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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):
March 17, 1998
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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 (978) 967-5000
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ITEM 5. OTHER EVENTS.
On March 18, 1998 Wang Laboratories, Inc. ("Wang") announced that it had
completed the previously announced purchase of Olsy, the wholly-owned
information technology solutions and service subsidiary of Olivetti S.p.A. Wang
also finalized a $500 million multicurrency revolving credit agreement designed
to support the development of the combined business.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits
Item Description
- ---- -----------
1. Press release "Wang Global and Olivetti finalize Olsy transaction"
2. Stock Purchase Agreement by and among Wang Laboratories, Inc., Wang
Nederland BV, Ing. C. Olivetti & C. S.P.A., Olivetti Sistemas e
Servicios Limitada and Olivetti do Brasil S.A.
3. Credit Agreement among Wang Laboratories, Inc., Various Subsidiary
Borrowers, Various Lending Institutions, Bankers Trust Company, as
Administrative Agent and Arranger and National Westminster Bank Plc,
as Syndication Agent and Arranger and Lehman Commercial Paper Inc., as
Documentation Agent and Co-Arranger
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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: MARCH 31, 1998 By: /s/ Albert A. Notini
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Senior Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
1. Press release "Wang Global and Olivetti finalize Olsy transaction"
2. Stock Purchase Agreement by and among Wang Laboratories, Inc., Wang
Nederland BV, Ing. C. Olivetti & C. S.P.A., Olivetti Sistemas e
Servicios Limitada and Olivetti do Brasil S.A.
3. Credit Agreement among Wang Laboratories, Inc., Various Subsidiary
Borrowers, Various Lending Institutions, Bankers Trust Company, as
Administrative Agent and Arranger and National Westminster Bank Plc,
as Syndication Agent and Arranger and Lehman Commercial Paper Inc.,
as Documentation Agent and Co-Arranger
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EXHIBIT 1
WANG GLOBAL AND OLIVETTI FINALIZE OLSY TRANSACTION
BILLERICA, Mass. - (March 18, 1998) - Wang (NASDAQ: WANG), Wang Global,
announced today that it has completed the previously announced purchase of Olsy,
the wholly-owned information technology (IT) solutions and service subsidiary of
Olivetti S.p.A.
The transaction is valued at approximately 700 billion lire ($390 million).
Coincident with the acquisition, Wang Global also finalized a $500 million
multi-currency revolving credit facility, designed to support the development of
the combined company. Bankers Trust Company acted as Agent. National Westminster
Bank PLC and a unit of Lehman Brothers Inc. were Co-arrangers.
ABOUT WANG GLOBAL
Headquartered in Billerica, Massachusetts, Wang Global is a leading
international network and desktop integration and services company
providing a comprehensive range of information technology services for
today's network-centric business environments. With annualized revenues in
excess of $3.0 billion, Wang Global designs, installs, operates and
maintains global computing and telecommunications networks for some of the
world's largest multinational companies. Services include systems
architecture design, installation, warranty, help desk, maintenance,
software support, and management of enterprise networks to the desktop.
Wang Global integration services provide business
(more)
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Wang/Page 2
solutions primarily for the banking industry as well as defense and civilian
government agencies. Wang Global employs more than 21,000 professionals and has
subsidiaries and affiliates in over 40 countries. Information about Wang Global
and its services can be found on the World Wide Web at www.wang.com.
###
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Among the important factors that
could cause actual results to differ materially from those indicated by
such forward-looking statements are changes in the mix of the company's
services business, competitive pressures, general economic conditions
and the risk factors detailed in the company's periodic reports and
registration statements filed with the Securities and Exchange
Commission.
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
by and among
WANG LABORATORIES, INC.,
WANG NEDERLAND BV,
ING. C. OLIVETTI & C. S.P.A.,
OLIVETTI SISTEMAS E SERVICIOS LIMITADA
and
OLIVETTI DO BRASIL S.A.
dated as of February 28, 1998
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TABLE OF CONTENTS
ARTICLE I CERTAIN PRE-CLOSING ACTIONS.........................2
1.1 Business Items......................................2
1.2 NonBusiness Items...................................3
1.3 Securitization; Factoring...........................4
1.4 Third Party and Intercompany Funded Debt............5
1.5 Intercompany Trade Receivables......................6
1.6 La Defense..........................................6
1.7 Separation of Personnel, Assets and
Records; Termination of
Powers of Attorney and Employment Agreements........7
1.8 12/31/97 Projected Balance Sheet
Actions; Additional Capital
Contribution..... ..................................8
1.9 Olsy France........................................10
1.10 Olsy Germany.......................................10
1.11 Oliricerca.........................................11
1.12 Lexikon............................................11
1.13 Cerdanyola Factory.................................12
ARTICLE II SALES AND PURCHASES................................12
2.1 Sales and Purchases................................12
ARTICLE III THE CLOSING........................................14
3.1 Time and Place of Closing..........................14
3.2 Deliveries by the Sellers..........................14
3.3 Deliveries by Wang.................................15
3.4 Escrows............................................16
3.5 Further Assurances.................................16
3.6 Simultaneous Deliveries and Actions................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF OLIVETTI........................................17
4.1 Organization, Standing and
Qualification; Disclosure Schedule.................17
4.2 Capitalization; Minority Interests.................19
4.3 No Other Interests.................................21
4.4 Authority..........................................21
4.5 Consents; No Violation.............................23
4.6 Financial Statements; Accounts
and Accounting Controls............................24
4.7 No Undisclosed Liabilities.........................27
4.8 Absence of Certain Changes.........................27
4.9 Properties and Assets..............................28
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4.10 Title to Personal Properties and Assets............28
4.11 Real Estate........................................29
4.12 Real Estate Leases.................................32
4.13 Personal Property Leases...........................35
4.14 Contracts..........................................36
4.15 Intellectual Property..............................41
4.16 Bank Accounts......................................50
4.17 Insurance..........................................50
4.18 Taxes..............................................51
4.19 Employees; Employee Relations......................53
4.20 Employee Benefit Plans; ERISA......................56
4.21 Compliance with Law; Political
Payments...........................................61
4.22 Environmental Matters..............................63
4.23 Litigation.........................................67
4.24 Products Liability.................................68
4.25 Securities Act.....................................69
4.26 Brokers and Finders................................69
4.27 Disclosure.........................................70
ARTICLE V REPRESENTATIONS AND WARRANTIES OF WANG.............70
5.1 Organization, Standing and
Qualification......................................70
5.2 Capitalization.....................................71
5.3 Authority..........................................72
5.4 Consents; No Violation.............................73
5.5 Reports............................................74
5.6 Financial Statements...............................74
5.7 Political Payments.................................74
5.8 Litigation.........................................75
5.9 Brokers and Finders................................75
5.10 Letter Concerning Financing........................76
5.11 Net Operating Loss.................................76
5.12 Absence of Adverse Change..........................76
5.13 Disclosure.........................................76
ARTICLE VI CERTAIN COVENANTS, AGREEMENTS AND
REPRESENTATIONS AND WARRANTIES OF
THE PARTIES........................................77
6.1 Conduct of Business Pending the Closing............77
6.2 Nonsolicitation....................................84
6.3 Full Access........................................86
6.4 Supplements to Disclosure Schedules................87
6.5 Non-Governmental Consents..........................87
6.6 Governmental Consents..............................90
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6.7 Best Efforts.......................................91
6.8 Expenses...........................................91
6.9 Records; Access....................................92
6.10 Delivery of Reports By Wang........................94
6.11 Financing..........................................95
6.12 Certain Information and
Financial Statements...............................96
6.13 1997 EBITDA Purchase Price Adjustment.............100
6.14 Closing Balance Sheet Purchase Price
Adjustment........................................102
6.15 Olsy Germany Asbestos Clean-Up....................107
6.16 Guarantees........................................107
6.17 Certain Employee Benefit Matters..................109
6.18 Determination of Funding Status
of OCJ Pension Plan...............................111
6.19 Spares............................................115
6.20 Trade Receivables.................................116
6.21 Work in Progress..................................117
6.22 Statutory Recapitalization........................118
6.23 Coopers & Lybrand Consent.........................118
6.24 Cooperation in Italy..............................120
6.25 Cooperation With Respect to Certain
Business Items and NonBusiness Items..............121
6.26 Certain Intellectual Property
Covenants.........................................122
6.27 Subleases.........................................125
ARTICLE VII TAX MATTERS.......................................125
7.1 Preparation and Filing of Tax Returns;
Payment of Taxes..................................125
7.2 Tax Indemnification...............................126
7.3 Entity Classification Election....................128
7.4 Tax Claims........................................128
7.5 Refunds...........................................130
7.6 Tax Payments Resulting from Audit
Adjustment........................................131
7.7 Amnesty...........................................132
7.8 Transfer and Similar Taxes........................133
7.9 FIRPTA Compliance.................................133
7.10 Assistance and Cooperation........................133
7.11 Characterization of Indemnification
Payments..........................................134
7.12 Indemnity Payments................................134
7.13 Survival..........................................136
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ARTICLE VIII ONDITIONS TO THE OBLIGATIONS
OF SELLERS........................................136
8.1 Representations and Warranties....................136
8.2 Performance.......................................136
8.3 Officers' Certificate.............................136
8.4 Non-Governmental Consents.........................137
8.5 Waiting Periods...................................137
8.6 No Injunction.....................................137
8.7 Governmental Actions..............................137
8.8 Absence of Adverse Change.........................137
8.9 Related Agreements................................137
8.10 Opinions..........................................138
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF BUYERS..........138
9.1 Representations and Warranties....................138
9.2 Performance; Olsy Shares; Pre-Closing.............138
9.3 Officers' Certificate.............................138
9.4 Olivetti Non-Governmental Notices.................139
9.5 Waiting Periods...................................139
9.6 No Injunction.....................................139
9.7 Governmental Actions..............................139
9.8 Financing.........................................139
9.9 Absence of Adverse Change.........................139
9.10 Related Agreements................................140
9.11 Opinions..........................................140
ARTICLE X SURVIVAL AND INDEMNIFICATION......................140
10.1 Survival..........................................140
10.2 Indemnification by Olivetti.......................141
10.3 Indemnification by Wang...........................144
10.4 Procedures Relating to Indemnification............145
10.5 Consideration for Payment of
Indemnification Obligations.......................147
10.6 Recovery Principles...............................147
ARTICLE XI TERMINATION AND ABANDONMENT.......................148
11.1 Termination.......................................148
11.2 Procedure Upon Termination........................149
ARTICLE XII MISCELLANEOUS PROVISIONS..........................150
12.1 Amendment and Modification........................150
12.2 Waiver of Compliance..............................150
12.3 Notices...........................................150
12.4 Assignment........................................152
12.5 Publicity.........................................152
12.6 Governing Law.....................................153
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12.7 Counterparts......................................153
12.8 Headings..........................................153
12.9 Entire Agreement..................................153
12.10 Third Parties.....................................153
12.11 Certain Defined Terms.............................154
12.12 Dispute Resolution................................159
12.13 Miscellaneous.....................................161
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LIST OF SCHEDULES
Schedule 1 Description of the Business
Schedule 1.2 Presumed NonBusiness Items
Schedule 1.8(a)(iv) Public Administration Trade
Receivables
Schedule 1.10 Olsy Germany Shares
Schedule 3.2(d) Certain Directors
Schedule 4.2(e) Certain Formation Transactions
Schedule 4.14(a) Major Customers
Schedule 4.14(b)(xvi) Certain Countries
Schedule 6.12(a) 12/31/97 Projected Balance Sheet
Schedule 6.12(b) Information Documents
Schedule 6.13(d) 1997 EBITDA Illustration
Schedule 6.14(d) Closing Tangible Equity Value
Adjustment Amount Illustration
Schedule 6.16(b) Customer Bonds
Schedule 6.16(c) Guarantees
Schedule 6.18(b) Actuarial Assumptions
Schedule 6.20 Trade Receivables Collection Periods
Schedule 6.21 Works in Progress Collection Periods
Schedule 6.27 Sublets with Olivetti Affiliates
Schedule 8.4 Wang Non-Governmental Consents
Schedule 9.4 Olivetti Non-Governmental Notices
Schedule 10.2(a)(viii) Civil Cases Pending in Italy
Schedule 10.6(d) Certain Plans
Schedule 12.11(a) Indemnified Related Agreements
Schedule 12.11(b) Major Subsidiaries
Schedule 12.11(c) Real Estate Agreements
Schedule 12.11(d) Related Agreements
Schedule 12.13 Defined Terms
LIST OF EXHIBITS
Exhibit 1 Oliricerca Share Transfer and Shareholder Agreement
Exhibit 2 Oliricerca Development and Cooperation Agreement
Exhibit 3 Lexikon Agreement
Exhibit 4 Earn-Out Agreement
Exhibit 5 Ancillary Consideration Agreement
Exhibit 6 Stock Appreciation Right Certificate
Exhibit 7 Letter of Credit
Exhibit 8 Cash Escrow Agreement
Exhibit 9 Stock Escrow Agreement
Exhibit 10 Stockholder Agreement
Exhibit 11 Form of Customer Consents
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Exhibit 12 Transitional Authorisation and Trademark
License Agreement
Exhibit 13 Matters to be Covered in Opinion of
Counsel for Wang
Exhibit 14 Matters to be Covered in Opinion of Counsel
for Olivetti
Exhibit 15 Noncompetition and Nonsolicitation Agreement
Exhibit 16 Indemnification Agreement (MIS)
Exhibit 17 Oliman Agreement
Exhibit 18 Transitional Services Agreement (Olivetti to Olsy)
Exhibit 19 Transitional Services Agreement (Olsy to Olivetti
Exhibit 20 Framework Preferred Services Provider Agreement
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 28, 1998 (this
"Agreement"), by and among Wang Laboratories, Inc., a Delaware corporation
("Wang"), Wang Nederland BV, a Netherlands corporation ("Wang Nederland" and
together with Wang, the "Buyers"), Ing. C. Olivetti & C. S.P.A., an Italian
corporation ("Olivetti"), Olivetti Sistemas e Servicios Limitada, a Brazilian
corporation ("Olivetti Sistemas"), and Olivetti do Brasil S.A., a Brazilian
corporation ("Olivetti Brazil" and together with Olivetti and Olivetti Sistemas,
the "Sellers").
Olivetti is engaged in, among other things, the business of providing
information technology solutions and services to customers worldwide more fully
described on Schedule 1 hereto (such business being hereinafter referred to as
the "Business").
Through a series of transactions beginning at the end of 1995 and
concluding on the date hereof described in general terms in the notes to the
9/30/97 Italian GAAP Financial Statements (as defined in Section 4.6(b)),
Olivetti has transferred its entire right, title and interest in the Business to
Olivetti Solutions S.P.A., an Italian corporation ("Olsy"), Olivetti Corporation
of Japan, a Japanese corporation ("Olsy Japan"), or Olsy do Brasil Ltda., a
Brazilian corporation ("Olsy Brazil") (such series of transactions being
hereinafter referred to as the "Formation").
This Agreement sets forth the terms and conditions upon which Olivetti
will sell to Wang, and Wang will purchase from Olivetti, the Business through
the sale and purchase of the outstanding shares of Olsy and Olsy Japan, owned by
Olivetti and of Olsy Brazil, owned by Olivetti Sistemas and Olivetti Brazil, and
certain related transactions.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree as follows:
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ARTICLE I
CERTAIN PRE-CLOSING ACTIONS
---------------------------
1.1 BUSINESS ITEMS. Prior to the Closing (as defined in Section 3.1)
(except as otherwise provided in this Agreement or in any Related Agreement (as
defined in Section 12.11)), Olivetti (at its expense and without any
consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary (as
defined in Section 12.11) or any Olsy Japan Subsidiary (as defined in Section
12.11) therefor other than as set forth in Section 2.1(b)) shall (with not less
than five Business Days prior notice to, and the consent of, Wang) sell,
transfer, convey, assign and deliver to Olsy, Olsy Japan, Olsy Brazil or a
Wholly-Owned Subsidiary (as defined in Section 12.11) (a) any employment
relationship, benefit plan or arrangement, asset, property, Contract (as defined
in Section 12.11), Intellectual Property (as defined in Section 4.15(a)(ii)),
right, privilege, franchise, operation or business (or any interest in or
license for or relating to any of the foregoing) owned or held by Olivetti or
any Olivetti Affiliate (as defined in Section 12.11) which does or did relate
exclusively to, or arises or arose exclusively out of, the Business, or is or
was used in providing products, services or support predominately (measured by
usage, revenue or cost) to customers of the Business or pursuant to or under
which products, services or support are or were provided predominately (measured
by usage, revenue or cost) to customers of the Business (such employment
relationship, benefit plan or arrangement, assets, properties, Contracts,
rights, privileges, franchises, operations or businesses (whether or not so
transferred) being hereinafter referred to as a "Business Item" and collectively
as the "Business Items") and (b) any liability or obligation which does or did
relate exclusively to, or arises or arose predominately out of any Business Item
so sold, transferred, conveyed, assigned and delivered. Notwithstanding anything
herein to the contrary, if Olivetti has unintentionally failed to sell,
transfer, convey, assign or deliver a Business Item prior to the Closing in
accordance with this Section 1.1 it shall not be in breach of this Section 1.1
if (a) (i) such Business Item is de minimis or (ii) the failure to so sell,
transfer, convey, assign or deliver has not had
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an adverse financial or economic effect on the business, assets, properties,
liabilities, results of operations or financial condition of Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary and (b) it sells, transfers, conveys,
assigns or delivers such Business Item within 45 days of the earlier of (i) the
date it becomes aware of such failure or (ii) the date of notice from Wang of
such failure. Wang acknowledges that (except as otherwise provided in this
Agreement or in any Related Agreement) it is not, pursuant to this Agreement,
acquiring (a) Olivetti's interest in OIS Italia S.p.A., Olivetti Information
Services S.p.A., Olivetti Sanita S.p.A. or Lottomatica S.c.p.A. (or any
employment relationship, benefit plan or arrangement, asset, property, right,
privilege, franchise, operation or business owned or held by any of the
foregoing on or before January 1, 1997 or acquired by any of the foregoing since
such date other than by way of sale, transfer, conveyance, assignment or
delivery from Olsy, Olsy Japan, Olsy Brazil or any Subsidiary) or (b) the
general purpose printers and specialized printers manufactured by Olivetti
Lexikon S.p.A. ("Lexikon") or any Affiliate (as defined in Section 12.11) of
Lexikon and any intellectual property relating solely and specifically thereto;
and Wang shall not assert that these are Business Items.
