the ordinary course of business.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement,
substantially in the form of Exhibit P, made by the Credit Parties
(other than Wang) in favor of the Agent for the benefit of the Lenders,
as amended, supplemented or otherwise modified from time to time.
"COVERED TAXES" is defined in Section 4.10(a).
"CREDIT AGREEMENT" means this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"CREDIT DOCUMENTS" means this Credit Agreement, the Revolving
Notes, the Guaranty, the Security Agreements, the Hypothec, the
Mortgages, the Lockbox Agreements, the Fee Letter, the Letter of Credit
Related Documents, the Environmental Indemnity Agreement and each other
document, agreement and instrument from time to time executed by any
Credit Party and delivered to the Agent or a Lender in connection
herewith, as each may be amended, supplemented or otherwise modified
from time to time.
"CREDIT PARTIES" means the Borrowers and the Guarantors.
"DATASERV" is defined in the preamble to this Credit
Agreement.
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"DATASERV INTELLECTUAL PROPERTY SECURITY AGREEMENT" means the
Amended and Restated Intellectual Property Security Agreement,
substantially in the form of Exhibit S, made by Dataserv and WSSM in
favor of the Collateral Agent for the benefit of the Lenders, as
amended, supplemented or otherwise modified from time to time.
"DATASERV SECURITY AGREEMENT" means the Amended and Restated
Security Agreement, substantially in the form of Exhibit R, made by
Dataserv and WSSM in favor of the Collateral Agent for the benefit of
the Lender, as amended, supplemented or otherwise modified from time to
time.
"DEFAULT" means an event, condition or default which with the
giving of notice, the passage of time or both would be an Event of
Default.
"DEFAULTING LENDER" is defined in Section 2.8(a).
"DISBURSEMENT ACCOUNT" means the operating account maintained
with the Disbursement Account Bank.
"DISBURSEMENT ACCOUNT BANK" means Fleet Bank, N.A. or such
other financial institution that is reasonably acceptable to the Agent.
"DOLLARS" and the sign "$" mean freely transferable lawful
money of the United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule 1, as such Schedule may be amended from
time to time.
"DOMESTIC SUBSIDIARY" means any Subsidiary owned by Wang on
the Closing Date other than (a) a Foreign Subsidiary and (b) FSI and
any of its Subsidiaries.
"EBITDA" means, in any fiscal period, Adjusted Net Income PLUS
the amount of all Interest Expense (net of all interest income), income
tax expense, depreciation and amortization, including amortization of
any goodwill or other intangibles and other non-cash charges of a
Person for such period, all determined in accordance with GAAP and to
the extent included in determining Adjusted Net Income for such period,
restructuring expenses for such period and MINUS, to the extent
included in the definition of Adjusted Net Income for such period,
non-cash equity earnings of such Person's unconsolidated Affiliates
PLUS, to the extent excluded in determining Adjusted Net Income for
such period, cash distributions received by such Person from its
unconsolidated Affiliates during such period.
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"ELIGIBLE ACCOUNTS RECEIVABLE" means Accounts of the Borrowers
deemed by the Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the
amount to be so included, the face amount of such Accounts shall be
reduced by the amount of all returns, discounts, claims, credits,
charges, or other allowances and by the aggregate amount of all
reserves, limits and deductions provided for in this definition and
elsewhere in this Credit Agreement. For purposes of calculating the
Accounts of Wang Canada under this Credit Agreement, if any Account is
denominated in a currency other than Dollars, then the face amount of
such Account shall be converted into Dollars at the Rate of Exchange on
the date that the Accounts are calculated. Unless otherwise approved in
writing by the Agent, no Account shall be deemed to be an Eligible
Account Receivable if:
(a) it arises out of a sale made by a Borrower to an
Affiliate, other than Persons who are Affiliates solely
because such Persons are employers of directors of a Borrower
or Affiliates of such employers; or
(b) it remains unpaid after 90 days from the date of
invoice (or, if the account debtor is the United States of
America or any department, body, agency or instrumentality
thereof, 120 days from the date of invoice with respect to
sales of products); or
(c) it is from the same account debtor (or any
Affiliate thereof) and fifty percent (50%) or more of all
Accounts from such account debtor (or any Affiliate thereof)
are ineligible under clause (b) above; or
(d) the Account, when aggregated with all other
Accounts of such account debtor, exceeds thirty-five percent
(35%) in face value of all Accounts then outstanding, to the
extent of such excess; PROVIDED, HOWEVER, that Accounts
supported or secured by an irrevocable letter of credit in
form and substance reasonably satisfactory to the Agent,
issued by a financial institution reasonably satisfactory to
the Agent, and duly pledged to the Collateral Agent (together
with sufficient documentation to permit direct draws by the
Agent) and Accounts covered by a credit insurance policy
reasonably acceptable to the Agent shall be excluded for
purposes of such calculation; or
(e) the account debtor for the Account is a creditor
of any of the Borrowers, has or has asserted a right of
setoff, has disputed its liability or made any
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claim with respect to the Account, to the extent of the amount
owed by such Credit Party to the account debtor, the amount of
such actual or asserted right of setoff, or the amount of such
dispute or claim, as the case may be, PROVIDED, HOWEVER,
Accounts (other than any Account which specifically has become
the subject of an asserted right of setoff, dispute or claim)
on which Bull HN is the account debtor up to an aggregate
amount at any time of $2,000,000 shall not be deemed
ineligible based solely on this clause (e); or
(f) the account debtor is (or its assets are) the
subject of an Insolvency Event or, in the reasonable judgment
of the Agent, likely to become subject to an Insolvency Event
unless such debtor has been provided with a debtor in
possession credit facility pursuant to Section 364 of Title 11
of the United States Code or similar arrangement reasonably
acceptable to the Agent; or
(g) the sale is to an account debtor outside of the
United States, or with respect to sales by Wang Canada,
outside of Canada, unless the Account is supported by an
irrevocable letter of credit in form and substance reasonably
satisfactory to the Agent and assigned to and directly
drawable by the Agent or is covered by a credit insurance
policy reasonably acceptable to the Agent; or
(h) the sale to the account debtor is on a
bill-and-hold, guaranteed sale, sale-and-return, sale on
approval or consignment basis or made pursuant to any other
written agreement providing for repurchase or return; or
(i) the goods giving rise to such Account have not
been shipped and delivered to the account debtor, the services
(other than maintenance services) giving rise to such Account
have not been performed or the Account otherwise does not
represent a final sale; or
(j) the Account does not comply with all applicable
Requirements of Law, including, without limitation, the
Federal Consumer Credit Protection Act, the Federal Truth in
Lending Act and Regulation Z of the Board of Governors of the
Federal Reserve System; or
(k) the Collateral Agent does not have a valid and
perfected first priority Lien (other than Liens permitted
under the Credit Documents) on such Account or the Account
does not otherwise conform to the
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representations and warranties contained in this Credit
Agreement or the other Credit Documents; or
(l) 90 days after the Agent notifies Wang of the
effectiveness of this clause (l), the account debtor is the
United States of America or any department, body, agency,
authority or instrumentality thereof, unless the Borrowers
duly assign their right to payment of such Account to the
Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. [Sections] 3727 et seq.), in form and
substance satisfactory to the Agent, and otherwise comply with
such Act; or
(m) it is an Unbilled Account, unless (i) the account
debtor is the United States of America or any department,
body, agency, authority or instrumentality thereof, (ii) the
Account is owing to WFI and (iii) the Account is invoiced
within 90 days from the rendition of services or the sale of
products.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means the Environmental
Guaranty and Indemnification Agreement, dated as of January 30, 1995,
made by Wang in favor of the Collateral Agent for the benefit of the
Lenders, as amended by the Environmental Indemnity Amendment and as
further amended, supplemented or otherwise modified from time to time.
"ENVIRONMENTAL INDEMNITY AMENDMENT" means the Amendment to the
Environmental Indemnity Agreement, substantially in the form of Exhibit
W, between Wang and the Collateral Agent.
"ENVIRONMENTAL LAWS" means all federal, state and local
statutes, laws (including common or case law), rulings, regulations or
governmental, administrative or judicial policies, directives, orders
or interpretations applicable to the business or property of any Credit
Party relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Materials.
"EQUIPMENT" is defined in the Security Agreements.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C. [Sections] 1000 et seq., amendments thereto,
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successor statutes, and regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means any entity required to be aggregated
with Wang or any of its Subsidiaries under Sections 414(b), (c), (m) or
(o) of the Internal Revenue Code.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule 1, as such Schedule may be amended from
time to time (or, if no such office is specified, its Domestic Lending
Office), or such other office or Affiliate of such Lender as such
Lender may from time to time specify in writing to Wang and the Agent.
"EURODOLLAR RATE" means, with respect to the Interest Period
for each Eurodollar Rate Loan comprising part of the same Borrowing, an
interest rate per annum equal to the rate (rounded upward to the
nearest whole multiple of one-sixteenth (1/16) of one percent (1%) per
annum, if such rate is not such a multiple) of the offered quotation,
if any, to first class banks in the Eurodollar market by the Agent for
Dollar deposits of amounts in immediately available funds comparable to
the principal amount of the Eurodollar Rate Loan for which the
Eurodollar Rate is being determined with maturities comparable to the
Interest Period for which such Eurodollar Rate will apply as of
approximately 10:00 a.m. (New York City time) two (2) Business Days
prior to the commencement of such Interest Period.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as
provided in Section 4.2.
"EVENT(S) OF DEFAULT" is defined in Section 8.1.
"EXCESS CASH FLOW" means, with respect to any period ending on
the last day of a fiscal quarter of Wang, and measured on a cumulative
basis for the period (the "MEASUREMENT PERIOD") from July 1, 1996
through the last day of such fiscal quarter (a) EBITDA for the
Measurement Period MINUS (b) the sum without duplication of (i) cash
Interest Expense for the Measurement Period, (ii) cash income taxes of
Wang and its consolidated Subsidiaries for the Measurement Period,
(iii) all principal payments (other than in connection with
refinancings permitted by Section 7.2(b)) on or mandatory redemptions
of Indebtedness of Wang and its consolidated Subsidiaries during the
Measurement Period (other than repayments of Revolving Loans in the
ordinary course of business which do not permanently reduce the
Commitment), (iv) all cash Capital Expenditures of Wang and
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its consolidated Subsidiaries made during the Measurement Period (other
than Capital Expenditures made pursuant to Section 7.2(q)(b)), (v) all
cash dividends declared by Wang for the Measurement Period, regardless
of when such dividends are actually paid, (vi) all cash Investments
made by Wang and its consolidated Subsidiaries during the Measurement
Period (other than Investments made pursuant to Section
7.2(e)(viii)(b)), (vii) all cash restructuring expenses of Wang and its
consolidated Subsidiaries for the Measurement Period, (viii) accrued
restructuring charges of Wang and its consolidated Subsidiaries paid in
cash during the Measurement Period, (ix) until the outstanding
principal amount of all of the Subordinated Notes is zero (-0-), one
hundred percent (100%) of the outstanding principal amount of the
Subordinated Notes.
"EXISTING INDEBTEDNESS" means the Indebtedness of Wang and its
Restricted Subsidiaries (including, without limitation, INET) existing
on the date of the initial Loan hereunder as set forth on Schedule 2.
"EXISTING INET LOAN FACILITY" means the Revolving Credit and
Term Loan Agreement, dated as of March 14, 1994 among INET, the
financial institutions party thereto and Crestar Bank, as Agent, as
amended, and all other agreements, documents and instruments executed
and delivered by INET or any of its Subsidiaries in connection
therewith, each as amended, supplemented or otherwise modified from
time to time.
"EXISTING LETTERS OF CREDIT" means the letters of credit
issued pursuant to Article III of the Existing Credit Agreement and
outstanding on the Closing Date, which are set forth on Schedule 3.2.
"EXPENSES" means all reasonable costs and expenses of the
Agent and the Collateral Agent incurred in connection with the Credit
Documents and the transactions contemplated therein, including, without
limitation, (i) the reasonable costs of conducting record searches,
examining collateral, opening bank accounts and lockboxes, depositing
checks, receiving and transferring funds (including charges for checks
for which there are insufficient funds), and other costs of
administration and enforcement of the rights of the Lenders under the
Credit Documents, (ii) the reasonable fees and expenses of legal
counsel and paralegals, accountants, appraisers and other consultants,
experts or advisors retained by the Agent or the Collateral Agent,
(iii) reasonable fees and expenses incurred in connection with the
assignments of or sales of participations in the Revolving Loans, (iv)
reasonable fees and taxes in connection with the filing of financing
statements, (v) the
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reasonable costs of preparing and recording Collateral Documents,
releases of Collateral, and waivers, amendments, and terminations of
any of the Credit Documents and (vi) all other fees and expenses set
forth in the Fee Letter.
"EXPIRATION DATE" means the earlier of September 30, 1999 and
the date of termination of the Commitments pursuant to the terms
hereof.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the
weighted average of the rates on overnight Federal Funds transactions
with members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"FEE LETTER" means the letter agreement dated July 23, 1996
between BT Commercial Corporation and Wang, as amended, supplemented or
otherwise modified from time to time.
"FEES" means, collectively, the Unused Line Fee, Letter of
Credit Fees, the Issuing Bank Fees and the fees provided for in the Fee
Letter.
"FINANCIAL STATEMENTS" means the consolidated and, if so
requested by the Agent, consolidating balance sheets, statements of
operations, statements of cash flows and statements of changes in
shareholder's equity of Wang and its consolidated Subsidiaries for the
period specified, prepared in accordance with GAAP and consistently
with prior practices.
"FOREIGN LENDER" means any Lender organized under the laws of
a jurisdiction outside of the United States.
"FOREIGN SUBSIDIARY" means any Person (i) that is a
"controlled foreign corporation," as defined in Section 957(a) of the
Internal Revenue Code and (ii) of which Wang or any of its Subsidiaries
is a "United States shareholder," as defined in Section 951(b) of the
Internal Revenue Code, excluding any Person that is incorporated,
organized or formed under the laws of Canada or any province thereof.
"4 1/2% PREFERRED CERTIFICATE OF DESIGNATION" means the
Certificate of Designation, Number, Voting Powers, etc. with respect to
the 4 1/2% Preferred Stock, as filed with the
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Delaware Secretary of State on May 26, 1995, as such Certificate may be
amended from time to time as permitted by the terms of this Credit
Agreement.
"4 1/2% PREFERRED STOCK" means $90,000,000 face amount of the
4 1/2% Convertible Preferred Stock, par value $.01 per share, of Wang
having the rights, preferences and privileges set forth in the 4 1/2%
Certificate of Designation.
"FSI" means Financial Service International, Inc., a Delaware
corporation and a wholly-owned Subsidiary of Wang.
"FUNDING BANK" is defined in Section 4.9.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"GOVERNING DOCUMENTS" means, as to any Person, the certificate
or articles of incorporation and by-laws or other organizational or
governing documents of such Person.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTORS" means Wang International Holding, Inc., Wang
Software, WSSM and any other Person who from time to time guarantees
any or all of the Obligations.
"GUARANTY" means the Amended and Restated Guaranty,
substantially in the form of Exhibit J, made by the Guarantors in favor
of the Collateral Agent for the benefit of the Lenders, as amended,
supplemented or otherwise modified from time to time.
"HAZARDOUS MATERIALS" means any and all pollutants and
contaminants and any and all toxic, caustic, radioactive or hazardous
materials, substances or wastes that are regulated under any
Environmental Laws, including without limitation, petroleum, its
derivatives and by-products and any other hydrocarbons.
"HIGHEST LAWFUL RATE" means, at any given time during which
any Obligations shall be outstanding hereunder, the maximum
non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations, under the laws of the State of New York (or the law of any
other jurisdiction whose laws may be mandatorily applicable
notwithstanding
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other provisions of this Credit Agreement and the other Credit
Documents), or under applicable federal laws which may presently or
hereafter be in effect and which allow a higher maximum nonusurious
interest rate than under New York (or such other jurisdiction's) law,
in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this
Credit Agreement and any other Credit Documents executed in connection
herewith, and any available exemptions, exceptions and exclusions.
"HSR" means the Hart-Scott-Rodino Antitrust Improvements Acts
of 1976, as amended.
"HYPOTHEC" means the Amended and Restated Movable Hypothec,
substantially in the form of Exhibit O, made by Wang Canada in favor of
the Collateral Agent for the benefit of the Lenders, as amended,
supplemented or otherwise modified from time to time.
"INDEBTEDNESS" of any Person means (a) indebtedness for
borrowed money or for the deferred purchase price of property or
services (other than trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices),
whether on open account or evidenced by a note, bond, debenture or
similar instrument, (b) obligations under capital leases to the extent
required to be capitalized in accordance with GAAP, (c) reimbursement
obligations for letters of credit, banker's acceptances or other credit
accommodations, (d) liabilities, as determined by the Agent, under any
Interest Rate Agreement, (e) Contingent Obligations and (f) obligations
secured by any Lien on that Person's property, even if that Person has
not assumed such obligations. Foreign exchange contracts entered into
in the ordinary course of business consistent with the past practices
of Wang and its Subsidiaries shall in no event constitute Indebtedness.
"INDEBTEDNESS BASKET" is defined in Section 7.2(b)(xii).
"INDEMNIFIED PARTY" is defined in Section 10.10(a).
"INET" is defined in the preamble to this Credit Agreement.
"INET PURCHASE AGREEMENT" means the Stock Purchase Agreement
dated as of July 24, 1996 by and among Wang and the other stockholders
signatories thereto, as amended, supplemented or otherwise modified
from time to time.
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"INET PURCHASE DOCUMENTS" means the INET Purchase Agreement
and each other document, agreement and instrument executed and
delivered in connection therewith.
"INET SUBORDINATED NOTES" means the collective reference to
the seven separate non-negotiable unsecured subordinated promissory
notes made by Wang and payable to the Sellers, which notes shall be in
the aggregate principal amount equal to $66,630,000 and otherwise in
the form of Exhibit L, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of
this Credit Agreement.
"INSOLVENCY EVENT" means, with respect to any Person, the
occurrence of any of the following: (a) such Person shall be
adjudicated insolvent or bankrupt, or shall generally fail to pay or
admit in writing its inability to pay its debts as they become due, (b)
such Person shall seek dissolution, arrangement, winding up or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its creditors,
(c) such Person shall make a general assignment for the benefit of its
creditors, or consent to or acquiesce in the appointment of a receiver,
trustee, custodian or liquidator for a substantial portion of its
property, assets or business, (d) such Person shall file a voluntary
petition under any bankruptcy, insolvency or similar law, (e) such
Person, or a substantial portion of its property, assets or business
shall become the subject of an involuntary proceeding or petition
seeking (i) to adjudicate it bankrupt or insolvent, or (ii) any
dissolution, reorganization, winding-up, arrangement, protection,
relief or composition of it or its indebtedness or the appointment of a
receiver, trustee, custodian or liquidator, or shall become subject to
any writ, judgment, warrant of attachment, execution or similar process
and such proceeding, petition, writ, judgment, warrant of attachment,
execution or similar process shall not have been released, vacated,
withdrawn, dismissed or bonded, as the case may be or (f) such Person
shall take any action to authorize any of the foregoing.
"INTELLECTUAL PROPERTY COLLATERAL" is defined in the Wang
Intellectual Property Security Agreement, the Wang Canada Intellectual
Property Security Agreement, the Wang Software Intellectual Property
Security Agreement and the Dataserv Intellectual Property Security
Agreement.
"INTERCOMPANY CONVERTIBLE INSTRUMENTS" is defined in the
Reorganization Plan.
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"INTEREST EXPENSE" means the consolidated expense of Wang and
its consolidated Subsidiaries for interest on Indebtedness, computed in
accordance with GAAP.
"INTEREST PERIOD" means for any Eurodollar Rate Loan the
period commencing on the date of such Borrowing and ending on the last
day of the period selected by Wang pursuant to the provisions below.
The duration of each such Interest Period shall be one, two, three or
six months, in each case as Wang may, in an appropriate Notice of
Borrowing, Notice of Continuation or Notice of Conversion, select;
PROVIDED, HOWEVER, that Wang may not select any Interest Period that
ends after the Expiration Date. Whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, PROVIDED that if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day.
"INTEREST RATE AGREEMENT" means any interest rate protection
or hedge agreement, including, without limitation, any interest rate
future, option, swap and cap agreement.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, any amendments thereto, and any successor statute thereto and
regulations and guidance promulgated thereunder.
"INTERNAL REVENUE SERVICE" or "IRS" means the United States
Internal Revenue Service and any successor agency.
"INVENTORY" is defined in the Security Agreements.
"INVESTMENT" means all expenditures made and all liabilities
incurred and assumed (including Contingent Obligations) for or in
connection with Acquisitions, loans, advances, capital contributions or
transfers of property to a Person (other than asset dispositions
permitted by this Credit Agreement). In determining the aggregate
amount of Investments outstanding at any particular time, (a) a
guaranty shall be valued at not less than the principal amount
outstanding of the obligation guaranteed, or if less, the maximum
stated amount of such guaranty; (b) returns of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution) shall be deducted; (c) earnings, whether as
dividends or interest, shall be deducted if received in cash; and (d)
decreases in the market value shall not be deducted unless such
decreases are computed in accordance with GAAP.
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"ISSUING BANK" means BTCo or any Lender, Affiliate of any
Lender or other financial institution acceptable to the Agent and Wang
which may at any time issue or be requested to issue a Letter of Credit
under this Credit Agreement. If there is more than one Issuing Bank,
all references to the "Issuing Bank" shall be deemed to refer to each
Issuing Bank or to all Issuing Banks, as the context shall require.
"ISSUING BANK FEES" is defined in Section 4.4(b).
"LENDER" is defined in the preamble to this Credit Agreement.
"LENDER ADVANCES" is defined in Section 2.2.
"LETTER OF CREDIT AGREEMENT" is defined in Section 3.4.
"LETTER OF CREDIT FEE" is defined in Section 4.4(a).
"LETTER OF CREDIT OBLIGATIONS" means the sum of the aggregate
undrawn amount of all Letters of Credit outstanding, plus the aggregate
amount of all drawings under Letters of Credit for which the Borrowers
have not reimbursed the Issuing Bank, plus the aggregate amount of all
payments made by the Lenders to the Issuing Bank for participations in
Letters of Credit for which the Borrowers have not reimbursed the
Lenders.
"LETTER OF CREDIT RELATED DOCUMENTS" is defined in Section
3.8.
"LETTER OF CREDIT REQUEST" is defined in Section 3.4.
"LETTERS OF CREDIT" means (a) all letters of credit issued
pursuant to Article III of this Credit Agreement, (b) all Existing
Letters of Credit and (c) and all amendments, renewals, extensions or
replacements thereof.
"LIEN(s)" means any lien, claim, charge, pledge, security
interest, assignment, hypothecation, deed of trust, mortgage, lease,
conditional sale, retention of title, or other preferential arrangement
having substantially the same economic effect as any of the foregoing,
whether voluntary or imposed by law.
"LINE OF CREDIT" means the aggregate revolving line of credit
extended by the Lenders to the Borrowers for Revolving Loans and
Letters of Credit pursuant to and in accordance with the terms of this
Credit Agreement, in the amount of $225,000,000 as such revolving line
of credit may be reduced from time to time in accordance with this
Credit Agreement.
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"LITIGATION PROCEEDS" means any cash proceeds (net of all
litigation and related costs, fees and expenses) recovered or received
by Wang or a Restricted Subsidiary on account of a settlement,
compromise or damage award with respect to any individual claim, cause
of action or civil proceeding.
"LOAN ACCOUNT" is defined in Section 2.10.
"LOANS" means the Revolving Loans made from time to time
hereunder.
"LOCKBOX AGREEMENTS" is defined in Section 2.12(a).
"LOCKBOX BANKS" is defined in Section 2.12(a).
"LOCKBOXES" is defined in Section 2.12(a).
"MAJORITY LENDERS" means those Lenders owed or holding in the
aggregate more than 50% of the total Commitments or if the Commitments
are terminated, more than 50% of the Revolving Loans or Letter of
Credit Obligations then outstanding; provided that if there is more
than one Lender and BTCo holds in the aggregate more than 50% of the
total Commitments or, if the Commitments are terminated and BTCo holds
more than 50% of the Revolving Loans or Letter of Credit Obligations
then outstanding, Majority Lenders shall mean BTCo and at least one
other Lender.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
on the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Wang and its
Subsidiaries, taken as a whole, (ii) the material impairment of the
ability of the Borrowers, taken as a whole, to perform their
obligations under the Credit Documents or of the Agent, the Collateral
Agent or the Lenders to enforce the Obligations or realize upon the
Collateral, or (iii) a material adverse effect on the value of the
Collateral taken as a whole or the amount which the Agent, the
Collateral Agent or the Lenders would be likely to receive (after
giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral taken as a whole.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Wang or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to
renew is reasonably likely to have a Material Adverse Effect.
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<PAGE> 29
"MATERIAL FOREIGN SUBSIDIARY" means each Foreign Subsidiary
listed on Schedule 6.1(ad) and identified thereon as material.
"MATERIAL LOCATION" means each property listed on Schedule
6.1(k) that is leased by a Credit Party and at which Inventory and
Equipment of any Credit Party with an aggregate original cost in excess
of $3,000,000 is located.
"MEASUREMENT PERIOD" is defined in the definition of Excess
Cash Flow.
"MINORITY STOCK ACQUISITION" is defined in Section
7.2(e)(xiii).
"MORTGAGE AMENDMENT" means each Amendment to each Mortgage,
substantially in the form of Exhibit V, between Wang and the Collateral
Agent.
"MORTGAGES" means the three separate Revolving Credit
Mortgages, Assignments of Rents and Leases and Security Agreements made
by Wang in favor of the Collateral Agent for the benefit of the
Lenders, each dated as of January 30, 1995, relating to the real
property located in Chelmsford, Middlesex County, Massachusetts,
Haverhill, Essex County, Massachusetts and Billerica, Middlesex County,
Massachusetts, each as amended by a Mortgage Amendment and as further
amended, supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which Wang, any of its Subsidiaries or
any ERISA Affiliate has contributed within the past six years or with
respect to which Wang or any of its Subsidiaries may incur any
liability.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or
issuance of any equity securities by a Credit Party, the aggregate
amount of cash received from time to time by or on behalf of such
Credit Party in connection with such transaction after deducting
therefrom only (a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions, (b) the amount of taxes payable in
connection with or as a result of such transaction, and (c) in the case
of any Asset Sale, the amount of any Indebtedness secured by a Lien on
such asset that, by the terms of such transaction, is required to be
repaid upon such disposition.
"NET INCOME" means, for any period, the net income of Wang and
its consolidated Subsidiaries on a consolidated
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basis, as reflected on the Financial Statements for such period.
"NOTICE OF BORROWING" is defined in Section 2.2(a).
"NOTICE OF CONTINUATION" is defined in Section 4.8(a).
"NOTICE OF CONVERSION" is defined in Section 4.8(b).
"OBLIGATIONS" means the unpaid principal and interest
hereunder (including interest accruing on or after the occurrence of an
Insolvency Event, whether or not an allowed claim), reimbursement
obligations under Letters of Credit, Fees, Expenses and all other
obligations and liabilities of the Borrowers to the Agent, the
Collateral Agent, the Issuing Bank or to the Lenders under this Credit
Agreement, the Revolving Notes, or any other Credit Document.
"OTHER TAXES" is defined in Section 4.10(b).
"OUTSTANDING SUPPLEMENTAL AMOUNT" means, as at the end of any
fiscal quarter, the amount by which the average daily balance of the
aggregate of Revolving Loans and all Letter of Credit Obligations
outstanding during such fiscal quarter exceeds the Accounts Borrowing
Base as at the last Business Day of such fiscal quarter.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"PENDING BORROWINGS" means prospective Borrowings for which a
Notice of Borrowing has been delivered but for which Revolving Loans
have not been advanced.
"PERMITTED ACQUISITIONS" means an Acquisition which
(i) would not contravene the provisions of
Sections 7.2(e) and (h);
(ii) is not an Acquisition of capital stock or
assets (unless such assets are principally located in the
United States or Canada) of a corporation incorporated outside
of the United States or Canada or an Acquisition which is
principally of assets located outside of the United States or
Canada; and
(iii) involves an Investment by or through Wang or,
with the consent of the Agent which shall not be unreasonably
withheld, a Domestic Subsidiary (whether or not existing on
the Closing Date);
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PROVIDED that (A) if the Investment is by a Domestic Subsidiary, such
Domestic Subsidiary, to the extent it has not previously done so,
promptly guarantees the Obligations and grants the Collateral Agent
liens and security interests in all of its assets to secure such
guaranty, (B) if capital stock of a Person is issued or otherwise
acquired by Wang or a Domestic Subsidiary in connection with such
Investment, such capital stock is promptly pledged to the Collateral
Agent for the benefit of the Lenders, such Person promptly guarantees
the Obligations and grants the Collateral Agent liens and security
interests on all of its assets, (C) if assets (other than capital
stock) are acquired in connection with such Acquisition, the Collateral
Agent is granted liens and security interests on such assets, (D) all
documentation granting the Collateral Agent a guaranty or a security
interest shall be in form and substance satisfactory to the Collateral
Agent and (E) Wang shall take, and shall cause such Subsidiary to take,
all such further actions and execute all such further documents and
instruments as the Collateral Agent reasonably determines in its sole
discretion to be necessary or desirable to cause the execution,
delivery and performance of such documentation to be duly authorized
and to perfect, protect or enforce the security interests and Liens
(and the priority status thereof) granted to the Collateral Agent.