1.2 NONBUSINESS ITEMS. Prior to the Closing (except as otherwise
provided in this Agreement or in any Related Agreement), Olivetti (at its
expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set
forth in Section 2.1(b)) shall (with not less than five Business Days prior
notice to, and the consent of, Wang) cause Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary (as defined in Section 12.11) to transfer to it (in
exchange for an amount in cash from Olivetti, in immediately available funds,
equal to the net book value thereof, if any) any employment relationship,
benefit plan or arrangement, asset, property, Contract, right, privilege,
franchise, operation or business (or any interest in or license for or relating
to any of the foregoing) owned or held by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, or any liability or obligation to which Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary is subject, in each case, which does
not or did not relate exclusively to, or does not or did not arise exclusively
out of, the
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Business, or is not or was not used in providing products, services or support
predominately (measured by usage, revenue or cost) to customers of the Business
or pursuant to or under which products, services or support are not or were not
provided predominately (measured by usage, revenue or cost) to customers of the
Business (such employment relationships, benefit plans or arrangements, assets,
properties, Contracts, rights, privileges, franchises, operations, businesses,
liabilities or obligations (whether or not so transferred) being hereinafter
referred to individually as a "NonBusiness Item" and collectively as the
"NonBusiness Items"). Notwithstanding anything herein to the contrary, if
Olivetti has unintentionally failed to cause Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary to transfer a NonBusiness Item to it prior to the
Closing in accordance with this Section 1.2 it shall not be in breach of this
Section 1.2 if (a) the failure to cause such transfer has not had an adverse
financial or economical effect on the business, assets, properties, liabilities,
results of operations or financial condition of Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary and (b) it causes the transfer of such NonBusiness
Item within 45 days of the earlier of (i) the date it becomes aware of such
failure or (ii) the date of notice from Wang of such failure. The entities
listed on Schedule 1.2 hereto shall be presumed to be NonBusiness Items (subject
to this Section 1.2 prior to the Closing and Section 3.5(a) after the Closing)
unless Wang notifies Olivetti otherwise within 90 days after the date hereof.
1.3 SECURITIZATION; FACTORING. (a) Prior to the Closing, Olivetti (at
Olsy's expense and without any consideration from the Buyers, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in Section 2.1(b)) shall cause (i) all plans, programs or arrangements
under which any trade receivables of any of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary were securitized to be terminated, (ii) all amounts due to
or from Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary thereunder to
be settled, (iii) all ongoing reporting obligations thereunder of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary to be terminated and (iv) all
Liens (as defined in Section 12.11) arising thereunder to be released. At the
Closing, Olivetti shall deliver to Wang true, complete and correct copies of
letters from each
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Person (as defined in Section 12.11) with whom any trade receivable of Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary was securitized confirming
the foregoing.
(b) Prior to the Closing, Olivetti (at Olsy's expense and
without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in
Section 2.1(b)) shall cause (i) all plans, programs or arrangements under which
any trade receivables of any of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary were factored with recourse to be terminated, (ii) all trade
receivables factored thereunder to be repurchased and (iii) all Liens arising
thereunder to be released.
1.4 THIRD PARTY AND INTERCOMPANY FUNDED DEBT. (a) Prior to the
Closing, Olivetti (at its expense and without any consideration from the Buyers,
Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary
therefor other than as set forth in Section 2.1(b)) shall cause (i) all amounts
owed under any credit facility, loan agreement or similar arrangement by Olsy,
Olivetti Australia Pty, Ltd., Olsy Canada Ltd. or any Major Subsidiary (as
defined in Section 12.11) (other than Olsy Japan) to be paid or otherwise
extinguished, (ii) all such credit facilities, loan agreements or similar
agreements to be terminated and (iii) all Liens arising thereunder to be
released, such that as of the Closing, none of Olsy, Olivetti Australia Pty,
Ltd., Olsy Canada Ltd. or any Major Subsidiary (other than Olsy Japan) will owe
any amounts to third parties under any such credit facility, loan agreement or
similar agreement (provided that Olivetti and Wang may mutually agree in writing
to defer any of the foregoing with respect to a particular credit facility, loan
agreement or similar arrangement until after the Closing if such deferral would
avoid substantial termination expenses associated with consummation of any of
the foregoing prior to the Closing).
(b) Prior to the Closing, Olivetti (at its expense and without
any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary
or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b))
shall cause all amounts owed by Olivetti
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or any Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary, on the other hand, or VICE VERSA, arising out of
loans from one to the other to be paid or otherwise extinguished, such that as
of the Closing there will be a single amount owing from Olivetti to Olsy, which
Olivetti shall pay in cash, in immediately available funds, immediately prior to
the Closing.
1.5 INTERCOMPANY TRADE RECEIVABLES. Prior to the Closing, Olivetti (at
its expense and without any consideration from the Buyers, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in Section 2.1(b)) shall cause all amounts owed by Olivetti or any
Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, on the other hand, or VICE VERSA, arising out of the sale
of products, services or support by one to the other to be, subject to payment
terms stated in OLGA (as defined in Section 12.11) or other specific stated
terms, paid, such that as of the Closing none of such amounts shall be in
dispute.
1.6 LA DEFENSE. Not later than the later of the Closing or June 30,
1998, Olivetti (at its expense and without any consideration from the Buyers,
Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary
therefor other than as set forth in Section 2.1(b)) shall cause Olsy to transfer
to a newly formed French Olivetti Affiliate the sale-leaseback agreement, dated
December 23, 1987, as amended, among Societe Lyonnaise Immobiliere pour le
Commerce et l'Industrie ("SLICOMI"), Compagnie Financiere pour la Location
d'Immeubles Industriels et Commerciaux ("LOCINDUS"), "NATIOCREDIBAIL", "Societe
Immobiliere pour le Commerce et l'Industrie", "Societe Generale pour le
Developpement des Operations de Credit Bail Immobilier SOGEBAIL" (collectively,
the "Landlord") and Olivetti Logabax S.A. renamed "Olsy France S.A." (the "La
Defense Agreement").
The assignment shall be evidenced by a deed of assignment in form and
substance reasonably satisfactory to Wang among the Landlord, Olsy France S.A.
("Olsy France") and the French Olivetti Affiliate (the "La Defense Deed of
Assignment") duly executed before French notaries which La Defense Deed of
Assignment shall record (i) the Landlord's consent to the assignment of the La
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Defense Agreement to the French Olivetti Affiliate, (ii) a full and
unconditional release by the Landlord of Olsy France's obligations as joint
guarantor under Article 204.5 of the La Defense Agreement (or alternatively, the
joint undertaking of the French Olivetti Affiliate and of Olivetti to indemnify
Olsy France should the Landlord not waive its right of recourse against Olsy
France under Article 204.5 of the La Defense Agreement) and (iii) an
acknowledgement that the terms and conditions stipulated in the La Defense
Agreement shall remain applicable.
The La Defense Deed of Assignment shall be delivered by Olivetti to
Wang not later than the later of the Closing or June 30, 1998. Olivetti shall
reimburse Wang for all costs and expenses associated with the La Defense
Agreement (in excess of its obligations under the sublease for a portion of the
La Defense premises referred to on Schedule 12.11(c) hereto) incurred by Olsy,
Olsy France or any Affiliate of Olsy between the Closing and the date the La
Defense Deed of Assignment is delivered. If Olivetti does not deliver the La
Defense Deed of Assignment by the later of the Closing or June 30, 1998,
Olivetti shall pay Wang 5,000,000,000 Italian lira and remain obligated under
this Section 1.6 to deliver the La Defense Deed of Assignment as soon as
practicable thereafter.
Olivetti shall be responsible for the payment of all taxes, if any,
which may become due by reason of the assignment to the French Olivetti
Affiliate of the La Defense Agreement and shall indemnify and hold Olsy France
harmless with respect to any negative tax impact on Olsy France of such
assignment.
1.7 SEPARATION OF PERSONNEL, ASSETS AND RECORDS; TERMINATION OF POWERS
OF ATTORNEY AND EMPLOYMENT AGREEMENTS. (a) Prior to the Closing or as soon as
practicable thereafter, Olivetti (at its expense and without any consideration
from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan
Subsidiary therefor other than as set forth in Section 2.1(b)) shall (except as
otherwise provided in this Agreement or any Related Agreement) move the
personnel, assets and records of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary into contiguous and secure space separated from the personnel, assets
and records of
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Olivetti or any Olivetti Affiliate as is reasonable for the personnel, assets or
records concerned.
(b) Prior to the Closing (or in the case of clause (ii) not
later than 30 days after the Closing), Olivetti (at its expense and without any
consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or
any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b))
shall cause (i) all powers of attorney granted by Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary to any director, officer or employee of Olivetti or
any Olivetti Affiliate to be terminated and (ii) cause the employment agreements
with the four executives previously identified to Olivetti by Wang to be
terminated.
1.8 12/31/97 PROJECTED BALANCE SHEET ACTIONS; ADDITIONAL CAPITAL
CONTRIBUTION. (a) Prior to the Closing and effective not later than as of
December 31, 1997 (or in the case of clauses (ii) and (iii), effective as at
January 1, 1998 or in the case of clauses (v) and (vii), effective as at
February 15, 1998), Olivetti (at its expense and without any consideration from
the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan
Subsidiary therefor other than as set forth in this Section 1.8(a) or Section
2.1(b)) has caused or shall cause each of the following actions to be taken:
(i) the sale, transfer, conveyance, assignment and
delivery by Olsy Espana S.A. of all the assets or liabilities of, or
associated with, the "Fondo de Indemnizaciones de pago diferido" to an
Olivetti Affiliate and the purchase by such Olivetti Affiliate of all
such assets for 71,400,000,000 Italian lira and the assumption by such
Olivetti Affiliate of all costs, expenses, liabilities and obligations
relating to the "Fondo de Indemnizaciones de pago diferido" and the
provision of retirement income benefits and death benefits to former
employees of Olsy Espana S.A., including, without limitation, all
internal and external administrative costs (including, but not limited
to, legal fees, expenses of paying benefits, responding to participant
inquiries and record keeping) and funding obligations relating thereto;
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(ii) the increase of the restructuring fund for
empty spaces on the books and records of Olsy and the Controlled
Subsidiaries to an aggregate of 30,000,000,000 Italian lira;
(iii) the increase of the accrual for unpaid
holidays on the books and records of Olsy and the Controlled
Subsidiaries to an aggregate of whatever amount as is necessary to
reflect the status thereof as of December 31, 1997;
(iv) the sale, transfer, conveyance, assignment and
delivery by Olsy to Olivetti of the trade receivables set forth on
Schedule 1.8(a)(iv) hereto for 102,300,000,000 Italian lira in cash, in
immediately available funds;
(v) the payment by Olivetti to Olsy of
25,000,000,000 Italian lira in cash, in immediately available funds,
which payment shall be converted prior to the Closing into a
contribution to capital with the resulting share capital increase
resolved at the extraordinary shareholders meeting of Olsy held on
January 30, 1998;
(vi) the increase of the headcount restructuring
fund on the books and records of Olsy and the Controlled Subsidiaries
in Italy to 50,000,000,000 Italian lira; and
(vii) the increase of the restructuring fund for
the clean-up of the building located in Frankfurt-am-Main at Lyner
Strasse, 34 on the books and records of Olsy by an amount of D.M.
12,936,000 (converted in Italian lira on the basis of the exchange rate
of the day on which the increase is effective) additional to the fund
of D.M. 12,780,000 recorded on the books and records of Olivetti
G.m.b.H., a German company ("Olsy Germany").
(b) In addition, not later than February 15, 1998, Olivetti (at
its expense and without any consideration from the Buyers, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in this Section 1.8(b) or Section 2.1(b)) shall pay 15,000,000,000
Italian lira in cash, in immediately available funds to Olsy, which
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payment shall be converted prior to the Closing into a contribution to capital
with the resulting share capital increase resolved at the extraordinary
shareholders meeting of Olsy held on January 30, 1998.
1.9 OLSY FRANCE. At a pre-closing to be held immediately prior to the
Closing at places to be mutually agreed by Wang and Olivetti (the
"Pre-Closing"), Olivetti (without any consideration from the Buyers, Olsy Japan,
Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as
set forth in this Section 1.9 or Section 2.1(b)) shall cause Olsy International
NV, a Dutch company which shall remain a Wholly-Owned Subsidiary after the
Closing ("Olsy International"), to sell, transfer, convey, assign and deliver to
Wang (or any subsidiary assignee of Wang permitted under Section 12.4) 3,000,000
shares, par value 10 French francs per share (the "Olsy France Shares"), of Olsy
France, representing all of the outstanding shares of capital stock of Olsy
France, free and clear of any Lien. In consideration for such sale, transfer,
conveyance, assignment and delivery, Wang shall pay (or cause to be paid) the
consideration to be agreed not later than two Business Days prior to the
Pre-Closing (the "Olsy France Consideration") to Olsy International. At the
Pre-Closing, Olivetti will deliver (or cause to be delivered) (i) duly executed
ORDRES DE MOUVEMENT and (ii) the resignations of those individuals who are
members of the Board of Directors of Olsy France and those officers of Olsy
France specified by Wang not later than five Business Days prior to the
Pre-Closing, and Wang will deliver (or cause to be delivered) the Olsy France
Consideration by wire transfer of immediately available funds to an account
designated by Olsy International at least three Business Days prior to the
Pre-Closing.
1.10 OLSY GERMANY. At the Pre-Closing, Olivetti (without any
consideration from the Buyers, Olsy Japan, Olsy Brazil, any Subsidiary or any
Olsy Japan Subsidiary therefor other than as set forth in this Section 1.10 or
Section 2.1(b)) shall cause Olsy International to sell, transfer, convey, assign
and deliver to Wang (or any subsidiary assignee of Wang permitted under Section
12.4) the eleven shares set forth in Schedule 1.10 hereto with total nominal
value of DM 50,100,000 (the "Olsy Germany Shares"), of Olsy Germany,
representing all of the outstanding shares of capital stock of
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Olsy Germany, free and clear of any Lien. In consideration for such sale,
transfer, conveyance, assignment and delivery, Wang shall pay (or cause to be
paid) the consideration to be agreed not later than two Business Days prior to
the Pre-Closing (the "Olsy Germany Consideration") to Olsy International. At the
Pre-Closing, Olivetti will deliver (or cause to be delivered) a duly executed
and notarized deed of sale and transfer, and Wang will deliver (or cause to be
delivered) the Olsy Germany Consideration by wire transfer of immediately
available funds to an account designated by Olsy International at least three
Business Days prior to the Pre-Closing. At the Closing, Olivetti shall cause
appropriate notification to be made pursuant to ' 16(1) of the Gesetz betreffend
die Gesellschaften mit beschrankter Haftung.
1.11 OLIRICERCA. Concurrently with the execution hereof, Olivetti
(without any consideration from the Buyers, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary therefor, except as set forth in Section
2.1(b)) shall, and shall cause Olsy to, execute the Share Transfer and
Shareholder Agreement substantially in the form of Exhibit 1 hereto (the
"Oliricerca Share Transfer and Shareholder Agreement"). Olivetti shall not, and
shall cause Olsy not to, consent to any modification, amendment, termination or
waiver of any provision of the Share Transfer and Shareholder Agreement prior to
the Closing. At the Pre-Closing, Olivetti shall, and shall cause Olsy to,
consummate the transactions described in the Share Transfer and Shareholder
Agreement, including causing Oliricerca to execute a Development and Cooperation
Agreement substantially in the form of Exhibit 2 hereto (the "Oliricerca
Development and Cooperation Agreement").
1.12 LEXIKON. Prior to the Pre-Closing, Olivetti shall have caused
Lexikon and Olsy to execute a Supplemental Agreement substantially in the form
of Exhibit 3 hereto (the "Lexikon Agreement"), amending the Framework OEM
Agreement between Lexikon and Olivetti S.p.A. Olivetti shall not, and shall
cause Lexikon not to, consent to any modification, amendment, termination or
waiver of any provision of such Lexikon Agreement or Framework OEM Agreement
prior to the Closing.
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1.13 CERDANYOLA FACTORY. Prior to the Closing, Olivetti (at its
expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set
forth in Section 2.1(b)) shall cause (a) Olivetti Espana S.A. to sell, transfer,
convey, assign and deliver the real property known as Boters 5 Cerdanyola,
Property Register No. 5 of Barcelona, volume No. 648, book No. 500 sheet No. 62,
estate No. 22.737 and all buildings and improvements thereon to an Olivetti
Affiliate for an amount in cash, in immediately available funds, equal to the
OLGA net book value thereof as of December 31, 1997 and (b) such Olivetti
Affiliate to purchase such real property and all buildings and improvements
thereon and assume all liabilities and obligations associated therewith.
ARTICLE II
SALES AND PURCHASES
-------------------
2.1 SALES AND PURCHASES. (a) Subject to the terms and conditions of
this Agreement, at the Closing, and in consideration of the payments to be made
hereunder:
(i) Olivetti shall sell, transfer, convey, assign
and deliver to Wang Nederland (or any subsidiary assignee of Wang
permitted under Section 12.4) all of the ordinary shares, par value
1,000 Italian lira per share, of Olsy outstanding as of the Closing
Date (as defined in Section 3.1) (which shall include those to be
issued pursuant to Sections 1.8(a)(v) and 1.8(b) and in satisfaction of
the condition in Section 9.2(b)), representing all of the outstanding
shares of capital stock of Olsy (the "Olsy Shares"), free and clear of
any Lien;
(ii) Olivetti shall sell, transfer, convey, assign
and deliver to Wang (or any non-Japanese subsidiary assignee of Wang
permitted under Section 12.4) 87,000 shares, par value 50,000 yen per
share, of Olsy Japan, representing 80% of the outstanding shares of
capital stock of Olsy Japan (the "Olsy Japan Shares"), free and clear
of any Lien (other than the restrictions in the by-laws of
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Olsy Japan or in the Memorandum of Understanding and Shareholders
Agreement, both dated as of May 13, 1985, by and between Olivetti and
Toshiba Corporation of Tokyo, Japan); and
(iii) Olivetti Sistemas and Olivetti Brazil shall
sell, transfer, convey, assign and deliver to Wang (or any subsidiary
assignee of Wang permitted under Section 12.4) the quotas of Real
1,126,318 and 5,229,566 respectively, held in the capital of Olsy
Brazil, representing all of the outstanding shares of capital stock of
Olsy Brazil (the "Olsy Brazil Shares"), free and clear of any Lien.
(b) Subject to the terms and conditions of this Agreement
(including, without limitations, the adjustment of the Purchase Price (as
defined in Section 2.1(c)) pursuant to Sections 6.13 and 6.14), at the Closing,
in consideration of the sale, transfer, conveyance, assignment and delivery by
Olivetti pursuant to Section 2.1(a), Wang shall pay, deliver or transfer (or
cause Wang Nederland or any subsidiary assignee of Wang permitted under Section
12.4 to pay) to Olivetti:
(i) 123,400,000,000 Italian lira in cash (the "Cash
Portion of the Purchase Price"), 30,000,000,000 Italian lira of which
shall be deposited in escrow in accordance with Section 3.4(a);
(ii) 7,250,000 shares of common stock, par value
$0.01 per share ("Wang Common Stock"), of Wang (the "Wang Shares"), all
of which shall be deposited in escrow in accordance with Section
3.4(b);
(iii) the right to the earn-outs (the "Earn-Outs")
set forth in an Earn-Out Agreement by and between Wang and Olivetti
substantially in the form of Exhibit 4 hereto;
(iv) the right to the ancillary consideration (the
"Ancillary Consideration") set forth in the Ancillary Consideration
Agreement by and between Wang and Olivetti substantially in the form of
Exhibit 5 hereto, all of
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which shall be deposited in escrow in accordance with Section 3.4(b);
and
(v) the Stock Appreciation Rights (the "Rights")
set forth in a Stock Appreciation Right Certificate substantially in
the form of Exhibit 6 hereto.
(c) The Cash Portion of the Purchase Price, the Wang Shares, the
Earn-Outs, the Ancillary Consideration and the Rights are hereinafter
collectively referred to as the "Purchase Price." The Purchase Price is subject
to adjustment pursuant to Sections 6.13 and 6.14.
ARTICLE III
THE CLOSING
-----------
3.1 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street, Boston,
Massachusetts at 10:00 a.m. (local time) on the later of (a) March 16, 1998 or
(b) the third Business Day following the date on which all of the conditions in
Articles VIII and IX to each party's respective obligations to consummate the
transactions contemplated by this Agreement shall have been satisfied or waived
(the "Condition Satisfaction Date"), provided that if the clause (b) applies and
the Condition Satisfaction Date occurs after the fifteenth day of any month, the
Closing shall occur on the later of (i) the last Business Day of the month in
which the Condition Satisfaction Date occurs or (ii) the third Business Day
following the Condition Satisfaction Date, or (c) at such other time and place
as the parties may agree in writing. The date on which the Closing occurs is
referred to herein as the "Closing Date."
3.2 DELIVERIES BY THE SELLERS. At the Closing, the Sellers will
deliver (or cause to be delivered) the following to Wang:
(a) the certificate or certificates representing the Olsy Shares
and the Olsy Japan Shares,
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duly executed, and a power of attorney authorizing the named attorney-in-fact to
record the transfer of the Olsy Brazil Shares in accordance with applicable
Brazilian law, duly executed;
(b) a Letter of Credit (the "Letter of Credit") issued in
accordance with ICC publication 500 substantially in the form of Exhibit 7
hereto issued by Banca Commerciale Italiana S.p.A. (or any other primary Italian
or U.S. bank reasonably acceptable to Wang) in the face amount of 50,000,000,000
Italian lira;
(c) each Related Agreement to which any Seller or any Affiliate
of Olivetti is a party, duly executed;
(d) the resignations of all directors of Olsy and each
Controlled Subsidiary listed on Schedule 3.2(d) hereto, duly executed, and
resolutions electing successors thereto designated by Wang; and
(e) all other previously undelivered documents required to be
delivered by Olivetti or any Affiliate of Olivetti to Wang pursuant to this
Agreement at or prior to the Closing (including, without limitation, the
officers' certificate and the opinions of counsel required to be delivered by
Olivetti pursuant to Sections 9.3 and 9.11, respectively), duly executed where
such execution is called for.
3.3 DELIVERIES BY WANG. At the Closing, Wang will deliver (or cause
Wang Nederland or any assignee of Wang permitted under Section 12.4 to deliver)
the following to Sellers:
(a) the Cash Portion of the Purchase Price, by wire transfer of
immediately available funds, 93,400,000,000 Italian lira of which shall be
delivered to one or more accounts as shall be designated by Olivetti at least
three Business Days prior to the Closing, and 30,000,000,000 Italian lira of
which shall be deposited in escrow in accordance with Section 3.4(a);
(b) a certificate representing the Wang Shares issued in the
name of Olivetti or its designee, duly executed by Wang (the "Wang Shares
Certificate"),
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which shall be deposited in escrow in accordance with Section 3.4(b);
(c) each Related Agreement to which it is a party, duly
executed; and
(d) all other previously undelivered documents required to be
delivered by Wang or any of its Affiliates to the Sellers pursuant to this
Agreement at or prior to the Closing (including, without limitation, the
officers' certificate and opinion of counsel required to be delivered by Wang
pursuant to Sections 8.3 and 8.10, respectively), duly executed where such
execution is called for.
3.4 ESCROWS. At the Closing, Wang and Olivetti shall deposit (a)
30,000,000,000 Italian lira of the Cash Portion of the Purchase Price in escrow
pursuant to a Cash Escrow Agreement, substantially in the form of Exhibit 8
hereto (the "Cash Escrow Agreement") and (b) the Wang Shares Certificate and the
Ancillary Consideration in escrow pursuant to a Stock Escrow Agreement,
substantially in the form of Exhibit 9 hereto (the "Stock Escrow Agreement").
3.5 FURTHER ASSURANCES. (a) After the Closing, Olivetti shall from
time to time, at the request of Wang and, except as otherwise provided in the
proviso to this Section 3.5(a), without further cost or expense to Wang, execute
and deliver such other instruments of sale, transfer, conveyance and assignment
and take such other actions as Wang may reasonably request in order to more
effectively consummate the transactions contemplated hereby (including, without
limitation, the transactions contemplated by Article I) without regard to
whether such transactions were to be consummated before or after the Closing and
to vest in Wang or Wang Nederland (or any subsidiary assignee of Wang permitted
under Section 12.4) good, valid and marketable title to the Olsy Shares, the
Olsy Japan Shares, the Olsy Brazil Shares, the Olsy France Shares, the Olsy
Germany Shares, the Business Items and the assets, properties, Contracts,
Intellectual Property, rights, privileges, franchises, operations and business
of the Business, free and clear of any Lien (other than those contemplated by
this Agreement); provided, however, that Wang shall reimburse Olivetti for any
out-of-pocket costs or expenses incurred by Olivetti
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with respect to any action taken pursuant to this Section 3.5(a) with respect to
the Olsy France Shares or the Olsy Germany Shares; and provided further,
however, that Olivetti's obligations under this Section 3.5(a) with respect to
Sections 1.1, 1.2 and 1.7 shall expire on the second year anniversary of the
Closing Date, the eighteen month anniversary of the Closing Date and the second
year anniversary of the Closing Date, respectively; provided further, however,
that Olivetti's obligations under this Section 3.5(a) with respect to any
Business Item or NonBusiness Item the subject of the second sentences of Section
1.1 and 1.2, respectively, shall be satisfied by Olivetti's sale, transfer,
conveyance, assignment or delivery of such Business Item or NonBusiness Item in
accordance with such sentences.
(b) After the Closing, Wang shall from time to time, at the
request of Olivetti and without further cost or expense to Olivetti, execute and
deliver such other instruments of sale, transfer, conveyance and assignment and
take such other actions as Olivetti may reasonably request in order to more
effectively consummate the transactions contemplated hereby.
3.6 SIMULTANEOUS DELIVERIES AND ACTIONS. All deliveries shall be made
or other actions to be taken at the Closing shall be deemed to occur
simultaneously, and no such delivery or action shall be deemed complete until
all such deliveries and actions have been completed or the relevant parties had
agreed to waive such delivery or action. If the Closing does not occur, any
delivery made or other action taken at the Pre-Closing shall be deemed not to
have occurred and be without force or effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OLIVETTI
------------------------------------------
Olivetti hereby represents and warrants to (and as provided in
Sections 4.5(a), 4.16, 4.23(a) and 4.25 covenants with) Wang as follows:
4.1 ORGANIZATION, STANDING AND QUALIFICATION; DISCLOSURE SCHEDULE. (a)
Each of the Sellers, Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries:
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(i) is a corporation duly organized or incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation; (ii) has full
corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets; and (iii) is
duly qualified or licensed to do business as a foreign corporation in good
standing in each jurisdiction in which the conduct of its business or the
ownership, leasing or operation of its properties or assets or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not, in the aggregate, have or
result in a Material Adverse Effect (as defined in Section 12.11).
(b) Olivetti has previously delivered to Wang a true, complete
and correct copy of a Disclosure Schedule, dated as of the date hereof (the
"Olivetti Disclosure Schedule"), which sets forth on individual schedules
corresponding to the sections of this Article IV or other Articles of this
Agreement to which they relate, without any general cross reference to other
schedules, the various disclosures required to be made pursuant to this Article
IV or other Articles of this Agreement and which, with respect to any disclosure
required to be made pursuant to this Article IV or other Articles of this
Agreement based on amounts in U.S. dollars stated therein, is based on the
conversion rates for U.S. dollars and the local currency in effect on December
31, 1997. Any paraphrasing of the text of this Article IV or other Articles of
this Agreement in the Olivetti Disclosure Schedule is for reference purposes
only and does not affect the disclosures required to be made pursuant to this
Article IV or other Articles of this Agreement.
(c) Schedule 4.1 of the Olivetti Disclosure Schedule sets forth
a complete and correct list of all jurisdictions in which each of Olivetti (with
respect to the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries is qualified to do business as a foreign corporation. The copies of
the certificates or articles of incorporation, memoranda or articles of
association or by-laws (or other organizational documents) of each of Olivetti,
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries heretofore
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delivered to Wang by Olivetti are complete and correct copies of such
instruments, as currently in effect.
4.2 CAPITALIZATION; MINORITY INTERESTS. (a) Schedule 4.2(a) of
the Olivetti Disclosure Schedule sets forth (i) the jurisdiction of
incorporation and capitalization of each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries, (ii) the type (including currency denomination),
number and percentage of the outstanding shares of capital stock of or other
ownership interest in (aa) Olsy owned by Olivetti, (bb) Olsy Japan owned by
Olivetti, (cc) Olsy Brazil owned by Olivetti Sistemas or Olivetti Brazil or (dd)
each Controlled Subsidiary owned by Olsy or a Controlled Subsidiary and, in each
case, the holder of record thereof, (iii) the holder of record of any
outstanding shares of capital stock of or other ownership interest in (aa) Olsy
Japan not owned by Olivetti or (bb) any Controlled Subsidiary not owned by Olsy
or a Controlled Subsidiary and, in each case, the type (including currency
denomination), number and percentage of the outstanding shares of capital stock
or other ownership interest so held of record and (iv) the holder of record of
any outstanding shares of capital stock of or other ownership interest in any
Noncontrolled Subsidiary (as defined in Section 12.11) or any Olsy Japan
Subsidiary held of record by Olsy, Olsy Japan or a Controlled Subsidiary and, in
each case, the type (including currency denomination), number of the shares of
capital stock or other ownership interest so held of record and, to the Best
Knowledge of Olivetti (as defined in Section 12.11), the jurisdiction of
incorporation of any such Noncontrolled Subsidiary or Olsy Japan Subsidiary and
the holder of record of any outstanding shares of capital stock of or other
ownership interest in any such Noncontrolled Subsidiary or Olsy Japan Subsidiary
not held of record by Olsy, Olsy Japan or a Controlled Subsidiary. Except as set
forth on Schedule 4.2(a) of the Olivetti Disclosure Schedule, neither Olivetti
nor any Olivetti Affiliate owns, directly or indirectly, any capital stock of or
other ownership interest in Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any
Olsy Japan Subsidiary.
(b) Except as set forth in Schedule 4.2(b) of the Olivetti
Disclosure Schedule, there is (i) no outstanding right of subscription, option,
warrant, call or other right (including any right of conversion or
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exchange under any outstanding security or other instrument but excluding any
rights of preemption required by laws of their respective jurisdictions of
incorporation) to acquire any capital stock of or other ownership interest in
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (ii) no
outstanding put right or other right to sell any capital stock of or other
ownership interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Except as set
forth on Schedule 4.2(b) of the Olivetti Disclosure Schedule, there is no
agreement, commitment, understanding or arrangement relating to the voting,
issuance, sale, operation, delivery, transfer or redemption of any of the
capital stock, asset or business of or ownership interest in Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary. Upon consummation of the transactions
contemplated hereby, Wang will acquire good, valid and marketable title to all
of the issued and outstanding shares of capital stock of or other ownership
interest in (i) Olsy owned by Olivetti, (ii) Olsy Japan owned by Olivetti, (iii)
Olsy Brazil owned by Olivetti Sistemas or Olivetti Brazil, (iv) each Controlled
Subsidiary owned by Olsy or a Controlled Subsidiary, (v) each Noncontrolled
Subsidiary owned directly by Olsy or a Controlled Subsidiary or (vi) each Olsy
Japan Subsidiary owned directly by Olsy Japan, free and clear of any Lien (other
than restrictions set forth on Schedule 4.2(b) of the Olivetti Disclosure
Schedule).
(c) Except as set forth on Schedule 4.2(c) of the Olivetti
Disclosure Schedule, all of the outstanding shares of capital stock of or other
ownership interest in each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries are duly authorized, validly issued, fully paid, nonassessable and,
except as required by the laws of their respective jurisdictions of
incorporation, free of preemptive rights and all of the outstanding shares of
capital stock of or other ownership interest in each of the Noncontrolled
Subsidiaries held of record by Olsy or a Controlled Subsidiary and each of the
Olsy Japan Subsidiaries held of record by Olsy Japan are fully paid and
nonassessable. Except as set forth on Schedule 4.2(c) of the
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Olivetti Disclosure Schedule, each of Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries is capitalized in accordance with applicable law. Except
as set forth on Schedule 4.2(c) of the Olivetti Disclosure Schedule, neither
Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has any obligation
to contribute additional capital to any Subsidiary, except as required by the
laws of a Subsidiary's jurisdiction of incorporation. Except as set forth in
Schedule 4.2(c) of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan,
Olsy Brazil nor any Controlled Subsidiary has any obligation to make any
payments to any other current or former stockholder of Olsy, Olsy Japan, Olsy
Brazil, any Subsidiary or any Olsy Japan Subsidiary (other than payments made in
the ordinary course of business for services rendered or products provided in
the ordinary course of business at arm's length).
(d) The minority partners and managers of Open Systems Olivetti
Austria Gesellschaft mbH & Co. K.G. ("Open Systems") do not have rights relating
to the interests currently or previously held by the same in, or other interests
in, the capital of Open Systems or to their relationships with Open Systems,
other than those set forth in the Partnership Agreement dated June 18, 1996 or
in the Share Transfer Agreement (version September 30, 1996) as amended and
supplemented by the Option Agreement, Call Option Agreement and Declaration of
Waiver previously supplied by Olivetti to Wang or, as to compensation, so agreed
with the same in the ordinary course of business.