"PERMITTED DISCRETION" means the Agent's good faith judgment
based upon any factor which the Agent reasonably believes in good
faith: (i) is reasonably likely to materially adversely affect the
value of any Eligible Account, the enforceability or priority of the
Agent's Liens thereon or the amount which the Agent and the Lenders
would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such
Collateral; (ii) indicates that any collateral report or financial
information delivered to the Agent by any Person on behalf of a Credit
Party is incomplete, inaccurate or misleading in any material respect;
(iii) materially increases the likelihood of a bankruptcy,
reorganization or other insolvency proceeding involving any Credit
Party or any of the Eligible Accounts; or (iv) creates or reasonably
could be expected to create an Event of Default. In exercising such
judgment, the Agent may consider such factors already included in or
tested by the definition of Eligible Accounts Receivable as well as any
of the following factors: (i) the financial and business climate of a
Credit Party's industry, (ii) changes in collection history and
dilution with respect to the Accounts and (iii) any other factors that
materially change the credit risk of lending to the Borrowers on the
security of the Accounts. The burden of establishing lack of good faith
shall be on the Borrowers.
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"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced and be continuing: (a) Liens for taxes,
assessments and governmental charges not yet due and payable or which
are being diligently contested in good faith by Wang or one of its
Subsidiaries by appropriate proceedings, provided that in any such case
an adequate reserve is being maintained by Wang or one of its
Subsidiaries to the extent required by GAAP (or other applicable
accounting standards in the relevant jurisdictions) for the payment of
the same; (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations that
are not overdue for a period of more than 15 days or which are being
diligently contested in good faith and by appropriate proceedings and
as to which appropriate reserves are being maintained to the extent
required by GAAP (or other applicable accounting standards in the
relevant jurisdictions); provided that the Agent has been notified of
all such Liens securing Indebtedness in excess of $1,000,000; (c)
pledges or deposits to secure obligations under workers' compensation
laws or similar legislation or to secure public or statutory
obligations; (d) easements, rights of way and other encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not materially detract from
the value of the property subject thereto or materially interfere with
the ordinary conduct of the business of the Person whose property is
subject to such easement, right of way or encumbrance; (e) any or all
rights granted in connection with the establishment or maintenance of
industry standard source code escrow agreements arising in the ordinary
course of business; and (f) other liens to secure claims not in excess
of $2,000,000 incurred in the ordinary course of business other than in
connection with the borrowing of money.
"PERSON" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government
(including any division, agency or department thereof), and, as
applicable, the successors, heirs and assigns of each.
"PLAN" means any employee benefit plan, program or arrangement
subject to ERISA maintained or contributed to by Wang or any of its
Subsidiaries other than any Foreign Subsidiary, or with respect to
which any of them may incur liability.
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<PAGE> 33
"PREFERRED STOCK" means the 4 1/2% Preferred Stock and the
6 1/2% Preferred StocK.
"PRESCRIBED IRS RATE" means the applicable interest rate as
prescribed from time to time by the IRS pursuant to Section 1274(d) of
the Internal Revenue Code.
"PRIME LENDING RATE" means the rate which the Agent announces
as its prime lending rate from time to time. The Prime Lending Rate is
a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Agent and each of the
Lenders may make commercial loans or other loans at rates of interest
at, above or below the Prime Lending Rate.
"PRIME RATE LOAN" means a Loan that bears interest as provided
in Section 4.1.
"PROHIBITED TRANSACTION" is defined in Section 6.1(r)(v).
"PROPORTIONATE SHARE" of a Lender means a fraction, expressed
as a decimal, obtained by dividing its Commitment by the total
Commitments of all the Lenders or, if the Commitments are terminated,
by dividing its then outstanding Revolving Loans and/or Letter of
Credit participations by the aggregate Revolving Loans and/or Letter of
Credit Obligations then outstanding.
"PURCHASE MONEY LIENS" is defined in Section 7.2(b)(xii).
"RATE OF EXCHANGE" means the spot rate of exchange at which
the Agent is able on the relevant date to purchase Dollars with other
currency.
"REDUCED RATE" is defined in Section 4.10(e), relating to
backup withholding tax.
"REINVESTMENT SALE" means the sale after May 1, 1996 by a
Borrower of any or all of the stock acquired in a Minority Stock
Acquisition.
"REGISTER" is defined in Section 10.8(c).
"REORGANIZATION PLAN" means the Amended and Restated
Reorganization Plan of Wang and Official Committee of Unsecured
Creditors as confirmed by the United States Bankruptcy Court for the
District of Massachusetts.
"REPORTABLE EVENT" means any of the events described in
Section 4043 of ERISA and the regulations thereunder, other
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than a reportable event for which the 30-day notice requirement to the
PBGC has been waived.
"REQUIREMENT OF LAW" means (a) the Governing Documents of a
Person, (b) any law, treaty, rule or regulation or determination of an
arbitrator, court or other Governmental Authority, or (c) any
franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval binding on a
Person or any of its property.
"RESTRICTED SUBSIDIARY" means any Subsidiary that is a Credit
Party and any other Subsidiary owned by Wang on the Closing Date or
acquired thereafter (other than a Foreign Subsidiary, FSI and any of
its Subsidiaries).
"RETIREE HEALTH PLAN" means an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to
persons after termination of employment, other than as required by
Section 601 of ERISA.
"REVOLVING LOANS" is defined in Section 2.1(a).
"REVOLVING NOTE" means an amended and restated joint and
several promissory note of the Borrowers payable to the order of any
Lender, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"SCHEDULED INVESTMENTS" is defined in Section 7.2(e)(vii)(A).
"SECURITY AGREEMENTS" means the Wang Security Agreement, the
Wang Intellectual Property Security Agreement, the Wang Canada Security
Agreement, the Wang Canada Intellectual Property Security Agreement,
the Wang Software Security Agreement, the Wang Software Intellectual
Property Security Agreement, the Dataserv Security Agreement and the
Dataserv Intellectual Property Security Agreement.
"SELLERS" means the collective reference to the parties to the
INET Purchase Agreement other than Wang.
"SETTLEMENT DATE" is defined in Section 2.6(a).
"6 1/2% PREFERRED CERTIFICATE OF DESIGNATION" means the
Certificate of Designation, Number, Voting Powers, etc. with respect to
the 6 1/2% Preferred Stock, as filed with the Delaware Secretary of
State on February 27, 1996, as such Certificate may be amended from
time to time as permitted by the terms of this Credit Agreement.
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"6 1/2% PREFERRED STOCK" means $143,750,000 face amount of the
6 1/2% Series B Cumulative Convertible Preferred Stock, par value $.01
per share, of Wang having the rights, preferences and privileges set
forth in the 6 1/2% Certificate of Designation.
<TABLE>
"SPECIFIED PERCENTAGE" means a percentage determined by
reference to EBITDA for the most recently ended four fiscal quarter
period as set forth below:
<CAPTION>
EBITDA For Last
Four Fiscal Quarters Percentage
- -------------------- ----------
<C> <C>
$115,000,000 or greater, but less 60%
than $120,000,000
$120,000,000 or greater, but less 70%
than $125,000,000
$125,000,0000 or greater, but less 80%
than $130,000,000
$130,000,000 or greater, but less 90%
than $135,000,000
$135,000,000 or greater 100%
</TABLE>
"SUBORDINATED NOTES" means the collective reference to the
Bull Subordinated Note and the INET Subordinated Notes.
"SUBSIDIARY" means as to any Person, a corporation or other
entity in which that Person directly or indirectly owns or controls the
shares of stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or appoint other
managers of such corporation or other entity. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Credit Agreement shall refer to a Subsidiary or Subsidiaries of
Wang.
"SUPPLEMENTAL AMOUNT" means (a) $125,000,000 from the Closing
Date to March 31, 1998, (b) $100,000,000 from April 1, 1998 to
September 30, 1998, (c) $75,000,000 from October 1, 1998 to March 31,
1999 and (d) $50,000,000 commencing April 1, 1999 and thereafter, as
such amounts may from time to time be reduced pursuant to the following
provisions of this definition. The Supplemental Amount shall be
immediately and permanently reduced by an amount equal to 50% of the
Net Cash Proceeds received by any Credit Party from the consummation of
any Asset Sale (other than a Reinvestment Sale, an Asset Sale which has
a purchase price or transaction value of less than $2,500,000 or an
Asset Sale which is the result of a casualty, loss or condemnation and
the Net Cash Proceeds of such Asset Sale are reinvested
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in Wang's business, taken as a whole), PROVIDED that the Supplemental
Amount shall not be reduced by more than $75,000,000 in the aggregate
pursuant to this sentence.
"SYNDICATION DATE" means the earlier of (i) the date that is
ninety (90) days after the Closing Date and (ii) the date on which the
Agent notifies Wang of the completion of the primary syndication of the
Revolving Loans under this Credit Agreement, as determined by the Agent
in its sole discretion, which notice shall be promptly given.
"TAX TRANSFEREE" is defined in Section 4.10(a).
"TAXES" is defined in Section 4.10(a).
"TERMINATION EVENT" means (i) a Reportable Event with respect
to any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of Wang,
any of its Subsidiaries or any ERISA Affiliate from a Benefit Plan
during a plan year in which it was a "substantial employer" (as defined
in Section 4001(a)(2) of ERISA); (iii) the providing of notice of
intent to terminate a Benefit Plan in a distress termination (as
described in Section 4041(c) of ERISA); (iv) the institution by the
PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan;
(v) any event or condition (a) which is reasonably likely to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (b) that is reasonably likely to result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA;
or (vi) the partial or complete withdrawal within the meaning of
Sections 4203 and 4205 of ERISA, of Wang, any of its Subsidiaries or
any ERISA Affiliate from a Multiemployer Plan.
"TYPE" means, with respect to any Loan, whether such Loan is a
Eurodollar Rate Loan or a Prime Rate Loan.
"UNBILLED ACCOUNTS" means Accounts for which an invoice has
not been issued.
"UNUSED AVAILABILITY" means, at any time of determination, the
excess of (x) the lesser of the Borrowing Base or the Line of Credit
over (y) the sum of the unpaid principal amount of the Loans
outstanding, the Letter of Credit Obligations and the Pending
Borrowings.
"UNUSED LINE FEE" is defined in Section 4.5.
"WANG" is defined in the preamble to this Credit Agreement.
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"WANG CANADA" is defined in the preamble to this Credit
Agreement.
"WANG CANADA INTELLECTUAL PROPERTY SECURITY AGREEMENT" means
the Amended and Restated Intellectual Property Security Agreement,
substantially in the form of Exhibit I, made by Wang Canada in favor of
the Collateral Agent, as amended, supplemented or otherwise modified
from time to time.
"WANG CANADA SECURITY AGREEMENT" means the Amended and
Restated Security Agreement, substantially in the form of Exhibit K,
made by Wang Canada and Wang International Holding, Inc. in favor of
the Collateral Agent, as amended, supplemented or otherwise modified
from time to time.
"WANG INTELLECTUAL PROPERTY SECURITY AGREEMENT" means the
Amended and Restated Intellectual Property Security Agreement,
substantially in the form of Exhibit H, made by INET, Wang and WFI in
favor of the Collateral Agent for the benefit of the Lenders, as
amended, supplemented or otherwise modified from time to time.
"WANG SECURITY AGREEMENT" means the Amended and Restated
Security Agreement, substantially in the form of Exhibit G, made by
INET, Wang and WFI in favor of the Collateral Agent for the benefit of
the Lenders, as amended, supplemented or otherwise modified from time
to time.
"WANG SOFTWARE" means Wang Software N.Y., Inc., a New York
corporation and a wholly-owned subsidiary of Wang, formerly known as
Sigma Imaging Systems, Inc."
"WANG SOFTWARE INTELLECTUAL PROPERTY SECURITY AGREEMENT" means
the Amended and Restated Intellectual Property Security Agreement,
substantially in the form of Exhibit U, made by Wang Software in favor
of the Collateral Agent for the benefit of the Lenders, as amended,
supplemented or otherwise modified from time to time.
"WANG SOFTWARE SECURITY AGREEMENT" means the Amended and
Restated Security Agreement, substantially in the form of Exhibit T,
made by Wang Software in favor of the Collateral Agent for the benefit
of the Lender, as amended, supplemented or otherwise modified from time
to time.
"WFI" is defined in the preamble to this Credit Agreement.
"WSSM" means Wang Software Storage Management Group, Inc., a
Delaware corporation formerly known as Avail Systems Corp. and a
wholly-owned subsidiary of Wang.
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SECTION 1.2. ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise defined or specified herein, all accounting terms used in this Credit
Agreement shall be construed in accordance with GAAP, applied on a basis
consistent in all material respects with the Financial Statements delivered to
the Agent on or before the Closing Date. All accounting determinations for
purposes of determining compliance with Section 7.2(q) through (t) shall be made
in accordance with GAAP as in effect on the Closing Date and applied on a basis
consistent in all material respects with the audited Financial Statements
delivered to the Agent on or before the Closing Date. The Financial Statements
required to be delivered hereunder from and after the Closing Date, and all
financial records, shall be maintained in accordance with GAAP. If GAAP shall
change from the basis used in preparing the audited Financial Statements
delivered to the Agent on or before the Closing Date, the certificates required
to be delivered pursuant to Section 7.1 demonstrating compliance with the
covenants contained herein shall include calculations setting forth the
adjustments necessary to demonstrate how Wang is in compliance with the
financial covenants based upon GAAP as in effect on the Closing Date. Any
reference herein to a "restructuring" expense shall be deemed to be a reference
to restructuring and reorganization costs and expenses.
SECTION 1.3. OTHER TERMS; HEADINGS. Terms used herein that are
defined in the Uniform Commercial Code, in effect from time to time, in the
State of New York (the "CODE") shall have the meanings given in the Code. Each
of the words "hereof," "herein," and "hereunder" refer to this Credit Agreement
as a whole. An Event of Default shall "continue" or be "continuing" until such
Event of Default has been cured or has been waived in accordance with Section
10.11 hereof. References to Articles, Sections, Schedules, and Exhibits are
internal references to this Credit Agreement, and to its attachments, unless
otherwise specified. The headings and the Table of Contents are for convenience
only and shall not affect the meaning or construction of any provision of this
Credit Agreement.
SECTION 1.4. COMPUTATION OF TIME PERIODS. In this Credit
Agreement, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
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ARTICLE II
REVOLVING LOANS
SECTION 2.1. REVOLVING CREDIT COMMITMENTS.
(a) Subject to the terms and conditions set forth in this
Credit Agreement, on and after the Closing Date and to and excluding the
Expiration Date, each Lender severally agrees to make loans and advances to Wang
("REVOLVING LOANS") in an amount not to exceed at any time its Proportionate
Share of the lesser of (x) the total Commitments and (y) the Borrowing Base,
minus, in each case, the then outstanding Letter of Credit Obligations and the
Pending Borrowings; PROVIDED, HOWEVER that in no event shall the aggregate
amount of Revolving Loans made and Letters of Credit issued in respect of
Eligible Accounts Receivable consisting of Unbilled Accounts exceed the lesser
of 10% of all Accounts of WFI that do not consist of Unbilled Accounts and
$10,000,000.
(b) The Agent, at any time in the exercise of its Permitted
Discretion, on not less than ten (10) days' prior written notice to Wang, may
(i) establish and increase or decrease reserves against Eligible Accounts
Receivable, (ii) reduce the advance rate provided for in the definition of
Accounts Borrowing Base, or restore such advance rate to any level equal to or
below the advance rate in effect as of the date of this Credit Agreement, and
(iii) impose additional restrictions (or eliminate the same) to the standards of
eligibility set forth in the definition of Eligible Accounts Receivable. The ten
(10) day notice provision in this section shall not apply to a determination by
the Agent with respect to whether a specific Account or all Accounts of an
account debtor should be deemed ineligible. Such determination may be made at
any time by the Agent upon notice to the Borrower in the exercise of its
Permitted Discretion. The Agent may, but shall not be obligated to, rely on each
Borrowing Base Certificate and any other schedules or reports in determining the
eligibility of Accounts.
SECTION 2.2. BORROWING OF REVOLVING LOANS. It is contemplated
that Revolving Loans will be made available to Wang directly by the Lenders
("LENDER ADVANCES") and, in the circumstances described in Section 2.2(b), from
the Agent acting on behalf of the Lenders ("AGENT ADVANCES"). The Revolving
Loans made by each Lender shall be evidenced by Revolving Notes payable to the
order of each Lender, with appropriate insertions as to the date and principal
amount.
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(a) LENDER ADVANCES OF REVOLVING LOANS. Subject to the
determination by the Agent and the Lenders that the applicable conditions for
borrowing contained in Article V are satisfied, upon notice from Wang to the
Agent, substantially in the form of Exhibit C ("NOTICE OF BORROWING") received
by the Agent before 1:00 p.m. (New York City time) on a Business Day, Lender
Advances of Revolving Loans shall be made to the extent of each Lender's
Proportionate Share of the requested borrowing. The Notice of Borrowing shall
specify whether the requested Borrowing is of Prime Rate Loans or Eurodollar
Rate Loans.
(b) AGENT ADVANCES OF REVOLVING LOANS. The Agent is
authorized by the Lenders, but is not obligated, to make Agent Advances (i) upon
a Notice of Borrowing received by the Agent before 3:00 p.m. (New York City
time) on a Business Day, or (ii) upon advice received by the Agent on a Business
Day from the Disbursement Account Bank of the face amount of checks drawn on the
Disbursement Account, which have been or will be presented for payment on that
day, minus the amount of funds then available in the Disbursement Account. All
Agent Advances shall be Prime Rate Loans. Agent Advances will not at any time
exceed the amount available for borrowing under Section 2.1(a). Agent Advances
will be subject to periodic settlement with the Lenders under Section 2.6. Agent
Advances may be made only in the following circumstances:
(i) For administrative convenience, the Agent may, but is
not obligated to, make Agent Advances in reliance upon Wang's actual or
deemed representations under Section 5.2 that the conditions for
borrowing are satisfied.
(ii) If the conditions for borrowing under Section 5.2 cannot
be fulfilled, Wang shall in its Notice of Borrowing or otherwise give
immediate notice thereof to the Agent, with a copy to each of the
Lenders, and the Agent may, but is not obligated to, continue to make
Agent Advances for twenty (20) Business Days from the date the Agent
first receives such notice, or until sooner instructed by the Majority
Lenders to cease.
SECTION 2.3. DISBURSEMENT OF REVOLVING LOANS. The proceeds of
Revolving Loans shall be transmitted by the Agent (x) upon advice received by
the Agent from the Disbursement Account Bank, as described in Section 2.2(b),
directly to the Disbursement Account, (y) in the circumstances described in
Section 3.5, directly to the Issuing Bank and (z) in all other circumstances, as
requested by Wang in its Notice of Borrowing.
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SECTION 2.4. NOTICES OF BORROWING. Notices of Borrowing may be
given under this Section by telephone or facsimile transmission, and, if by
telephone, promptly confirmed in writing, substantially in the form of Exhibit
C. Wang shall specify in each Notice of Borrowing whether the conditions for the
requested borrowing are satisfied. Wang may request one or more borrowings of
Prime Rate Loans by Notice of Borrowing given not later than 2:00 p.m. (New York
City time) on the same Business Day as the proposed Borrowing. A Notice of
Borrowing for Eurodollar Rate Loans shall be given not later than 2:00 p.m. (New
York City time) on the third Business Day prior to the proposed Borrowing. Each
Notice of Borrowing shall, unless otherwise specifically provided herein,
consist entirely of Revolving Loans of the same Type and, if such Borrowing is
to consist of Eurodollar Rate Loans, shall be in an aggregate amount for all
Lenders of not less than $1,000,000 or an integral multiple of $100,000 in
excess thereof. The right of Wang to choose Eurodollar Rate Loans is subject to
the provisions of Section 4.8. Once given, a Notice of Borrowing is irrevocable
by and binding on Wang. Wang shall provide to the Agent a list, with specimen
signatures, of officers authorized to request Revolving Loans and Letters of
Credit. The Agent is entitled to rely upon such list until it is replaced by
Wang.
SECTION 2.5. SAME DAY SETTLEMENT OF LENDER ADVANCES. The Agent
shall give each Lender prompt notice by telephone or facsimile transmission of a
Notice of Borrowing that requests Lender Advances of Revolving Loans. No later
than 3:00 p.m. (New York City time) on the date of the proposed Borrowing
reflected in the Notice of Borrowing, each Lender shall make available to the
Agent at the Agent's address such Lender's Proportionate Share of such borrowing
in immediately available funds. Unless the Agent receives contrary written
notice prior to the date of any such borrowing of Revolving Loans, it is
entitled to assume that each Lender will make available its Proportionate Share
of the borrowing and in reliance upon that assumption, but without any
obligation to do so, may advance such Proportionate Share on behalf of such
Lender.
SECTION 2.6. PERIODIC SETTLEMENT OF AGENT ADVANCES AND
REPAYMENTS.
(a) THE SETTLEMENT DATE. The amount of each Lender's
Proportionate Share of Revolving Loans shall be computed weekly (or more
frequently in the Agent's discretion) and shall be adjusted upward or downward
based on all Revolving Loans (including Agent Advances) and repayments received
by the Agent as of 5:00 p.m. (New York City time) on the last Business Day of
the period specified by the Agent (such date, the "SETTLEMENT DATE").
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(b) SUMMARY STATEMENTS; SETTLEMENTS OF PRINCIPAL. The Agent
shall deliver to each of the Lenders promptly after the Settlement Date a
summary statement of the amount of outstanding Revolving Loans (including Agent
Advances). As reflected on the summary statement: (i) the Agent shall transfer
to each Lender its Proportionate Share of repayments; and (ii) each Lender shall
transfer to the Agent, or the Agent shall transfer to each Lender, such amounts
as are necessary to insure that, after giving effect to all such transfers, the
amount of Revolving Loans made by each Lender shall be equal to such Lender's
Proportionate Share of the aggregate amount of Revolving Loans outstanding as of
such Settlement Date. If the summary statement requires transfers to be made to
the Agent by the Lenders and is received prior to 12:00 Noon (New York City
time) on a Business Day, such transfers shall be made in immediately available
funds no later than 3:00 p.m. (New York City time) that day; and, if received
after 12:00 Noon (New York City time), then no later than 3:00 p.m. (New York
City time) on the next Business Day. The obligation of each Lender to transfer
such funds is irrevocable, unconditional and without recourse to or warranty by
the Agent.
(c) DISTRIBUTION OF INTEREST AND UNUSED LINE FEES. Interest
on the Revolving Loans (including Agent Advances) shall be allocated by the
Agent to each Lender in accordance with the Proportionate Share of Revolving
Loans actually advanced by and repaid to each Lender, and shall accrue from and
including the date such Revolving Loans are so advanced and to but excluding the
date such Revolving Loans are either repaid by the Borrowers or actually settled
under this Section. The Unused Line Fee shall be allocated by the Agent to each
Lender in accordance with such Lender's Proportionate Share of such Fee,
regardless of the amount of Revolving Loans actually advanced by such Lender.
After the end of each month, the Agent shall, upon receipt from the Borrowers,
distribute to each Lender its Proportionate Share of the interest and Unused
Line Fee accrued during such month. The Agent shall, upon receipt from the
Borrowers, distribute interest on Eurodollar Rate Loans promptly after it is
received from the Borrowers.
SECTION 2.7. SHARING OF PAYMENTS. If any Lender shall obtain
any payment pursuant to the terms of this Credit Agreement (whether voluntary,
involuntary, through the exercise of any right of setoff or otherwise) on
account of the Loans made by it or its participation in Letters of Credit in
excess of its Proportionate Share of payments on account of the Loans or Letters
of Credit obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
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thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect to the total amount so recovered, and PROVIDED,
FURTHER that this Section shall not apply with respect to any fees which are
intended to be for the benefit of less than all of the Lenders. The Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 2.7 may, to the fullest extent permitted by law, exercise all of
its rights of payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation. Notwithstanding anything
contained herein to the contrary, the sharing provisions of this Section 2.7
shall not apply to any payments received by any Lender from or on behalf of the
Borrowers or the Agent that are not made pursuant to the express terms and
provisions of this Credit Agreement.
SECTION 2.8. DEFAULTING LENDERS.
(a) A Lender who fails to pay the Agent its Proportionate
Share of any Revolving Loans (including Agent Advances) made available by the
Agent on such Lender's behalf, or who fails to pay any other amount owing by it
to the Agent, is a defaulting lender ("DEFAULTING LENDER"). The Agent may
recover all such amounts owing by a Defaulting Lender on demand. If the
Defaulting Lender does not pay such amounts on the Agent's demand, the Agent
shall promptly notify the Borrowers and the Borrowers shall pay such amounts
with respect to Revolving Loans within five Business Days. In addition, the
Defaulting Lender or the Borrowers shall pay the Agent interest on such amount
for each day from the date it was made available by the Agent to Wang to the
date it is recovered by the Agent at a rate PER ANNUM equal to (x) the overnight
Federal Funds Rate, if paid by the Defaulting Lender, or (y) the then applicable
rate of interest calculated under Section 4.1, if paid by the Borrowers; plus,
in each case, the Expenses and losses, if any, incurred as a result of the
Defaulting Lender's failure to perform its obligations.
(b) The failure of any Lender to fund its Proportionate
Share of any Revolving Loan (including Agent Advances) shall not relieve any
other Lender of its obligation to fund its Proportionate Share of such Revolving
Loan. Conversely, no Lender shall be responsible for the failure of another
Lender to fund such other Lender's Proportionate Share of a Revolving Loan.
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(c) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by a Borrower to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to Wang the amount of all such payments received or retained
by it for the account of such Defaulting Lender. For purposes of the Unused Line
Fee and for voting or consenting to matters with respect to the Credit Documents
and determining Proportionate Shares, such Defaulting Lender shall be deemed not
to be a "Lender" and such Lender's Commitment shall be deemed to be zero (-0-).
This Section shall remain effective with respect to such Lender until the
Defaulting Lender has paid all amounts required to be paid to the Agent
hereunder or until the Majority Lenders, the Agent and the Borrowers shall have
waived such Lender's default in writing or such default has been cured. The
operation of this Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the performance by the
Borrowers of their duties and obligations hereunder.
SECTION 2.9. MANDATORY AND VOLUNTARY PAYMENT; MANDATORY AND
VOLUNTARY REDUCTION OF COMMITMENTS.
(a) The aggregate balance of Revolving Loans and all Letter
of Credit Obligations outstanding at any time in excess of the lesser of (i) the
Borrowing Base then in effect and (ii) the Line of Credit shall be immediately
due and payable without the necessity of any demand; PROVIDED, HOWEVER that if
the aggregate balance of Revolving Loans and all Letter of Credit Obligations
exceeds the Borrowing Base solely due to a change in the Borrowing Base made by
the Agent pursuant to the terms of this Credit Agreement, the amount in excess
of the Borrowing Base shall be due and payable five (5) Business Days after
notice from the Agent.
(b) Wang may reduce or terminate the Commitments on a PRO
RATA basis at any time and from time to time in whole or in part; PROVIDED,
HOWEVER, that each such reduction must be in an aggregate amount for all Lenders
of not less than $5,000,000 (and in increments of $1,000,000 thereafter). Once
reduced, no portion of the Commitments may be reinstated.
(c) The Line of Credit shall be permanently and
automatically reduced to $200,000,000 on March 31, 1998, (ii) $175,000,000 on
September 30, 1998 and (iii) $150,000,000 on March 31, 1999. Such reductions
shall reduce the Commitment of each Lender proportionately by its Proportionate
Share of the amount of such reductions.
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(d) All Net Cash Proceeds from the consummation of an Asset
Sale or from the issuance of any equity securities, and Litigation Proceeds
shall be immediately paid to the Agent to be applied to repay the outstanding
Revolving Loans. All amounts applied to repay the outstanding Revolving Loans
under this Section 2.9(d) may be reborrowed, subject to the terms and conditions
contained herein.