(e) In the Formation, the transactions set forth on Schedule
4.2(e) hereto were effected in the manner set forth thereon.
4.3 NO OTHER INTERESTS. Neither Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary owns, directly or indirectly, any capital stock of or
other ownership interest in any Person not listed in Schedule 4.2(a) of the
Olivetti Disclosure Schedule.
4.4 AUTHORITY. (a) Each of the Sellers has full corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of the
Sellers of this Agreement and each of the Related Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all
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necessary action on the part of each of the Sellers. Each of the Sellers has
duly and validly executed and delivered this Agreement and, at or prior to the
Closing, shall duly and validly execute and deliver each of the Related
Agreements to which it is a party and, assuming the due authorization, execution
and delivery thereof by Wang (where such authorization, execution and delivery
thereof is called for), this Agreement constitutes and each of the Related
Agreements to which it is a party, when executed and delivered, shall constitute
a legal, valid and binding obligation of each of the Sellers, enforceable
against each of the Sellers in accordance with its respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(b) Each Olivetti Affiliate which is a party to a Related
Agreement has full corporate power and authority to execute and deliver such
Related Agreement to which it is a party and to consummate the transactions
contemplated thereby. The execution and delivery by each Olivetti Affiliate
which is a party to a Related Agreement of such Related Agreement and the
consummation of the transactions contemplated thereby have been duly and validly
authorized by all necessary action on the part of such Affiliate. Each Olivetti
Affiliate which is a party to a Related Agreement, at or prior to the Closing,
shall duly and validly execute and deliver each of the Related Agreements to
which it is a party and, assuming the due authorization, execution and delivery
thereof by Wang (where such authorization, execution and delivery thereof is
called for), each of the Related Agreements to which an Olivetti Affiliate is a
party, when executed and delivered, shall constitute a legal, valid and binding
obligation of such Olivetti Affiliate a party thereto, enforceable against such
Olivetti Affiliate in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law).
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4.5 CONSENTS; NO VIOLATION. (a) Except as set forth on Schedule 4.5(a)
of the Olivetti Disclosure Schedule, there is no requirement applicable to
Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to give any notice to, make any filing with, or obtain any
consent or approval of, any Person or Governmental Authority (as defined in
Section 12.11) (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary) in connection with the execution and delivery of
this Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby except any individual such notice,
filing, consent or approval the failure of which to give, does not cause Olsy,
Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate
(without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate (without duplication) cost or
expense of U.S. $250,000 (or an equivalent amount in another currency) or more
(including, without limitation, cost or expense incurred in giving, making or
obtaining such notice, filing, consent or approval). Olivetti shall reimburse
Wang for all costs and expenses (in excess of the first U.S. $2,000,000 thereof)
associated with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
giving any notice to, making any filing with, or obtaining any consent or
approval of, any Person or Governmental Authority (in its capacity as a customer
of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) required to be
given, made or obtained in connection with the execution and delivery of this
Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby which are not set forth on Schedule
4.5(a) of the Olivetti Disclosure Schedule.
(b) Except as set forth in Schedule 4.5(b) of the Olivetti
Disclosure Schedule, there is no (and in the case of the Drop-Down (as defined
in Section 12.11), was no) requirement applicable to Olivetti, any Olivetti
Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make
any filing with or obtain any permit, authorization, consent or approval of, any
Governmental Authority (in its capacity as such and not in its capacity as a
customer of Olsy, Olsy Japan, Olsy Brazil, a Subsidiary or an Olsy Japan
Subsidiary) in connection with the execution and delivery of this Agreement
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or any of the Related Agreements, the consummation of the transactions
contemplated hereby or thereby or the consummation of the Drop-Down.
(c) Except as set forth in Schedule 4.5(c) of the Olivetti
Disclosure Schedule, neither the execution and delivery by Olivetti of this
Agreement or any of the Related Agreements to which it is a party nor the
consummation of the transactions contemplated hereby or thereby will (and, in
the case of clause (iii), the Drop-Down did not): (i) conflict with or result in
a breach of any provision of the certificates or articles of incorporation,
memoranda or articles of association or by-laws (or other organizational
documents) of Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary; (ii) result in a breach of or default under (or give
rise to any right of termination, cancellation or acceleration under) any note,
bond, mortgage, indenture, license, agreement, lease or other similar instrument
or obligation (other than any of the foregoing with respect to which the
representations and warranties in this clause (ii) is given in Sections 4.12,
4.13, 4.14(a) or 4.15) to which Olivetti, any Olivetti Affiliate, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary is a party or by which any of
their respective properties or assets may be bound, except for any such
individual breach or default; (or right of termination, cancellation or
acceleration) (aa) as to which any requisite waiver or consent has been or, on
or prior to the Closing, shall have been, obtained or (bb) which does not cause
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate
(without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate (without duplication) cost or
expense of U.S. $250,000 (or an equivalent amount in another currency) or more
(including, without limitation, cost or expense incurred in curing such breach
or default); or (iii) violate any order, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Olivetti, any Olivetti Affiliate,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or any of their
respective assets or properties.
4.6 FINANCIAL STATEMENTS; ACCOUNTS AND ACCOUNTING CONTROLS. (a)
Olivetti has previously delivered to Wang true, complete and correct copies of a
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carve-out consolidated balance sheet of the Olivetti Solutions (Olsy) Business
Unit described in the notes thereto (the "12/31/96 Business Unit") as of
December 31, 1996 and carve-out consolidated statements of income and cash flows
of the 12/31/96 Business Unit for the twelve month period then ended, all
audited (other than the carve-out consolidated statement of cash flows) by
Coopers & Lybrand s.a.s. ("Coopers & Lybrand"), independent certified public
accountants, whose audit report thereon is included therein, and accompanied by
footnotes (collectively, the "12/31/96 Italian GAAP Financial Statements"). The
12/31/96 Italian GAAP Financial Statements (i) give a true and fair view of the
combined consolidated financial position of the 12/31/96 Business Unit as of
December 31, 1996 and the combined consolidated results of operations of the
12/31/96 Business Unit for the twelve month period then ended and (ii) were
prepared in accordance with Italian GAAP (as defined in Section 12.11) and OLGA
(as defined in Section 12.11) applied on a consistent basis and presented with
reference to a presentation generally accepted in the United States.
(b) Olivetti has previously delivered to Wang true, complete and
correct copies of a combined consolidated balance sheet of the Olivetti
Solutions (Olsy) Business Unit described in the notes thereto (the "9/30/97
Business Unit") as of September 30, 1997 (the "9/30/97 Italian GAAP Balance
Sheet") and combined consolidated statements of income and cash flows of the
9/30/97 Business Unit for the period then ended, all audited (other than the
combined consolidated statement of cash flows) by Coopers & Lybrand, independent
certified public accountants, whose audit report thereon is included therein,
and accompanied by footnotes (collectively, "9/30/97 Italian GAAP Financial
Statements"). The 9/30/97 Italian GAAP Financial Statements (i) give a true and
fair view of the combined consolidated financial position of the 9/30/97
Business Unit as of September 30, 1997 and the combined consolidated results of
operations and cash flows of the 9/30/97 Business Unit for the nine month period
then ended and (ii) were prepared in accordance with Italian GAAP and OLGA
applied on a consistent basis consistent with the 12/31/96 Italian GAAP
Financial Statements and presented with reference to a presentation generally
accepted in the United States, except that in preparing the 9/30/97 Italian GAAP
Financial Statements, Olivetti referred to the rules issued by CONSOB allowing
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companies listed in the Italian Stock Exchange to prepare interim financial
statements without accounting for income taxes.
(c) Olivetti has previously delivered to Wang true, complete and
correct copies of combined consolidated balance sheets of the Olivetti Solutions
(Olsy) Business Unit described in the notes thereto (the "U.S. GAAP Business
Unit") as of December 31, 1996 and September 30, 1997 and combined consolidated
statements of income and cash flows of the U.S. GAAP Business Unit for the
twelve month and nine month periods then ended, respectively, all audited by
Coopers & Lybrand, independent certified public accountants, whose audit report
thereon is included therein, and accompanied by footnotes (collectively, the
"U.S. GAAP Financial Statements"). The U.S. GAAP Financial Statements (i)
present fairly in all material respects the combined consolidated financial
position of the U.S. GAAP Business Unit as of December 31, 1996 and September
30, 1997 and the combined consolidated results of operations and cash flows of
the U.S. GAAP Business Unit for the twelve month and nine month periods then
ended, respectively, and (ii) were prepared in accordance with United States
generally accepted accounting principles ("U.S. GAAP") applied on a consistent
basis.
(d) The books, records and accounts of Olivetti (with respect to
the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries
accurately and fairly reflect in reasonable detail the transactions in which
they have engaged and the dispositions of their assets, have been maintained in
a manner adequate to permit the preparation of financial statements which give a
true and fair view of the financial position, results of operations and cash
flows of the Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries in accordance with Italian GAAP and OLGA and do permit the
preparation of the U.S. GAAP Financial Statements. The operations of the
Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries have
continuously been subject to a system of internal accounting controls sufficient
to provide reasonable assurances that: (i) transactions have been executed in
accordance with management's authorization; and (ii) transactions have been
recorded as necessary to permit preparation of financial statements in
conformity with
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Italian GAAP and OLGA and other applicable criteria and to maintain
accountability for assets and do permit preparation of the U.S. GAAP Financial
Statements.
4.7 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 4.7 of
the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary has any liabilities (whether reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured and whether or not of a
nature required by Italian GAAP to be reflected in a consolidated balance sheet
of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries or disclosed in
the notes thereto), except (a) such liabilities which (i) are reflected in the
9/30/97 Italian GAAP Balance Sheet or (ii) were incurred after the date of the
9/30/97 Italian GAAP Balance Sheet in the ordinary course of business and
consistent with past practice and (b) such liabilities not covered by clause (a)
which in the aggregate do not exceed 15,000,000,000 Italian lira.
4.8 ABSENCE OF CERTAIN CHANGES. (a) Except as set forth in Schedule
4.8 of the Olivetti Disclosure Schedule, since September 30, 1997, and through
and as of the date of this Agreement, (i) Olsy, Olsy Japan, Olsy Brazil and each
Controlled Subsidiary have been operated in the ordinary course of business and
consistent with past practice, (ii) neither Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the Major
Subsidiaries, taken separately, has suffered any material adverse change in
their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise) and (iii) neither Olsy, Olsy Japan, Olsy
Brazil nor any Controlled Subsidiary has (aa) taken any action which, if it were
taken after the date hereof, would require the prior written consent of Wang
pursuant to Sections 6.1(b)(i), (iii), (ix), (xiii), (xvi), (xvii), (xix), (xx),
(xxii), (xxiii), (xxiv) or (xxv), (bb) written up the value of any assets, (cc)
increased in any manner the compensation of any of its directors, officers or
employees (including any such increase under any Plan (as defined in Section
4.20)), except increases required to comply with applicable law, any Plan or any
applicable collective bargaining agreement, sales commission increases or
regularly scheduled merit increases for other than general managers of
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Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiaries or their direct
reports, (dd) hired any additional employees (other than in the ordinary course
of business consistent with past practice) or (ee) reversed any fund for
headcount reductions other than the reversal reflected on the 12/31/97 Projected
Balance Sheet (as defined in Section 6.12).
(b) The 12/31/97 Net Financial Position (as defined in Section
6.14(d)) shall not be less than negative 65,000,000,000 Italian lira (meaning
there shall not be less than 65,000,000,000 Italian lira in cash) after giving
effect to the actions required to be taken pursuant to Sections 1.3(a) or (b).
Since December 31, 1997, neither Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary has paid, distributed or otherwise transferred any cash to
Olivetti or any Olivetti Affiliate except in exchange for goods or services
pursuant to existing contractual relationships and in compliance with the same
or, while retaining title thereto, in connection with the centralized treasury
functions of Olivetti, in each case in the ordinary course of business
consistent with past practice.
4.9 PROPERTIES AND ASSETS. The assets, properties, furniture,
equipment, Contracts, Intellectual Property, rights, privileges, franchises,
operations and business presently owned, leased or licensed by Olsy, Olsy Japan,
Olsy Brazil or a Controlled Subsidiary include all assets, properties,
Contracts, Intellectual Property, rights, privileges, franchises, operations and
business used by Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary to
conduct their respective businesses as going concerns as conducted on the date
hereof.
4.10 TITLE TO PERSONAL PROPERTIES AND ASSETS. Each of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries has good, valid and
marketable title to all of the personal (tangible or intangible) properties or
assets which it purports to own, in each case, including, without limitation,
all of the personal properties and assets reflected in the 9/30/97 Italian GAAP
Balance Sheet and all of the personal properties and assets purchased by Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary since the date of the
9/30/97 Italian GAAP Balance Sheet, except such items of personal property or
assets (a) sold since the date of the 9/30/97
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Italian GAAP Balance Sheet in the ordinary course of business and consistent
with past practice or (b) the failure to have good, valid and marketable title
to which will not cause Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries to lose aggregate revenue with respect to any individual item of
personal property or asset or all such items of personal property or assets
respectively, of U.S. $1,500,000 or U.S. $5,000,000 (or an equivalent amount in
another currency) or more or incur aggregate cost or expense with respect to any
individual item of personal property or asset or all such items of personal
property or assets respectively, of U.S. $250,000 or U.S. $2,000,000 (or an
equivalent amount in another currency) or more (including, without limitation,
cost or expense incurred in acquiring good, valid and marketable title to any
such item of personal property or asset). All such personal properties and
assets (other than those excepted in the except clause of the immediately
preceding sentence) are free and clear of all Liens except, with respect to all
such properties and assets: (i) Liens shown on the 9/30/97 Italian GAAP Balance
Sheet as securing specified liabilities or obligations with respect to which no
default exists; (ii) Liens that will be released or discharged at or prior to
Closing; (iii) statutory Liens for current Taxes (as defined in Section 4.18(g))
not yet due and payable or being contested in good faith by appropriate
proceedings; (iv) statutory Liens arising in the ordinary course of business by
operation of law (including mechanic's, workmen's or warehousemen's Liens); and
(v) minor imperfections of title which do not impair the value of the personal
property or asset to which they relate.
4.11 REAL ESTATE. (a) Schedule 4.11(a) of the Olivetti Disclosure
Schedule contains the complete and correct address and legal description of all
of the real property in which either Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary holds a fee interest (the "Real Estate") and a complete
and correct list of all Liens affecting the Real Estate (collectively the
"Permitted Exceptions"). Either Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary has as of the date hereof, and will have as of the Closing Date,
good, valid and marketable title to the Real Estate, free and clear of all Liens
other than the Permitted Exceptions.
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(b) Except as set forth in Schedule 4.11(b) of the Olivetti
Disclosure Schedule, no work has been performed on or materials supplied to the
Real Estate within any applicable statutory period which could give rise to any
individual valid mechanic's or materialmen's lien which would cause Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary to incur aggregate (without
duplication) cost or expense of U.S. $250,000 (or an equivalent amount in
another currency) or more.
(c) There is no pending or, to the Best Knowledge of Olivetti,
threatened condemnation or eminent domain proceeding or proceeding to change or
redefine the zoning classification with respect to the Real Estate.
(d) To the Best Knowledge of Olivetti, the Real Estate is
legally subdivided and consists of separate tax lots so that it is assessed
separate and apart from any other property, and is an independent facility which
does not rely upon any other facility to fulfill any zoning or other legal
requirement, for structural support or the furnishing of utilities to the Real
Estate.
(e) To the Best Knowledge of Olivetti, all utility systems
serving the Real Estate, public or private, are, in all material respects, in
good operating condition, all installation charges therefor have been fully paid
and all service charges therefor have been or will be paid by the respective
owner up to and including the Closing Date.
(f) To the Best Knowledge of Olivetti and except as set forth in
Schedule 4.11(f) of the Olivetti Disclosure Schedule, the Real Estate is not
located in any special flood hazard area designated by any Governmental
Authority having jurisdiction over the Real Estate.
(g) To the Best Knowledge of Olivetti, the Real Estate complies
with the requirements of all building, zoning, subdivision, health, safety,
environmental, pollution control, waste products, sewage control and all other
applicable statutes, laws, codes, ordinances, rules, orders, regulations and
decrees (collectively the "Government Regulations").
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Olivetti has obtained all material consents, permits, licenses and approvals
required by such Government Regulations (the "Approvals"), and none of Olivetti,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has received notice
that such Approvals are not in full force and effect, or have not been properly
and validly issued. If not solely in the name of Olsy, Olsy Japan, Olsy Brazil
or a Controlled Subsidiary on or prior to the Closing or as soon thereafter as
practicable unless such approval is required to be obtained earlier under this
Agreement, such Approvals will be assigned to Wang by Olivetti. There is no
action pending or, to the Best Knowledge of Olivetti, threatened, by any
Governmental Authority claiming that the Real Estate violates such Government
Regulations. To the Best Knowledge of Olivetti, the conduct of the operation of
the Business by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
the Real Estate, including the right to ingress or egress from the premises,
does not violate any Governmental Regulations, and does not depend upon the
continuing consent of any Person.
(h) There are no suits, petitions, notices or proceedings
pending, given or, to the Best Knowledge of Olivetti, threatened by any Persons
or Governmental Authority before any Governmental Authority or otherwise, which,
if given, commenced or concluded, would have an adverse effect on the title of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to the Real Estate.