SECTION 2.10. MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF
ACCOUNT. The Agent shall maintain an account on its books in the name of Wang
(the "LOAN ACCOUNT") in which Wang will be charged with all loans and advances
made by the Lenders to Wang or for Wang's account, including the Revolving
Loans, the Letter of Credit Obligations, the Fees, the Expenses and any other
Obligations. The Loan Account will be credited with all amounts received by the
Agent from the Borrowers or for the Borrowers' account, including, as set forth
in Section 2.12, all amounts received in the Concentration Accounts from any
Lockbox Bank. The Agent shall send the Borrowers a monthly statement reflecting
the activity in the Loan Account. Absent manifest error, each monthly statement
shall be an account stated and shall be final, conclusive and binding on the
Borrowers.
SECTION 2.11. PAYMENT PROCEDURES. The Borrowers hereby
authorize the Agent to charge the Loan Account with the amount of all interest,
Fees and Expenses and other payments to be made hereunder and under the other
Credit Documents. The Borrowers' obligations to the Agent and the Lenders with
respect to such payments shall be discharged by the Agent's charging the Loan
Account as provided herein.
SECTION 2.12. COLLECTIONS.
(a) Wang and Wang Canada shall at all times maintain
lockboxes (the "LOCKBOXES") and shall instruct all account debtors on their
Accounts to remit all Collections to their respective Lockboxes. Such Borrowers
shall enter into agreements with the Agent and financial institutions acceptable
to the Agent (the "LOCKBOX BANKS") substantially in the form of Exhibit L to the
Existing Credit Agreement (the "LOCKBOX AGREEMENTS"), which among other things
shall provide for the opening of an account with such Lockbox Bank for the
deposit of Collections (a "COLLECTION ACCOUNT") and shall require the Agent's
consent to its termination (except on the Expiration Date). All Collections and
other amounts received by such Borrowers from any account debtor shall upon
receipt be deposited into a Collection Account maintained by such Borrowers.
Upon the terms and subject to the conditions set forth in the Lockbox
Agreements, all available amounts held in each Collection Account shall be wired
each Business Day into an account (a "CONCENTRATION ACCOUNT") maintained by the
Agent at a financial institution acceptable to the Borrowers and the Agent (a
"CONCENTRATION BANK"). Such
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Borrowers shall enter into one or more agreements with a Concentration Bank and
the Agent substantially in the form of Exhibit N to the Existing Credit
Agreement (the "CONCENTRATION ACCOUNT AGREEMENTS"). All amounts other than
Collections received by the Borrowers from any source shall upon receipt be
deposited into a separate Concentration Account maintained by the Agent at a
Concentration Bank. Upon the terms and subject to the conditions set forth in
the Concentration Account Agreements, all available amounts held in each
Concentration Account shall be wired each Business Day into an account
maintained by the Agent at Bankers Trust Company (the "BT ACCOUNT").
(b) WFI, INET and, subject to Section 7.1(t)(i), Dataserv
shall at all times maintain a Lockbox with a Lockbox Bank pursuant to a Lockbox
Agreement and shall instruct all account debtors on the Accounts to remit all
Collections to such Lockbox. All Collections and other amounts received by such
Borrowers from any account debtor shall upon receipt be deposited into a
Collection Account. Upon the terms and subject to the conditions set forth in
the Lockbox Agreements, all available amounts held in the Collection Accounts
shall be wired each Business Day into the BT Account. All amounts other than
Collections received by such Borrowers from any source shall upon receipt be
deposited into a separate Concentration Account maintained by the Agent at a
Concentration Bank. Until Dataserv complies with the provisions of Section
7.1(t)(i), Dataserv shall deposit all Collections and other amounts received by
Dataserv from any account debtor into a Collection Account maintained by Wang
promptly upon receipt.
(c) Wang shall cause Wang Software at all times to maintain
a bank account (the "WANG SOFTWARE DEPOSITARY ACCOUNT") with Chemical Bank or
any other bank acceptable to the Agent (the "DEPOSITARY ACCOUNT BANK"). Wang
shall cause Wang Software to enter into an agreement with the Agent and the
Depositary Account Bank, in form and substance satisfactory to the Agent (as
amended, supplemented or otherwise modified from time to time, the "WANG
SOFTWARE DEPOSITARY ACCOUNT AGREEMENT"), which among other things shall provide
for the opening of the Wang Software Depositary Account for the deposit of Wang
Software's Collections and shall require the Agent's consent to its termination
(except on the Expiration Date). Wang shall cause Wang Software to deposit all
Collections and other amounts received by Wang Software from any account debtor
into the Wang Software Depositary Account promptly upon receipt. Subject to the
terms and conditions set forth in the Wang Software Depositary Account
Agreement, upon and after the time the Depositary Account Bank shall have
received a Notice of Redirection (as defined in the Wang Software Depositary
Account Agreement) from the Agent, all amounts deposited in the Wang Software
Depositary Account shall be transferred only as provided by the Agent in such
Notice of Redirection.
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(d) Promptly upon the written request of the Agent, Wang
shall cause WSSM to deposit all Collections and other amounts received by WSSM
from any account debtor into a Collection Account maintained by Wang promptly
upon receipt.
SECTION 2.13. APPLICATION OF PAYMENTS. All amounts received in
the BT Account shall be credited to the Loan Account as of the date received.
Except as provided in Section 8.5, after the occurrence of an Event of Default,
and until it is waived, all amounts received by the Agent from the Lockbox
Banks, from the Concentration Accounts, from liquidation of Collateral or
otherwise, shall be applied in the following order: FIRST, to the payment of any
Fees, Expenses or other Obligations due and payable to the Agent or the
Collateral Agent under any of the Credit Documents, including Agent Advances and
any other amounts advanced by the Agent on behalf of the Lenders; SECOND, to the
payment of any Fees, Expenses or other Obligations due and payable to the
Issuing Bank under any of the Credit Documents; THIRD, to the ratable payment of
any Fees, Expenses or other Obligations due and payable to the Lenders under any
of the Credit Documents other than those Obligations specifically referred to in
this Section; FOURTH, to the ratable payment of interest due on the Revolving
Loans; FIFTH, to the ratable payment of principal due on the Revolving Loans;
SIXTH to cash collateralize Letters of Credit in accordance with the provisions
of Section 8.2(c); and SEVENTH, if no Obligations are outstanding, to the
Borrowers. Any amounts received in the BT Account after this Credit Agreement
has terminated, all Obligations have been indefeasibly paid in full and all
outstanding Letters of Credit have been cash collateralized in an amount equal
to 105% of the aggregate face amount thereof shall be delivered to Wang.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.1. ISSUANCE OF LETTERS OF CREDIT. Subject to the
terms and conditions of this Credit Agreement and in reliance upon the
representations and warranties of the Borrowers set forth herein, the Issuing
Bank shall issue Letters of Credit hereunder at the request of Wang and for the
account of Wang or, if approved by the Agent, one of Wang's Subsidiaries, as
more specifically described below. The Issuing Bank shall not be obligated to
issue any Letter of Credit for the account of Wang or any such Subsidiary on or
after the Expiration Date. The Issuing Bank shall not (in the case of clause (a)
below) and shall not be obligated to (in the case of clauses (b) and (c) below)
issue any Letter of Credit for the account of Wang or any such Subsidiary if at
the time of such requested issuance:
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(a) The face amount of such requested Letter of Credit when
added to the Letter of Credit Obligations then outstanding, would cause the
Letter of Credit Obligations to exceed (i) $70,000,000 or (ii) when added to the
aggregate amount of Revolving Loans and all Letter of Credit Obligations then
outstanding would cause the sum of the Revolving Loans and Letter of Credit
Obligations to exceed the lesser of (x) the Line of Credit and (y) the Borrowing
Base then in effect; PROVIDED, HOWEVER that in no event shall the aggregate
amount of Revolving Loans made and Letters of Credit issued in respect of
Eligible Accounts Receivable consisting of Unbilled Accounts exceed the lesser
of 10% of all Accounts of WFI that do not consist of Unbilled Accounts and
$10,000,000; PROVIDED, FURTHER that no Letter of Credit shall be issued if the
issuance thereof would cause the face amount of all Letter of Credit Obligations
then outstanding on account of documentary letters of credit to exceed
$40,000,000; or
(b) Any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the Issuing Bank shall prohibit, or request the Issuing Bank refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated) not in effect as of the Closing Date, or any unreimbursed
loss, cost or expense which was not applicable, in effect or known to the
Issuing Bank as of the Closing Date and which the Issuing Bank deems in good
faith to be material to it; or
(c) A default of any Lender's obligations to fund under
Section 3.6 exists, or such Lender is a Defaulting Lender, unless the Agent and
the Issuing Bank have entered into satisfactory arrangements with the Borrowers
to eliminate the Issuing Bank's risk with respect to such Lender, including cash
collateralization of such Lender's Proportionate Share of the Letter of Credit
Obligations.
SECTION 3.2. TERMS OF LETTERS OF CREDIT. The Letters of Credit
shall be in a form customarily used by the Issuing Bank or in such other form as
has been approved by the Issuing Bank. At the time of issuance, the amount and
the terms and conditions of each Letter of Credit, and of any drafts or
acceptances thereunder, shall be subject to approval by the Agent and Wang. In
no event may the term of any Letter of Credit issued hereunder exceed 365/366
days (except that such Letters of Credit may
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provide for annual renewal) and all Letters of Credit issued hereunder shall
expire no later than the date that is five (5) Business Days prior to the
Expiration Date. Any Letter of Credit containing an automatic renewal provision
(other than a Letter of Credit issued with respect to worker's compensation
insurance or a Letter of Credit listed on Schedule 3.2) shall also contain a
provision pursuant to which, notwithstanding any other provisions thereof, it
shall not be renewable on or after the Expiration Date and it shall expire no
later than the date that is three (3) Business Days prior to the Expiration
Date. Notwithstanding the foregoing, a Letter of Credit may have an expiry date
subsequent to the Expiration Date if, on or prior to the Expiration Date, such
Letter of Credit is cash collateralized in a manner satisfactory to the Agent
and in an amount equal to 105% of the aggregate face amount thereof or is
supported by another letter of credit which is issued by a financial institution
reasonably acceptable to the Agent and is in a form and contains terms and
conditions reasonably satisfactory to the Agent.
SECTION 3.3. LENDERS' PARTICIPATION. Immediately upon issuance
or amendment by the Issuing Bank of any Letter of Credit in accordance with the
procedures set forth in Sections 3.1 and 3.2, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation to
the extent of such Lender's Proportionate Share (based upon its Commitment) of
the liability with respect to such Letter of Credit (including, without
limitation, all obligations of the Borrowers with respect thereto, other than
amounts owing to the Issuing Bank consisting of Issuing Bank Fees) and any
security therefor or guaranty pertaining thereto.
SECTION 3.4. NOTICE OF ISSUANCE. Whenever Wang desires the
issuance of a Letter of Credit, Wang shall deliver to the Agent a written notice
no later than 1:00 p.m. New York City time at least three (3) Business Days (or
such shorter period as may be agreed to by the Issuing Bank) in advance of the
proposed date of issuance of a letter of credit request in substantially the
form attached as Exhibit F (a "LETTER OF CREDIT REQUEST") accompanied by such
application and agreement for letter of credit (a "LETTER OF CREDIT AGREEMENT")
as the Issuing Bank may specify to Wang in connection with such requested Letter
of Credit. The transmittal by Wang of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrowers that the Letter of
Credit may be issued in accordance with and will not violate any of the
requirements of Sections 3.1 and 3.2. Prior to the date of issuance of each
Letter of Credit, Wang shall provide to the Agent a precise description of the
documents and the text of any certificate to be presented by the beneficiary of
such Letter of Credit which if presented by such beneficiary on or prior to the
expiration date of the Letter of Credit would require the Issuing Bank to make
payment under the
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Letter of Credit. The Issuing Bank, in its reasonable judgment, may require
changes in any such documents and certificates. No Letter of Credit shall
require payment against a conforming draft to be made thereunder prior to the
second Business Day (under the laws of the jurisdiction of the Issuing Bank)
after the date on which such draft is presented. A Letter of Credit Request may
be given in writing or electronically and, if requested by the Agent, with
prompt confirmation in writing. Any electronic Letter of Credit Request shall be
deemed to have been prepared by, or under the supervision of the chief financial
officer or other Authorized Officer of Wang. The Agent shall promptly provide
the aforementioned Letter of Credit Request, document description and proposed
text of certification to the Issuing Bank.
SECTION 3.5. PAYMENT OF AMOUNT DRAWN UNDER LETTERS OF CREDIT.
In the event of any request for drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Bank shall notify the Agent, which shall notify
the Borrowers of such request, not later than 11:00 a.m. (New York City time) on
the Business Day immediately prior to the date on which the Issuing Bank intends
to honor such drawing. The Borrowers shall give notice to be received by the
Agent and the Issuing Bank not later than 2:00 p.m. (New York City time) on such
Business Day if they intend to reimburse the Issuing Bank for the amount of such
drawing with funds other than the proceeds of Loans. Such notice from the
Borrowers shall be irrevocable and, if given, the Borrowers, jointly and
severally, shall reimburse the Issuing Bank not later than the close of business
(New York City time) on the day on which such drawing is honored in an amount in
same day funds equal to the amount of such drawing. If the Agent shall not have
timely received such notice (i) the Borrowers shall be deemed to have timely
given a Notice of Borrowing to the Agent to make Loans on the date on which such
drawing is honored in an amount equal to the amount of such drawing and (ii)
subject to satisfaction or waiver of the applicable conditions specified in
Article V and the other terms and conditions of Borrowings contained herein, the
Lenders shall, on the date of such drawing, make Loans in the amount of such
drawing, the proceeds of which shall be applied directly by the Agent to
reimburse the Issuing Bank for the amount of such drawing or payment. If for any
reason, proceeds of Loans are not received by the Issuing Bank on such date in
an amount equal to the amount of such drawing, the Borrowers shall be obligated
to and shall reimburse the Issuing Bank, on the Business Day (under the laws of
the jurisdiction of the Issuing Bank) immediately following the date of such
drawing, in an amount in same day funds equal to the excess of the amount of
such drawing over the amount of such Loans, if any, which are so received, plus
accrued interest on such amount at the rate set forth in Section 4.1.
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SECTION 3.6. PAYMENT BY LENDERS. In the event that the
Borrowers do not reimburse the Issuing Bank for the amount of any drawing
pursuant to Section 3.5, the Agent shall promptly notify each Lender of the
unreimbursed amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to the Issuing Bank an
amount equal to its respective participation in same day funds, at the office of
the Issuing Bank specified in such notice, not later than 1:00 p.m. (New York
City time) on the first Business Day (under the laws of the jurisdiction of the
Issuing Bank) after the date notified by the Agent. In the event that any Lender
fails to make available to the Issuing Bank the amount of such Lender's
participation in such Letter of Credit as provided in this Section 3.6, the
Issuing Bank shall be entitled to recover such amount on demand from such Lender
together with interest at the Federal Funds Rate. The Agent or the Issuing Bank
shall distribute to each other Lender which has paid all amounts payable by it
under this Section 3.6 with respect to any Letter of Credit issued by the
Issuing Bank such other Lender's Proportionate Share of all payments
subsequently received by the Agent or the Issuing Bank from the Borrowers in
reimbursement of drawings honored by the Issuing Bank under such Letter of
Credit when such payments are received.
SECTION 3.7. NATURE OF ISSUING BANK'S DUTIES. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under that Letter of Credit have been delivered and that they comply on their
face with the requirements of that Letter of Credit. Subject to the last
sentence of this Section 3.7, as between the Borrowers, the Issuing Bank and
each other Lender, the Borrowers assume all risks of the acts and omissions of
the Issuing Bank, or misuse of the Letters of Credit issued by the Issuing Bank
by the respective beneficiaries of such Letters of Credit. In furtherance and
not in limitation of the foregoing, neither the Issuing Bank nor any of the
Lenders shall be responsible (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
such Letters of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such 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, (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, telecopy or otherwise, whether or not they be
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in cipher, (v) for errors in interpretation of technical terms, (vi) for any
loss or delay in the transmission or otherwise of any document required in order
to make a drawing under any such Letter of Credit, or of the proceeds thereof,
(vii) for the misapplication by the beneficiary of any such Letter of Credit, of
the proceeds of any drawing honored under such Letter of Credit, and (viii) for
any consequences arising from causes beyond the control of the Issuing Bank or
the other Lenders. None of the above shall affect, impair, or prevent the
vesting of any of the Issuing Bank's rights or powers hereunder. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create any liability of the Issuing Bank to the
Borrowers or any Lender.
SECTION 3.8. OBLIGATIONS ABSOLUTE. The obligations of the
Borrowers to reimburse, jointly and severally, the Issuing Bank for drawings
honored under the Letters of Credit and the obligations of the Lenders under
Section 3.6 shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Credit Agreement under all circumstances
including, without limitation, the following circumstances: (i) any lack of
validity or enforceability of this Credit Agreement, any Letter of Credit, any
Letter of Credit Agreement or any other agreement or instrument relating thereto
(the "LETTER OF CREDIT RELATED DOCUMENTS"); (ii) the existence of any claim,
setoff, defense or other right which the Borrowers or any Affiliate of the
Borrowers may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any Persons or entities for whom any such beneficiary or
transferee may be acting), the Issuing Bank, any Lender or any other Person,
whether in connection with this Credit Agreement, the other Credit Documents,
the transactions contemplated herein or therein or any unrelated transaction;
(iii) any draft, demand, certificate or any other documents 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;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; (v) payment by
the Issuing Bank under any Letter of Credit against presentation of a demand,
draft or certificate or other document which does not comply with the terms of
such Letter of Credit; (vi) failure of any drawing under a Letter of Credit or
any non-application or misapplication by the beneficiary of the proceeds of any
drawing; or (vii) the fact that a Default or Event of Default shall have
occurred and be continuing; PROVIDED, HOWEVER, that the Borrowers shall have no
obligation to reimburse the Issuing Bank and the Lenders shall have no
obligation under Section 3.6 in the event of the Issuing Bank's willful
misconduct or gross negligence in determining
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whether documents presented under the Letter of Credit comply with the terms of
such Letter of Credit.
ARTICLE IV
INTEREST, FEES AND EXPENSES
SECTION 4.1. INTEREST ON PRIME RATE LOANS. The Borrowers,
jointly and severally, shall pay to the Agent for the benefit of the Lenders
interest on Prime Rate Loans two Business Days after the last Business Day of
each month, calculated monthly in arrears at an interest rate per annum equal to
the Prime Lending Rate plus the Applicable Margin with respect to Prime Rate
Loans on the average net balances owing to the Agent and the Lenders at the
close of business each day during such month. The rate under this Section 4.1
shall change each day as the Prime Lending Rate changes.
SECTION 4.2. INTEREST ON EURODOLLAR RATE LOANS. The Borrowers,
jointly and severally, shall pay to the Agent for the benefit of the Lenders
interest on Eurodollar Rate Loans on the last day of each Interest Period with
respect to such Eurodollar Rate Loan and, in the case of an Interest Period
longer than three months, on the date occurring every three months from the
first day of such Interest Period, at the date of conversion of such Eurodollar
Rate Loan (or a portion thereof) to a Prime Rate Loan, and at maturity of such
Eurodollar Rate Loan, in each case at a per annum interest rate equal during the
Interest Period for such Eurodollar Loan to the Adjusted Eurodollar Rate for the
Interest Period in effect for such Eurodollar Rate Loan plus the Applicable
Margin with respect to Eurodollar Rate Loans. After maturity of such Eurodollar
Rate Loan (whether by acceleration or otherwise), interest shall be payable upon
demand. The Agent, upon determining the Adjusted Eurodollar Rate for any
Interest Period, shall promptly notify the Borrowers and the Lenders by
telephone (confirmed promptly in writing) or in writing thereof. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 4.3. INTEREST AND LETTER OF CREDIT FEES AFTER EVENT OF
DEFAULT. From the date of occurrence of any of the Events of Default specified
in Section 8.1(a), (f) or (g), until the earlier of the date upon which (i) all
Obligations shall have been paid and satisfied in full or (ii) such Event of
Default shall have been waived or cured, interest on the Loans, and Letter of
Credit Fees on Letter of Credit Obligations, shall each be payable on demand at
a rate per annum equal to, with respect to the Loans, the rate in effect under
Section 4.1, plus two percent (2%), and with respect to the Letter of Credit
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Obligations, the rate in effect under the first sentence of Section 4.4(a), plus
two percent (2%). From the date of occurrence of any of the Events of Default
specified in Section 8.1(b), (c), (d), (e), (h), (i), (j), (k) or (l), until the
earlier to occur of the events described in clauses (i) and (ii) of the
preceding sentence, interest on the Loans and Letter of Credit Fees on Letter of
Credit Obligations shall be payable on demand of the Majority Lenders, at the
rates respectively set forth in the preceding sentence.
SECTION 4.4. LETTER OF CREDIT FEES.
(a) The Borrowers, jointly and severally, shall pay to the
Agent for distribution to the Lenders two Business Days after the last Business
Day of each month a fee (the "LETTER OF CREDIT FEE"), in an amount equal to a
rate per annum equal to the Applicable Margin with respect to the Letter of
Credit Fee of the daily average amount of Letter of Credit Obligations
outstanding during the immediately preceding month. In addition, the Borrowers,
jointly and severally, shall pay to the Agent, for its own benefit, the letter
of credit facing fees outlined in the Fee Letter.
(b) The Borrowers, jointly and severally, shall also pay the
customary charges, fees and expenses of the Issuing Bank for the issuance,
administration and negotiation of each Letter of Credit (the "ISSUING BANK
FEES"). Each determination by the Agent of Letter of Credit Fees and other fees,
charges and expenses under this Section shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 4.5. UNUSED LINE FEE. The Borrowers, jointly and
severally, shall pay to the Agent for distribution to the Lenders two Business
Days after the last Business Day of each month and on the Expiration Date a fee
equal to a rate per annum equal to the Applicable Margin with respect to the
Unused Line Fee calculated monthly in arrears on the average unused portion of
the total Commitments at the close of business each day during such month or
occurring prior to the Expiration Date (the "UNUSED LINE FEE").
SECTION 4.6. OTHER FEES AND EXPENSES. The Borrowers, jointly
and severally, agree to pay fees to BT Commercial Corporation in the amounts and
at the times set forth in the Fee Letter and shall be obligated to reimburse the
Agent's and the Collateral Agent's Expenses promptly upon demand.
SECTION 4.7. CALCULATIONS. All calculations of (i) interest
hereunder and (ii) Fees, including, without limitation, Unused Line Fees and
Letter of Credit Fees, shall be made by the Agent, on the basis of a year of 360
days for the actual number of days elapsed (including the first day but
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excluding the last day) occurring in the period for which such interest or Fees
are payable. Each determination by the Agent of an interest rate, Fee or other
payment hereunder shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 4.8. SPECIAL PROVISIONS RELATING TO EURODOLLAR RATE
LOANS.
(a) CONTINUATION. With respect to any Borrowing consisting
of Eurodollar Rate Loans, Wang may (so long as no Default or Event of Default
has occurred and is continuing), subject to the provisions of Section 4.8(c),
elect to maintain such Borrowing or any portion thereof as consisting of
Eurodollar Rate Loans by selecting a new Interest Period for such Borrowing,
which new Interest Period shall commence on the last day of the immediately
preceding Interest Period. Each selection of a new Interest Period shall be made
by notice given not later than 2:00 p.m. (New York City time) on the third
Business Day prior to the date of any such continuation relating to Eurodollar
Rate Loans, by Wang to the Agent. Such notice by Wang of a continuation (a
"NOTICE OF CONTINUATION") shall be by telephone or facsimile transmission, and
if by telephone, promptly confirmed in writing substantially in the form of
Exhibit D, in each case specifying (i) the date of such continuation, (ii) the
Type of Loans subject to such continuation, (iii) the aggregate amount of Loans
subject to such continuation and (iv) the duration of the selected Interest
Period. Wang may elect to maintain more than one Borrowing consisting of
Eurodollar Rate Loans by combining such Borrowings into one Borrowing and
selecting a new Interest Period pursuant to this Section 4.8(a). If Wang shall
fail to select a new Interest Period for any Borrowing consisting of Eurodollar
Rate Loans in accordance with this Section 4.8(a), such Revolving Loans will
automatically, on the last day of the then existing Interest Period therefore,
convert into Prime Rate Loans. The Agent shall give each Lender prompt notice by
telephone or facsimile transmission of each Notice of Continuation.
(b) CONVERSION. Wang may on any Business Day (so long as no
Default or Event of Default has occurred and is continuing), upon notice (each
such notice, a "NOTICE OF CONVERSION") given to the Agent, and subject to the
provisions of Section 4.8(c), convert the entire amount of or a portion of all
Loans of one Type comprising the same Borrowing into Loans of another Type;
PROVIDED, HOWEVER, that any conversion of any Eurodollar Rate Loans into Loans
of another Type shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Rate Loans and, upon conversion of any Prime Rate
Loans into Loans of another Type, the Borrowers, jointly and severally, shall
pay accrued interest to the date of conversion on the principal amount
converted. Each such Notice of Conversion shall be given not later than 10:00
a.m. (New York
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City time) on the Business Day prior to the date of any proposed conversion into
Prime Rate Loans and on the third Business Day prior to the date of any proposed
conversion into Eurodollar Rate Loans. Subject to the restrictions specified
above, each Notice of Conversion shall be by telephone or facsimile
transmission, and if by telephone, promptly confirmed in writing substantially
in the form of Exhibit E, in each case specifying (i) the requested date of such
conversion, (ii) the Type of Loans to be converted, (iii) the portion of such
Type of Loan to be converted, (iv) the Type of Loan such Loans are to be
converted into and (v) if such conversion is into Eurodollar Rate Loans, the
duration of the Interest Period of such Loan. Each conversion shall be in an
aggregate amount for the Loans of all Lenders of not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof. Wang may elect to convert the
entire amount of or a portion of all Loans of one Type comprising more than one
Borrowing into Loans of another Type by combining such Borrowings into one
Borrowing; PROVIDED, HOWEVER, that if the Borrowings so combined consist of
Eurodollar Rate Loans, such Loans shall have Interest Periods ending on the same
date.
(c) CERTAIN LIMITATIONS ON EURODOLLAR RATE LOANS. The right
of Wang to maintain, select, continue or convert Eurodollar Rate Loans shall be
limited as follows:
(i) If the Agent is not offering U.S. dollar deposits (in
the applicable amounts) in the London interbank market, or the Agent
determines that adequate and fair means do not otherwise exist for
ascertaining the Eurodollar Rate for Eurodollar Rate Loans comprising
any requested Borrowing, continuation or conversion, the right of Wang
to select or maintain Eurodollar Rate Loans for such Borrowing or any
subsequent Borrowing shall be suspended until the Agent shall notify
Wang and the Lenders that the circumstances causing such suspension no
longer exists, and each Loan comprising such Borrowing shall be made as
a Prime Rate Loan.
(ii) If the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, continuation or conversion,
notify the Agent that the Eurodollar Rate for Loans comprising such
Borrowing will not adequately reflect the cost to such Lenders of
making or funding their respective Loans for such Borrowing, the right
of Wang to select Eurodollar Rate Loans for such Borrowing shall be
suspended until the Agent shall notify Wang and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan
comprising such Borrowing shall be made as a Prime Rate Loan.
(iii) If at any time any Lender determines (which
determination shall, absent manifest error, be conclusive
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and binding on all parties) that the making, continuation or conversion
of any Loan as a Eurodollar Rate Loan has become unlawful or
impermissible by reason of compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental Authority
(whether or not having the force of law or resulting in costs or
penalties), then, and in any such event, such Lender may give notice of
that determination in writing, to Wang and the Agent and the Agent
shall promptly transmit the notice to each other Lender. Until such
Lender gives notice otherwise, the right of Wang to select Eurodollar
Rate Loans from that Lender shall be suspended and each Eurodollar Rate
Loan outstanding from that Lender shall automatically and immediately
convert to a Prime Rate Loan.
(iv) Until the first Business Day following the Syndication
Date, the right of Wang to select Eurodollar Rate Loans for any
Borrowing shall be limited to Eurodollar Rate Loans with an Interest
Period of one month.
(v) There shall not be outstanding at any one time more than
an aggregate of seven (7) Borrowings of Loans which consist of
Eurodollar Rate Loans.
(vi) No Agent Advance shall be made as a Eurodollar Rate
Loan.
(d) COMPENSATION.
(i) Each Notice of Continuation and Notice of Conversion
shall be irrevocable by and binding on Wang. In the case of any
Borrowing, continuation or conversion that the related Notice of
Borrowing, Notice of Continuation or Notice of Conversion specifies is
to be comprised of Eurodollar Rate Loans, the Borrowers, jointly and
severally, shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill,
on or before the date for such Borrowing, continuation or conversion
specified in such Notice of Borrowing, Notice of Continuation or Notice
of Conversion, the applicable conditions set forth in Article V,
including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Lender to
fund the Loan to be made by such Lender as part of such Borrowing,
continuation or conversion.