(i) To the Best Knowledge of Olivetti, all of the buildings,
fixtures and other improvements located on the Real Estate, including the
mechanical and utility systems, are, in all material respects, in good operating
condition and repair, free of material construction defects, and the operation
thereof as presently conducted is not in material violation of any applicable
building code, zoning ordinance or other law or regulation.
(j) Schedule 4.11(j) of the Olivetti Disclosure Schedule
contains a true, complete and correct list of the building amnesties ("condono
edilizio") duly filed in compliance with the relevant Government Regulations.
All the amounts due in connection thereof have been fully paid, no further
obligations are pending
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towards the relevant Governmental Authority and no claims have been filed or are
expected to be filed by such Governmental Authority.
(k) Except as set forth in Schedule 4.11(k) of the Olivetti
Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has assigned any interest in the Real Estate nor leased
all or any portion of the Real Estate or granted any license, concession or
option or entered into any management or other service contract with respect to
any portion of the Real Estate to any Person other than Olsy or a Controlled
Subsidiary.
4.12 REAL ESTATE LEASES. (a) Schedule 4.12(a) of the Olivetti
Disclosure Schedule sets forth (i) the addresses and the name of the record
owner of all real property in which Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary holds a leasehold interest or rental contract interest
(the "Leased Premises") and (ii) a complete and correct list of each of the
leases or rental contracts for each of the Leased Premises, including all
amendments, modifications and supplements thereto (whether embodied in a formal
amendment, a letter or other written document) (the "Real Estate Leases").
Complete and correct copies of the Real Estate Leases, including all such
amendments, modifications and supplements, have previously been delivered to
Wang by Olivetti.
(b) Except as set forth on Schedule 4.12(b) of the Olivetti
Disclosure Schedule, each of the Leased Premises is occupied only by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary pursuant to a Real Estate Lease
between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and the
record owner of the Leased Premises (other than Olivetti or an Olivetti
Affiliate). Each Real Estate Lease between Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary on the one hand, and Olivetti or an Olivetti Affiliate, on
the other hand, for leased premises occupied by Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary has a remaining term of not more than three years.
(c) To the Best Knowledge of Olivetti, each of the Real Estate
Leases is valid, is in full force and effect and is binding and enforceable
against each of
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the parties thereto in accordance with its terms. None of the Real Estate Leases
has been modified or amended, in any material respect, since the date of
delivery of copies thereof to Wang by Olivetti. There has not occurred any event
which would constitute a material breach of or default in the performance of any
covenant, agreement or condition contained in any Real Estate Lease, nor, to the
Best Knowledge of Olivetti, has there occurred any event which with the passage
of time or the giving of notice or both would constitute such a breach or
default. To the Best Knowledge of Olivetti, none of Olivetti, Olsy, Olsy Japan,
Olsy Brazil, any Subsidiary or an Olsy Japan Subsidiary has given or received
any notice or claim of such breach or default, other than under a Real Estate
Lease under which the gross annual rent is less than U.S. $60,000 (or an
equivalent amount in another currency).
(d) To the Best Knowledge of Olivetti, none of Olivetti, Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary is obligated to pay any
leasing or brokerage commission relating to any Real Estate Lease, and Wang will
not have any enforceable obligation to pay any leasing or brokerage commission
upon the renewal of any Real Estate Lease.
(e) No material construction, alteration or other leasehold
improvement work with respect to any of the Real Estate Leases remains to be
paid for or to be performed by Olivetti, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary, other than any such payment or work
having a cost of less than U.S. $250,000 (or an equivalent amount in another
currency).
(f) To the Best Knowledge of Olivetti, Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary has obtained all permits, licenses and
approvals required for the use and operation of the business of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiaries in each of the Leased
Premises, and the conduct of the Business by Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary in the Leased Premises, including the right to ingress
or egress from the Leased Premises, does not violate any Government Regulations
and does not depend on the continuing consent of any Person. At the Closing, no
notices, permits, licenses, approvals, Taxes
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or fees, including, without limitation, transfer Taxes and recording fees, are
required to be filed, secured or paid with respect to the Real Estate Leases in
connection with the transactions contemplated by this Agreement or any of the
Real Estate Agreements (as defined in Section 12.11).
(g) To the Best Knowledge of Olivetti, all of the buildings,
fixtures and other improvements located on or comprising a part of each of the
Leased Premises (including, without limitation, the heat, ventilation,
air-conditioning and sprinkler systems) are, in all material respects, in good
operating condition and repair, and the operation thereof and the business
thereon as presently conducted is not in violation of any applicable building
code, zoning ordinance or other law or regulation; provided, however, that the
above representation as to buildings (as opposed to Leased Premises) shall apply
only with respect to buildings leased by Olsy in La Defense, France and
Lorenteggio, Italy, and buildings in which Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is the sole occupant.
(h) None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has received any notice that a lessor or sublessor under
any of the Real Estate Leases has commenced any litigation with respect to any
Real Estate Lease nor have Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary received notice that any such lessor or sublessor intends
to cancel, terminate or refuse to renew any Real Estate Lease under which the
gross annual rent is greater than U.S. $60,000 (or an equivalent amount in
another currency), and to the Best Knowledge of Olivetti, no such notices have
been received for any of the other Real Estate Leases.
(i) Except as set forth in Schedule 4.12(i) of the Olivetti
Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has assigned any interest under any Real Estate Lease or
subleased all or any portion of such Leased Premises or granted any license or
concession or entered into any management or other service contract with respect
to any portion of such Leased Premises. Where Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary has assigned any interest under any Real
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Estate Lease or subleased all or any portion of such Leased Premises or granted
any license or concession or entered into any management or other service
contract with respect to any portion of such Leased Premises as set forth on
Schedule 4.12(i) of the Olivetti Disclosure Schedule, there has not, to the Best
Knowledge of Olivetti, occurred any event which would constitute a material
breach of or default in the performance of any covenant, agreement or condition
contained in any such assignment, sublease, license, concession or contract, nor
has there occurred, to the Best Knowledge of Olivetti, any event which with the
passage of time or the giving of notice or both would constitute such a breach
or default. None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary has given or received any notice or claim of such breach or default.
(j) To the Best Knowledge of Olivetti, except as set forth in
Schedule 4.12(j) of the Olivetti Disclosure Schedule, the Drop-Down did not, and
neither the execution and delivery by Olivetti of this Agreement or any of the
Related Agreements to which it is a party nor the consummation of the
transactions contemplated hereby or thereby will, result in any breach,
violation or default of any material provision of any Real Estate Lease, or
require the consent of any lessor under, any such Real Estate Lease.
(k) Schedule 4.12(k) of the Olivetti Disclosure Schedule
contains a true, complete and correct list of the building amnesties ("condono
edilizio") duly filed in compliance with the relevant Government Regulations.
All the amounts due in connection thereof have been fully paid, no further
obligations are pending towards the relevant Governmental Authority and no
claims have been filed or are expected to be filed by such Governmental
Authority.
4.13 PERSONAL PROPERTY LEASES. Schedule 4.13 of the Olivetti
Disclosure Schedule lists all personal property leases pursuant to which Olsy,
Olsy Japan, Olsy Brazil and the Controlled Subsidiaries paid an aggregate U.S.
$350,000 (or an equivalent amount in another currency) or more in the fiscal
year ended December 31, 1997. Except as set forth in Schedule 4.13 of the
Olivetti Disclosure Schedule, (a) all such leases are in full force and effect
and valid, binding and enforceable
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in accordance with their respective terms, (b) none of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary party thereto nor, to the Best Knowledge of
Olivetti, any other party thereto, is in breach, violation or default under any
such lease (other than breaches, violations or defaults which would not
reasonably be expected to result in termination of any such lease or the
acceleration of the payment of any amounts under any such lease) and (c) neither
the execution and delivery by Olivetti of this Agreement or any of the Related
Agreements to which it is a party nor the consummation of the transactions
contemplated hereby or thereby will, result in any breach, violation or default
of any term (other than a nonmaterial term) of, or require the consent of any
lessor under, any such lease.
4.14 CONTRACTS. (a) (i) Each Customer Contract (as defined in this
Section 4.14(a)) is in the name of or was (or pursuant to Section 1.1 will be)
duly and validly assigned to Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary. (ii) Each Major Customer Contract (as defined in this Section
4.14(a)) is in full force and effect and is valid, binding and enforceable by
and against all of the parties thereto in accordance with its terms. (iii) None
of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary party to a Major
Customer Contract nor, to the Best Knowledge of Olivetti, any other Person or
Governmental Authority party to a Major Customer Contract, is in breach (other
than a de minimis breach), violation or default under any such Major Customer
Contract. (iv) Neither the execution and delivery by the Sellers of this
Agreement or any of the Related Agreements to which any Seller is a party nor
the consummation of the transactions contemplated hereby or thereby will, result
in any breach, violation or default under, or require the consent of any Person
or Governmental Authority under, any Major Customer Contract. (v) To the Best
Knowledge of Olivetti, Schedule 4.14(a)(v) of the Olivetti Disclosure Schedule
sets forth, by Major Customer (as defined in this Section 4.14(a)), each written
complaint from a Major Customer received by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary since January 1, 1997. (vi) The term "Customer Contract"
means any written agreement, contract, understanding or legally binding
arrangement of any nature pursuant to which Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has agreed to provide, or is providing, any products,
service
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or support. The term "Major Customer Contract" means (aa) any Customer
Contract pursuant to, or with respect to which, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary, individually or in the aggregate, earned or received
U.S. $1,000,000 (or an equivalent amount in another currency) or more during the
fiscal year ended December 31, 1997 or (bb) any Customer Contract with a Major
Customer pursuant to, or with respect to which, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary, individually or in the aggregate, earned or received
U.S. $650,000 (or an equivalent amount in another currency) or more during the
fiscal year ended December 31, 1997. The term "Major Customer" means the
customers set forth on Schedule 4.14(a) hereto.
(b) Except as set forth in Schedule 4.14(b) of the Olivetti
Disclosure Schedule, none of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a party to, nor is Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary or any of their respective properties or assets bound by, any of the
following:
(i) any Contract relating to the employment of, or
the performance of services by, any director, officer or employee for
an amount in annual base compensation and bonus in excess of U.S.
$150,000 (or an equivalent amount in another currency);
(ii) any Contract with any agent, contractor,
subcontractor, consultant, advisor, salesperson, sales representative,
distributor or dealer (other than any of the foregoing in their
capacity as a supplier of products) pursuant to which Olsy, Olsy Japan,
Olsy Brazil and the Controlled Subsidiaries paid or are expected to pay
an aggregate of U.S. $1,500,000 (or an equivalent amount in another
currency) or more in any year which is not terminable on not more than
60 days notice (without penalty or premium);
(iii) any Contract pursuant to which Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries is in possession of
inventory or other assets (including, without limitation, service and
repair parts) with an aggregate value of U.S.
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$2,000,000 (or an equivalent amount in another currency) or more by
way of consignment;
(iv) any Contract that contains any severance or
termination pay liabilities or obligations of U.S. $600,000 (or an
equivalent amount in another currency) or more;
(v) any Contract imposing any restriction on the
right or ability of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (aa) to compete with any other Person, (bb) to acquire any
product or other assets or any services from any other Person, to sell
any product or other asset or to perform any services for any other
Person or to transact business or deal in any other manner with any
other Person or (cc) to develop or distribute any technology or
Intellectual Property, except any such restriction which will not cause
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose
aggregate revenue of U.S. $1,500,000 (or an equivalent amount in
another currency) or more or incur aggregate cost or expense of U.S.
$250,000 (or an equivalent amount in another currency) or more
(including, without limitation, cost or expense to relieve such
restriction);
(vi) any Contract creating or involving (aa) any
agency or franchise relationship pursuant to which Olsy, Olsy Japan,
Olsy Brazil and the Controlled Subsidiaries earned or received or is
expected to earn or receive an aggregate of U.S. $5,000,000 (or an
equivalent amount in another currency) or more in any year or (bb) any
power of attorney in favor of any Person not a full time employee of
Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary;
(vii) any Contract relating to the acquisition,
disposition, issuance or transfer (other than in the ordinary course of
business consistent with past practice) of any securities, assets,
properties, rights, privileges, franchises, operation or business
(real, personal or mixed, tangible or intangible) with respect to which
there remains any obligation to make any future payments of any kind of
U.S. $2,000,000 (or an equivalent
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amount in another currency) or more, including, without limitation,
payments with respect to indemnification given thereunder;
(viii) any Contract relating to the creation of any
Lien of U.S. $5,000,000 (or an equivalent amount in another currency)
or more on any asset or property of Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary;
(ix) any Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity
or any surety arrangements of U.S. $1,000,000 (or an equivalent amount
in another currency) or more;
(x) any Contract creating or relating to any
partnership, joint venture or strategic alliance or any sharing of
revenues, profits, losses, costs or liabilities pursuant to which Olsy,
Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (aa) earned or
received or is expected to earn or receive an aggregate of U.S.
$1,500,000 (or an equivalent amount in another currency) or more, or
(bb) incurred or paid or is expected to incur or pay an aggregate of
U.S. $250,000 (or an equivalent amount in another currency) or more;
(xi) any Contract relating to the purchase or sale
of any product or other asset by or to, or the performance of any
services or support by or for, (aa) Olivetti or any Olivetti Affiliate
pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries (x) earned or received or is expected to earn or receive
an aggregate of U.S. $1,000,000 (or an equivalent amount in another
currency) or more in any year, or (y) incurred or paid or is expected
to incur or pay an aggregate of U.S. $1,000,000 (or an equivalent
amount in another currency) or more in any year, or (bb) any officer or
director of Olivetti or any such Affiliate or any Associate (as defined
in Section 12.11) of any such director or officer;
(xii) any Contract relating to the return of
inventory or other assets with a value of U.S. $2,000,000 (or an
equivalent amount in another
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currency) or more in the possession of wholesalers, distributors,
retailers or other customers;
(xiii) any Contract relating to software
development pursuant to which Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries (aa) earned or received or is expected to earn
or receive an aggregate of U.S. $1,500,000 (or an equivalent amount in
another currency) or more in any year, or (bb) incurred or paid or is
expected to incur or pay an aggregate of U.S. $1,500,000 (or an
equivalent amount in another currency) or more in any year;
(xiv) any Contract for borrowed money in amount of
U.S. $5,000,000 (or an equivalent amount in another currency) or more;
(xv) any Contract not otherwise disclosed on
Schedule 4.14(b) of the Olivetti Disclosure Schedule pursuant to which
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (aa)
earned or received an aggregate of U.S. $5,000,000 (or an equivalent
amount in another currency) or more in any year, or (bb) incurred or
paid an aggregate of U.S. $5,000,000 (or an equivalent amount in
another currency) or more in any year; and
(xvi) any Contract with any Person or Governmental
Authority in any of the countries set forth in Schedule 4.14(b)(xvi)
hereto.
(c) Schedule 4.14(c) of the Olivetti Disclosure Schedule sets
forth the standard warranties given by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary in connection with providing products, services or
support.
(d) Except as set forth on Schedule 4.14(d) of the Olivetti
Disclosure Schedule, none of the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has given any uncapped warranty or representation
specifically with respect to the Year 2000 or eurocompliance.
(e) Except as set forth in Schedule 4.14(e) of the Olivetti
Disclosure Schedule, to the Best Knowledge of Olivetti, no direct or indirect
shareholder
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in, nor member of the Board of Directors (or other governing body) of, any
Person, that has a direct or indirect interest in any partnership, joint
venture, alliance or other venture set forth in Section 4.14(b) of the Olivetti
Disclosure Schedule with respect to Section 4.14(b)(x) is an Official (as
defined in Section 12.11) of any Governmental Authority in which such venture
conducts operations related to any such Official or candidate.
(f) Olivetti has, to the Best Knowledge of Olivetti, previously
delivered to Wang true, complete and correct copies of all notices of breach,
default or termination received by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary with respect to any Customer Contracts (i) pursuant to
which, or with respect to which, Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries earned or received an aggregate of U.S. $1,000,000 (or
an equivalent amount in another currency) or more during the fiscal year ended
December 31, 1997 and (ii) which provides for the payment of consequential
damages or lost profits.
(g) The Lexikon Agreement and Oliricerca Share Transfer and
Shareholder Agreement will be in full force and effect in the forms attached
hereto, and will not have been altered, modified, amended or terminated, and no
provision thereof waived or breached by any party thereto, prior to the Closing
Date.