(ii) If any payment of principal of, or conversion or
continuation of, any Eurodollar Rate Loan is made other than on the
last day of the Interest Period for such Loan as a result of a payment,
prepayment, conversion or continuation
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of such Loan or acceleration of the maturity of the Revolving Notes
pursuant to Article VIII or for any other reason, the Borrowers,
jointly and severally, shall, upon demand by any Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a
result of such payment, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Loan.
(iii) Calculation of all amounts payable to a Lender under
this Section 4.8(d) shall be made as though such Lender elected to fund
all Eurodollar Rate Loans by purchasing U.S. dollar deposits in its
Eurodollar Lending Office's interbank eurodollar market.
SECTION 4.9. INDEMNIFICATION IN CERTAIN EVENTS. If after
the Closing Date, either (i) any change in or in the interpretation of any law
or regulation is introduced, including, without limitation, with respect to
reserve requirements, applicable to the Agent, to any of the Lenders, the
Collateral Agent or any other banking or financial institution from whom any of
the Lenders borrows funds or obtains credit (a "FUNDING BANK"), or (ii) the
Agent, the Collateral Agent, a Funding Bank or any of the Lenders complies with
any future guideline or request from any central bank or other Governmental
Authority, or (iii) the Agent, the Collateral Agent, a Funding Bank or any of
the Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or the
Agent, the Collateral Agent, a Funding Bank or any of the Lenders complies with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, and in
the case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent's, the
Collateral Agent's, or such Funding Bank's or Lender's policies as the case may
be with respect to capital adequacy) by an amount deemed by such Lender to be
material, and any of the foregoing events described in clauses (i), (ii) or
(iii) increases the cost to the Agent, the Collateral Agent, the Issuing Bank or
any of the Lenders of (A) funding or maintaining the total Commitments or (B)
issuing,
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making or maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or reduces the amount receivable in respect thereof by
the Agent, the Collateral Agent, the Issuing Bank or any Lender, then the
Borrowers, jointly and severally, shall upon demand by the Agent, pay to the
Agent, for the account of each applicable Lender or, as applicable, the
Collateral Agent, the Issuing Bank or a Funding Bank, additional amounts
sufficient to indemnify the Lenders against such increase in cost or reduction
in amount receivable. A certificate as to the amount of such increased cost and
setting forth in reasonable detail the calculation thereof shall be submitted to
the Borrowers by the Agent, or the applicable Lender, the Collateral Agent,
Issuing Bank or Funding Bank, and shall be conclusive absent manifest error.
Prior to making any such demand, each of the Lenders, the Agent, the Collateral
Agent, Funding Bank or other such party shall use reasonable efforts to
designate a different Applicable Lending Office if such a designation could
reduce or eliminate any such payment.
SECTION 4.10. NET PAYMENTS.
(a) Any and all payments by the Borrowers hereunder, under the
Revolving Loans or under the Letters of Credit to or for the benefit of any
Lender, the Issuing Bank, the Collateral Agent or the Agent shall be made free
and clear of and without deduction or withholding for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings and
penalties, interests and all other liabilities with respect thereto ("TAXES"),
including any Taxes imposed under Section 7701(l) of the Internal Revenue Code,
excluding, (i) in the case of each such Lender, the Issuing Bank, the Collateral
Agent or the Agent, taxes imposed on its net income (including, without
limitation, any taxes imposed on branch profits) and franchise taxes imposed on
it by the jurisdiction under the laws of which such Lender, the Issuing Bank,
the Collateral Agent or the Agent (as the case may be) is organized or any
political subdivision thereof, (ii) in the case of each Lender, taxes imposed on
its net income (including, without limitation, any taxes imposed on branch
profits), and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof, (iii)
in the case of each such Lender, the Issuing Bank, the Collateral Agent and the
Agent, any Taxes that are in effect and that would apply to a payment to such
Lender, the Issuing Bank, the Collateral Agent or Agent, as applicable, as of
the Closing Date (other than any Taxes imposed under Section 7701(l) of the
Internal Revenue Code), and (iv) if any Person acquires any interest in this
Credit Agreement, any Revolving Loan or Letter of Credit pursuant to the
provisions hereof, or a Foreign Lender or the Agent changes the office in which
the Borrowing is made, accounted for or booked (any such person, or such Foreign
Lender or the Agent in that event, being referred to as a "TAX TRANSFEREE"), any
Taxes (other than Taxes
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imposed under Section 7701(l) of the Internal Revenue Code) to the extent that
they are in effect and would apply to a payment to such Tax Transferee as of the
date of the acquisition of such interest or change in office, as the case may be
(all such nonexcluded Taxes being hereinafter referred to as "COVERED TAXES").
If the Borrowers shall be required by law to deduct or withhold any Covered
Taxes from or in respect of any sum payable hereunder, under any Revolving Loan
or under any Letter of Credit to or for the benefit of any Lender, the Issuing
Bank, the Collateral Agent or the Agent or any Tax Transferee, (A) the sum
payable shall be increased as may be necessary so that after making all required
deductions or withholdings of Covered Taxes (including deductions of Covered
Taxes applicable to additional sums payable under this Section 4.10) such
Lender, the Issuing Bank, the Agent, the Collateral Agent or such Tax
Transferee, as the case may be, receives an amount equal to the sum it would
have received had no such deductions or withholdings been made, (B) such
Borrower shall make such deductions or withholdings and (C) such Borrower shall
pay the full amount so deducted or withheld to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrowers, jointly and severally, agree
to pay any present or future stamp, documentary, excise, privilege, intangible
or similar levies that arise at any time or from time to time (i) from any
payment made under any and all Credit Documents, (ii) from the transfer of the
rights of the Lender under any Credit Documents to any transferee, or (iii) from
the execution or delivery by the Borrowers of, or from the filing or recording
or maintenance of, or otherwise with respect to the exercise by the Agent or the
Lenders of their rights under, any and all Credit Documents (hereinafter
referred to as "OTHER TAXES").
(c) The Borrowers, jointly and severally, indemnify each
Lender, the Issuing Bank, the Agent, the Collateral Agent and any Tax Transferee
for the full amount of (i) Covered Taxes imposed on or with respect to amounts
payable hereunder, (ii) Other Taxes, and (iii) any Taxes (other than Covered
Taxes imposed by any jurisdiction on amounts payable under this Section 4.10)
paid by such Lender, the Issuing Bank, the Collateral Agent or the Agent or such
Tax Transferee, as the case may be, and any liability (including penalties,
interest and expenses) arising solely therefrom or with respect thereto. Payment
of this indemnification shall be made within 30 days from the date such Lender,
the Issuing Bank or the Agent or Tax Transferee certifies and sets forth in
reasonable detail the calculation thereof as to the amount and type of such
Taxes. Any such certificate submitted by the Lender, the Issuing Bank, the
Collateral Agent or Agent or Tax Transferee in good faith to the Borrowers
shall, absent manifest error, be final, conclusive and binding on all parties.
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(d) Within 30 days after having received a receipt of
Covered Taxes or Other Taxes, the Borrowers will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(e) On or before the Closing Date, each Foreign Lender shall
deliver to the Agent and the Borrowers (i) two valid, duly completed copies of
IRS Form 1001 or 4224 or successor applicable form, as the case may be, and any
other required form, certifying in each case that such Foreign Lender is
entitled to receive payments under this Credit Agreement or the Revolving Loans
payable to it without deduction or withholding of any United States federal
income taxes or with such withholding imposed at a reduced rate (the "REDUCED
RATE"), and (ii) a valid, duly completed IRS Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each such Foreign Lender shall also deliver to
the Agent and the Borrowers two further copies of said Form 1001 or 4224 and W-8
or W-9, or successor applicable forms, or other manner of required
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States
federal income tax or entitlement to having such withholding imposed at the
Reduced Rate or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the Borrowers
and the Agent, certifying (i) in the case of a Form 1001 or 4224 that such
Foreign Lender is entitled to receive payments under this Credit Agreement or
the Revolving Notes payable to it without deduction or withholding of any United
States federal income taxes, unless in any such case any change in a tax treaty
to which the United States is a party, or any change in law or regulation of the
United States or official interpretation thereof has occurred after the Closing
Date and prior to the date on which any such delivery would otherwise be
required that renders all such forms inapplicable or that would prevent such
Foreign Lender from duly completing and delivering any such form with respect to
it, and such Foreign Lender advises the Borrowers and the Agent that it is not
capable of receiving payments without any deduction or withholding at the
Reduced Rate, or (ii) in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax.
(f) If a Tax Transferee that is organized under the laws of
a jurisdiction outside of the United States acquires an interest in this Credit
Agreement or any Revolving Loan or a Foreign Lender changes the office through
which Loans are made, accounted for or booked, the transferor, or the applicable
Foreign Lender, in the case of a change of office, shall cause such Tax
Transferee to agree that, on or prior to the effective
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date of such acquisition or change, as the case may be, it will deliver to the
Borrowers and the Agent (i) two valid, duly completed copies of IRS Form 1001 or
4224 or successor applicable form, as the case may be, and any other required
form, certifying in each case that such Tax Transferee is entitled to receive
payments under this Credit Agreement and the Revolving Notes payable to it
without deduction or withholding of United States federal income tax or with
such withholding imposed at a Reduced Rate; and (ii) a valid, duly completed IRS
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding tax. Each Tax Transferee that
delivers to the Borrowers and the Agent a Form 1001 or 4224, and Form W-8 or W-9
and any other required form, pursuant to the next preceding sentence, further
undertakes to deliver two further copies of the said Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms, or other manner of required
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States
federal income tax or entitlement to having such withholding imposed at the
Reduced Rate or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the Borrowers
and the Agent, certifying (i) in the case of a Form 1001 or 4224 that such Tax
Transferee is entitled to receive payments under this Credit Agreement without
deduction or withholding of any United States federal income taxes or with such
withholding imposed at the Reduced Rate, unless any change in treaty, law or
regulation or official interpretation thereof has occurred after the effective
date of such acquisition or change and prior to the date on which any such
delivery would otherwise be required that renders all such forms inapplicable or
that would prevent such Tax Transferee from duly completing and delivering any
such form with respect to it, and such Tax Transferee advises the Borrowers and
the Agent that it is not capable of receiving payments (a) without any deduction
or withholding of United States federal income tax or (b) with such withholding
at the Reduced Rate, as the case may be, or (ii) in the case of a Form W-8 or
W-9, establishing an exemption from United States backup withholding tax.
(g) If any Taxes for which the Borrowers would be required
to make payment under this Section 4.10 are imposed, the Lender, the Issuing
Bank, the Collateral Agent or the Agent, as the case may be, shall use its
reasonable best efforts to avoid or reduce such Taxes by taking any appropriate
action (including, without limitation, assigning its rights hereunder to a
related entity or a different office) which would not in the sole opinion of
such Lender, the Issuing Bank, the Collateral Agent or the Agent be otherwise
disadvantageous to such Lender, the Issuing Bank or the Agent, as the case may
be.
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(h) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 4.10 shall survive the payment in full of the
Obligations.
SECTION 4.11. AFFECTED LENDERS. If the Borrowers are
obligated to pay to any Lender any amount under Sections 4.9 or 4.10 materially
in excess of any such amounts payable to the other Lenders or if any Lender is a
Defaulting Lender and remains as such for five Business Days following its
receipt of written notice from the Agent or the Borrowers, or if the Borrowers
are exercising their right to replace a non-consenting Lender under Section
10.11(d), the Borrowers may, if no Default or Event of Default then exists,
replace such Lender with another lender reasonably acceptable to the Agent, and
such Lender hereby agrees to be so replaced subject to the following:
(a) The obligations of the Borrowers hereunder to the Lender
to be replaced (including such increased or additional costs incurred from the
date of notice to the Borrowers of such increase or additional costs through the
date such Lender is replaced hereunder) shall be paid in full to the Agent for
the account of such Lender concurrently with such replacement;
(b) The replacement Lender shall be a bank or other
financial institution that is not subject to the increased costs arising under
Section 4.9 which may have effectuated the Borrowers' election to replace any
Lender hereunder, and each such replacement Lender shall execute and deliver to
the Agent such documentation satisfactory to the Agent pursuant to which such
replacement Lender is to become a party hereto, conforming to the provisions of
Section 10.8, with a Commitment equal to that of the Lender being replaced
(before giving effect to Section 2.8) and shall make a Loan or Loans in the
aggregate principal amount equal to the aggregate outstanding principal amount
of the Loan or Loans of the Lender being replaced (or Loans that should have
been made but for a Defaulting Lender's failure to lend);
(c) Upon such execution of such documents referred to in
clause (b) and repayment of the amounts referred to in clause (a), the
replacement lender shall be a "Lender" with a Commitment as specified
hereinabove and the Lender being replaced shall cease to be a "Lender"
hereunder, except with respect to indemnification provisions under this Credit
Agreement, which shall survive as to such replaced Lender;
(d) The Agent shall reasonably cooperate in effectuating the
replacement of any Lender under this Section 4.11, but at no time shall the
Agent be obligated to initiate any such replacement; and
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(e) Any Lender replaced under this Section 4.11 shall be
replaced at the Borrowers' sole cost and expense and at no cost or expense to
the Agent or any of the Lenders (other than a Defaulting Lender).
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. CONDITIONS TO INITIAL LOANS AND LETTERS OF
CREDIT. The obligation of each Lender to fund its Proportionate Share of the
initial Loan and the obligation of the Issuing Bank to issue the initial Letter
of Credit is subject to the satisfaction of the following conditions precedent:
(a) There shall be no pending or, to the best knowledge of
the Borrowers, threatened in writing, litigation, proceeding, inquiry or other
action seeking an injunction or other restraining order, damages or other relief
with respect to the transactions contemplated by this Credit Agreement, the
other Credit Documents, the INET Purchase Documents or the transactions
contemplated hereby and thereby or the Borrowers' other business activities,
except where such litigation, proceeding, inquiry or other action is not
reasonably likely to have a Material Adverse Effect.
(b) The Borrowers shall have paid all accrued fees and
expenses of the Agent in connection with the negotiation, preparation, execution
and delivery of the Credit Documents (including, without limitation, the
reasonable accrued fees and expenses of counsel to the Agent).
(c) The Agent and the Lenders shall have received each of
the agreements, opinions, reports, approvals, consents, certificates and other
documents set forth on the Closing Document List attached hereto as Schedule
5.1(c), in each case, in form and substance reasonably satisfactory to the
Lenders.
(d) All documentation relating to the transactions
contemplated hereby (including, without limitation, the Credit Documents) shall
be in form and substance reasonably satisfactory to the Agent and the Lenders.
(e) All Existing Indebtedness of INET and all other Existing
Indebtedness incurred in connection with the Acquisition of the Acquired INET
Stock shall be on terms and conditions (including, without limitation, amount,
pricing, amortization, intercreditor arrangements and extent of subordination)
reasonably satisfactory to the Agent.
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(f) INET shall have been released from all obligations under
the Existing INET Loan Facility and all related documents and agreements
pursuant to a release in form and substance satisfactory to the Agent and all
liens and security interests related thereto shall be released or terminated.
(g) Except for (i) the filing of U.C.C. financing statements
under the Code and the filing of the Wang Intellectual Property Security
Agreement, the Wang Canada Intellectual Property Security Agreement, the Wang
Software Intellectual Property Security Agreement and the Dataserv Intellectual
Property Security Agreement or other effective notice of the security interests
granted therein with the United States Patent and Trademark Office and the
United States Copyright Office, (ii) consents or authorizations which have been
obtained or filings which have been made, and which in either case are in full
force and effect, (iii) consents or authorizations of Governmental Authorities
of the laws under which the Foreign Subsidiaries are organized with respect to
the pledge by Wang in favor of the Agent of the shares of capital stock in such
Subsidiaries, (iv) any filing and recordation of the releases of any security
interest in the Collateral pledged to Crestar Bank in connection with the
Existing INET Loan Facility, or (v) consents or authorizations the failure to
obtain, or filings the failure to make, are not reasonably likely to have a
Material Adverse Effect, no consent or authorization of, filing with or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Borrowings hereunder, the grant of the Liens
pursuant to the Credit Documents, the consummation of the transactions
contemplated by the INET Purchase Agreement or the continuing operations of Wang
and its consolidated Subsidiaries following such consummation or with the
execution, delivery, performance, validity or enforceability of this Credit
Agreement, the Revolving Notes, the Letters of Credit, the other Credit
Documents or the INET Purchase Documents.
(h) (i) No change, occurrence, event or development or event
involving a prospective change that is reasonably likely to have a Material
Adverse Effect shall have occurred and be continuing since March 31, 1996 or
(ii) there shall not have occurred a substantial impairment of the financial
markets generally that is reasonably likely to materially and adversely affect
the transactions contemplated hereby, in each case as determined by the Agent
and each Lender in its sole discretion.
(i) After giving effect to the Loans to be made on the
Closing Date, the Borrowers shall have Unused Availability sufficient, in the
Agent's judgment, to their overall business and working capital requirements.
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(j) Each Credit Party shall be in compliance with all
material indentures or agreements to which it is a party.
(k) The Liens and all other security interests in favor of
the Collateral Agent, for the benefit of the Lenders, shall have been duly
perfected and shall constitute first and prior Liens, except as otherwise
provided in the Credit Documents.
(l) The INET Purchase Agreement, the INET Subordinated Notes
and the other INET Purchase Documents shall be executed and delivered in form
and substance reasonably satisfactory to the Agent.
(m) The transactions contemplated by the INET Purchase
Agreement shall have occurred closed on terms and pursuant to documentation
satisfactory to the Agent, and Wang shall own all of the Acquired INET Stock
free and clear of all Liens except in favor of the Collateral Agent for the
benefit of the Lenders and the Liens permitted under the Credit Documents.
Without limiting the generality of the foregoing, the purchase price for the
Acquired INET Stock shall not exceed (i) $100,000,000 in cash and (ii)
$66,630,000 in the form of the INET Subordinated Notes.
(n) The Agent shall have received (i) audited financial
statements (including an income statement, cash flow statement and balance
sheet) of INET for the fiscal year ended December 31, 1995, prepared in
accordance with GAAP (or the equivalent standard in the relevant jurisdiction)
and accompanied by an unqualified opinion of KPMG Peat Marwick, (ii) the most
recently prepared unaudited monthly financial statements of INET, prepared in
accordance with GAAP and certified as true and correct by the chief financial
officer of INET, which monthly financial statements shall be in form and
substance satisfactory to the Agent, (iii) PRO FORMA balance sheet of Wang and
its consolidated Subsidiaries as of August 31, 1996, adjusted to give effect to
the closing of the INET Purchase Agreement and the transactions contemplated
thereby, and (iv) all of the financial statements, notes thereto and reports
thereon described in Section 3.6(a) of the INET Purchase Agreement, and all such
financial statements shall be in form and substance satisfactory to the Agent.
(o) There shall not have occurred a material adverse change
in the business, condition (financial or otherwise) operations, performance or
prospects of INET since December 31, 1995.
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(p) Counsel to the Agent shall have performed a legal review
satisfactory to the Agent of all of INET's material contracts, tax,
environmental, litigation and other potential and contingent liabilities.
(q) The Agent shall have received such other approvals,
opinions or documents as any Lender or the Issuing Bank through the Agent may
reasonably request.
If the conditions precedent set forth in this Section 5.1 are satisfied, then
all of such conditions precedent shall be deemed to have occurred at the same
time.
SECTION 5.2. CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS
OF CREDIT. The obligation of each Lender to fund its Proportionate Share of any
requested Loan or of the Agent to cause the Issuing Bank to issue any requested
Letter of Credit is subject to the conditions precedent set forth below. Each
Notice of Borrowing and each Letter of Credit Request, and each issuance by Wang
of a check drawn against, or request for transfer from, the Disbursement Account
shall constitute a representation and warranty that such conditions are
satisfied.
(a) All representations and warranties contained in this
Credit Agreement and the other Credit Documents shall be true and correct on and
as of the date of such Notice of Borrowing or Letter of Credit Request or
issuance of a check drawn against or request for transfer from the Disbursement
Account, as if then made, other than representations and warranties that relate
solely to an earlier date;
(b) No Default or Event of Default shall have occurred, or
would result from the making of the requested Revolving Loan or the issuance of
the requested Letter of Credit, which has not been waived or cured; and
(c) No event has occurred since March 31, 1996 which has had
or is reasonably likely to have a Material Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES OF THE
BORROWERS. The Borrowers represent and warrant as follows:
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(a) ORGANIZATION AND QUALIFICATION. Wang and each
consolidated Subsidiary (i) is a corporation duly organized, validly existing
and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, (ii) has the power and authority to own its
properties and assets and to transact the businesses in which it presently is,
or proposes to be, engaged and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where it presently is, or
proposes to be, engaged in business, except for those jurisdictions where the
failure to qualify or be in good standing is not reasonably likely to result in
a Material Adverse Effect. Schedule 6.1(a) lists all jurisdictions in which Wang
and each Domestic Subsidiary, FSI and its Subsidiaries are qualified to do
business as foreign corporations as of the Closing Date.
(b) AUTHORITY. Each Borrower and each other Credit Party has
the requisite corporate power and authority to execute, deliver and perform each
of the Credit Documents and INET Purchase Documents to which it is a party. All
corporate action necessary for the execution, delivery and performance of any of
the Credit Documents has been or, prior to the execution and delivery thereof,
will be taken. All corporate action necessary for the execution, delivery and
performance of any of the INET Purchase Documents to which a Credit Party is a
party has been taken.
(c) ENFORCEABILITY. This Credit Agreement is and, when
executed and delivered, each other Credit Document and INET Purchase Document is
and, when executed, and delivered, will be the legal, valid and binding
obligation of the Borrowers or of any Credit Party which is a party thereto,
enforceable in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency or similar laws affecting creditors'
rights generally, and (ii) general principles of equity.
(d) NO CONFLICT. The execution, delivery and performance of
each Credit Document by the Borrowers or any other Credit Party does not, and
the execution, delivery and performance by Wang of each INET Purchase Document
to which it is a party will not, contravene (i) the Governing Documents of the
Borrowers or any other Credit Party, or (ii) any Requirement of Law (including,
without limitation, HSR and the other Acquisition Notification Laws) or (iii)
any franchise, license, permit, indenture, contract, lease, agreement,
instrument or other commitment to which it is a party or by which it or any of
its properties are bound, in each case, other than those which are not
reasonably likely to result in a Material Adverse Effect, and will not, except
as contemplated herein, result in the imposition of any Liens upon any of its
properties.
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(e) CONSENTS AND FILINGS. No material consent,
authorization, approval or filing is required in connection with the execution,
delivery and performance of this Credit Agreement, any Credit Document or any
INET Purchase Document, or the continuing operations of Wang and any Subsidiary,
except: (i) those that have been obtained or made; (ii) filings necessary to
create, perfect or retain the perfection of Liens against the Collateral; (iii)
filings required under HSR or the other Acquisition Notification Laws; and (iv)
in the case of the continuing operations of Wang and each Subsidiary, those the
failure to obtain are not reasonably likely to have a Material Adverse Effect.
All applicable waiting periods under HSR and the other Acquisition Notification
Laws will have expired or been earlier terminated prior to the Closing Date.
(f) GOVERNMENT REGULATION. Neither of the Borrowers nor any
other Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940,
or any other Requirement of Law that limits its ability to incur indebtedness or
its ability to consummate the transactions contemplated in this Credit Agreement
and the other Credit Documents.
(g) SOLVENCY. The fair saleable value of the assets of Wang
and its Subsidiaries on a consolidated basis, WFI and its Subsidiaries on a
consolidated basis, Dataserv and its Subsidiaries on a consolidated basis, Wang
Canada and its Subsidiaries on a consolidated basis and INET and its
Subsidiaries on a consolidated basis exceeds all their respective probable
liabilities, including those to be incurred pursuant to this Credit Agreement,
the other Credit Documents and the INET Purchase Documents. No Borrower and its
Subsidiaries on a consolidated basis (i) has unreasonably small capital in
relation to the business in which it is or proposes to be engaged and (ii) has
incurred, or believes that it will incur, after giving effect to the
transactions contemplated by this Credit Agreement, the other Credit Documents
and the INET Purchase Agreement, debts beyond its ability to pay as such debts
become due.
(h) RIGHTS IN COLLATERAL; PRIORITY OF LIENS. All property
consisting of Collateral is owned or leased by the Borrowers or another Credit
Party, free and clear of any and all Liens in favor of third parties, other than
Liens permitted under Section 7.2(a), and to the extent such Collateral consists
of real estate, the Borrowers or another Credit Party has good and marketable
title in fee simple to such real estate. Upon the proper filing of the UCC
financing statements, the security interests granted pursuant to the Credit
Documents constitute valid and enforceable first, prior and perfected Liens on
the Collateral to the extent such Liens can be perfected by the filing of such
financing statements.
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(i) FINANCIAL DATA.
(A) Wang has provided to the Agent and each of the
Lenders complete and accurate copies of annual audited
Financial Statements for the fiscal year ended June 30, 1995,
reported on by Ernst & Young LLP and unaudited Financial
Statements for the fiscal period ended March 31, 1996. Such
Financial Statements have been prepared in accordance with
GAAP consistently applied throughout the periods involved and
fairly present the respective financial positions, results of
operations and cash flows of Wang and its consolidated
Subsidiaries for each of the periods covered. Neither Wang nor
any of its consolidated Subsidiaries has any Contingent
Obligation, or liability for taxes or long-term leases, which
is not reflected in such Financial Statements or the footnotes
thereto. During the period from March 31, 1996 to and
including the Closing Date there has been no sale, transfer or
other disposition by Wang or any of its consolidated
Subsidiaries of any material part of its business or property
and no purchase or other acquisition of any business or
property (including any capital stock of any other Person
other than as part of the Acquired INET Stock) material in
relation to the consolidated financial condition of Wang and
its consolidated Subsidiaries at March 31, 1996, except for
the acquisitions of Dataserv and WSSM. Since March 31, 1996,
except as permitted under this Credit Agreement (a) there has
been no change, occurrence, development or event which has had
or is reasonably likely to have a Material Adverse Effect and
(b) no dividends or other returns of capital or other
distributions have been declared, paid or made upon the
capital stock of any Credit Party, except for dividends paid
to Wang by its Subsidiaries, regularly scheduled dividends to
holders of the Preferred Stock, dividends paid-in-kind and
payments in respect of the InterCompany Convertible
Instruments, nor has any of the capital stock of Wang been
redeemed, retired, purchased or otherwise acquired for value
by Wang or any of its Subsidiaries.
(B) INET has provided to the Agent and each of the
Lenders complete and accurate copies of annual audited balance
sheet, statement of operations, statement of cash flows and
statement of changes in shareholder's equity of INET and its
consolidated Subsidiaries (the "INET FINANCIAL STATEMENTS")
for the fiscal year ended December 31, 1995, reported on by
KPMG Peat Marwick and unaudited INET Financial Statements for
the fiscal period ended May 31, 1996. Such Financial
Statements have been prepared in
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accordance with GAAP consistently applied throughout the
periods involved and fairly present the financial position,
results of operation and cash flows of INET for each of the
periods covered and, with respect to the unaudited Financial
Statements only, subject to normal year-end audit adjustments.
INET does not have any Contingent Obligation, or liability for
taxes or long-term leases, which is not reflected in such
Financial Statements or the footnotes thereto. During the
period from May 31, 1996 to and including the date hereof
there has been no sale, transfer or other disposition by INET
of any material part of its business or property and no
purchase or other acquisition of any business or property
(including any capital stock of any other Person) material in
relation to the financial condition of INET at June 30, 1996.
(j) CASH FLOW STATEMENTS. The forecasted cash flow statements
and other financial statements of Wang and its consolidated Subsidiaries on a
consolidated basis dated July 24, 1996 for the fiscal years ended June 30, 1996,
1997, 1998 and 1999 delivered to the Agent and the Lenders in writing were
prepared in good faith on the basis of assumptions which were fair in light of
the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, such Borrower's best estimate of its and
(in the case of Wang) its consolidated Subsidiaries' future financial
performance. The forecasted statements described in this Section 6.1(j) should
not be construed by the Agent or the Lenders as a guaranty of results or
performance in the future.