4.15 INTELLECTUAL PROPERTY.
(a) CERTAIN DEFINITIONS. As used herein:
(i) "Copyrights" shall mean all copyrights (except
moral rights), rights in mask works and database rights, and all
registrations and applications for registration of any of the
foregoing;
(ii) "Intellectual Property" shall mean Copyrights,
Patents, Know-How, Software and Trademarks, and all rights (except
moral rights) vesting in the owner thereof pursuant to the applicable
laws of any competent jurisdiction;
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(iii) "Intellectual Property Agreements" shall mean
the Olsy IP Agreements (as defined in Section 4.15(c)(i)) and the Olsy
Licensing Agreements (as defined in Section 4.15(c)(iii));
(iv) "Know How" shall mean methods, devices,
technology, trade secrets, industrial designs, know-how, technical
manuals and documentation and other proprietary information, including,
without limitation, proprietary processes and formulae;
(v) "Olsy Intellectual Property" shall mean such
Intellectual Property as is required by Sections 4.15(b)(i) and
4.15(b)(ii) to be listed in Schedules 4.15(b)(i) and 4.15(b)(ii) of the
Olivetti Disclosure Schedule;
(vi) "Patents" shall mean patents and patent
applications, all continuations, continuations-in-part, divisions,
reissues, reexaminations, extensions and foreign counterparts of such
patents and patent applications, and all invention disclosures;
(vii) "Software" shall mean all (aa) computer
software, including, without limitation, all source code, object code,
interpreted code, Java byte code, firmware, middleware, programs,
utilities, languages, subroutines or routines, (bb) databases and
compilations, including any and all data and collections of data,
whether machine readable or otherwise, (cc) all content contained on
any Internet or intranet site(s) and (dd) descriptions, flowcharts and
other work product used to design, plan, organize and develop any of
the foregoing; and
(viii) "Trademark" shall mean (aa) registered
trademarks and registered service marks, applications for registration
for trademarks and service marks, renewal registrations and
applications for renewal registrations, extensions and foreign
counterparts of such registrations and applications for registration;
(bb) material unregistered trademarks and service marks; (cc) corporate
names, business names and trade names, whether
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registered or unregistered; and (dd) Internet domain names and
associated addresses and URLs.
(b) OWNED INTELLECTUAL PROPERTY.
(i) Schedule 4.15(b)(i) of the Olivetti Disclosure
Schedule sets forth a correct and complete list of all (aa) Patents,
(bb) Trademarks and (cc) registered Copyrights and material
unregistered Copyrights (inclusive of but not limited to material
Software), that are owned as of the date hereof by Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary. Such list includes the name
of the owner of each item of Intellectual Property and the state or
country where such item is owned, and shall also indicate whether such
item qualifies as a NonBusiness Item as defined in and for the purposes
of Section 1.2.
(ii) Schedule 4.15(b)(ii) of the Olivetti
Disclosure Schedule sets forth a correct and complete list of all (aa)
Patents, (bb) Trademarks (other than the Olivetti Trademarks as defined
in Section 6.26(a)(i)) and (cc) registered Copyrights and material
unregistered Copyrights (inclusive of but not limited to material
Software), that are owned as of the date hereof by Olivetti or any
Olivetti Affiliate, provided that such item qualifies as a Business
Item as defined in and for the purposes of Section 1.1. Such list
includes the name of the owner of each such item of Intellectual
Property and the state or country where such item is owned.
(iii) Schedule 4.15(b)(iii) of the Olivetti
Disclosure Schedule sets forth a correct and complete list of all (aa)
Patents, (bb) Trademarks and (cc) registered Copyrights and material
unregistered Copyrights (inclusive of, but not limited to, material
Software), that are owned as of the date hereof by Olivetti or any
Olivetti Affiliate, provided that such item qualifies as a NonBusiness
Item as defined in and for purposes of Section 1.2 and such item was
used by Olsy, Olsy Japan, Olsy Brazil or a Subsidiary in their
respective commercial activities during the two-year period ending on
the date of the Closing (collectively, with all
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other Patents, Trademarks (other than the Olivetti Trademarks) and
Copyrights (including Software) used in the Business which qualify as
NonBusiness Items, the "Licensed Olivetti Intellectual Property"). Such
list includes the name of the owner of each such item of Intellectual
Property and the state or country where such item is owned.
(iv) Except as set forth in Schedule 4.15(b)(iv) of
the Olivetti Disclosure Schedule: (aa) either Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary is, or will be upon Closing, the sole
and exclusive owner of the Olsy Intellectual Property, free and clear
of any Lien; (bb) either Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary has, or will have upon Closing, such rights to use, protect,
prosecute, sell, transfer, license, dispose of or bring actions for the
infringement of its rights in and to, and to exclude others from using
the Olsy Intellectual Property as are established by the applicable
laws of each relevant jurisdiction to the sole and exclusive owner of
an item of Intellectual Property of such kind; (cc) the Olsy
Intellectual Property which is registered or the subject of an
application for registration (collectively, the "Olsy Registered
Intellectual Property") has been duly maintained in all material
respects in accordance with the legal and administrative requirements
of the appropriate jurisdictions, and has not lapsed, expired, been
cancelled or been abandoned; (dd) no registration or application for
registration of any material item of Olsy Registered Intellectual
Property is the subject of any pending opposition, interference,
cancellation or other legal or governmental proceeding filed before any
Governmental Authority in any competent jurisdiction before September
30, 1997, nor to the Best Knowledge of Olivetti, has any of the
foregoing been filed after such date; (ee) there is no pending or
threatened claim by any former or present employees, officers,
directors or independent contractors of Olsy, Olsy Japan, Olsy Brazil
or a Controlled Subsidiary asserted with respect to any Olsy
Intellectual Property (including, but not limited to such Olsy
Intellectual Property which has been or will be acquired by Olsy, Olsy
Japan, Olsy Brazil or a Subsidiary from Olivetti or any Olivetti
Affiliate);
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(ff) to the Best Knowledge of Olivetti neither Olsy, Olsy
Japan, Olsy Brazil, Olivetti nor any Controlled Subsidiary or Affiliate
of Olivetti has provided, licensed, sublicensed or disclosed a material
portion of any source code for any of the Software listed in Schedules
4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule to any third
party, except pursuant to a signed agreement requiring the licensee,
for an indefinite period, to maintain the confidentiality of such
source code and not to use the source code other than for purposes
approved by Olsy or the applicable Affiliate; and (gg) all Trademarks
included in the Olsy Intellectual Property are or will be at the
Closing assigned (but not necessarily recorded) to Olsy. For purposes
of this Section 4.15 the terms "registered" and "registration" shall
include issued patents.
(c) INTELLECTUAL PROPERTY AGREEMENTS.
(i) Schedule 4.15(c)(i) of the Olivetti Disclosure
Schedule sets forth a correct and complete list of (aa) all material
Contracts to which Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a Party and pursuant to which Olsy, Olsy Japan, Olsy
Brazil or the relevant Controlled Subsidiary has obtained from any
Person the right to use, copy, disclose, distribute, transmit, modify,
maintain, create derivative works of or otherwise exploit any
Intellectual Property or which relate to the development for,
acquisition by, sale or transfer to Olsy, Olsy Japan, Olsy Brazil or a
Controlled Subsidiary, of any Intellectual Property, and (bb) all
material Contracts of such a kind to which Olivetti or any Olivetti
Affiliate is a Party which qualify as Business Items as defined in
Section 1.1. Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule
identifies the parties to such Contracts and the nature and subject
matter thereof. The Contracts listed in Schedule 4.15(c)(i) of the
Olivetti Disclosure Schedule are collectively referred to as "Olsy IP
Agreements".
(ii) Except as set forth in Schedule 4.15(c)(ii) of
the Olivetti Disclosure Schedule: (aa) each Olsy IP Agreement is, or
will be at Closing, valid, binding and enforceable in accordance
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with its terms; (bb) to the Best Knowledge of Olivetti none of Olsy,
Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or, as the case may
be, Olivetti or any Affiliate of Olivetti), or any other Person or
Governmental Authority party to an Olsy IP Agreement is in material
breach, material violation or default under any Olsy IP Agreement; (cc)
neither the execution and delivery of this Agreement or any of the
Related Agreements, nor the transfer by Olivetti or any Affiliate of
Olivetti of any Olsy IP Agreement pursuant to Section 1.1, nor the
consummation of the transactions contemplated hereby or thereby, will
result in any material breach, material violation, default under or
termination of any Olsy IP Agreement and (dd) the transfer by Olivetti
or any Affiliate of Olivetti of any Olsy IP Agreement pursuant to
Section 1.1 will not require the consent of any Person or Governmental
Authority.
(iii) Schedule 4.15(c)(iii) of the Olivetti
Disclosure Schedule sets forth a correct and complete list of (aa) all
material Contracts (other than Customer Contracts) to which Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary is a party pursuant to
which Olsy, Olsy Japan, Olsy Brazil or the relevant Controlled
Subsidiary has licensed, sublicensed, assigned (in part) or otherwise
granted to any Person the right to use, copy, disclose, distribute,
transmit, modify, maintain, create derivative works of or otherwise
exploit any Intellectual Property, or which relate to the development
of any Intellectual Property for any Person by Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary or which relate to the sale, transfer
or other disposition of any Olsy Intellectual Property to any Person by
Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary, (bb) all
material Contracts to which Olivetti or any Olivetti Affiliate is a
Party which qualify as Business Items as defined in and for the
purposes of Section 1.1 and which relate in any way to the Olsy
Intellectual Property, and (cc) all Customer Contracts that grant
licenses, sublicenses or other rights in or to, or which sell,
transfer, assign or otherwise dispose of, any Olsy Intellectual
Property, other than solely by granting to end user customers
non-exclusive licenses to use or reproduce object code versions of
software for
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their internal business purposes. Schedule 4.15(c)(iii) of the Olivetti
Disclosure Schedule identifies the parties to such agreements and the
nature and subject matter thereof. The Contracts listed in Schedule
4.15(c)(iii) of the Olivetti Disclosure Schedule are collectively
referred to as "Olsy Licensing Agreements".
(iv) Except as set forth in Schedule 4.15(c)(iv) of
the Olivetti Disclosure Schedule: (aa) each Olsy Licensing Agreement is
or will be at Closing valid, binding and enforceable in accordance with
its terms; (bb) none of Olsy, Olsy Japan, Olsy Brazil or a Controlled
Subsidiary (or, as the case may be, Olivetti or any Affiliate of
Olivetti), or any other Person or Governmental Authority party to an
Olsy Licensing Agreement is in material breach, material violation or
default under any Olsy Licensing Agreement; (cc) neither the execution
and delivery of this Agreement or any of the Related Agreements, nor
the transfer by Olivetti or any Affiliate of Olivetti of any Olsy
Licensing Agreement pursuant to Section 1.1, nor the consummation of
the transactions contemplated hereby or thereby, will result in any
material breach, material violation or default under any such Olsy
Licensing Agreement; and (dd) the transfer by Olivetti or any Affiliate
of Olivetti of any Olsy IP Agreement pursuant to Section 1.1 will not
require the consent of any Person or Governmental Authority.
(v) Except as set forth in Schedule 4.15(c)(v) of
the Olivetti Disclosure Schedule, there are no milestone or other
payments of more than U.S. $200,000 except payments which are royalties
and license fees due and payable in the ordinary course of business by
Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries to
any Person by reason of the ownership, use, reproduction or
distribution of any Olsy Intellectual Property.
(d) INFRINGEMENT. Except as set forth in Schedule 4.15(d) of the
Olivetti Disclosure Schedule:
(i) neither the manufacture, marketing, use or sale
of any product, the rendering of any service under, or the licensing or
sublicensing of,
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any Intellectual Property by Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary in the manner such product is manufactured,
marketed, used or sold, such service is rendered, or such Intellectual
Property is licensed or sublicensed by Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary as of the date hereof, nor the conduct by
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the
Business as heretofore conducted by each of them do or will: (aa)
materially violate any Contract with any Person or Governmental
Authority; or (bb) to the Best Knowledge of Olivetti, infringe upon,
violate, misappropriate, misuse or otherwise conflict with any Patents
or Trademarks of any Person or Governmental Authority; or (cc) infringe
upon, violate, misappropriate, misuse or otherwise conflict with any
Intellectual Property other than Patents and Trademarks of any Person
or Governmental Authority;
(ii) there is no pending material claim or
litigation, or to the Best Knowledge of Olivetti, any threatened claim
or litigation or grounds therefor, by any Person or Governmental
Authority (aa) alleging the infringement, violation, misappropriation,
misuse or conflict with the Intellectual Property of any Person or
Governmental Authority, or (bb) challenging or questioning the
ownership, validity or enforceability of any Olsy Intellectual
Property;
(iii) there is no pending litigation brought by
Olivetti or any Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries) against any Person or
Governmental Authority claiming the infringement, violation,
misappropriation or misuse by any such Person or Governmental Authority
of Olsy Intellectual Property; and
(iv) to the Best Knowledge of Olivetti, there are
no grounds for any claim or litigation which could be brought by
Olivetti or any Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries) against any Person or
Governmental Authority based on the material infringement, violation,
misappropriation or misuse
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of any Olsy Intellectual Property.
(e) MISCELLANEOUS.
(i) YEAR 2000. Olivetti represents and warrants
that Olivetti and its Affiliates (including Olsy, Olsy Japan, Olsy
Brazil and its Controlled Subsidiaries) have not received any written
claims, demands or complaints alleging a breach of any Contract on the
grounds that the Software listed in Schedules 4.15(b)(i)-(iii) of the
Olivetti Disclosure Schedule has not or will not operate prior to,
during, and after the calendar year 2000 AD, without error relating to
date data, specifically including but not limited to any error relating
to calculations, sorting, interpretation, processing or acceptance date
data which represents or references different centuries or more than
one century or any specific date.
(ii) VIRUSES. To the best knowledge of the Managing
Director of Olivetti, any of the finance, treasury, legal,
administration, human resources, industrial relations, real estate,
intellectual property, tax or corporate development staff function
directors of Olivetti or Marco De Benedetti (acquired (x) in the
performance of their respective duties in the ordinary course of
business or (y) in the course of consulting with the general manager
and controller of Olsy with respect to the subject matter of these
representations or warranties, which consulting Olivetti hereby
represents and warrants to Wang was conducted), the Software listed in
Schedules 4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule will not
at the time of the Closing contain any codes, commands or instructions,
including material viruses, time bombs, worms, and Trojan horses
(collectively, "Viruses"), that may, or may be used to, access, alter,
delete, damage or disable such Software or any other software, data,
information or machines. Schedule 4.15(e)(ii) of the Olivetti
Disclosure Schedule contains a description of the procedures adopted by
Olsy to protect the Software developed or distributed by Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries from Viruses. To the
best knowledge of the Managing Director of Olivetti, any of the
finance, treasury,
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legal, administration, human resources, industrial relations, real
estate, intellectual property, tax or corporate development staff
function directors of Olivetti or Marco De Benedetti (acquired (x) in
the performance of their respective duties in the ordinary course of
business or (y) in the course of consulting with the general manager
and controller of Olsy with respect to the subject matter of these
representations or warranties, which consulting Olivetti hereby
represents and warrants to Wang was conducted), there have been no
material failures to follow the procedures described in Schedule
4.15(e)(ii) of the Olivetti Disclosure Schedule.
4.16 BANK ACCOUNTS. As of the Closing, no funds or other
assets of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary will be in
any account of any nature of any bank, trust company, savings or loan
association or other financial institution maintained by Olivetti or any
Olivetti Affiliate. Olivetti shall cause each of Olsy, Olsy Japan, Olsy Brazil
and the Controlled Subsidiaries to deliver to Wang, not later than five Business
Days prior to the Closing, a schedule setting forth the names and addresses of
all banks, trust companies, savings and loan associations and other financial
institutions and post offices at which Olsy, Olsy Japan, Olsy Brazil or any of
the Controlled Subsidiaries maintains any account (including, without
limitation, any safe deposit account), the account numbers thereof and the names
of all persons authorized to draw thereon, make withdrawals therefrom or have
access thereto.
4.17 INSURANCE. Schedule 4.17 of the Olivetti Disclosure
Schedule (a) lists all policies of fire, liability (including products
liability), property, workers' compensation, officers' and directors' liability
and other forms of insurance covering any of the assets or properties of, or
relating to, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary owned or
held by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b)
identifies all risks of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary which have been designated as being self-insured. Except as set forth
in Schedule 4.17 of the Olivetti Disclosure Schedule, each policy listed is
valid, binding and enforceable in accordance with its respective terms and is in
full force and effect, all premiums due with respect to each policy
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<PAGE> 59
listed have been paid or deferred with the agreement of the insurers or are the
subject of a legitimate dispute, and there are no notices of cancellation or
termination with respect to any policy listed. The coverage provided by the
policies listed is consistent with the past practice of the Business and the
business of Olsy, Olsy Japan, Olsy Brazil or each Controlled Subsidiary and is
normal and customary for businesses similarly situated in the jurisdictions in
which they are located or are conducting business. To the Best Knowledge of
Olivetti, neither Olivetti (with respect to the Business), Olsy, Olsy Japan,
Olsy Brazil nor any Controlled Subsidiary has been refused any insurance with
respect to its respective assets, properties or operations, nor has its coverage
been limited by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three years.
4.18 TAXES. (a) Except as set forth in Schedule 4.18(a) of the
Olivetti Disclosure Schedule, all Tax Returns (as defined in this Section 4.18)
by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or
any affiliated, combined or unitary group of which Olsy, Olsy Japan, Olsy Brazil
or a Controlled Subsidiary is or was a member, have been duly and timely filed
with the appropriate taxing authorities and were, in all respects, true,
complete and correct, except for any errors or omissions on such Tax Returns
which would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.18(b) of the Olivetti
Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil and each Controlled
Subsidiary has paid or will have had paid to the appropriate taxing authority on
its behalf, within the time and in the manner prescribed by law, all Taxes for
which it is liable, except for Taxes the failure of which to pay would not have
a Material Adverse Effect.
(c) Except as set forth in Schedule 4.18(c) of the Olivetti
Disclosure Schedule (which shall set forth the nature of the proceeding, the
type of return, the deficiencies claimed, asserted, proposed or assessed and the
amount thereof, and the taxable year in question), no Tax audits, investigations
or written claims or other administrative proceedings or court proceedings are
presently pending against Olivetti or any
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Olivetti Affiliate or against Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with regard to any Taxes or Tax Returns of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary and no written notification has been
received by Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary that such an audit or other proceeding is pending or
threatened with regard to any such Taxes or Tax Return.
(d) Except as set forth in Schedule 4.18(d) of the Olivetti
Disclosure Schedule, no jurisdiction where Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary has not filed a Tax Return has made a written claim that
Olsy, Olsy Japan, Olsy Brazil or such Controlled Subsidiary is required to file
a Tax Return in such jurisdiction.
(e) Except as set forth in Schedule 4.18(e) of the Olivetti
Disclosure Schedule, no Controlled Subsidiary that has been organized, created
or otherwise formed pursuant to the laws of the United States or any state or
territory thereof (each a "U.S. Controlled Subsidiary") or any entity
(regardless of its organizational form) Controlled (as defined in Section 12.11)
by a U.S. Controlled Subsidiary has elected under Treasury Regulation '
301.7701-3 to be classified for U.S. federal income tax purposes (i) as a
partnership or disregarded as a separate entity where such entity would
otherwise be classified as a corporation, or (ii) as a corporation where such
entity would otherwise be classified as a partnership or disregarded as a
separate entity.
(f) Olivetti and/or its Affiliates (including Olsy, Olsy Japan,
Olsy Brazil and any Controlled Subsidiary) has previously delivered or made
available to Wang complete and accurate copies of each of (i) all audit reports,
letter rulings and technical advice memoranda relating to United States federal,
state, local or foreign Taxes due with respect to the income or business of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, (ii) any closing
agreement, settlement agreement or similar agreement or arrangement entered into
by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
with any taxing authority, and (iii) any Tax sharing agreement, Tax
indemnification agreement or similar contract or arrange-
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<PAGE> 61
ment entered into by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary.
(g) For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, goods and services, capital, transfer, franchise, profits, license,
withholding, payroll, employment, employer health, excise, severance, stamp,
occupation, real and personal property, social security, estimated, recording,
gift, value assessed, windfall profits or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary, combined or other basis, together with any interest,
fines, penalties, additions to tax or other additional amounts imposed by any
taxing authority. For the avoidance of any doubt, any and all interest,
penalties, additions to tax or other additional amounts included within the
definition of "Taxes" shall be treated as attributable to the same taxable
period as the Taxes to which such interest, penalties, additions to tax or other
additional amounts relate. For purposes of this Agreement, "Tax Return" shall
mean any return, declaration, report, estimate, information or other document
(including any documents or statements attached thereto) required to be filed
with any taxing authority with respect to Taxes.
4.19 EMPLOYEES; EMPLOYEE RELATIONS. (a) Schedule 4.19(a)(i) of the
Olivetti Disclosure Schedule contains a true and complete list of all the
employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in Italy
as of January 31, 1998 with an indication of their employment classification for
purposes of applicable collective bargaining agreements. Schedule 4.19(a)(ii) of
the Olivetti Disclosure Schedule contains a true and complete list of all other
employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as of
January 31, 1998 by country with an indication of their employment
classification for purposes of applicable collective bargaining agreements, if
any. As of December 31, 1997, Olsy and the Controlled Subsidiaries employed
3,817 employees in Italy. No present or former employees of Olivetti or any of
its Affiliates other than those listed in Schedules 4.19(a)(i) or (ii) of the
Olivetti Disclosure Schedule have a right vis-a-vis Olsy,
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<PAGE> 62
Olsy Japan, Olsy Brazil or any Controlled Subsidiary which will entitle them to
be hired as an employee of the latter nor has any of the employees listed in
Schedules 4.19(a)(i) or (ii) a right to obtain an employment classification
other than as listed in Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure
Schedule under any collective bargaining agreement or applicable law. Except as
set forth on Schedule 4.19(a)(iii) of the Olivetti Disclosure Schedule, none of
the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure
Schedule is employed or paid by, or receives or is entitled to receive benefits
from, more than one of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary.
None of the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti
Disclosure Schedule has been authorized or instructed not to report to work or
otherwise designated "no-shows". None of the employees listed on Schedules
4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule are performing services
for Olivetti or any Olivetti Affiliate on a regular basis. The approximately 80
contractors/fixed term employees in Holland previously discussed by Olivetti and
Wang may be terminated at the expiration of their respective contract terms
without cost or expense to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary. All costs of the employees listed on Schedule 4.19(a)(i) or (ii) of
the Olivetti Disclosure Schedule for the period ended September 30, 1997 are
reflected on the 9/30/97 Italian GAAP Financial Statements.
(b) Schedule 4.14(b)(i) of the Olivetti Disclosure Schedule
lists all employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with annual base compensation and bonus in excess of U.S. $150,000
(or an equivalent amount in another currency) for the calendar year ended
December 31, 1997.
(c) Schedule 4.19(c) of the Olivetti Disclosure Schedule lists
all collective bargaining agreements or other written agreements (including shop
level agreements), work rules or practices, agreed to with any labor
organization, employee association or works council, applicable to employees of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
(d) Except as set forth in Schedule 4.19(d) of the Olivetti
Disclosure Schedule, to the Best
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Knowledge of Olivetti, there are no controversies involving an amount greater
than U.S. $35,000 (or an equivalent amount in another currency) pending (or to
the Best Knowledge of Olivetti, threatened) between Olivetti, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary and any employees, former employees,
employees' collective bargaining representatives, job applicants or any
association or group of such persons, relating to employment in or with Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Except as set forth in
Schedule 4.19(d) of the Olivetti Disclosure Schedule, there are no written
personnel policies, rules or procedures applicable to employees of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary. True and correct copies of all
such policies, rules or procedures scheduled in Schedule 4.19(d) of the Olivetti
Disclosure Schedule have been provided to Wang. Each of Olivetti, Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries has complied in all material
respects with all federal, state, local or foreign laws applicable to present or
former employees (or any Person found to be a present or former employee),
employees' collective bargaining representatives, job applicants or any
association or group of such persons, of Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, including without limitation any provisions thereof
relating to terms and conditions of employment, wages, hours, the payment of
social security and similar taxes and occupational safety and health.
(e) Except as set forth in Schedule 4.19(e) of the Olivetti
Disclosure Schedule, neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary (i) is a party to, otherwise involved in (or to the Best
Knowledge of Olivetti, threatened by) any labor dispute, strike, stoppage,
slowdown or lockout, any union organizing activity in the United States, or any
administrative, governmental, judicial or appellate proceeding or investigation,
directly or indirectly, arising out of the wages, hours or other terms or
conditions of employment of any person who was or is now employed by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary, (ii) is currently negotiating,
or is subject to any order, judgment, decree or injunction of any court,
regulatory authority, arbitrator or other tribunal requiring it to negotiate any
collective bargaining agreement with regard to persons employed by Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsid-
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<PAGE> 64
iary or (iii) has experienced any strike, stoppage, slowdown or lockout during
the preceding three years.
(f) Each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries has complied with any applicable foreign, state or local
law with regard to plant closings, mass layoffs, collective dismissals or
redundancies, as such terms are defined for purposes of such laws, applicable to
present or former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary. Except as set forth in Schedule 4.19(f) of the
Olivetti Disclosure Schedule, none of the present or former employees of the
Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has
suffered an employment loss, dismissal, redundancy, or termination as those
terms are defined for purposes of such laws in the six-month period ending on
the Closing Date.
(g) Olivetti North America complied with the Worker Adjustment
and Retraining Notification Act of 1988 (the "WARN Act") with regard to plant
closings or mass layoffs, as such terms are defined in the WARN Act. Except as
set forth in Schedule 4.19(g) of the Olivetti Disclosure Schedule, none of the
present or former employees of Olivetti North America has suffered an employment
loss as that term is defined in the WARN Act in the six-month period ending on
the Closing Date.
(h) Olivetti has taken or will take in a timely fashion all
necessary actions required by law or by agreement to inform, consult, notify or
obtain the consent, as applicable, of the works council or other employee
representation bodies of all entities which shall be acquired directly or
indirectly by Wang pursuant to this Agreement.
4.20 EMPLOYEE BENEFIT PLANS; ERISA. (a) For purposes of this
Agreement, "Plan" shall mean each thrift, savings, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, vacation or sick leave, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, employee welfare, profit-sharing,
pension, or retirement plan, program, agreement or arrangement, statutory,
contractual or otherwise, and each other fringe or employee benefit plan,
program, agreement
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or arrangement, statutory, contractual or otherwise, sponsored, maintained or
contributed to or required to be contributed to by Olivetti or by any Controlled
Subsidiary, for the benefit of any employee or former employee of the Business,
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, other than any such
plan, program, agreement or arrangement sponsored or maintained by a state,
local, federal or foreign government or governmental subdivision or entity of
any kind. Schedule 4.20(a) of the Olivetti Disclosure Schedule sets forth a true
and complete list of all Plans.
(b) With respect to each Plan other than any Plan maintained for
the benefit of any employees of any United States Subsidiary (the "Olsy Plans"),
Olivetti has delivered or made available to Wang all correct and complete copies
of material documentation available to Olivetti, Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary with respect to such Olsy Plan, including, without
limitation, Plan texts and all amendments thereto, funding agreements, actuarial
reports, funding and financial information returns and statements, all
professional opinions (whether or not internally prepared) with respect to each
Olsy Plan, all material internal memoranda concerning the Olsy Plan, copies of
material correspondence with all regulatory authorities with respect to each
Olsy Plan and plan summaries, booklets and personnel manuals.
(c) Each Olsy Plan has been maintained in material compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities; neither Olsy, Olsy
Japan, Olsy Brazil, nor any Controlled Subsidiary has incurred, nor reasonably
expects to incur, any obligation in connection with the termination of or
withdrawal from any Olsy Plan that has not been satisfied in full. Except as set
forth in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no Olsy Plan that
provides pension or retirement benefits is intended to enjoy any special tax
status under applicable law, nor have any advance tax rulings been sought or
received in respect of any such Olsy Plan. No fact or circumstances exist that
would reasonably be expected to materially adversely affect such special tax
status of any such Olsy Plan. Except as set forth in Schedule
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4.20(c) of the Olivetti Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil or
each Controlled Subsidiary may unilaterally amend, modify, vary or terminate, in
whole or in part, each Olsy Plan, merge any such Olsy Plan with another
arrangement, plan or fund and, to the extent permitted under applicable law,
take contribution holidays under or withdraw surplus, on an ongoing and
termination basis, from each such Olsy Plan, subject only to approvals required
by applicable law. No Olsy Plan is liable, or would reasonably be expected to be
liable, to an order that it be wound-up in whole or in part. Except as set forth
in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no amounts are required
to be transferred out of, or in respect of, any Olsy Plans. As of the Closing
Date, all employee and other data necessary to administer each Olsy Plan will be
provided by Olivetti to Wang and will be true, correct and complete as of the
Closing Date. No insurance policy or any other contract or agreement affecting
any Olsy Plan requires or permits a retroactive increase in premiums or payments
due thereunder in respect of events or circumstances occurring prior to the
Closing Date. The level of insurance reserves under or in respect of each
insured Olsy Plan is reasonable and sufficient to provide for all incurred but
unreported claims.
(d) With respect to (i) each Plan that is not an Olsy Plan, in
the case of clause (aa) below and (ii) each Plan that is an "employee benefit
plan" (as that term is defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) subject to ERISA (hereinafter
referred to collectively as the "ERISA Plans"), in the case of clauses (bb)
through (gg) below, Olivetti has heretofore delivered to Wang correct and
complete copies of each of the following documents:
(aa) a copy thereof (including all amendments thereto);
(bb) a copy of the annual report, if required under ERISA, with
respect thereto for the last two years;
(cc) a copy of the actuarial report, if any, with respect
thereto for the last two years;
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(dd) a copy of the most recent report prepared with respect
thereto in accordance with Statement of Financial Accounting Standards
No. 87 or No. 106, if any;
(ee) a copy of the most recent Summary Plan Description,
together with each Summary of Material Modifications, required under
ERISA with respect thereto;
(ff) if the Plan is funded through a trust or any third party
funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements
thereof; and
(gg) the most recent determination letter, if any, received from
the Internal Revenue Service with respect to each Plan that is intended
to be qualified under section 401 of the Code.
(e) Except as set forth in Schedule 4.20(e) of the Olivetti
Disclosure Schedule, (i) no material liability under Title IV of ERISA has been
incurred by Olivetti or any ERISA Affiliate that has not been satisfied in full
except for any such liability the payment of which is not yet due and (ii) no
condition exists that presents a material risk to Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary of incurring a liability under such Title, other
than liability for premiums due the Pension Benefit Guaranty Corporation
("PBGC") (which premiums have been paid when due).
(f) Neither Olivetti nor any ERISA Affiliate, nor any ERISA
Plan, nor any trust created thereunder, nor any trustee or administrator thereof
has engaged in a transaction in connection with which Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary could reasonably be expected to be subject
to either a material civil penalty assessed pursuant to section 409 or 502(i) of
ERISA or a material Tax imposed pursuant to section 4975 or 4976 of the Code.
(g) No ERISA Plan, or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in section 302 of
ERISA and
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section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each ERISA Plan ended prior to the Closing Date;
and all contributions (other than contributions that are not material in amount)
required to be made with respect to each ERISA Plan (whether pursuant to the
terms thereof or otherwise) on or prior to the Closing Date have been timely
made.
(h) Except as set forth in Schedule 4.20(h) of the Olivetti
Disclosure Schedule, no ERISA Plan is a "multiemployer pension plan," as such
term is defined in section 3(37) of ERISA, nor is any ERISA Plan a multiple
employer plan described in section 4063(a) of ERISA.
(i) Except as set forth in Schedule 4.20(i) of the Olivetti
Disclosure Schedule, each Plan (other than any Olsy Plan) has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code.
(j) Each ERISA Plan which is intended to be "qualified" within
the meaning of section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service as to its "qualified" status.
(k) Except as set forth in Schedule 4.20(k) of the Olivetti
Disclosure Schedule, no Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary beyond their retirement or other termination of service
(other than (i) coverage mandated by applicable law, (ii) death benefits or
retirement benefits under any "employee pension plan," as that term is defined
in section 3(2) of ERISA, (iii) benefits the full cost of which are borne by the
current or former employee (or his beneficiary) or (iv) benefits the payment of
which would not result in material cost to Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary).
(l) Except as set forth in Schedule 4.20(l) of the Olivetti
Disclosure Schedule, the Drop-Down did not, and the consummation of the
transac-
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tions contemplated by this Agreement or any of the Related Agreements
will not by themselves (i) entitle any current or former employee or officer of
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to severance pay,
unemployment compensation or any other payment or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer.
(m) Except as set forth in Schedule 4.20(m) of the Olivetti
Disclosure Schedule, there are no pending, threatened or anticipated claims by
or on behalf of any Plan, by any employee or beneficiary covered under any such
Plan or otherwise involving any such Plan (other than routine claims for
benefits) that is reasonably expected to result in a material cost or liability
to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary.
4.21 COMPLIANCE WITH LAW; POLITICAL PAYMENTS. (a) Except (i) as set
forth in Schedule 4.21(a) of the Olivetti Disclosure Schedule or disclosed to
Wang in the review referred to in Section 4.21(c) and (ii) any noncompliance
which would cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries
to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an
equivalent amount in another currency) or more or incur aggregate (without
duplication) cost or expense of U.S. $250,000 (or an equivalent amount in
another currency) or more, the operations of the Business and the business of
each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries have been
since January 1, 1995, and are being, conducted in compliance, in all material
respects, with all (applicable from time to time) laws, rules, regulations and
other requirements of all national Governmental Authorities and of all states,
municipalities and other political subdivisions and agencies thereof, having
jurisdiction over the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, including, without limitation, all such laws, rules, regulations and
other requirements relating to antitrust, consumer protection, currency
exchange, employment (including equal opportunity), health, occupational safety,
pension, securities, anti-boycott compliance, export control, foreign asset
control, foreign corrupt practices, trading-with-the-enemy matters or doing
business with or providing services to a Governmental Authority. Except
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as set forth in Schedule 4.21(a) of the Olivetti Disclosure Schedule, neither
Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has
received any notification, demand, subpoena or inquiry relating to any present
or past failure by the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to comply, in any material respect, with such laws, rules,
regulations or other requirements nor, to the Best Knowledge of Olivetti, has
the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary been
the subject of any inquiry or investigation by any Governmental Authority
regarding any such present or past failure.
(b) Except as set forth in Schedule 4.21(b) of the Olivetti
Disclosure Schedule or disclosed to Wang in the review referred to in Section
4.21(c): (i) no offer, payment, gift, promise to pay or give, or authorization
of the payment or giving of any money or anything of value has been made by or
on behalf of the Business, Olsy, Olsy Japan, Olsy Brazil or any of the
Controlled Subsidiaries, either directly or through any intermediary, to any
Official of any Governmental Authority, or to any political party or Official
thereof, or to any candidate for governmental or political office, for the
purpose of affecting or influencing any act or decision of such person or
inducing such person to use his influence to affect or influence any act or
decision of any Governmental Authority in order to assist the Business, Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries in obtaining or
retaining business for or with, or directing business to, any person and (ii)
neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled
Subsidiaries has received any written communication, whether from a Governmental
Authority, competitor, employee or otherwise, alleging that Olivetti, Olsy, Olsy
Japan, Olsy Brazil or any of the Controlled Subsidiaries has engaged in any
action that would be inconsistent with the representations and warranties set
forth in this Section 4.21(b). Olivetti has delivered or otherwise made
available for inspection to Wang, true, complete and correct copies of any and
all reports, studies, analyses, or other writings regarding any audits,
inquiries, investigations, reviews or other evaluations that have been conducted
by or on behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any of the
Controlled Subsidiaries, or any of the Boards of Directors thereof with respect
to the possible occurrence of
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any action that would be inconsistent with the representations and warranties
set forth in this Section 4.21(b).