(k) LOCATIONS OF OFFICES, RECORDS AND INVENTORY. As of the
Closing Date, the address of the principal place of business and chief executive
office of each Credit Party is set forth on Schedule 6.1(k). As of the Closing
Date, the books and records of each Credit Party, and all of its chattel paper
and records of Accounts, are maintained exclusively at the locations for such
Credit Party set forth on such Schedule. As of the Closing Date, there is no
jurisdiction in the United States or Canada in which any Credit Party has any
Collateral (except for vehicles and Inventory in transit for processing or at
customer sites) other than those jurisdictions with respect to such Credit Party
identified on Schedule 6.1(k). A complete list of the legal name and address of
each location in the United States or Canada at which any Credit Party's
Inventory or Equipment with an aggregate book value in excess of $500,000 is
located as of the Closing Date is set forth on Schedule 6.1(k). Schedule 6.1(k)
indicates whether each location listed thereon is leased or owned by such Credit
Party on the Closing Date and whether each such location is a Material Location
on the Closing Date. None of the receipts received and to be received by any
Credit Party from any
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warehouseman state that any Credit Party's Inventory or Equipment covered
thereby is to be delivered to bearer.
(l) SUBSIDIARIES; OWNERSHIP OF STOCK. As of the Closing
Date, the only direct or indirect Subsidiaries of Wang are those listed on
Schedule 6.1(l)(i). As of the Closing Date, Wang or a Subsidiary is the record
and beneficial owner of all of the shares of capital stock of each of the
Subsidiaries listed on Schedule 6.1(l)(ii), except for director's qualifying
shares. Except as set forth on Schedule 6.1(l)(iii), as of the Closing Date
there are no proxies, irrevocable or otherwise, with respect to such shares, and
no equity securities of any of the Subsidiaries are or may become required to be
issued by reason of any options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any such
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any such Subsidiary is or may become bound to issue
additional shares of its capital stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by Wang are owned by
Wang free and clear of any Liens, other than Liens granted to the Collateral
Agent for the benefit of the Lenders under the Collateral Documents.
(m) NO JUDGMENTS OR LITIGATION. Except as set forth on
Schedule 6.1(m), no judgments, orders, writs or decrees are outstanding against
Wang or any of its consolidated Subsidiaries nor is there now pending or, to the
best of Wang's knowledge after diligent inquiry, threatened in writing any
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against Wang or any of its consolidated Subsidiaries that (i)
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Credit Agreement, any Note, any other Credit Document or
any of the INET Purchase Documents or the consummation of the transactions
contemplated hereby or thereby.
(n) LICENSES AND PERMITS. Except with respect to
environmental matters described in Section 6.1(t), each of the Credit Parties
and Material Foreign Subsidiaries has obtained and holds in full force and
effect, all franchises, licenses, leases, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights and approvals which
are necessary or advisable for the operation of its business as presently
conducted and as proposed to be conducted except where it is not reasonably
likely to have a Material Adverse Effect.
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(o) NO DEFAULTS. After giving effect to the closing of the
INET Purchase Agreement and the other transactions contemplated herein, neither
Wang nor any of its Subsidiaries is in default under any term of any indenture,
contract, lease, agreement, instrument or other commitment to which any of them
is a party or by which any of them is bound which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect. The Borrowers
know of no dispute regarding any such indenture, contract, lease, agreement,
instrument or other commitment which, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
(p) LABOR MATTERS. Schedule 6.1(p) accurately sets forth all
collective bargaining agreements or other agreements with labor organizations to
which the Credit Parties or any of the Material Foreign Subsidiaries is a party
as of the Closing Date, and their dates of expiration. There are no existing or,
to the best of the Borrowers' knowledge after diligent inquiry, threatened
strikes, lockouts or other disputes relating to any collective bargaining or
other agreements with labor organizations to which Wang or any of its
Subsidiaries is a party which, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect.
(q) COMPLIANCE WITH LAW. Neither Wang nor any of its
Subsidiaries has violated or failed to comply with any Requirement of Law,
including without limitation ERISA, HSR, the other Acquisition Notification Laws
and Environmental Laws which violation or failure to comply, individually or in
the aggregate, is reasonably likely to have a Material Adverse Effect. The
transactions contemplated by the INET Purchase Agreement have been consummated
in accordance with all applicable laws except where the failure to do so is not
reasonably likely to have a Material Adverse Effect.
(r) ERISA; PENSION PLANS.
(i) As of the Closing Date, none of Wang, any of its
Subsidiaries or any ERISA Affiliate maintains or contributes to any
Plan, other than those listed on Schedule 6.1(r).
(ii) Wang, each of its Subsidiaries and each ERISA Affiliate
have fulfilled all contribution obligations for each Plan (including
obligations related to the minimum funding standards of ERISA and the
Internal Revenue Code).
(iii) No Termination Event has occurred nor has any other
event occurred that is likely to result in a Termination Event other
than any Termination Event described in clause (ii) or (vi) of the
definition of Termination Event that is not reasonably likely to have a
Material Adverse Effect.
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(iv) None of Wang or its Subsidiaries or any ERISA Affiliate
is required to or reasonably expects to be required to provide security
to any Plan under Section 401(a)(29) of the Internal Revenue Code.
(v) Wang, each of its Subsidiaries and each ERISA Affiliate
are in material compliance in all respects with any applicable
provisions of ERISA with respect to all Plans. Since June 30, 1995,
there has been no prohibited transaction as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code (a "PROHIBITED
TRANSACTION") with respect to any Plan or, to the best knowledge of the
Borrowers, with respect to any Multiemployer Plan, which, in either
such case, is reasonably likely to result in any material liability to
Wang, its Subsidiaries or any other ERISA Affiliates. Wang, its
Subsidiaries and each ERISA Affiliate have made when due any and all
payments required to be made under any agreement relating to a
Multiemployer Plan or any Requirement of Law pertaining thereto. With
respect to each Plan and Multiemployer Plan, Wang, its Subsidiaries and
each ERISA Affiliate have not incurred any liability to the PBGC (other
than required premium payments) and, except as set forth on Schedule
6.1(r), have not had asserted against them any penalty for failure to
fulfill the minimum funding requirements of ERISA.
(vi) To the Borrowers' best knowledge, each Multiemployer
Plan is able to pay benefits when due.
(vii) As of the Closing Date, neither Wang, its Subsidiaries
nor any ERISA Affiliate has instituted or, except as set forth on
Schedule 6.1(r), intends to institute proceedings to terminate any
Benefit Plan.
(viii) As of the Closing Date, except as set forth on Schedule
6.1(r), the aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan which is subject to
Title IV of ERISA, determined on either an accumulated or projected
benefit obligation basis, as disclosed in, and as of the date of, the
most recent actuarial report for such Plan, does not exceed the
aggregate fair market value of the assets of such Plan.
(ix) Neither Wang, its Subsidiaries nor any ERISA Affiliate
has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan.
(x) To the extent that any Plan is insured, Wang, its
Subsidiaries and all ERISA Affiliates have paid when due all
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premiums required to be paid for all periods through and
including the Closing Date.
(xi) All pension plans maintained by Wang Canada are fully
funded on an on-going and termination basis.
(s) BUSINESS AND PROPERTIES. Neither the business nor the
properties of Wang or any Subsidiary is affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) which is reasonably likely to have a
Material Adverse Effect.
(t) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth
on Schedule 6.1(t), (i) neither Wang nor any of its Subsidiaries is the subject
of a judicial or administrative proceeding or investigation relating to the
violation of any Environmental Laws, or asserting potential liability arising
from the release or disposal by any Person of any Hazardous Materials which,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect, (ii) neither Wang nor any of its Subsidiaries has filed or
received any notice under any Environmental Laws concerning the treatment,
storage, disposal, spill or release or threatened release of any Hazardous
Materials at, on, beneath or adjacent to property owned or leased by Wang or any
of its Subsidiaries, or the release or threatened release at any other location
of any Hazardous Material generated, used, stored, treated, transported or
released by or on behalf of Wang or any of its Subsidiaries which, individually
or in the aggregate, is reasonably likely to have a Material Adverse Effect; and
(iii) neither Wang nor any of its Subsidiaries has knowledge of any contingent
liability for any release of any Hazardous Materials, in each case which,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect.
(u) REAL PROPERTY. As of the Closing Date, except as set
forth on Schedule 6.1(u), no Credit Party either owns or leases any real
property.
(v) MATERIAL CONTRACTS. As of the Closing Date, set forth on
Schedule 6.1(v) is a complete and accurate list of all Material Contracts to
which Wang or any of its Subsidiaries is a party, showing as of the date hereof
the parties, subject matter and term thereof. Each such contract has been duly
authorized, executed and delivered by Wang and each Subsidiary that is a party
thereto, and, to the Borrowers' best knowledge, each other party thereto. Except
as described on Schedule 6.1(v), none of the Material Contracts contains any
burdensome restrictions on Wang or any of its Subsidiaries or any of their
respective properties, and each Material Contract is in full force and
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effect and is binding upon and enforceable against all parties thereto in
accordance with its terms, and there exists no default under such contract by
any party thereto which is reasonably likely to have a Material Adverse Effect.
(w) INTELLECTUAL PROPERTY. As of the Closing Date, set forth
on Schedule 6.1(w) hereto is a complete and accurate list of all patents,
registered trademarks, trade names, registered service marks and registered
copyrights, and all applications therefor and material licenses thereof, of each
Credit Party, showing with regard to the registrations and applications the
jurisdiction in which registered or applied for, the registration or application
number, the date of registration (if any) and any expiration or application
date. Each of Wang and its Subsidiaries owns or licenses all material patents,
trademarks, service-marks, logos, tradenames, trade secrets, know-how,
copyrights, or licenses and other rights with respect to any of foregoing, which
are necessary for the operation of its business as presently conducted or
presently proposed to be conducted and which, if not obtained or held, is
reasonably likely to have a Material Adverse Effect. Except as set forth on
Schedule 6.1(w) hereto, to the best of the Borrowers' knowledge, neither Wang
nor any of its Subsidiaries has infringed any patent, trademark, service-mark,
tradename, copyright, license or other right owned by any other Person by the
sale or employment of any product, process, method, substance, part or other
material presently contemplated to be sold or employed, where such sale or
employment is reasonably likely to have a Material Adverse Effect on such Credit
Party and no claim or litigation is pending, or to the best of the Borrowers'
knowledge, threatened in writing against any Credit Party that contests its
right to sell or use any such product, process, method, substance, part or other
material which claim or litigation is reasonably likely to have a Material
Adverse Effect.
(x) TAXES AND TAX RETURNS.
(i) Wang and each of its consolidated Subsidiaries has
properly completed and timely filed all income tax returns it is
required to file. The information filed is complete and accurate in all
material respects. All deductions taken in such income tax returns are
appropriate and in accordance with applicable laws and regulations,
except deductions that may have been disallowed but are being
challenged in good faith and for which adequate reserves have been made
in accordance with GAAP or other applicable accounting standards in the
relevant jurisdictions.
(ii) All taxes, assessments, fees and other governmental
charges for periods beginning prior to the date hereof have been timely
paid (or, if not yet due, adequate reserves therefor have been
established) and neither Wang
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nor any of its consolidated Subsidiaries has any material liability
for taxes in excess of the amounts so paid or reserves so established.
(iii) Except as set forth on Schedule 6.1(x), no deficiencies
for taxes have been claimed, proposed or assessed by any taxing or
other Governmental Authority against Wang or any of its consolidated
Subsidiaries and no tax Liens other than liens for current taxes not
yet due or those being contested in good faith have been filed. There
are no pending or threatened (in writing) audits, investigations or
claims for or relating to any liability for taxes and there are no
matters under discussion with any Governmental Authority which is
reasonably likely to result in a material additional liability for
taxes. Either the federal income tax returns of Wang have been audited
by the Internal Revenue Service and such audits have been closed, or
the period during which any assessments may be made by the Internal
Revenue Service has expired without waiver or extension for all years
up to and including the fiscal year of Wang ended June 30, 1991.
(iv) Neither Wang nor any of its Subsidiaries is a party to
or has any obligation under any written tax sharing agreement or
agreement regarding payments in lieu of taxes except as set forth on
Schedule 6.1(x).
(y) CORPORATE AND TRADE NAME. Except as set forth on
Schedule 6.1(y), during the past five years, as of the Closing Date no Credit
Party has been known by or used any other corporate or fictitious name.
(z) TITLE TO PROPERTY. Each of Wang and its Restricted
Subsidiaries has (i) good and marketable fee simple title to or valid leasehold
interests in all of its real property and (ii) subject to the terms of the
Intellectual Property Security Agreement, good and marketable title to all of
its other property (including, in each case, all real and other property in each
case as reflected in the Financial Statements delivered to the Agent hereunder),
other than properties disposed of in the ordinary course of business or in any
manner otherwise permitted under this Credit Agreement since the date of the
most recent audited consolidated balance sheet of Wang and its Subsidiaries, and
in each case subject to no Liens other than those Liens that are permitted by
Section 7.2(a).
(aa) ACCURACY AND COMPLETENESS OF INFORMATION. All factual
information heretofore, contemporaneously or hereafter furnished by or on behalf
of Wang or any of its Subsidiaries in writing to the Agent or any Lender for
purposes of or in connection with this Credit Agreement or any Credit Documents,
or any transaction contemplated hereby or thereby is or will be, to
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the best knowledge of the Borrowers, 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 material fact necessary to make such
information not misleading at such time. Since June 30, 1995, there are no facts
now known to any officer of the Borrowers which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect and which have
not been set forth herein, in the Financial Statements, or any certificate,
opinion or other written statement made or furnished by the Borrowers to the
Agent.
(ab) AFFILIATE TRANSACTIONS. As of the Closing Date, except
as set forth on Schedule 6.1(ab), neither Wang nor any of its Subsidiaries is a
party to or bound by any agreement or arrangement (whether oral or written) to
which any Affiliate of Wang or any Subsidiary is a party except (i) consistent
with past practices in the ordinary course of and pursuant to the reasonable
requirements of Wang's or such Subsidiary's business or (ii) upon fair and
reasonable terms no less favorable to Wang and such Subsidiary than it could
obtain in a comparable arm'slength transaction with an unaffiliated Person.
(ac) NO OTHER INDEBTEDNESS. After giving effect to the
closing of this Credit Agreement, the INET Purchase Agreement and the
transactions contemplated hereby and thereby, neither Wang nor any of its
Restricted Subsidiaries has any Indebtedness other than Indebtedness that is
permitted under Section 7.2(b).
(ad) FOREIGN SUBSIDIARIES. A complete list of all Foreign
Subsidiaries and Material Foreign Subsidiaries on the Closing Date is set forth
on Schedule 6.1(ad).
(ae) ASSIGNMENT OF CLAIMS ACT. Set forth on Schedule 6.1(ae)
hereto is a complete and accurate list of all effective assignments made with
respect to any of the Accounts of INET under the Assignment of Claims Act of
1940, as amended (31 U.S.C. [Sections] 3727 et seq.).
(af) SURVIVAL OF REPRESENTATIONS. All representations made
by the Borrowers in this Credit Agreement and in any other Credit Document
executed and delivered in connection herewith
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shall survive the execution and delivery hereof and thereof and the closing of
the transactions contemplated hereby.
ARTICLE VII
COVENANTS OF THE BORROWERS
SECTION 7.1. AFFIRMATIVE COVENANTS. Until termination of
this Credit Agreement and payment and satisfaction of all Obligations due
hereunder:
(a) FINANCIAL REPORTING. Wang shall timely deliver to each
Lender the following information:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, but
(except with respect to the "Management Letter" referred to in clause
(C)) not later than 90 days after each fiscal year end, beginning with
the fiscal year ending June 30, 1996: (A) Wang's annual audited
Financial Statements; (B) a comparison in reasonable detail to the
prior year audited Financial Statements; (C) the Auditors' unqualified
opinion, "Management Letter" and a statement indicating that the
Auditors have not obtained knowledge of the existence of any Default or
Event of Default during their audit; (D) a narrative discussion of
Wang's consolidated financial condition and results of operations and
the consolidated liquidity and capital resources for such fiscal year,
prepared by an Authorized Officer; and (E) a compliance certificate
substantially in the form of Exhibit M (the "Compliance Certificate")
with an attached schedule of calculations demonstrating compliance with
the Article VII financial covenants. To the extent that Wang's annual
report on Form 10-K contains any of the foregoing items, the Lenders
will accept Wang's Form 10-K in lieu of such items.
(ii) PROJECTIONS. Not later than 90 days after each fiscal
year end, beginning with the fiscal year ended June 30, 1997,
projections of Wang's financial condition and results of operations for
the next three years prepared in good faith and based upon reasonable
assumptions, containing projected balance sheets, statements of
operations, statements of cash flows on a quarterly basis for the first
year and on an annual basis for the last two years (each prepared
consistent with Wang's historical practices and in form and substance
acceptable to the Agent). The projections provided pursuant to this
Section 7.1(a)(ii) will not be construed by the Agent or the Lenders as
a guaranty of results or performance in the future.
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(iii) QUARTERLY FINANCIAL STATEMENTS. As soon as available,
but not later than 45 days after the end of each of the first three
fiscal quarters of each fiscal year of Wang, beginning with the fiscal
quarter ending September 30, 1996: (A) Wang's Financial Statements as
of the fiscal quarter then ended, and for the fiscal year to date; (B)
the certification of an Authorized Officer that such Financial
Statements have been prepared in accordance with GAAP (subject to
year-end audit adjustments); (C) a narrative discussion of Wang's
consolidated financial condition and results of operations and the
consolidated liquidity and capital resources for such fiscal quarter
and fiscal year to date, prepared by an Authorized Officer; and (D) a
Compliance Certificate signed by an Authorized Officer with an attached
schedule of calculations demonstrating compliance with the Article VII
financial covenants. To the extent that Wang's quarterly report on Form
10-Q contains any of the foregoing, the Lenders will accept Wang's Form
10-Q in lieu of such items.
(iv) MONTHLY FINANCIAL STATEMENTS. As soon as available, but
not later than thirty (30) days after the end of each of the months of
July, August, October, November, January, February, April and May,
forty-five (45) days after the end of the months of September, December
and March and sixty (60) days after the end of the month of June,
commencing with the month of July, 1996: (A) a consolidating balance
sheet for Wang as at the end of such month and for the fiscal year to
date and consolidating statements of operations for such month and for
the fiscal year to date; (B) a certification by an Authorized Officer
that such balance sheet and statement of operations have been prepared
in accordance with GAAP (subject to year-end audit adjustments); and
(C) a Compliance Certificate signed by an Authorized Officer with an
attached schedule of calculations demonstrating compliance with the
Article VII financial covenants.
(v) QUARTERLY COMPARISON TO PRIOR PROJECTIONS. As soon as
available, but not later than 45 days after the end of each of the
first three fiscal quarters of Wang, commencing with the fiscal
quarter ended September 30, 1996, and 90 days after the end of each
fiscal year of Wang, commencing with the fiscal year ended June 30,
1997 a comparison of actual results of operations, cash flow and
capital expenditures for Wang and its consolidated Subsidiaries for
such period and for the period from the beginning of the current
fiscal year through the end of such period with amounts previously
projected for those periods and with actual results for corresponding
periods in the previous fiscal year.
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(vi) PUBLIC FILINGS. As soon as available, copies of all
10-Ks, 10-Qs, 8-Ks, proxy statements, annual reports, quarterly
reports, registration statements and any other filings or other
communications made by Wang to its stockholders generally or the
Securities Exchange Commission from time to time pursuant to the
Securities Exchange Act of 1934, as amended, or the Securities Act of
1933, as amended.
(vii) INTERIM COMPLIANCE CERTIFICATES. Within three Business
Days prior to making any payment or distribution, directly or
indirectly, on account of any Subordinated Note, (A) a certificate
signed by an Authorized Officer certifying that no Default or Event of
Default has occurred and is continuing or would result from making such
payment or distribution and (B) Compliance Certificate signed by an
Authorized Officer with an attached schedule of calculations
demonstrating compliance with the Article VII financial covenants as
calculated through the last day of the most recently ended fiscal
quarter for which sufficient information is available to make such a
determination.
(b) COLLATERAL REPORTING. Wang shall timely deliver to the
Agent the following certificates and reports:
(i) BORROWING BASE CERTIFICATES. Monthly, within ten (10)
Business Days after the last Business Day of each month, and at any
other time requested by the Agent, a borrowing base certificate (the
"BORROWING BASE CERTIFICATE"), which shall be: (A) completed
substantially in the form of Exhibit B, detailing the Borrowers'
Eligible Accounts Receivable as of the last day of the preceding month;
(B) prepared by or under the supervision of an Authorized Officer and
certified by such officer; and (C) attached to such additional
schedules and other information as the Agent may reasonably request.
(ii) FURTHER ASSURANCES. When reasonably requested by the
Agent, any further information regarding the Collateral, business
affairs and financial condition of Wang or any of its Subsidiaries.
(c) NOTIFICATION REQUIREMENTS. Wang shall timely give the
Agent and each of the Lenders the following notices:
(i) NOTICE OF DEFAULTS. Promptly, and in any event within
five (5) Business Days after becoming aware of the occurrence of a
Default or Event of Default, a certificate of an Authorized Officer
specifying the nature thereof and Wang's proposed response thereto,
each in reasonable detail.
(ii) PROCEEDINGS OR ADVERSE CHANGES. Promptly, and in any
event within ten (10) Business Days after Wang becomes
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aware of (A) any proceeding being instituted or threatened to be
instituted by or against a Credit Party, a Domestic Subsidiary or any
Material Foreign Subsidiary in any federal, state, local or foreign
court or before any commission or other regulatory body (federal,
state, local or foreign) involving a sum in excess of $5,000,000, (B)
any order, judgment or decree in excess of $5,000,000 being entered
against a Credit Party, a Domestic Subsidiary or any Material Foreign
Subsidiary or any of their respective properties or assets or (C) any
actual or prospective change, development or event which has had or is
reasonably likely to have a Material Adverse Effect, a written
statement describing such proceeding, order, judgment, decree, change,
development or event and any action being taken with respect thereto by
Wang or any such Subsidiary.
(iii) ERISA NOTICES.
(A) Promptly, and in any event within ten (10)
Business Days after Wang, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief executive
officer, president or vice president-finance of Wang
describing such Termination Event and any action that is being
taken with respect thereto by Wang, any such Subsidiary or
ERISA Affiliate, and any action taken or threatened by the
Internal Revenue Service, Department of Labor or PBGC. Wang,
such Subsidiary and the ERISA Affiliate shall be deemed to
know all facts known by the administrator of any Benefit Plan
of which it is the plan sponsor;
(B) promptly, and in any event within ten (10)
Business Days after the filing thereof with the Internal
Revenue Service, a copy of each funding waiver request filed
with respect to any Benefit Plan and all communications
received by Wang, any of its Subsidiaries or any ERISA
Affiliate with respect to such request;
(C) promptly, and in any event within three (3)
Business Days after receipt by Wang, any of its Subsidiaries
or any ERISA Affiliate, of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(D) promptly, and in any event within three (3)
Business Days after Wang, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that any of the
following have occurred, notice (including the nature of the
event and, when known, any action
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taken or threatened by the Internal Revenue Service or
the PBGC with respect thereto) of:
(1) any Prohibited Transaction which could
subject the Borrowers or any ERISA Affiliate to a
civil penalty assessed pursuant to Section 502(i) of
ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, or
any trust created thereunder,
(2) any cessation of operations (by the
Borrowers or any ERISA Affiliate) at a facility in
the circumstances described in Section 4063(e) of
ERISA,
(3) a failure by the Borrowers or any ERISA
Affiliate to make a payment to a Plan required to
avoid imposition of a lien under Section 302(f) of
ERISA,
(4) the adoption of an amendment to a Plan
requiring the provision of security to such Plan
pursuant to Section 307 of ERISA, or
(5) any change in the actuarial assumptions
or funding methods used for any Plan, where the
effect of such change is to materially increase or
materially reduce the unfunded benefit liability or
obligation to make periodic contributions;
(E) promptly upon the request of the Agent or any
Lender, each annual report (IRS Form 5500 series) and all
accompanying schedules, the most recent actuarial reports, the
most recent financial information concerning the financial
status of each Plan administered or maintained by the
Borrowers or any ERISA Affiliate, and schedules showing the
amounts contributed to each such Plan by or on behalf of the
Borrowers or any ERISA Affiliate in which any of their
personnel participate or from which such personnel may derive
a benefit, and each Schedule B (Actuarial Information) to the
annual report filed by any Borrower or any ERISA Affiliate
with the Internal Revenue Service with respect to each such
Plan; and
(F) Promptly upon the filing thereof, copies of any
Form 5310, or any successor or equivalent form to Form 5310,
filed with the PBGC in connection with the termination of any
Plan.
(iv) MATERIAL CONTRACTS. Promptly upon disclosing the
same in accordance with the securities laws of the United
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States, written notice with respect to any Material Contract of the
Borrowers or any of their Subsidiaries, together with a written
statement describing such event, and an explanation of any actions
being taken with respect thereto.
(v) COLLATERAL MATTERS. Written notice to the Agent of any
change in the location of Inventory and Equipment having an aggregate
book value in excess of $500,000 or the location of the chief executive
office or place of business of any Credit Party from the locations
specified in Schedule 6.1(k) not later than two Business Days following
such change. Not later than ten (10) Business Days following any such
change, Wang shall cause to be executed and delivered to the Agent any
financing statements or other documents reasonably required by the
Agent, all in form and substance reasonably satisfactory to the Agent.
(d) CORPORATE EXISTENCE. Except as permitted by Sections
7.1(p), 7.2(c) and (d), Wang shall, and shall cause each of its Restricted
Subsidiaries to, (i) maintain its corporate existence (except for the
transactions permitted under Section 7.2(c), provided the Agent receives two (2)
Business Days prior written notice thereof), (ii) maintain in full force and
effect, except where Wang determines in its reasonable judgment that such
maintenance is no longer necessary, all material licenses, bonds, franchises,
leases, trademarks and qualifications to do business except where the failure to
do so is not reasonably likely to have a Material Adverse Effect, and all
material patents, contracts and other rights necessary or advisable to the
profitable conduct of their businesses, and (iii) continue in, and limit their
operations to, the same general lines of business as presently conducted by
them.
(e) BOOKS AND RECORDS; INSPECTIONS. Wang agrees to maintain,
and to cause each of its Subsidiaries to maintain, books and records pertaining
to the Collateral in such detail, form and scope as is consistent with good
business practice. The Borrowers agree that the Agent or its agents may enter
upon their premises or any of the Subsidiaries at any time and from time to
time, during normal business hours and upon reasonable notice under the
circumstances, and at any time at all on and after the occurrence of an Event of
Default, and which has not otherwise been waived by the Agent or cured, for the
purposes of (i) inspecting and verifying the Collateral, (ii) inspecting and/or
copying (at the Borrowers' expense) any and all records pertaining thereto, and
(iii) discussing the affairs, finances and business of the Borrowers with any
officers, employees and directors of the Borrowers or with the Auditors.
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G
(f) INSURANCE. Wang agrees to maintain, and to cause each of
its Subsidiaries to maintain, public liability insurance, business interruption
insurance, third party property damage insurance and replacement value insurance
on its assets (including the Collateral) under such policies of insurance, with
such insurance companies, in such amounts and covering such risks as are at all
times satisfactory to the Agent in its commercially reasonable judgment. All
policies covering the Collateral are to name the Collateral Agent as an
additional insured and the loss payee in case of loss, and are to contain such
other provisions as the Agent may reasonably require to fully protect the
Collateral Agent's interest in the Collateral and to any payments to be made
under such policies.
(g) CASUALTY LOSS. Wang shall provide written notice to the
Agent and the Lenders of the occurrence of any of the following events within
five (5) Business Days after the occurrence of such event: any asset or property
owned or used by any Credit Party is (i) damaged or destroyed, or suffers any
material loss, or (ii) condemned, confiscated or otherwise taken, in whole or in
part, or the use thereof is otherwise diminished so as to render impracticable
or unreasonable the use of such asset or property for the purposes to which such
asset or property were used immediately prior to such condemnation, confiscation
or taking, by exercise of the powers of condemnation or eminent domain or
otherwise, and in either case the amount of the damage, destruction, loss or
diminution to the fair market value of the damaged asset is in excess of
$1,000,000 (collectively, a "CASUALTY LOSS"). Wang shall, and shall cause each
other Credit Party to, diligently file and prosecute its claim or claims for any
award or payment in connection with a Casualty Loss.
(h) TAXES. Wang agrees to pay, when due (including by
extension), and to cause each of its Subsidiaries to pay, when due (including by
extension), all taxes and other amounts set forth in Section 6.1(x)(ii) lawfully
levied or assessed against Wang, any of its Subsidiaries or any of the
Collateral before any penalty or interest accrues thereon; PROVIDED, HOWEVER,
that, unless such taxes have become a federal, state, local, foreign tax or
ERISA Lien on any of the assets of Wang or any of its Subsidiaries, no such tax
need be paid if the same is being contested, in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision shall have been made therefor as required
in order to be in conformity with GAAP or other applicable standards in foreign
jurisdictions.
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(i) COMPLIANCE WITH LAWS. Other than with respect to
environmental matters covered by Section 7.1(n), Wang agrees to comply, and to
cause each of its Subsidiaries to comply, with all Requirements of Law
applicable to the Collateral or any part thereof, or to the operation of its
business or its assets generally, unless the Borrowers or such Subsidiary
contest any such Requirements of Law in a reasonable manner and in good faith or
where the failure to comply is not reasonably likely to have a Material Adverse
Effect.
(j) USE OF PROCEEDS. The Revolving Loans and Letters of
Credit made to the Borrowers hereunder shall be used by the Borrowers (i) to
refinance the Indebtedness owed by Wang and its Subsidiaries under the Existing
Credit Agreement, (ii) to refinance the Indebtedness owed by INET and its
Subsidiaries under the Existing INET Loan Facility, (iii) for the Borrowers'
general corporate purposes and (iv) to finance a portion of the purchase price
payable by Wang pursuant to the INET Purchase Agreement. The Borrowers shall not
use any portion of the proceeds of any Revolving Loans for the purpose of
purchasing or carrying any "margin stock" (as defined in Regulation G of the
Board of Governors of the Federal Reserve System) in any manner which violates
the provisions of Regulation G or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the terms
and conditions of this Credit Agreement.
(k) FISCAL YEAR. Wang agrees to maintain, and to cause each
of its Subsidiaries to maintain, its fiscal year as a year ending June 30,
except that (x) Wang de Mexico S.A. de C.V. may end its fiscal year on December
31 and (y) Wang and its Subsidiaries may change its fiscal year with the prior
written consent of the Agent (not to be unreasonably withheld).
(l) MAINTENANCE OF PROPERTY. Except as permitted by Section
7.1(d), Wang agrees to keep, and to cause each of its Subsidiaries to keep, all
property useful and necessary to their respective businesses in good working
order and condition (ordinary wear and tear excepted) in accordance with their
past operating practices and not to commit or suffer any material waste with
respect to any of their properties except to the extent failure to do so is not
reasonably likely to result in a Material Adverse Effect.
(m) ERISA DOCUMENTS. The Borrowers will cause to be
delivered to the Agent, upon the Agent's request, each of the following: (i) a
copy of each Plan (or, where any such plan is not in writing, complete
description thereof) (and if applicable, related trust agreements or other
funding instruments) and all amendments thereto, all written interpretations
thereof and written descriptions thereof that have been distributed to employees
or former employees of Wang or its Subsidiaries;
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(ii) the most recent determination letter issued by the Internal Revenue Service
with respect to each Benefit Plan; (iii) for the three most recent plan years,
Annual Reports on Form 5500 Series required to be filed with any governmental
agency for each Benefit Plan; (iv) all actuarial reports prepared for the last
three plan years for each Benefit Plan; (v) a listing of all Multiemployer
Plans, with the aggregate amount of the most recent annual contributions
required to be made by the Borrowers or any ERISA Affiliate to each such plan
and copies of the collective bargaining agreements requiring such contributions;
(vi) any information that has been provided to the Borrowers or any ERISA
Affiliate regarding withdrawal liability under any Multiemployer Plan; and (vii)
information relating to the aggregate amount of the most recent annual payments
made to former employees of the Borrowers or any ERISA Affiliate under any
Retiree Health Plan.
(n) ENVIRONMENTAL AND OTHER MATTERS.
(i) Wang shall, and shall cause each of its Subsidiaries to,
conduct its business so as to comply in all material respects with all
applicable Environmental Laws, in all jurisdictions in which any of
them is doing business, including, without limitation, compliance in
all material respects with the terms and conditions of all permits and
governmental authorizations, except to the extent that Wang or any of
the Subsidiaries are contesting, in good faith by appropriate legal
proceedings, any such Environmental Law or interpretation thereof or
application thereof; PROVIDED, FURTHER, that Wang and each of the
Subsidiaries shall comply in all material respects with the applicable
order of any court or other governmental agency relating to such
Environmental Laws unless Wang or the Subsidiaries shall currently be
prosecuting an appeal or proceedings for review and shall have secured
a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review.
If Wang or any of the Subsidiaries shall (A) receive written notice
that any material violation of any federal, state or local
Environmental Law may have been committed or is about to be committed
by Wang or any of the Subsidiaries, (B) receive written notice that any
administrative or judicial complaint or order has been filed or is
about to be filed against Wang or any of the Subsidiaries alleging
material violations of any federal, state or local Environmental Law,
or requiring Wang or any of the Subsidiaries to take any action in
connection with the release of toxic or hazardous substances into the
environment or (C) receive any written notice from a federal, state, or
local governmental agency or private party alleging that Wang or any of
the Subsidiaries may be liable or responsible for material costs
associated with a response to or cleanup of a release of a toxic or
hazardous substance into the environment or any damages caused
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thereby, Wang shall provide the Agent and the Lenders with a copy of
such notice within ten (10) days after the receipt thereof by the
Borrowers or any of the Subsidiaries. Within ten (10) days after the
Borrowers learn of the enactment or promulgation of any federal, state
or local Environmental Law, which is reasonably likely to have a
Material Adverse Effect, Wang shall provide the Agent and the Lenders
with notice thereof. The Borrowers shall promptly take all reasonable
actions necessary to prevent the imposition of any Liens on any of its
properties arising out of or related to any environmental matters. At
the request of the Agent, Wang shall provide the Agent with any
additional information relating to environmental matters and any
potential related liability resulting therefrom as the Agent may
reasonably request.
(ii) For purposes of this Section 7.1(n), "material" means
any noncompliance or basis of liability that is reasonably likely to
subject Wang or any of its Subsidiaries to liability in excess of
$10,000,000.
(o) SECURITY INTERESTS. Wang will defend, and will cause
each other Credit Party to defend, the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein, other than
claims relating to Liens permitted by the Credit Documents. Wang agrees to
comply, and will cause each other Credit Party to comply, with the requirements
of all provincial, state and federal laws in order to grant to the Lenders valid
and perfected first security interests in the Collateral.
(p) PATENTS AND TRADEMARKS. Wang shall do or cause to be
done all things necessary to preserve and keep in full force and effect all of
its and its Restricted Subsidiaries' material patents and applications and
registrations and applications of trademarks, service marks and other marks,
trade names (other than the "Bull" tradename) or other similar registered
property except (i) as otherwise permitted pursuant to the Intellectual Property
Security Agreement or (ii) those the failure to preserve and keep in full force
and effect is not reasonably likely to have a Material Adverse Effect.
(q) FURTHER ASSURANCES. Wang shall take, and shall cause
each of its Subsidiaries to take, all such further actions and execute all such
further documents and instruments as the Agent may at any time reasonably
determine in its sole discretion to be necessary or desirable to further carry
out and consummate the transactions contemplated by the Credit Documents, to
cause the execution, delivery and performance of the Credit Documents to be duly
authorized and to perfect or protect the Liens (and the priority status thereof)
of the Collateral Agent for the benefit of the Lenders on the Collateral.
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(r) COLLATERAL ACCESS AGREEMENTS. Wang shall use its
reasonable best efforts (which shall not require a substantial expenditure of
funds) to deliver to the Agent a Collateral Access Agreement with respect to
each Material Location in existence on the Closing Date, duly executed by the
landlord of such Material Location and the applicable Credit Party. Prior to the
date on which any other location listed on Schedule 6.1(k) becomes a Material
Location, Wang shall use its reasonable best efforts (which shall not require a
substantial expenditure of funds) to deliver to the Agent a Collateral Access
Agreement with respect to each such location, duly executed by the landlord of
such location and the applicable Credit Party.
(s) PLEDGE OF STOCK IN FOREIGN SUBSIDIARIES.
(i) Promptly upon receipt by Wang of a written notice from
the Agent stating that the Agent has determined, in its reasonable
judgment, that there exists a Foreign Subsidiary not listed on Schedule
6.1(ad) that is material, Wang shall, or shall cause its Subsidiaries
(other than its Foreign Subsidiaries) to, pledge to the Collateral
Agent for the ratable benefit of the Lenders all of the issued and
outstanding shares of capital stock of such Foreign Subsidiary pursuant
to documentation in form and substance satisfactory to the Agent, and
Wang shall take, and shall cause each of such Subsidiaries to take, all
such actions and execute all such further documents and instruments as
the Agent reasonably determines in its sole discretion to be necessary
or desirable to perfect, protect or enforce the Liens (and the priority
status thereof) of the Collateral Agent for the benefit of the Lenders
on the shares of stock in each such Foreign Subsidiary, including
without limitation, the delivery to the Agent of opinions of Wang's
counsel with respect to each such Foreign Subsidiary in form and
substance satisfactory to the Agent, and Schedule 6.1(ad) shall be
deemed to be amended to add such Foreign Subsidiary thereto.
(ii) As soon as practicable after the Closing Date, but in
any event within sixty (60) days after the Closing Date, Wang shall
take all such actions and execute all such further documents and
instruments as the Collateral Agent reasonably determines in its sole
discretion to be necessary or desirable to perfect, protect or enforce
the Liens (and the priority status thereof) of the Collateral Agent for
the benefit of the Lenders on the shares of stock in each Material
Foreign Subsidiary, including without limitation, the delivery to the
Collateral Agent of an opinion of counsel to Wang with respect to each
such Foreign Subsidiary in form and substance satisfactory to the
Collateral Agent. If the Agent determines in its reasonable judgment
that Wang is making good faith efforts to deliver the documents and
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instruments referred to in the immediately preceding sentence, Wang
shall have additional time to deliver such documents and instruments as
notified in writing by the Agent.
(t) CASH MANAGEMENT AGREEMENTS.
(i) Not later than one hundred twenty (120) days after the
Closing Date, Dataserv shall cause to be delivered to the Collateral
Agent a Lockbox Agreement, duly executed by Dataserv and a Lockbox
Bank.
(ii) Not later than forty-five (45) days after the Closing
Date, Wang shall cause to be delivered to the Collateral Agent duly
executed amendments to all of the agreements set forth on Schedule
7.1(t), which amendments shall name BT Commercial Corporation as the
Collateral Agent and shall otherwise be in form and substance
satisfactory to the Collateral Agent. If the Agent determines in its
reasonable judgment that Wang is making good faith efforts to deliver
the documents and instruments referred to in the immediately preceding
sentence, Wang shall have additional time to deliver such documents and
instruments as notified in writing by the Agent.
SECTION 7.2. NEGATIVE COVENANTS. Until termination of this
Credit Agreement and payment and satisfaction of all Obligations due hereunder:
(a) LIENS, ETC. Wang will not, nor will it permit any of its
Restricted Subsidiaries to, directly or indirectly at any time create, incur,
assume or suffer to exist any Lien on or with respect to any of its properties
of any character (including, without limitation, Accounts) whether now owned or
hereafter acquired, except:
(i) Liens created by the Collateral Documents;
(ii) Permitted Liens on the properties of Wang and its
Restricted Subsidiaries;
(iii) the Liens on the properties of Wang and its Restricted
Subsidiaries existing on the date hereof and described on Schedule
7.2(a);
(iv) Purchase Money Liens;
(v) cash deposits for bids and other performance obligations
under contracts entered into by Wang and its Restricted Subsidiaries in
the ordinary course of business;
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(vi) the replacement, extension or renewal of any Lien
permitted by clauses (i) through (v) above, (vii) and (viii) below upon
or in the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in any
direct or contingent obligor) of the Indebtedness secured thereby;
(vii) Liens securing Indebtedness under capital leases
permitted under Section 7.2(b)(xiii); PROVIDED, HOWEVER, that no such
Lien shall extend to or cover any property other than the assets leased
under such leases; and
(viii) leases or subleases of real estate (other than the real
estate upon which Agent is granted a mortgage) granted by Wang or a
Restricted Subsidiary to other Persons in the ordinary course of
business and not materially interfering with the conduct of the
business of such Person and cash security deposits made pursuant to
real estate leases in customary amounts.
(b) INDEBTEDNESS. Wang will not, nor will it permit any of
its Restricted Subsidiaries to, directly or indirectly, at any time create,
incur, assume or suffer to exist, any Indebtedness other than:
(i) Indebtedness under the Credit Documents;
(ii) Indebtedness secured by Liens permitted by Section
7.2(a)(ii);
(iii) the Existing Indebtedness and any refinancings,
extensions and replacements thereof, if on terms no less favorable to
the borrower thereof, the Agent and the Lenders, as determined by the
Agent in its reasonable discretion, than the Existing Indebtedness;
(iv) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business
of Wang and the Restricted Subsidiaries;
(v) (A) Unsecured Indebtedness incurred after the date
hereof owing by Wang to a Subsidiary and (B) upon prior written notice
to the Agent, unsecured Indebtedness owing by Wang to a Foreign
Subsidiary, the proceeds of which are used to pay a portion of the
purchase price payable under the INET Purchase Agreement; PROVIDED that
(1) such Indebtedness shall not bear interest at a rate per annum in
excess of the Prescribed IRS Rate and (2) such Indebtedness is
evidenced by one or more promissory notes subordinated to the payment
of the Obligations and otherwise in form and substance satisfactory to
the Agent (it being understood that Wang may not pay principal and
interest on such Indebtedness if a
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Default or an Event of Default has occurred and is continuing or would
result therefrom);
(vi) each Subordinated Note and, any refinancings, extensions
and replacements thereof, if on terms no less favorable to Wang, the
Agent and the Lenders as determined by the Agent in its reasonable
discretion, than such Subordinated Note;
(vii) Indebtedness of Wang and the Restricted Subsidiaries
under Interest Rate Agreements entered into the ordinary course of
business and in form and substance satisfactory to the Agent;
(viii) Indebtedness owing by one Borrower to another Borrower;
PROVIDED that (A) such Indebtedness is used only for general working
capital purposes if such Indebtedness is owing to Wang, (B) such
Indebtedness is evidenced by one or more promissory notes subordinated
to the payment of the Obligations and otherwise in form and substance
satisfactory to the Agent, (C) such promissory notes are pledged to the
Collateral Agent for the ratable benefit of the Lenders pursuant to
documentation in form and substance satisfactory to the Collateral
Agent and (D) such notes are delivered to the Collateral Agent with
note powers executed in blank;
(ix) Contingent Obligations of Wang in an aggregate amount
not to exceed $30,000,000 at any time which Contingent Obligations are
incurred by Wang solely to the extent required to capitalize a Foreign
Subsidiary under the laws in which such Foreign Subsidiary is
organized; PROVIDED, HOWEVER, that any payments (in cash, property or
otherwise) made by Wang in respect of any such Contingent Obligation
shall only be permitted to the extent they are otherwise permitted
under Section 7.2(e)(vii)(E);
(x) Indebtedness constituting Investments otherwise
permitted by Sections 7.2(e)(vii) and (xiv);
(xi) with the consent of the Majority Lenders other
Indebtedness subordinated to payment of the Obligations in amounts and
on terms and conditions acceptable to Majority Lenders provided that
this clause (xi) shall not be deemed to be a consent by the Lenders to
permit any such Indebtedness;
(xii) Indebtedness of Wang and the Restricted Subsidiaries
secured by purchase money liens on assets acquired after the date of
this Credit Agreement ("PURCHASE MONEY LIENS"), PROVIDED that the sum
of the aggregate amount of Indebtedness outstanding at any time under
this Section 7.2(b)(xii), Section 7.2(b)(xiii) and Section 7.2(b)(xiv)
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shall not exceed $20,000,000 (such amount, the "INDEBTEDNESS BASKET").
Each Purchase Money Lien shall attach only to the property to be
acquired, a description shall have been furnished to the Agent for any
item of equipment for which the purchase price is greater than
$1,000,000, and the Indebtedness incurred shall not exceed one hundred
percent (100%) of the purchase price of the assets purchased;
(xiii) Indebtedness of Wang and the Restricted Subsidiaries
under capital leases, PROVIDED that the sum of the aggregate amount of
Indebtedness outstanding at any time under Section 7.2(b)(xii), this
Section 7.2(b)(xiii) and Section 7.2(b)(xiv) shall not exceed the
Indebtedness Basket;
(xiv) Indebtedness of Wang and its Restricted Subsidiaries
other than Indebtedness permitted under Sections 7.2(b)(i) through
(xiii), PROVIDED that the sum of the aggregate amount of Indebtedness
at any time outstanding under Section 7.2(b)(xii), Section 7.2(b)(xiii)
and this Section 7.2(b)(xiv) shall not exceed the Indebtedness Basket.
(c) CORPORATE CHANGES, ETC. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, directly or indirectly,
at any time merge, amalgamate or consolidate, or liquidate or dissolve
itself (or suffer any liquidation or dissolution), except for (i) the
merger, consolidation or liquidation of any such Subsidiary with and
into Wang (provided Wang shall be the surviving corporation) and (ii)
the merger, consolidation, liquidation or (in the case of a Subsidiary
organized under the laws of Canada or any province thereof)
amalgamation of any such Subsidiary with and into another Subsidiary
(provided a Credit Party shall be the surviving corporation in any
merger or amalgamation involving such Credit Party and another
Subsidiary that is not a Credit Party).
(d) SALES, ETC. OF ASSETS. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, directly or indirectly,
at any time sell, lease, transfer or otherwise dispose of any assets
(including contract rights), or grant any option or other right to
purchase, lease or otherwise acquire any assets (including contract
rights), except
(i) sales of Inventory (including the transfer of source
code or object code and related documentation into or out of
industry standard escrow arrangements), and obsolete assets
in the ordinary course of business;
(ii) the licensing of intellectual property;
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(iii) such dispositions of intellectual property
as occur in the normal course of business and which are not,
either individually or in the aggregate, reasonably likely to
result in a Material Adverse Effect;
(iv) the assets listed on Schedule 7.2(d);
(v) the sale of any other assets of the
Restricted Subsidiaries having an aggregate sale price or
transaction value not to exceed $20,000,000 in any fiscal
year, PROVIDED that in the case of the sale of such assets and
the sale of assets listed on Schedule 7.2(d), (A) such sales
are for fair value and (B) at least seventy-five percent (75%)
of the aggregate consideration is paid in full in cash at the
time of sale and is used to repay the outstanding Revolving
Loans;
(vi) so long as no Event of Default shall occur
and be continuing, the grant of any option or other right to
purchase any asset in a transaction which would be permitted
under the provisions of the immediately preceding clauses (i)
through (v);
(vii) the sales and leasebacks permitted by
Section 7.2(m); and
(viii) transfers of assets into Restricted
Subsidiaries provided that the transfers do not impair the
Liens held by the Agent on the assets transferred, the assets
are not part of the Borrowing Base and, in the reasonable
judgment of the Agent, the assets have an immaterial value.
(e) INVESTMENTS IN OTHER PERSONS. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, directly or indirectly,
at any time make or hold any Investment in any Person (whether in cash,
securities or other property of any kind) other than:
(i) Investments in Cash Equivalents;
(ii) Loans and advances made by a Borrower or
such Subsidiary after the Closing Date in the ordinary course
of business and consistent with past practice (A) to employees
of such Person and (B) for travel, entertainment and
relocation expenses of employees of such Person in the
ordinary course of business;
(iii) the endorsement of instruments for
collection or deposit in the ordinary course of business;
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(iv) Investments to acquire the Acquired INET
Stock;
(v) stock or obligations issued to a Credit
Party or any Restricted Subsidiary by any Person (or the
representative of such Person) in respect of Indebtedness of
such Person owing to such Credit Party or Restricted
Subsidiary in connection with the insolvency, bankruptcy,
receivership or reorganization of such Person or a composition
or readjustment of the debts of such Person; PROVIDED, THAT,
the original of any such stock or instrument evidencing such
obligations shall be promptly delivered to the Agent, upon the
Agent's request, together with such stock power, assignment or
endorsement by such Credit Party as the Agent may request;
(vi) Investments in existence on the date here
of and described on Schedule 7.2(e)(vi);
(vii) loans, investments and advances from Wang
(A) to its consolidated Subsidiaries in
existence as of the date hereof as described on Schedule
7.2(e)(vii) (the "SCHEDULED INVESTMENTS") and subject to
compliance with Sections 7.2(b)(ix) and (x) and the other
provisions of this Credit Agreement, any refinancings,
extensions and replacements of the Scheduled Investments on
terms no less favorable to Wang, the Agent and the Lenders, as
determined by the Agent in its reasonable discretion, than the
Scheduled Investments;
(B) to certain Subsidiaries as provided under
Article VI(C) of the Reorganization Plan with respect to
InterCompany Convertible Instruments; provided that Wang may
make cash payments on such certificates in amounts equal to
(i) the redemption value of $1,000 for each unit of
Intercompany Convertible Instrument and (ii) the amount by
which the market value of shares into which InterCompany
Convertible Instruments are convertible on the date that the
holders thereof request conversion exceeds the realized value
of such shares on the date that the shares are actually sold
by the holders thereof. If Wang makes any such cash payments,
it shall immediately pay to the Agent as a prepayment under
Section 2.9 an amount equal to such cash payments as a
permanent and automatic reduction of the Line of Credit;
(C) to certain Subsidiaries in amounts
reasonably consistent with the amounts listed next to each
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Subsidiary's name on Schedule 7.2(e)(vii) and in an aggregate
amount not to exceed the amount specified therefor in the
forecasts of Wang referred to in Section 6.1(j) in connection
with the incorporation of the Bull Acquired Assets into Wang's
existing lines of business and otherwise in a manner
consistent with such business plan;
(D) after the Closing Date, to Wang Software, WSSM,
Wang Nihon Wang K.K., OGIC, S.A. and Wang France S.A. solely
for the purpose of conducting research and development that
otherwise, consistent with past practice, would be conducted
by Wang in the ordinary course of Wang's business;
(E) to its Foreign Subsidiaries and its
unconsolidated Affiliates in an aggregate amount outstanding
at any time not to exceed $10,000,000, it being understood
that, so long as no Default or Event of Default has occurred
and is continuing, the amount of all indebtedness incurred
under Section 7.2(b)(v)(B) and the amount of all cash received
by Wang after the Closing Date from any Foreign Subsidiaries
or any of such unconsolidated foreign Affiliates as returns of
capital, dividends and loans permitted hereunder shall be
deemed to reduce the amount of loans, advances and investments
outstanding under this Section 7.2(e)(vii)(E); and
(F) permitted as Asset Sales pursuant to Section
7.2(d)(viii).
<TABLE>
(viii) so long as no Default or Event of Default has
occurred and is continuing or would result therefrom Permitted
Acquisitions in an aggregate amount not to exceed the amount
(the "BASE INVESTMENT AMOUNT") per annum set forth below:
<CAPTION>
Fiscal Year Ended Amount
----------------- ------
<S> <C> <C> <C>
June 30, 1997 $20,000,000
June 30, 1998 $25,000,000
June 30, 1999 and each fiscal $25,000,000
year thereafter
</TABLE>
plus (a) for any fiscal year commencing with the fiscal year
ended June 30, 1998, an amount equal to any portion of the
Base Amount (but not greater than 50% of such Base Amount) not
spent in the immediately preceding fiscal year, but not in any
year prior thereto, and (b) the then Available Excess Cash
Flow Amount; PROVIDED, however that any individual
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Acquisition or series of Acquisitions in an aggregate amount
in excess of $35,000,000 in any fiscal year shall require the
approval of the Majority Lenders.
(ix) loans made to or other evidences of
Indebtedness made by each purchaser of assets permitted to be
sold under Section 7.2(d)(iv) and (v) to finance up to
twenty-five percent (25%) of the aggregate consideration paid
by such purchaser to acquire such assets;
(x) Investments by Wang made solely with
shares of capital stock of Wang;
(xi) obligations of account debtors of a
Borrower arising from Accounts which are past due evidenced by
a promissory note made by such account debtor payable to such
Borrower, PROVIDED that promptly upon the receipt of the
original of any such promissory note by such Borrower, such
promissory note shall be endorsed to the order of the Agent by
such Borrower as payee and promptly delivered to the Agent as
so endorsed;
(xii) Investments constituting Indebtedness
otherwise permitted under Section 7.2(b);
(xiii) so long as no Default or Event of Default
has occurred and is continuing or would result therefrom and
the Unused Availability is at least $25,000,000 immediately
before and after giving effect thereto, upon prior written
notice to the Agent, Acquisitions by a Borrower of
non-controlling interests of capital stock (the "MINORITY
STOCK ACQUISITIONS") and loans to a Person other than a
Subsidiary in an aggregate amount not to exceed $10,000,000
plus the Net Cash Proceeds of any Reinvestment Sale (the
"MINORITY STOCK ACQUISITION BASKET") during the term of this
Credit Agreement, PROVIDED that if the principal amount of any
such loan is greater than $2,500,000, such loan shall be
evidenced by a promissory note, such promissory note shall be
promptly pledged to the Collateral Agent for the ratable
benefit of the Lenders pursuant to documentation in form and
substance satisfactory to the Collateral Agent and such note
shall be promptly delivered to the Collateral Agent with note
powers executed in blank; and
(xiv) such other Investments as the Agent and the
Majority Lenders may approve in writing in their sole
discretion.
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(f) AFFILIATE TRANSACTIONS. Except as set forth on Schedule
6.1(bb), Wang will not, nor will it permit any of its Restricted
Subsidiaries to, at any time enter into, directly or indirectly, any
transaction with, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service to, any Subsidiary
or Affiliate of Wang, except in the ordinary course of and consistent
with past business practices and pursuant to the reasonable
requirements of Wang's or such Restricted Subsidiary's or Affiliate's
business, as the case may be, or upon fair and reasonable terms no less
favorable to Wang or such Restricted Subsidiary or such Affiliate than
could be obtained in a comparable arm's-length transaction with an
unaffiliated Person.
(g) DIVIDENDS, EXCHANGE, ETC. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, directly or indirectly,
declare or pay any dividends (other than solely in shares of stock) on,
or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of its
capital stock or any warrants, options or rights to purchase any such
capital stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of Wang or any of such
Subsidiaries, except that (i) such Subsidiary of Wang may pay dividends
to Wang or to such Subsidiary's parent, (ii) if no Event of Default has
occurred and is continuing or would result therefrom, Wang may pay
regularly scheduled cash dividends to holders of the Preferred Stock in
respect of the immediately preceding fiscal quarter and (iii) if no
Event of Default has occurred and is continuing or would result
therefrom, Wang may expend up to an aggregate of $5,000,000 per annum
(x) to purchase, redeem or retire shares of its capital stock from its
directors and employees and (y) to repurchase shares of its common
stock from stockholders that own less than 100 shares of such stock.
(h) CHANGE IN NATURE OF BUSINESS. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, at any time make any
material change in the lines of its business as carried on at the date
hereof.
(i) CHARTER AMENDMENTS, ETC. Wang will not, nor will it permit
any of its Restricted Subsidiaries to, at any time amend its
certificate of incorporation (including the Certificates of
Designation), except for an amendment to the certificate of
incorporation to solely increase the number of authorized shares of
common or preferred stock, to the extent necessary in connection with
the mergers,
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amalgamations and consolidations permitted hereunder or in any other
manner not adverse to the Agent or the Lenders.
(j) ACCOUNTING CHANGES. Wang will not, nor will it
permit any of its Restricted Subsidiaries to, at any time
make or permit any material change in accounting policies or
reporting practices, except as required by GAAP.
(k) PREPAYMENTS, REPAYMENTS AND MATERIAL AMENDMENTS OF
MATERIAL CONTRACTS.
(i) Wang will not, nor will it permit any of its
Restricted Subsidiaries to, at any time (A) prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in
violation of any subordination terms of, any Indebtedness,
other than the prepayment of the Loans in accordance with the
terms of this Credit Agreement, the prepayment of Indebtedness
owing by a Subsidiary to a Credit Party, the prepayment of
Indebtedness permitted under Sections 7.2(b)(viii), (xii) and
(xiii), in connection with any refinancing permitted under
Section 7.2(b), and, in the case of any asset disposition
permitted by this Credit Agreement, prepayments of
Indebtedness secured by a Lien on such assets that, by the
terms of any such disposition or the Indebtedness secured by
such Lien, is required to be repaid upon such disposition, (B)
repay or otherwise satisfy more than the Specified Percentage
of the principal amount of the INET Subordinated Note in cash
or (C) amend, modify, cancel or terminate or permit the
amendment, modification, cancellation or termination of, any
of the Material Contracts, except in the event that such
amendments or modifications is not reasonably likely to have a
Material Adverse Effect.
(ii) Without limiting the generality of the foregoing,
Wang shall not, and shall not permit any of its Restricted
Subsidiaries to, amend, modify or change, or consent or agree
to any amendment, modification or change, to any of the terms
of any Subordinated Note and any other Indebtedness
subordinated to the payment of the Obligations (A) if the
effect of such amendment, modification or change is to
(directly or indirectly) (i) increase the amount of any
payment of principal thereof, (ii) increase the interest rate
or premium payable thereon, (iii) increase the amount of fees
or any other amounts payable with respect thereto, (iv)
shorten the scheduled amortization or average weighted life
thereof, (v) shorten the date for payment of interest or
principal thereon, (vi) shorten the final maturity
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thereof or (vii) change any covenant, event of default or
condition thereunder in a manner adverse to the Agent and the
Lenders as determined by the Agent in its reasonable
discretion, or (B) if such amendment, modification or change
would, together with all other amendments, modifications or
changes made, increase materially the obligations of Wang or
any such Subsidiary or confer additional material rights on
the holder of any Subordinated Note or such other Indebtedness
subordinated to the payment of the Obligations.
(l) NEGATIVE PLEDGE. Wang will not, nor will it permit any of
its Restricted Subsidiaries to, at any time enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets other than
(i) in favor of the Agent and the Lenders, (ii) in connection with
Liens described in Section 7.2(a)(iv), but solely with respect to the
property subject to such Liens, and (iii) in connection with the
Indebtedness described in Sections 7.2(b)(xii) and (xv), but solely
with respect to the property financed with such Indebtedness.
(m) LIMITATION ON SALES AND LEASEBACKS. Wang will not, nor
will it permit any of its Restricted Subsidiaries to, at any time enter
into any arrangement with any Person providing for the leasing by Wang
or such Subsidiary of real or personal property (other than, subject to
Section 7.2(d) and the other provisions of this Agreement, the assets
set forth on Schedule 7.2(d) and other assets with a fair market value
not to exceed $20,000,000 for all such assets in the aggregate) which
has been or is to be sold or transferred by Wang or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental
obligations of Wang or such Subsidiary.
(n) PARTNERSHIPS; SUBSIDIARIES; JOINT VENTURES. Wang will not,
nor will it permit any of its Restricted Subsidiaries to, at any time
create any direct or indirect subsidiary, enter into any joint venture
or similar arrangement or become a partner in any general or limited
partnership, except as otherwise permitted by Section 7.2(e) and joint
sales, marketing and development arrangements in the ordinary course of
business; provided that Wang may create one or more new Domestic
Subsidiaries if the following conditions are met: (a) upon creation of
any such Subsidiary such Subsidiary shall be a Restricted Subsidiary;
(b) such new Subsidiary shall promptly guarantee the Obligations and
grant the Agent liens and security interests in all of its assets for
the benefit of the Lenders;
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(c) Wang shall promptly pledge all shares in such Subsidiary to the
Agent for the benefit of the Lenders; (d) all documentation granting
the Agent a guaranty or a security interest shall be in form and
substance satisfactory to the Agent; and (e) Wang shall take and shall
cause such Subsidiary to take, all such further actions and execute all
such further documents and instruments as the Agent reasonably
determines in its sole discretion to be necessary or desirable to cause
the execution, delivery and performance of such documentation to be
duly authorized and to perfect, protect or enforce the security
interests and Liens (and the priority status thereof) granted to the
Agent.
(o) ADDITIONAL BANK ACCOUNTS. Wang will not at any time open,
maintain or otherwise have or permit the other Credit Parties to enter
into or otherwise have any checking, savings or other accounts at any
bank or other financial institution, or any other account where money
is or may be deposited or maintained with any Person, other than the
Lockbox Accounts, the Disbursement Account, the Collection Accounts,
the Concentration Accounts, the BT Account, accounts with Bankers Trust
Company, the accounts of Wang Software, Dataserv and WSSM set forth on
Schedule 7.2(o), and payroll accounts, as set forth on Schedule 7.1(u)
or as otherwise agreed to in writing by the Agent.
(p) EXCESS CASH. The Borrowers will not, directly or
indirectly, maintain in the aggregate in all of their deposit accounts
(other than the Disbursement Account, the Collection Accounts, the
Concentration Accounts, accounts with Bankers Trust Company, payroll
accounts and as set forth on Schedule 7.2(p)) total cash balances and
Investments permitted by Sections 7.2(e)(i) and (vi) in excess of
$10,000,000 for more than two (2) consecutive Business Days at any time
during which any Revolving Loans are outstanding.
(q) CAPITAL EXPENDITURES. Wang and its consolidated
Subsidiaries will not at any time make or commit to make any payments
for Capital Expenditures, except that Wang and its consolidated
Subsidiaries may make or commit to make Capital Expenditures in the
aggregate not exceeding the amount (the "BASE AMOUNT") per six-month
period set forth below:
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<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
July 1, 1996 through December 31, 1996 $37,500,000
January 1, 1997 through June 30, 1997 $37,500,000
July 1, 1997 through December 31, 1997 $37,500,000
January 1, 1998 through June 30, 1998 $37,500,000
July 1, 1998 through December 31, 1998 $40,000,000
January 1, 1999 through June 30, 1999 $40,000,000
and for each succeeding six month
period thereafter
</TABLE>
plus (a) for any six month period set forth above commencing with the
period beginning July 1, 1997 an amount equal to any portion of the
Base Amount not spent in the immediately preceding two six month
periods (but not in any period prior thereto) and (b) at any time, an
amount equal to the then Available Excess Cash Flow Amount.
(r) MINIMUM CONSOLIDATED NET WORTH. As of the Closing Date and
the end of any fiscal quarter thereafter, Wang will not permit
Consolidated Net Worth to be less than the sum of (a) (i) $350,000,000
(as such amount may be adjusted in accordance with post-closing
purchase accounting adjustments, restructurings and Wang noncash
charges, all as approved by the Agent in its reasonable discretion),
(b) 75% of the cumulative increases in retained earnings of Wang and
its consolidated Subsidiaries for the fiscal quarters subsequent to the
Closing Date, (c) 75% of the net proceeds of any capital or equity
infusion received by Wang through an offering of the capital stock of
Wang and (d) 75% of the fair market value of any capital stock issued
by Wang in connection with an Investment by Wang.
(s) MINIMUM CONSOLIDATED CURRENT RATIO. Wang will not at any
time permit the ratio of Wang and its consolidated Subsidiaries current
assets to Wang and its consolidated Subsidiaries current liabilities,
each computed in accordance with GAAP, to be less than .90 to 1.00;
PROVIDED, HOWEVER, that for purposes of the calculation of such ratio,
the determination of consolidated current liabilities shall include the
full outstanding balance of the Revolving Loans and shall exclude the
current portion of any accrued restructuring and reorganization costs
of Wang and its consolidated Subsidiaries and the principal amount of
the Subordinated Notes.
(t) MINIMUM CONSOLIDATED EBITDA. Wang will not at any time
permit the EBITDA of Wang and its consolidated Subsidiaries, for the
four consecutive fiscal quarters ended on the date set forth below, to
be less than the amount set forth below:
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<TABLE>
<CAPTION>
Rolling Period Ending Amount
--------------------- ------
<S> <C>
September 30, 1996 $100,000,000
December 31, 1996 $105,000,000
March 31, 1997 $110,000,000
June 30, 1997 $115,000,000
September 30, 1997 $121,250,000
December 31, 1997 $127,500,000
March 31, 1998 $133,750,000
June 30, 1998 $140,000,000
September 30, 1998 $147,500,000
December 31, 1998 $155,000,000
March 31, 1999 $162,500,000
June 30, 1999 the last day $170,000,000
of each fiscal quarter thereafter
</TABLE>
(u) NO PROHIBITED TRANSACTIONS UNDER ERISA. Wang will
not, and will not permit any of the Restricted Subsidiaries to,
directly or indirectly:
(i) Engage in any prohibited transaction which could
reasonably be expected to result in a civil penalty or excise
tax described in Sections 406 of ERISA or 4975 of the Internal
Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously
obtained from the Department of Labor, other than any civil
penalty or excise tax that is not reasonably likely to have a
Material Adverse Effect;
(ii) permit to exist with respect to any Benefit Plan
any accumulated funding deficiency (as defined in Sections 302
of ERISA and 412 of the Internal Revenue Code), whether or not
waived;
(iii) fail to pay timely required contributions or
annual installments due with respect to any waived funding
deficiency to any Benefit Plan;
(iv) terminate any Benefit Plan where such event
would result in any liability of Wang, any Subsidiary or any
ERISA Affiliate under Title IV of ERISA, other than any
liability that is not reasonably likely to have a Material
Adverse Effect;
(v) fail to make any required contribution or payment
to any Multiemployer Plan;
(vi) fail to pay any required installment or any
other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or
other payment;
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(vii) amend a Plan resulting in an increase in
current liability for the plan year such that either of Wang,
any Subsidiary or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal
Revenue Code; or
(viii) withdraw from any Multiemployer Plan where
such withdrawal is reasonably likely to result in any
liability of any such entity under Title IV of ERISA, other
than any liability that is not reasonably likely to have a
Material Adverse Effect.
(v) BUSINESS OF CERTAIN SUBSIDIARIES. Wang shall not permit
(i) FSI to engage in any business other than to own the shares of
capital stock of the Subsidiaries of FSI and (ii) the Subsidiaries of
FSI other than Foreign Subsidiaries to engage in any business other
than providing insurance and related services.
(w) LOCATION OF INVENTORY AND EQUIPMENT. Wang shall not, and
shall not permit any other Credit Party, to maintain or keep Inventory
and Equipment having an aggregate book value in excess of $500,000 at
any location that is not set forth on Schedule 6.1(k).
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. The occurrence of any
of the following events shall constitute an "EVENT OF DEFAULT":
(a) the Borrowers shall fail to pay (i) any interest, Fees,
Expenses or other Obligations (other than principal) when due or within three
(3) Business Days of when due, whether at stated maturity, by acceleration, or
otherwise or (ii) any principal when due, whether at stated maturity, by
acceleration or otherwise; or
(b) any representation or warranty made by any Credit Party
under or in connection with any Credit Document shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) the Borrowers or any Restricted Subsidiary shall fail to
perform or observe any term, covenant or agreement contained in Section
7.1(a)(vii), (b), (c), (r), (s) and (t) and Section 7.2 of this Credit
Agreement, Sections 1.10 or 1.11 of any of the Mortgages, Section 4 of the Wang
Security Agreement, Section 4 of the Wang Canada Security Agreement, Section 2
of the Wang Intellectual Property Security Agreement, Section 4 of the
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Wang Software Security Agreement, Section 2 of the Wang Software Intellectual
Property Security Agreement, Section 4 of the Dataserv Security Agreement,
Section 2 of the Dataserv Intellectual Property Security Agreement or Section 2
of the Wang Canada Intellectual Property Security Agreement; or
(d) any Credit Party shall fail to perform or observe any
term, covenant or agreement contained in any Credit Document (other than as set
forth in Sections 8.1(a) and (c)) on its part to be performed or observed or any
Borrower or any Subsidiary shall fail to comply with any provisions contained in
any Material Contract to which it is a party if such failure shall remain
unremedied for the earlier of thirty (30) days after its occurrence or ten (10)
Business Days after notice from the Agent to the Borrowers; or
(e) any Borrower or any Restricted Subsidiary (i) shall fail
to pay any Indebtedness in an amount in excess of $3,000,000 (including the
Subordinated Notes but excluding disputed trade Indebtedness in the ordinary
course of business and the Indebtedness hereunder) when due (whether at
scheduled maturity or by required prepayment, acceleration, demand or
otherwise), or (ii) shall otherwise be in breach or default in any of its
obligations under any agreement with respect to any such Indebtedness, if the
effect of such failure to pay, breach or default is to cause such Indebtedness
to become due or redeemed or permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to declare such
Indebtedness due or require such Indebtedness to be redeemed prior to its stated
maturity; or
(f) any Credit Party shall dissolve, wind up or otherwise
cease its business; or
(g) any Borrower or any Restricted Subsidiary shall become
the subject of (i) an Insolvency Event as set forth in clause (e) of the
definition of Insolvency Event that is not resolved or dismissed within sixty
(60) days or (ii) any Insolvency Event except as set forth in clause (e) of the
definition of Insolvency Event; or
(h) any judgment or order for the payment of money in excess
of $5,000,000 shall be rendered against Wang or any Restricted Subsidiary and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; PROVIDED
that in the case of any such judgment or order with respect to a Subsidiary that
is not a Credit Party, such judgment or order shall have a Material Adverse
Effect; or
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(i) any non-monetary judgment or order shall be rendered
against the Borrowers or any Subsidiary that is reasonably likely to have a
Material Adverse Effect, and there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(j) except through the action or inaction of the Agent or
any Lender, any covenant, agreement or obligation of any Credit Party contained
in or evidenced by any of the Credit Documents shall cease to be enforceable, or
shall be determined to be unenforceable, in accordance with its terms; any
Credit Party shall deny or disaffirm its obligations under any of the Credit
Documents or any Liens granted in connection therewith; or any Liens granted in
any of the Collateral shall be determined to be void, voidable or invalid, are
subordinated or are not given the priority contemplated by this Credit
Agreement; or
(k) except through the action or inaction of the Collateral
Agent or any Lender, a Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and, except as otherwise
permitted under Section 7.2(a), perfected first priority Lien on the Collateral
purported to be covered thereby; or
(l) a Change in Control shall have occurred.
SECTION 8.2. ACCELERATION AND CASH COLLATERALIZATION. Upon
the occurrence and during the continuance of an Event of Default, the Agent may
take any or all of the following actions, without prejudice to the rights of the
Agent or any Lender to enforce its claims against the Borrowers:
(a) ACCELERATION. Upon the written request of the Majority
Lenders, and by delivery of written notice to the Borrowers from the Agent, all
Obligations shall be declared to be immediately due and payable (except with
respect to any Event of Default with respect to a Credit Party set forth in
Section 8.1(g), in which case all Obligations shall automatically become
immediately due and payable without the necessity of any request of the Majority
Lenders or notice or other demand to the Borrowers) without presentment, demand,
protest or any other action or obligation of the Agent or any Lender, all of
which are hereby expressly waived by the Borrowers.
(b) TERMINATION OF COMMITMENTS. Upon the written request of
the Majority Lenders, and by delivery of written notice to the Borrowers from
the Agent, the Commitments shall be immediately terminated and, at all times
thereafter, all Revolving Loans made by any Lender pursuant to this Credit
Agreement shall be at such Lender's sole discretion, unless such
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Event of Default is cured or waived in accordance with Section 10.11.
(c) CASH COLLATERALIZATION. On demand of the Agent or the
Majority Lenders, the Borrowers shall immediately deposit with the Collateral
Agent for each Letter of Credit then outstanding, cash or Cash Equivalents in an
amount equal to 105% of the greatest amount drawable thereunder and execute and
deliver documentation with respect to such cash collateralization in form and
substance satisfactory to the Collateral Agent.
SECTION 8.3. RESCISSION OF ACCELERATION. After acceleration of
the maturity of the Revolving Loans, if the Borrowers pay all accrued interest
and all principal due (other than by reason of the acceleration) and all
Defaults and Events of Default are otherwise remedied or waived in accordance
with Section 10.11, the Majority Lenders may elect in their sole discretion, to
rescind the acceleration and return any cash collateral. (This Section is
intended only to bind all of the Lenders to a decision of the Majority Lenders
and not to confer any right on the Borrowers, even if the described conditions
for the Majority Lenders' election may be met.)
SECTION 8.4. REMEDIES. Upon the occurrence and during the
continuance of an Event of Default, the Agent, the Collateral Agent and the
Lenders shall have all rights and remedies with respect to the Obligations under
the Credit Documents and the Collateral available to it as creditors under
applicable law and the Credit Documents and the Agent and, to the fullest extent
permitted by applicable law, the Collateral Agent may do any or all of the
following:
(a) remove for copying all documents, instruments, files and
records (including the copying of any computer records) relating to the
Accounts or use (at the expense of the Borrowers) such supplies or
space of any Credit Party at such Credit Party's place of business
necessary to properly administer and collect the Accounts thereon;
(b) accelerate or extend the time of payment, compromise,
issue credits, or bring suit on the Accounts (in the name of the
Borrowers or the Lenders) and otherwise administer and collect the
Accounts;
(c) sell, assign and deliver the Accounts and any returned,
reclaimed or repossessed merchandise, with or without advertisement, at
public or private sale, for cash, on credit or otherwise, subject to
applicable law; and
(d) foreclose the security interests created pursuant to the
Credit Documents by any available procedure, or take possession of any
or all of the Collateral without judicial
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process and enter any premises where any Collateral may be located for
the purpose of taking possession of or removing the same.
Any Lender may bid or become a purchaser at any sale, free from any right of
redemption, which right is expressly waived by the Borrowers. If notice of
intended disposition of any Collateral is required by law, it is agreed that
fifteen (15) Business Days notice shall constitute reasonable notification. Wang
will assemble, and cause each other Credit Party to assemble the Collateral and
make it available to the Collateral Agent at such locations as the Agent may
specify, whether at the premises of such Credit Party or elsewhere, and will
make available to the Collateral Agent the premises and facilities of such
Credit Party for the purpose of the Collateral Agent's taking possession of,
removing or putting the Collateral in saleable form.
SECTION 8.5. RIGHT OF SETOFF. In addition to and not in
limitation of all rights of offset that any Lender or the Issuing Bank may have
under applicable law, upon the occurrence of any Event of Default, and whether
or not any Lender or the Issuing Bank has made any demand or the Obligations of
any Credit Party have matured, each Lender and the Issuing Bank shall have the
right to appropriate and apply to the payment of the Obligations of a Credit
Party all deposits and other obligations then or thereafter owing by such Lender
or the Issuing Bank to such Credit Party. Each Lender or the Issuing Bank
exercising such rights shall notify the Agent thereof (and the Agent shall
promptly notify the Borrowers thereof) and any amount received as a result of
the exercise of such rights shall be shared in accordance with Section 2.7.
SECTION 8.6. LICENSE FOR USE OF SOFTWARE AND OTHER
INTELLECTUAL PROPERTY. Unless expressly prohibited by the licensor thereof, if
any, the Agent and the Collateral Agent are hereby granted a limited
non-exclusive non-transferable license to use all computer software programs,
data bases, processes and materials used by any Borrower and any Subsidiary in
connection with its businesses or in connection with the Collateral solely in
connection with the exercise of remedies under this Credit Agreement and the
other Credit Documents. The Agent and the Collateral Agent agree not to use any
such license prior to the occurrence of an Event of Default.
SECTION 8.7. NO MARSHALLING; DEFICIENCIES; REMEDIES
CUMULATIVE. The net cash proceeds resulting from the Agent's or the Collateral
Agent's exercise of any of the foregoing rights to liquidate all or
substantially all of the Collateral (after deducting all of the Agent's and the
Collateral Agent's Expenses related thereto) shall be applied by the Agent to
the payment of the Obligations to the Agent, the Collateral Agent and the
Lenders, whether due or to become due, in such order as the Agent
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may elect. The Borrowers, jointly and severally, shall remain liable to the
Agent, the Collateral Agent and the Lenders for any deficiencies, and the Agent,
the Collateral Agent and the Lenders in turn agree to remit to the Borrowers or
their respective successors or assigns, any surplus resulting therefrom. The
foregoing remedies are not intended to be exhaustive and the full or partial
exercise of any of them shall not preclude the full or partial exercise of any
other available remedy under this Credit Agreement, under any other Credit
Document, at equity or at law.
ARTICLE IX
THE AGENT AND THE COLLATERAL AGENT
SECTION 9.1. APPOINTMENT OF AGENT AND COLLATERAL AGENT.
(a) Each Lender hereby designates BTCO as the Agent and BTCC
as the Collateral Agent and irrevocably authorizes the Agent and the Collateral
Agent to take action on such Lender's behalf under the Credit Documents and to
exercise the powers and to perform the duties described therein and to exercise
such other powers as are reasonably incidental thereto. Each Agent may perform
any of its duties by or through its agents or employees.
(b) Other than the Borrowers' rights under Section 9.9, the
provisions of this Article IX are solely for the benefit of each Agent and the
Lenders, and none of the Credit Parties shall have any rights as a third party
beneficiary of any of the provisions hereof. Each Agent shall act solely as
agent of the Lenders and assumes no obligation toward or relationship of agency
or trust with or for any Credit Party.
(c) As used in this Article IX and unless the context
otherwise requires, the term "Agent" shall refer to each of BTCo in its capacity
as Agent and BTCC in its capacity as Collateral Agent.
SECTION 9.2. NATURE OF DUTIES OF AGENT. Each Agent shall have
no duties or responsibilities except those expressly set forth in the Credit
Documents. Neither Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or willful
misconduct. The duties of each Agent shall be mechanical and administrative in
nature. Each Agent shall not have a fiduciary relationship in respect of any
Lender or any participant of any Lender.
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SECTION 9.3. LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon either Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial or other condition and
affairs of each Credit Party in connection with the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of each Credit Party, and, except as expressly provided in this Credit
Agreement, each Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.
(b) Each Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or the
Revolving Notes or the financial or other condition of any Credit Party. Each
Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Credit Agreement or the Revolving Notes, or the financial condition of any
Credit Party, or the existence or possible existence of any Default or Event of
Default, unless specifically requested to do so in writing by any Lender.
SECTION 9.4. CERTAIN RIGHTS OF THE AGENT. Each Agent may
request instructions from the Majority Lenders at any time. If either Agent
requests instructions from the Majority Lenders with respect to any action or
inaction, such Agent shall be entitled to await instructions from the Majority
Lenders before such action or inaction. No Lender shall have any right of action
based upon either Agent's action or inaction in response to instructions from
the Majority Lenders.
SECTION 9.5. RELIANCE BY AGENT. Each Agent may rely upon
written or telephonic communication it believes to be genuine and to have been
signed, sent or made by the proper person. Each Agent may obtain the advice of
legal counsel (including counsel for the Borrowers with respect to matters
concerning the Borrowers), independent public accountants and other experts
selected by it and shall have no liability for any action or inaction taken or
omitted to be taken by it in good faith based upon such advice.
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SECTION 9.6. INDEMNIFICATION OF AGENT. To the extent either
Agent is not reimbursed and indemnified by the Borrowers, each Lender will
reimburse and indemnify such Agent, to the extent of its Proportionate Share for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever (including all Expenses) which
may be imposed on, incurred by or asserted against such Agent in performing its
duties hereunder or otherwise relating to the Credit Documents unless resulting
from such Agent's gross negligence or willful misconduct. The agreements
contained in this Section shall survive any termination of this Credit Agreement
and the other Credit Documents and the payment in full of the Obligations.
SECTION 9.7. THE AGENT IN ITS INDIVIDUAL CAPACITY. In its
individual capacity, each Agent shall have the same rights and powers hereunder
as any other Lender or holder of a Revolving Note or participation interests and
may exercise the same as though it was not performing the duties specified
herein. The terms "Lenders," "Majority Lenders," "holders of Revolving Notes,"
or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity. Each Agent and its Affiliates may
accept deposits from, lend money to, acquire equity interests in, and generally
engage in any kind of banking, trust, financial advisory or other business with
the Borrowers or any Affiliate of the Borrowers as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrowers for services in connection with this Credit Agreement and otherwise
without having to account for the same to the Lenders.
SECTION 9.8. HOLDERS OF REVOLVING NOTES. Each Agent may deem
and treat the payee of any Revolving Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with each Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Revolving Note, shall be conclusive and binding on
any subsequent holder, transferee or assignee of such Revolving Note or of any
Revolving Note or Revolving Notes issued in exchange therefor.
SECTION 9.9. SUCCESSOR AGENT.
(a) Either or both Agents may, upon ten (10) Business Days'
notice to the Lenders and the Borrowers, resign by giving written notice thereof
to the Lenders and the Borrowers. An Agent's resignation shall be effective upon
the appointment of a successor Agent. Such resignation of an Agent shall be
deemed to be a resignation of Bankers Trust Company as Issuing Bank.
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(b) Upon receipt of either Agent's resignation, the Majority
Lenders may appoint a successor Agent which shall also be a Lender. Unless an
Event of Default shall have occurred and be continuing at the time of such
appointment, the successor Agent shall be subject to approval by the Borrowers,
which approval shall not be unreasonably withheld and if the Borrower approves
of the successor Agent, such approval shall be delivered to the Majority Lenders
within five (5) Business Days after the Borrowers' receipt of notice of a
proposed successor Agent. If a successor Agent has not accepted its appointment
within fifteen (15) Business Days, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent.
(c) Upon its acceptance of the agency hereunder, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Credit Agreement. The
retiring Agent shall continue to have the benefit of this Article IX for any
action or inaction while it was Agent.
SECTION 9.10. COLLATERAL MATTERS.
(a) Each Lender authorizes and directs each Agent to enter
into the Collateral Documents for the benefit of the Lenders. Except as
otherwise set forth herein, any action or exercise of powers by the Majority
Lenders under the Credit Documents, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of the
Lenders. Prior to an Event of Default, without notice to or consent from any
Lender, either Agent may take any action necessary or advisable to perfect and
maintain the perfection of the Liens upon the Collateral.
(b) Each Agent is authorized to release any Lien granted to or
held by such Agent upon any Collateral (i) upon termination of the Commitments
and payment and satisfaction of all of the Obligations, (ii) required to be
delivered in connection with permitted sales of Collateral hereunder, if any,
upon receipt of the proceeds or (iii) if the release can be and is approved by
the Majority Lenders or all Lenders, as applicable. Each Agent may request and
the Lenders will provide confirmation of such Agent's authority to release
particular types or items of Collateral.
(c) Upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Credit Agreement, or consented
to in writing by the Majority Lenders or all of the Lenders, as applicable, and
upon at least five (5) Business Days' prior written request by the Borrowers,
either Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the
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release of the Liens granted to such Agent for the benefit of the Lenders herein
or pursuant hereto upon the Collateral that was sold or transferred; PROVIDED
that (i) each Agent shall not be required to execute any such document on terms
which, in such Agent's opinion, would expose such Agent to liability or create
any obligation of such Agent or entail any adverse consequence to such Agent
other than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of the Borrowers or any Subsidiary in respect of)
all interests retained by the Borrowers or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, each Agent shall be
authorized to deduct all of the Expenses reasonably incurred by such Agent from
the proceeds of any such sale, transfer or foreclosure.
(d) Neither Agent shall have any obligation to assure that the
Collateral exists or is owned by the Borrowers or any Subsidiary, that such
Collateral is cared for, protected or insured, or that the Liens in the
Collateral have been created, perfected, or have any particular priority. With
respect to the Collateral, each Agent may act in any manner it may deem
appropriate, in its sole discretion, given such Agent's own interest in the
Collateral as one of the Lenders and it shall have no duty or liability
whatsoever to the Lenders, except for its gross negligence or willful
misconduct.
SECTION 9.11. ACTIONS WITH RESPECT TO DEFAULTS. In addition to
each Agent's right to take actions on its own accord as permitted under this
Credit Agreement, each Agent shall take such action with respect to a Default or
Event of Default as shall be directed by the Majority Lenders or all Lenders, as
applicable. Until an Agent shall have received such directions, such Agent may
act or not act as it deems advisable and in the best interests of the Lenders.
SECTION 9.12. DELIVERY OF INFORMATION. Each Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by such Agent
from the Borrowers, any Subsidiary, the Majority Lenders, any Lender or any
other Person under or in connection with this Credit Agreement or any other
Credit Document except (i) as specifically provided in this Credit Agreement or
any other Credit Document and (ii) as specifically requested from time to time
in writing by any Lender with respect to a specific document, instrument, notice
or other written communication received by and in the possession of such Agent
at the time of receipt of such request and then only in accordance with such
specific request.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY
DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF THE
CREDIT DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL
BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS
OF THE STATE OF NEW YORK.
SECTION 10.2. SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG
THE BORROWERS AND THE LENDERS (OR THE AGENT OR THE COLLATERAL AGENT ACTING ON
THEIR BEHALF), WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, AND THE
COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE
AGENT AND THE COLLATERAL AGENT, ON BEHALF OF THE LENDERS, SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE BORROWERS OR
THEIR PROPERTY IN ANY LOCATION REASONABLY SELECTED BY THE AGENT OR THE
COLLATERAL AGENT IN GOOD FAITH TO ENABLE THE AGENT OR THE COLLATERAL AGENT TO
REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF THE AGENT OR THE COLLATERAL AGENT. THE BORROWERS AGREE THAT THEY WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING
BROUGHT BY THE AGENT OR THE COLLATERAL AGENT. THE BORROWERS WAIVE ANY OBJECTION
THAT THEY MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR THE
COLLATERAL AGENT HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
SECTION 10.3. SERVICE OF PROCESS. THE BORROWERS HEREBY
IRREVOCABLY DESIGNATE CT CORPORATION SYSTEM LOCATED AT 1633 BROADWAY, NEW YORK,
NEW YORK AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH BORROWER TO RECEIVE, FOR
AND ON BEHALF OF SUCH BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CREDIT
AGREEMENT OR ANY OTHER CREDIT DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL BE PROMPTLY FORWARDED BY MAIL
TO SUCH BORROWER, BUT FAILURE OF SUCH BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS.
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SECTION 10.4. JURY TRIAL. THE BORROWERS, THE AGENT, THE
COLLATERAL AGENT, THE ISSUING BANK AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY. INSTEAD, ANY DISPUTES WILL BE RESOLVED IN A BENCH TRIAL.
SECTION 10.5. LIMITATION OF LIABILITY. NEITHER THE AGENT, THE
COLLATERAL AGENT NOR ANY LENDER SHALL HAVE ANY LIABILITY TO THE BORROWERS
(WHETHER SOUNDING IN TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY ANY
BORROWER IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE
TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY THIS CREDIT AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY
A FINAL AND NONAPPEALABLE JUDGMENT OR COURT ORDER BINDING ON THE AGENT, THE
COLLATERAL AGENT OR ANY SUCH LENDER, THAT THE LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS CONSTITUTING GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR SUCH LENDER'S
FAILURE TO FUND A LOAN PURSUANT TO THE TERMS OF THIS CREDIT AGREEMENT. THE
BORROWERS HEREBY WAIVE ALL FUTURE CLAIMS AGAINST THE AGENT AND THE COLLATERAL
AGENT FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES UNLESS RESULTING
FROM THE GROSS NEGLIGENCE OF SUCH PERSON OR SUCH PERSON'S KNOWING VIOLATION OF
THE LAW.
SECTION 10.6. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay
or omission of the Agent, the Collateral Agent, the Issuing Bank or the Lenders
to exercise any right or remedy hereunder shall impair any such right or operate
as a waiver thereof. No single or partial exercise by the Agent, the Collateral
Agent, the Issuing Bank or the Lenders of any right or remedy shall preclude any
other or further exercise thereof, or preclude any other right or remedy.
SECTION 10.7. NOTICES. Except as otherwise provided herein,
all notices and correspondences hereunder shall be in writing and sent by
certified or registered mail, return receipt requested, or by overnight delivery
service, with all charges prepaid, or by telecopier, if to the Agent, the
Collateral Agent, the Issuing Bank or any of the Lenders, then to Bankers Trust
Company, One Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006,
Attention: Ms. Linda McCormack, and if to the Borrowers, then to the Borrowers
c/o Wang at 600 Technology Park Drive, Billerica, Massachusetts 01821,
Attention: Mr. Richard L. Buckingham, Vice President and Treasurer and Albert A.
Notini, Esq., General Counsel, or by facsimile transmission, promptly confirmed
in writing sent by first class mail, if to the Agent, or any of the Lenders, at
(212) 618-2640, and if to the Borrowers, at (508) 967-5864 or, as to any party,
such other address as shall be designated by such party in a written notice to
each other party. All such notices and correspondence shall be deemed given (i)
if sent by certified or registered mail, three (3) Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at the
above stated
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addresses or when delivery is refused and (iii) if sent by telex or facsimile
transmission, when receipt of such transmission is acknowledged.
SECTION 10.8. ASSIGNMENTS AND PARTICIPATIONS.
(a) BORROWER ASSIGNMENT. The Borrowers shall not assign this
Credit Agreement or any rights or obligations hereunder, without the prior
written consent of the Agent and the Lenders.
(b) LENDER ASSIGNMENTS. Each Lender may assign to one or more
banks or other financial institutions all or a portion of its rights and
obligations under this Credit Agreement, the Revolving Notes and the other
Credit Documents, with the consent of the Agent, and with the consent of Wang
(not to be unreasonably withheld), and upon execution and delivery to the Agent,
for its acceptance and recording in the Register, of an agreement in
substantially the form of Exhibit N (an "ASSIGNMENT AND ASSUMPTION AGREEMENT"),
together with surrender of any Revolving Note or Revolving Notes subject to such
assignment and a processing and recordation fee of $2,500.00. No such assignment
shall be for less than $5,000,000 of the Commitments unless it is to another
Lender. Upon such execution and delivery of the Assignment and Assumption
Agreement to the Agent, from and after the date specified as the effective date
in the Assignment and Assumption Agreement (the "ACCEPTANCE DATE"), (x) the
assignee thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Assumption Agreement, such assignee shall have the rights and obligations of a
Lender hereunder and (y) the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights (other than any
rights it may have pursuant to Section 10.10 which will survive) and be released
from its obligations under this Credit Agreement (and, in the case of an
Assignment and Assumption Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Credit Agreement, such
Lender shall cease to be a party hereto). (This Section does not apply to
branches and Affiliates of a Lender, it being understood that a Lender may make,
carry or transfer Revolving Loans at or for the account of any of its branch
offices or Affiliates without consent of the Borrowers, the Agent or any Lender
and without payment of any processing and recordation fee.)
By executing and delivering an Assignment and Assumption
Agreement, the assignee thereunder confirms and agrees as follows: (i) other
than as provided in such Assignment and Assumption Agreement, the assigning
Lender makes no representation or warranty and assumes no responsibility with
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respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement, the
Revolving Notes or any other instrument or document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or any
other Credit Parties or the performance or observance by the Borrowers or any
other Credit Parties of any of their obligations under this Credit Agreement or
any other instrument or document furnished pursuant hereto, (iii) such assignee
confirms that it has received a copy of this Credit Agreement, together with
copies of the Financial Statements referred to in Section 6.1(i), the Financial
Statements delivered pursuant to Section 7.1(a), if any, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption Agreement,
(iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Credit Agreement, (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Credit Agreement as are delegated
to the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Credit Agreement are required to be performed by it as a Lender.
(c) AGENT'S REGISTER. The Agent shall maintain a register of
the names and addresses of the Lenders, their Commitments, and the principal
amount of their Revolving Loans (the "REGISTER"). The Agent shall also maintain
a copy of each Assignment and Assumption Agreement delivered to and accepted by
it and modify the Register to give effect to each Assignment and Assumption
Agreement. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Credit Agreement. The Register and copies of
each Assignment and Assumption Agreement shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of each Assignment and Assumption
Agreement and surrender of the affected Revolving Note or Revolving Notes
subject to such assignment, the Agent will give prompt notice thereof to the
Borrowers. Within five (5) Business Days after its receipt of such notice, each
Borrower shall execute and deliver to the Agent a new Revolving Note or
Revolving Notes to the order of the assignee in the amount of the
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Commitment or Commitments assumed by it and to the assignor in the amount of the
Commitment or Commitments retained by it, if any. Such new Revolving Note or
Revolving Notes shall reevidence the indebtedness outstanding under the
surrendered Revolving Note or Revolving Notes and shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Revolving Note or Revolving Notes, shall be dated as of the Closing Date. The
Agent shall return to the Borrowers the affected Revolving Note or Notes
surrendered to the Agent marked "cancelled" or, if any such note cannot be
located, an affidavit to such effect. The Agent shall be entitled to rely upon
the Register exclusively for purposes of identifying the Lenders hereunder.
(d) LENDER PARTICIPATIONS. Each Lender may sell participations
(without the consent of the Agent, the Borrowers or any other Lender) to one or
more banks or other financial institutions in or to all or a portion of its
rights and obligations under this Credit Agreement, the Revolving Notes and the
other Credit Documents. Notwithstanding a Lender's sale of a participation
interest, such Lender's obligations hereunder shall remain unchanged. The
Borrowers, the Agent, and the other Lenders shall continue to deal solely and
directly with such Lender. No participant shall have rights to approve any
amendment or waiver of this Credit Agreement except to the extent such amendment
or waiver would (i) increase the Commitment of the Lender from whom the
participant purchased its participation interest, if such increase would cause
such participant's obligations to increase; (ii) reduce the principal of, or
rate or amount of interest on the Revolving Loans subject to such participation;
(iii) postpone any date fixed for any payment of principal of, or interest on,
the Revolving Loans subject to the participation interest; or (iv) release all
or a substantial portion of the Collateral, other than in each case when
otherwise permitted hereunder. A participant shall be entitled to the benefits
of Sections 4.8(d), 4.9 and 4.10 only up to a maximum amount for each section
equal to the maximum amount for each section which the Lender from whom it
acquired its participation would have been entitled if it had not sold the
participation.
Each Lender agrees that, without the prior written consent of
Wang and the Agent, it will not make any assignment hereunder in any manner or
under any circumstances that would require registration or qualification of, or
filings in respect of, any Loan, Revolving Note or other Obligation under the
securities laws of the United States or of any jurisdiction.
(e) CONFIDENTIALITY. In connection with their efforts to
assign its rights or obligations or sell participations pursuant to Sections
10.8(b) and (d) hereof, the Agent or the Lenders may disclose any information
they have, now or in the future, with respect to the business of the Borrowers
or the
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Acquisition of the Acquired INET Stock to prospective assignees or purchasers,
provided that such prospective assignees or purchasers agree to be bound by the
provisions of Section 10.9.
SECTION 10.9. CONFIDENTIALITY. Except as provided in Section
10.8(e), each Lender agrees that it will not disclose, without the prior consent
of the Borrowers, any information with respect to the Borrowers or any
Subsidiary which is furnished pursuant to this Credit Agreement and which is
designated by the Borrowers to the Lenders in writing as confidential (the
information delivered pursuant to Sections 7.1(a), (b), (c) and (e) and 8.4(a)
being hereby so designated), and acknowledges that such information, except as
provided below, is material non-public information about the Borrowers and their
consolidated Subsidiaries PROVIDED, THAT any Lender may disclose any such
information (a) to its Affiliates, employees, auditors, or counsel, or to
another Lender if the disclosing Lender or such disclosing Lender's holding or
parent company in its reasonable discretion determines that any such party
should have access to such information provided that each such person will be
advised of the confidential nature of such information, (b) as has become
generally available to the public other than through improper disclosure by the
Agent or any Lender, (c) as may be required or appropriate in any report,
statement or testimony submitted to any Governmental Authority having or
claiming to have jurisdiction over such Lender, (d) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, PROVIDED that Wang is given prior or contemporaneous notice of such
disclosure and (e) in order to comply with any Requirement of Law.
SECTION 10.10. INDEMNIFICATION; REIMBURSEMENT OF EXPENSES OF
COLLECTION.
(a) The Borrowers, jointly and severally, hereby indemnify and
agree to defend and hold harmless the Agent, the Collateral Agent, the Issuing
Bank and each of the Lenders and their respective directors, officers, agents,
employees and counsel (each, an "Indemnified Party") from and against any and
all losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) arising out of or by reason of (i) any litigations, investigations,
claims or proceedings which arise out of or are in any way related to (A) this
Credit Agreement, any other Credit Document or the transactions contemplated
hereby or thereby including, without limitation, the transactions contemplated
by the INET Purchase Agreement, (B) the issuance of the Letters of Credit, (C)
the failure of the Issuing Bank to honor a drawing under any Letter of Credit,
as a result of any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto
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government or Governmental Authority, (D) any actual or proposed use by the
Borrowers of the proceeds of the Revolving Loans or (E) the Agent's, the
Collateral Agent's or the Lenders' entering into this Credit Agreement, the
other Credit Documents or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (ii) any remedial or other action taken
by the Borrowers, the Agent, the Collateral Agent or any of the Lenders in
connection with compliance by the Borrowers or any Subsidiary, or any of their
respective properties, with any federal, state or local Environmental Laws. In
addition, the Borrowers shall, upon demand, pay to the Agent all costs and
expenses incurred by the Agent (including the reasonable fees and disbursements
of counsel and other professionals) in connection with the preparation,
execution, delivery, administration, modification and amendment of the Credit
Documents, and pay to the Agent, the Collateral Agent and any Lender all costs
and expenses (including the reasonable fees and disbursements of counsel and
other professionals) paid or incurred by the Agent, the Collateral Agent or such
Lender in (A) enforcing or defending its rights under or in respect of this
Credit Agreement, the other Credit Documents or any other document or instrument
now or hereafter executed and delivered in connection herewith, (B) in
collecting the Obligations, (C) in foreclosing or otherwise collecting upon the
Collateral or any part thereof and (D) obtaining any legal, accounting or other
advice in connection with any of the foregoing. If and to the extent that the
Obligations of the Borrowers hereunder are unenforceable for any reason, the
Borrowers, jointly and severally, hereby agree to make the maximum contribution
to the payment and satisfaction of such Obligations which is permissible under
applicable law.
(b) The Borrowers' Obligations under Sections 4.8(d), 4.9,
4.10, 9.6 and this Section 10.10 shall survive any termination of this Credit
Agreement and the other Credit Documents and the payment in full of the
Obligations, and are in addition to, and not in substitution of, any other of
their Obligations set forth in this Credit Agreement.
SECTION 10.11. AMENDMENTS AND WAIVERS.
(a) No amendment or waiver of any provision of this Credit
Agreement or any other Credit Document shall be effective unless in writing and
signed by the Majority Lenders (or by the Agent on their behalf with the consent
of the Majority Lenders) and the Borrowers, except that:
(i) the consent of all the Lenders is required to (A) reduce
the principal of, or interest on, the Revolving
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Notes, any Letter of Credit reimbursement obligations or any Fees
hereunder (other than Fees that are exclusively for the account of the
Agent, the Collateral Agent or the Issuing Bank), (B) postpone the
final scheduled date of maturity of the Revolving Notes or any date
fixed for any payment in respect of interest on the Revolving Notes,
any Letter of Credit reimbursement obligations or any Fees hereunder,
or any other amounts payable to any Lender hereunder (C) change any
minimum requirement necessary for the Lenders or Majority Lenders to
take any action hereunder or the percentage of Commitments necessary to
take any such action, (D) amend or waive this Section 10.11(a), or
change the definition of Majority Lenders, (E) release any Liens in
favor of the Lenders on all or any portion of the Collateral
representing a substantial percentage of the value of the Collateral,
taken as a whole, except as otherwise expressly provided in this Credit
Agreement, and other than in connection with the financing,
refinancing, sale or other disposition of any asset of the Credit
Parties permitted under this Credit Agreement, (F) increase the advance
rate from that set forth in the definition of Accounts Borrowing Base
or waive or reduce any scheduled permanent reduction in the
Supplemental Amount, (G) consent to the assignment or transfer by the
Borrowers of any of their rights and obligations under this Credit
Agreement, (H) release any Credit Party or material Guarantor except in
connection with transactions expressly permitted hereunder or (I) amend
or waive any provision of Section 10.10(a) without the consent of the
Lender affected thereby;
(ii) no such amendment or waiver shall extend or increase the
Commitment of any Lender over the amount thereof then in effect without
the consent of such Lender, or waive or amend any scheduled reduction
in such Commitment (it being understood that amendments or waivers of
conditions precedent, covenants, Defaults or Events of Default shall
otherwise not constitute an increase in the Commitment of any Lender,
and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such
Lender);
(iii) the consent of the Agent, the Collateral Agent or the
Issuing Bank, as the case may be, shall be required for any amendment,
waiver or consent affecting the rights or duties of the Agent, the
Collateral Agent or the Issuing Bank under any Credit Document, in
addition to the consent of the Lenders otherwise required by this
Section 10.11; and
(iv) the consent of the Borrowers shall not be required for
any amendment, modification or waiver of the provisions of Article IX
(other than Section 9.9).
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(b) The Borrowers and the Lenders hereby authorize the Agent
to modify this Credit Agreement by unilaterally amending or supplementing
Schedule I to reflect assignments of the Commitments.
(c) Notwithstanding the foregoing, the Borrowers may amend
Schedule 6.1(a) and Schedule 6.1(k) without the consent of the Majority Lenders;
PROVIDED THAT, except as contemplated by Section 8.1, no amendment to any such
Schedule shall be permitted to cure any Default or Event of Default which would
otherwise have existed in the absence of such amendment; and PROVIDED FURTHER
THAT, with respect to any amendment to Schedule 6.1(k) the Borrower shall comply
with Section 7.1(c)(v).
(d) If, in connection with any proposed amendment or waiver
of any of the provisions of this Credit Agreement as contemplated by Section
10.11(a)(i), the consent of the Majority Lenders is obtained but the consent of
one or more of such other Lenders whose consent is required is not obtained,
then the Borrowers shall have the right to replace each such nonconsenting
Lender or Lenders (so long as all non-consenting Lenders are so replaced) with
one or more replacement Lenders pursuant to Section 4.11 so long as at the time
of such replacement, each such replacement Lender consents to the proposed
amendment or waiver; provided that the Borrowers shall not have the right to
replace a Lender solely as a result of the exercise of such Lender's rights (and
the withholding of any required consent by such Lender) pursuant to Section
10.11(a)(i).
SECTION 10.12. NONLIABILITY OF AGENT, COLLATERAL AGENT,
CO-AGENTS AND LENDERS. The relationship between the Borrowers and the Lenders,
the Collateral Agent and the Agent shall be solely that of borrower and lender.
Neither the Agent, the Collateral Agent nor any Lender shall have any fiduciary
responsibilities to any Borrower. Neither the Agent nor any Lender undertakes
any responsibility to the Borrowers to review or inform the Borrowers of any
matter in connection with any phase of the Borrowers' business or operations.
None of the Co-Agents shall have any duties, obligations or liabilities
hereunder in its capacity as Co-Agent.
SECTION 10.13. INDEPENDENT NATURE OF LENDERS' RIGHTS. The
amounts payable at any time hereunder to each Lender under such Lender's
Revolving Note or Notes shall be a separate and independent debt.
SECTION 10.14. COUNTERPARTS. This Credit Agreement and any
waiver or amendment hereto may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
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SECTION 10.15. EFFECTIVENESS. This Credit Agreement shall
become effective on the date on which all of the parties hereto shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Agent, or, in the case of the Lenders, shall have
given to the Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.
SECTION 10.16. SEVERABILITY. In case any provision in or
obligation under this Credit Agreement or the Revolving Notes or the other
Credit Documents shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 10.17. MAXIMUM RATE. Notwithstanding anything to the
contrary contained elsewhere in this Credit Agreement or in any other Credit
Document, the Borrowers, the Agent and the Lenders hereby agree that all
agreements among them under this Credit Agreement and the other Credit
Documents, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever shall
the amount paid, or agreed to be paid, to the Agent or any Lender for the use,
forbearance, or detention of the money loaned to the Borrowers and evidenced
hereby or thereby or for the performance or payment of any covenant or
obligation contained herein or therein, exceed the Highest Lawful Rate. If due
to any circumstance whatsoever, fulfillment of any provisions of this Credit
Agreement or any of the other Credit Documents at the time performance of such
provision shall be due shall exceed the Highest Lawful Rate, then,
automatically, the obligation to be fulfilled shall be modified or reduced to
the extent necessary to limit such interest to the Highest Lawful Rate, and if
from any such circumstance any Lender should ever receive anything of value
deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the Borrowers.
All sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other indebtedness of the
Borrowers to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness, until payment in full thereof, so that the actual
rate of interest on account of all such indebtedness does not exceed the Highest
Lawful Rate throughout the entire term of such indebtedness. The terms and
provisions of this Section shall control every other provision of this Credit
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Agreement and all agreements among the Borrowers, the Agent and the Lenders.
SECTION 10.18. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This
Credit Agreement and the other Credit Documents constitute the entire agreement
among the Borrowers, the Agent and the Lenders, supersedes any prior agreements
among them, and shall bind and benefit the Borrowers and the Lenders and their
respective successors and permitted assigns.
SECTION 10.19. JUDGMENT. The obligation of Wang Canada in
respect of any sum due from it to the Agent, the Collateral Agent or any Lender
under any Credit Document shall, notwithstanding any judgment in a currency
other than Dollars, be discharged only to the extent that on the Business Day
following receipt by the Agent, the Collateral Agent or such Lender of any sum
adjudged to be so due in such other currency, the Agent, the Collateral Agent or
such Lender may in accordance with normal banking procedures purchase Dollars
with such other currency; if the Dollars so purchased are less than the sum
originally due to the Agent, the Collateral Agent or such Lender in Dollars, the
Borrowers agree, as a separate obligation and notwithstanding any such judgment,
to, jointly and severally, indemnify the Agent, the Collateral Agent or such
Lender against such loss, and if the Dollars so purchased exceed the sum
originally due to the Agent, the Collateral Agent or such Lender in Dollars, the
Agent, the Collateral Agent or such Lender agrees to remit to Wang Canada such
excess.
SECTION 10.20. WAIVER OF IMMUNITIES. To the extent that Wang
Canada has or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, to the fullest extent permitted by law, Wang
Canada hereby irrevocably waives such immunity in respect of its obligations
under this Credit Agreement and any other Credit Document to which it is a party
and, without limiting the generality of the foregoing, agrees that the waivers
set forth in this Section shall have the fullest scope permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are intended
to be irrevocable for purposes of such Act.
SECTION 10.21. INTEREST ACT (CANADA). Wang Canada hereby
acknowledges that the rate or rates of interest applicable to the Obligations
are computed on the basis of a year of 360 days and paid for the actual number
of days elapsed. For purposes of the Interest Act (Canada), at any time and from
time to time, the yearly rate of interest provided in this Credit Agreement,
which is paid or payable by the Borrowers pursuant hereto is equivalent and may
be determined by multiplying the
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applicable rate of interest by the number of days in such calendar year and
dividing such product by 360.
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<PAGE> 126
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed by their proper and duly authorized officers as of the
date set forth above.
BORROWERS
---------
WANG LABORATORIES, INC.
By: /s/ Richard L. Buckingham
-------------------------------------
Name: Richard L. Buckingham
Title: V.P. & Treasurer
WANG FEDERAL, INC., formerly known
as HFS INC.
By: /s/ Richard L. Buckingham
-------------------------------------
Name: Richard L. Buckingham
Title: Treasurer
WANG CANADA LIMITED
By: /s/ Richard L. Buckingham
-------------------------------------
Name: Richard L. Buckingham
Title: V.P. & Treasurer
I-NET, INC.
By: /s/ Terrence M. McManus
-------------------------------------
Name: Terrence M. McManus
Title: Vice President
DATASERV COMPUTER MAINTENANCE, INC.
By: /s/ Richard L. Buckingham
-------------------------------------
Name: Richard L. Buckingham
Title: Treasurer
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<PAGE> 127
AGENT
-----
BANKERS TRUST COMPANY, as Agent
By: /s/ J. Jeffcott Ogden
-------------------------------------
Name: J. Jeffcott Ogden
Title: Managing Director
COLLATERAL AGENT
----------------
BT COMMERCIAL CORPORATION,
as Collateral Agent
By: /s/ J. Jeffcott Ogden
-------------------------------------
Name: J. Jeffcott Ogden
Title: Sr. Vice President
CO-AGENTS
---------
BAYBANK, as Co-Agent
By: /s/ John B. Desmond
-------------------------------------
Name: John B. Desmond
Title: Vice President
FLEET NATIONAL BANK, formerly known
as Fleet National Bank of
Massachusetts, as Co-Agent
By: /s/ Catherine Bruton
-------------------------------------
Name: Catherine Bruton
Title: V.P.
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<PAGE> 128
LEHMAN COMMERCIAL PAPER INC.,
as Co-Agent
By: /s/ Dennis J. Dee
-------------------------------------
Name: Dennis J. Dee
Title: Authorized Signatory
RIGGS BANK N.A., formerly known as
The Riggs National Bank of
Washington, D.C., as Co-Agent
By: /s/ Ana G. Tejblum
-------------------------------------
Name: Ana G. Tejblum
Title: V.P.
ISSUING BANK
------------
BANKERS TRUST COMPANY,
as Issuing Bank
By: /s/ J. Jeffcott Ogden
-------------------------------------
Name: J. Jeffcott Ogden
Title: Managing Director
LENDERS
-------
BANKERS TRUST COMPANY
By: /s/ J. Jeffcott Ogden
-------------------------------------
Name: J. Jeffcott Ogden
Title: Managing Director
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<PAGE> 129
BAYBANK
By: /s/ John B. Desmond
-------------------------------------
Name: John B. Desmond
Title: Vice President
FLEET NATIONAL BANK, formerly known
as Fleet National Bank of
Massachusetts
By: /s/ Catherine Bruton
-------------------------------------
Name: Catherine Bruton
Title: V.P.
LEHMAN COMMERCIAL PAPER INC.
By: /s/ Dennis J. Dee
-------------------------------------
Name: Dennis J. Dee
Title: Authorized Signatory
RIGGSBANK N.A., formerly known as
The Riggs National Bank of
Washington, D.C.
By: /s/ Ana G. Tejblum
-------------------------------------
Name: Ana G. Tejblum
Title: V.P.
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<PAGE> 130
In accordance with the terms of Section 10.11 of the Existing
Credit Agreement, each of the undersigned hereby consents to the amendment and
restatement of the Existing Credit Agreement in the form of this Credit
Agreement.
BT COMMERCIAL CORPORATION
By: /s/ J. Jeffcott Ogden
-------------------------------------
Name: J. Jeffcott Ogden
Title: Sr. Vice President
FLEET NATIONAL BANK, formerly known
as Fleet National Bank of
Massachusetts
By: /s/ Catherine Bruton
-------------------------------------
Name: Catherine Bruton
Title: V.P.
BAYBANK
By: /s/ John B. Desmond
-------------------------------------
Name: John B. Desmond
Title: Vice President
FLEETNATIONAL BANK, formerly known
as Fleet Bank of Massachusetts,
N.A.
By: /s/ Catherine Bruton
-------------------------------------
Name: Catherine Bruton
Title: V.P.
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<PAGE> 131
RIGGSBANK N.A., formerly known as
The Riggs National Bank of
Washington, D.C.
By: /s/ Ana G. Tejblum
-------------------------------------
Name: Ana G. Tejblum
Title: V.P.
HELLER FINANCIAL, INC.
By:
-------------------------------------
Name:
Title:
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<PAGE> 132
Agreed and Consented to:
BT COMMERCIAL CORPORATION, as Agent
under the existing Credit Agreement
By: /s/ J. Jeffcott Ogden
-------------------------------
Name: J. Jeffcott Ogden
Title: Sr. Vice President
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<PAGE> 133
EXECUTION COPY
AGREEMENT made this 20th day of August, 1996 by and among Wang
Laboratories, Inc. ("Wang"), Wang Federal, Inc. ("WFI"), BT Commercial
Corporation, as Agent (the "Agent"), and Heller Financial, Inc. ("Heller").
Reference is made to the Credit Agreement dated as of January 30, 1995 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; capitalized terms used herein shall have the meanings given such
terms in the Credit Agreement unless otherwise defined herein), among Wang and
WFI as Borrowers, the financial institutions from time to time parties thereto,
as Lenders, the Agent, Fleet National Bank of Massachusetts and BayBank, as
Co-Agents, and Bankers Trust Company, as Issuing Bank.
The Agent and Wang have informed Heller that they intend to amend and
restate the Credit Agreement and provide for, among other things, an increase
in the aggregate Commitments. Heller is unwilling to agree to such amendment and
restatement or to an increase in the aggregate Commitments unless its Commitment
is terminated and it is paid all amounts due it under the terms of the Credit
Agreement. Accordingly, the Agent, Wang, WFI and Heller hereby agree as follows:
1. In accordance with Section 10.11 of the Credit Agreement, Heller hereby
agrees to the amendment and restatement of the Credit Agreement.
2. Upon the closing of the amendment and restatement of the Credit
Agreement (the "Closing") and the satisfaction of the conditions set forth in
paragraph 3 below, Heller shall no longer have any rights under the Credit
Agreement and the other Credit Documents, shall be released from its obligations
under the Credit Agreement and the other Credit Documents and its Commitment
shall be terminated.
3. The terms of this Agreement shall be effective only upon the
satisfaction of each of the following conditions:
a. Receipt by the Agent by telecopy of a copy of this Agreement executed
by all of the parties hereto;
b. Receipt by the Agent of the originally executed Revolving Note held by
Heller; and
c. Receipt by Heller by wire transfer of an amount which represents
Heller's share of the Obligations outstanding as of the date of the
Closing.
4. Heller represents and warrants that it is the legal and beneficial owner
of the interest being released by it hereunder and that such interest is free
and clear of any adverse claims.
<PAGE> 134
5. This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
6. The validity, interpretation and enforcement of this Agreement shall be
governed by the laws of the state of New York without giving effect to the
conflict of laws principles (other than Section 5-1401 of the New York General
Obligations Law).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the first date above
written.
WANG LABORATORIES, INC.
By: /s/ Richard L. Buckingham
---------------------------
Name: Richard L. Buckingham
Title: V.P. & Treasurer
WANG FEDERAL, INC. (formerly
known as HFS Inc.)
By: /s/ Richard L. Buckingham
---------------------------
Name: Richard L. Buckingham
Title: V.P. & Treasurer
BT COMMERCIAL CORPORATION,
as Agent
By: /s/ J. Jeffcott Odgen
---------------------------
Name: J. Jeffcott Odgen
Title: Senior Vice President
HELLER FINANCIAL, INC.
By: /s/ Jeffrey A. Schumacher
---------------------------
Name: Jeffrey A. Schumacher
Title: Assistant Vice President
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