(c) Olivetti has reviewed with Wang the material facts relating
to any pending inquiries or investigations by any Governmental Authority
concerning the Business or the business of Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary.
4.22 ENVIRONMENTAL MATTERS. (a) Except as set forth in Schedule
4.22(a) of the Olivetti Disclosure Schedule:
(i) The operations of Olsy, Olsy Japan, Olsy Brazil
and each of the Controlled Subsidiaries, including the use and
operations of all Real Estate and the Leased Premises, are in
compliance with all applicable Environmental Laws (as defined in
Section 4.22(c)) (which compliance includes, but is not limited to, the
possession by Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries of all permits, licenses and other governmental
authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof) except where any
Individual Environmental Noncompliance (as defined in Section 4.22(c))
will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiaries to lose aggregate (without duplication) revenue of U.S.
$1,500,000 (or an equivalent amount in another currency) or more or
incur aggregate (without duplication) costs or expense of U.S. $250,000
(or an equivalent amount in another currency) or more. Neither
Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled
Subsidiaries has received any written communication, whether from a
Governmental Authority, citizens group, employee or otherwise, alleging
that the Business, Olsy, Olsy Japan, Olsy Brazil or any of the
Controlled Subsidiaries is not in such compliance, and to the Best
Knowledge of Olivetti, there are no past or present actions,
activities, circumstances, conditions, events or incidents that may
prevent or interfere with such compliance in the future.
(ii) There is no Environmental Claim (as defined in
Section 4.22(c)) pending (or to the Best Knowledge of Olivetti
threatened) against Olsy,
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Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries or, to the
Best Knowledge of Olivetti, against any person or entity whose
liability for any Environmental Claim Olsy, Olsy Japan, Olsy Brazil or
any of the Controlled Subsidiaries has or may have retained or assumed
either contractually or by operation of law.
(iii) To the Best Knowledge of Olivetti, there are
no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the Release (as
defined in Section 4.22(c)) or presence of any Hazardous Material (as
defined in Section 4.22(c)), of which could form the basis of any
Environmental Claim against Olsy, Olsy Japan, Olsy Brazil, any of the
Controlled Subsidiaries or, to the Best Knowledge of Olivetti, against
any person or entity whose liability for any Environmental Claim Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries has or
may have retained or assumed either contractually or by operation of
law except where any individual such action, activity, circumstance,
condition, event, incident or Individual Environmental Noncompliance
will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to lose aggregate (without duplication) revenue of U.S.
$1,500,000 (or an equivalent amount in another currency) or more or
incur aggregate (without duplication) costs or expense of U.S. $250,000
(or an equivalent amount in another currency) or more.
(iv) No transfer, reissuance or renewal of any
permit, license or other governmental authorization and no notice to
any Governmental Authority under any Environmental Law will be required
to permit Wang to conduct the business of Olsy, Olsy Japan, Olsy Brazil
or any of the Controlled Subsidiaries, and the business of Olsy, Olsy
Japan, Olsy Brazil and each of the Controlled Subsidiaries will be in
compliance with all applicable Environmental Laws immediately following
the Closing except where any Individual Environmental Noncompliance
will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to lose aggregate (without duplication) revenue of U.S.
$1,500,000 (or an equivalent amount in another currency) or more or
incur aggre-
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gate (without duplication) costs or expense of U.S. $250,000 (or an
equivalent amount in another currency) or more.
(v) (i) Neither Olsy, Olsy Japan, Olsy Brazil nor
any of the Controlled Subsidiaries has, and to the Best Knowledge of
Olivetti, no other Person has, Released, placed, stored, buried or
disposed of any Hazardous Material in, on, beneath, from or adjacent to
any real property now owned, leased, operated or used by Olsy, Olsy
Japan, Olsy Brazil, any of the Controlled Subsidiaries or any of their
respective predecessors in interest, except for inventories of such
items to be used in the ordinary course of business of Olsy, Olsy
Japan, Olsy Brazil or any of the Controlled Subsidiaries (which
inventories were and are stored, tested, handled and disposed of in
accordance with applicable Environmental Laws and in a manner such that
there has been no Release of any such item) and (ii) no Person,
including Olsy, Olsy Japan, Olsy Brazil or any of the Controlled
Subsidiaries will be required to Cleanup (as defined in Section
4.22(c)) any site or facility owned, leased, operated or used by Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pursuant
to any Environmental Law, as a result of any act or omission of Olsy,
Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries or any
use or Release or threatened Release of any Hazardous Material at or
from real property owned, operated, leased or used by Olsy, Olsy Japan,
Olsy Brazil or any of the Controlled Subsidiaries prior to the Closing,
except where any individual circumstance or state of fact referred to
in this clause (v) will not cause Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to lose aggregate (without duplication) revenue
of U.S. $1,500,000 (or an equivalent amount in another currency) or
more or incur aggregate (without duplication) costs or expense of U.S.
$250,000 (or an equivalent amount in another currency) or more.
(b) Schedule 4.22(b) of the Olivetti Disclosure Schedule sets
forth all permits, licenses and other governmental authorizations currently held
by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pursuant
to applicable Environmental Laws.
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Olivetti has delivered or otherwise made available for inspection to Wang true,
complete and correct copies and results of any reports, studies, analyses, tests
or monitoring possessed or initiated by Olivetti, Olsy, Olsy Japan, Olsy Brazil
or any of the Controlled Subsidiaries pertaining to Hazardous Materials in, on,
beneath or adjacent to any Real Estate and Leased Premises currently or formerly
owned, operated or leased by Olsy, Olsy Japan, Olsy Brazil or any of the
Controlled Subsidiaries, or regarding compliance with applicable Environmental
Laws by the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary.
(c) For purposes of this Section 4.22:
(i) "Cleanup" means all actions required to (aa)
clean up, remove, treat or remediate Hazardous Materials in the indoor
or outdoor environment, (bb) prevent the Release of Hazardous Materials
so that they do not migrate, endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment or (cc) perform
pre-remedial studies and investigations and post-remedial monitoring
and care;
(ii) "Environmental Claim" means any claim, action,
cause of action, investigation or written notice by any person or
entity alleging potential liability (including, without limitation,
potential liability for investigatory costs, Cleanup costs,
governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or
resulting from (aa) the presence or Release of any Hazardous Materials
at any location, whether or not owned or operated by Olsy, Olsy Japan,
Olsy Brazil or any of the Controlled Subsidiaries or (bb) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law;
(iii) "Environmental Laws" means all national,
federal, state, and local laws and regulations relating to pollution or
protection of human health or the environment, including without
limitation, laws relating to Releases or threatened Releases of
Hazardous Materials or otherwise relating to the manufacture,
processing, distribution, use,
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treatment, storage, Release, disposal, transport or handling of
Hazardous Materials, and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials;
(iv) "Hazardous Materials" means all materials,
substances and wastes defined in an Environmental Law as "hazardous
substances," "hazardous waste," "dangerous materials," and "solid
waste" or words of similar import as in effect as of the Closing Date,
and in addition, shall include, without limitation, petroleum and
petroleum products, chemicals, pollutants, contaminants, wastes, toxic
substances, asbestos in any form that is friable, and transformers and
other equipment that contain dielectric fluid containing
polychlorinated biphenyls;
(v) "Individual Environmental Noncompliance" means
(aa) all claims of noncompliance with Environmental Law set forth in a
notice of violation of a certain date prepared by a governmental entity
or in a civil or criminal complaint alleging noncompliance with
Environmental Laws, or (bb) any specific violation of Environmental
Law, including but not limited to exceedances of permit requirements,
from the first date of a violation until the violation is corrected or
the facility involved otherwise comes into compliance with law; and
(vi) "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal,
leaching or migration into the indoor or outdoor environment
(including, without limitation, ambient air, surface water, groundwater
and surface or subsurface strata) or into or out of any property,
including the movement of Hazardous Materials through or in the air,
soil, surface water, groundwater or property.
4.23 LITIGATION. (a) Except as set forth in Schedule 4.23(a) of the
Olivetti Disclosure Schedule, there is no action, suit, charge, proceeding,
arbitration, inquiry, grievance or investigation pending (or, to the Best
Knowledge of Olivetti, threatened) by or before
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any court or governmental or other regulatory or administrative agency or
commission involving Olivetti (with respect to the Business), Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary involving, individually, an amount in
excess of U.S. $500,000, or in the aggregate, an amount in excess of U.S.
$2,000,000. Olivetti shall reimburse Wang for all costs (including, without
limitation, all judgments, awards, assessments or expenses (including, without
limitation, reasonable out-of-pocket expenses of investigation and reasonable
attorneys' and consultants' fees) associated with any action, suit, charge,
proceeding, arbitration, inquiry, grievance or investigation pending as of the
Closing (or, to the Best Knowledge of Olivetti, threatened as of the Closing) by
or before any court or governmental or other regulatory or administrative agency
or commission involving Olivetti (with respect to the Business), Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary in excess of the amounts
specifically reserved therefor on the Closing Balance Sheet plus U.S.
$2,000,000.
(b) Except as set forth in Schedule 4.23(b) of the Olivetti
Disclosure Schedule, there is no action, suit, charge, proceeding, arbitration,
inquiry, grievance or investigation, pending (or, to the Best Knowledge of
Olivetti, threatened) against Olivetti (with respect to the Business), Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary by or before any court or
governmental or other regulatory or administrative agency or commission which
questions or challenges the validity of this Agreement or any of the Related
Agreements or any action taken or to be taken by the Sellers, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary pursuant to this Agreement, or any of
the Related Agreements or in connection with the transactions contemplated
hereby or thereby, and neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any
Controlled Subsidiary knows or has reason to know of any valid basis for any
such action, suit, inquiry, grievance, proceeding, arbitration or investigation.
4.24 PRODUCTS LIABILITY. Except as set forth in Schedule 4.24 of
the Olivetti Disclosure Schedule, there is no action, suit, inquiry, proceeding,
arbitration, grievance or investigation pending (or, to the Best Knowledge of
Olivetti, threatened) by or before any court or governmental or other regulatory
or administrative
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agency or commission against or involving Olivetti (with respect to the
Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary relating
to any product alleged to have been manufactured or sold by Olivetti, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary and alleged to have been
defective or improperly designed or manufactured or any service alleged to have
been provided by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary and alleged to have been defective or improperly performed, in each
case, involving an amount in excess of U.S. $500,000. To the Best Knowledge of
Olivetti, Olivetti has previously delivered to Wang true, complete and correct
copies of any and all reports, studies, analyses or other writings regarding any
audits, inquiries, investigations, reviews or other evaluations that have been
conducted by or on behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, the
Controlled Subsidiaries or any of the Boards of Directors thereof with respect
to whether any product may have been defective or improperly designed or
manufactured or any service that may have been defective or improperly
performed.
4.25 SECURITIES ACT. Olivetti represents that the Wang Shares being
delivered to Olivetti (or its designee) pursuant to Section 2.1(b)(ii) of this
Agreement are being received for its own account, not as nominee or agent for
any other person, firm or corporation and not for distribution or resale to
others in contravention of the Securities Act (as defined in Section 12.11).
Olivetti agrees that it will not sell or otherwise transfer the Wang Shares
unless they are registered under the Securities Act or unless an exemption from
such registration is available. Olivetti consents to the placement of a legend
on any certificate or other document evidencing the Wang Shares stating that
such Wang Shares have not been registered under the Securities Act or under any
state securities or "blue sky" laws and setting forth or referring to the
restrictions on transferability and sale thereof set forth in the Stockholder
Agreement attached as Exhibit 10 hereto until such time as such restrictions are
no longer applicable.
4.26 BROKERS AND FINDERS. Except for Lehman Brothers, which are
serving as financial advisors to Olivetti and whose fees will be paid by
Olivetti, neither Olivetti nor any Affiliate of Olivetti is obliged to pay,
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or has retained any broker or finder or other person who is entitled to, any
broker's or finder's fee based upon any agreement or undertaking made by
Olivetti or any Affiliate of Olivetti in connection with this Agreement or any
Related Agreements to which any of them is a party or the transactions
contemplated hereby or thereby.
4.27 DISCLOSURE. No representations or warranties by Olivetti in
this Agreement or any Related Agreement to which Olivetti is a party and no
statement contained in the financial statements referred to in Sections 4.6(a)
or (b), the Olivetti Disclosure Schedule or Schedules 1, 1.8(a)(iv), 1.10,
4.2(e), 6.16(b), 6.16(c), 6.20, 6.21, 10.2(a)(viii) or 10.6(d) hereto contain
(or, with respect to any of the foregoing which are completed, amended or
supplemented after the date hereof, will contain) any untrue statement of
material fact or omit (or, with respect to any of the foregoing which are
completed, amended or supplemented after the date hereof, will omit) to state
any material fact necessary, in light of the circumstances under which it was
made, in order to make such representation, warranty or statement not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WANG
--------------------------------------
Wang represents and warrants to Olivetti as follows:
5.1 ORGANIZATION, STANDING AND QUALIFICATION. Each of the Buyers
(a) is a corporation duly organized or incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, (b) has full
corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets and (c) is
duly qualified or licensed to do business as a foreign corporation in good
standing in each jurisdiction in which the conduct of its business, the
ownership, leasing or operation of its properties or assets or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not, in the aggregate, have or
result in a material adverse effect on or change in the business,
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assets, properties, liabilities, results of operations or condition (financial
or otherwise) of Wang, taken as a whole. The copies of the certificate of
incorporation and by-laws of Wang heretofore delivered to Olivetti by Wang are
complete and correct copies of such instruments, as currently in effect. The
copies of the minutes of the meetings of the Board of Directors of Wang held
during the period beginning on January 1, 1995 and ending on December 31, 1997
heretofore made available to Olivetti by Wang are, except for the portions
thereof redacted relating to the transactions contemplated hereby, other
business combinations, acquisitions or similar transactions or strategic
investments by or in Wang, true and complete copies of such minutes (other than
the exhibits thereto).
5.2 CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of Wang consists of (a) 5,000,000 shares of preferred
stock, $.01 par value per share (the "Wang Preferred Stock"), of which 90,000
shares have been designated as 4-1/2% Series A Cumulative Convertible Preferred
Stock and are issued and outstanding, 143,750 shares have been designated as
6-1/2% Series B Cumulative Convertible Preferred Shares and are issued and
outstanding and (b) 100,000,000 shares of common stock, $.01 par value per share
(the "Wang Common Stock"), of which 38,503,186 shares are issued and outstanding
(2,591,331 of which remain in a disputed claims reserve established pursuant to
(i) 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 (the "Bankruptcy Court") on September 20, 1993, (ii)
the disclosure statement used to solicit consents to such reorganization plan
and (iii) the signed confirmation order with respect to such reorganization plan
(the documents referred to in clauses (i), (ii) and (iii) being referred to
hereinafter collectively as the "Reorganization Plan") of which 2,585,331 are
expected to be distributed within 90 days of the date hereof). All issued and
outstanding shares of Wang Preferred 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 Wang Preferred Stock or Wang
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Common Stock (including 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 January 31, 1998, 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, up to
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 9,324,807 shares which may be issued upon the
conversion of the Wang Preferred Stock, up to 303,030 shares which may be issued
upon exercise of a common stock purchase warrant issued to Microsoft
Corporation, up to 11,530,021 shares which may be issued to employees of Wang
pursuant to Wang's 1993 Stock Incentive Plan, 1994 Employees' Stock Incentive
Plan, Employees' Stock Purchase Plan and 1995 Employees' Stock Purchase Plan and
320,000 shares issuable upon the exercise of stock options granted to the
directors of Wang pursuant to Wang's 1993 and 1995 Directors' Stock Option
Plans. The issuance of the Wang Shares has been duly authorized and, upon
delivery to Olivetti of certificates therefor against payment in accordance with
the terms hereof, the Wang Shares will have been validly issued, fully paid,
nonassessable and free of preemptive rights.
5.3 AUTHORITY. Each of the Buyers has full corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of the
Buyers of this Agreement and each of the Related Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action on the part of
each of the Buyers. Each of the Buyers has duly and validly executed and
delivered this Agreement and, at or prior to the Closing, shall duly and validly
execute and deliver each of the Related Agreements to which it is a party and,
assuming the due authorization, execution and delivery thereof by Olivetti, this
Agreement constitutes and each of the Related Agreements to which it is a party,
when executed and delivered, shall constitute a legal, valid and binding
obligation of each of the Buyers, enforceable against each of the Buyers in
accordance with its terms, except
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as such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
5.4 CONSENTS; NO VIOLATION. (a) Except as set forth in Schedule
5.4(a) of the Disclosure Schedule delivered by Wang to Olivetti dated as of the
date of this Agreement (the "Wang Disclosure Schedule"), there is no requirement
applicable to any of the Buyers to give any notice to, to make any filing with,
or to obtain any consent or approval of, any Person in connection with the
execution and delivery of this Agreement or any of the Related Agreements or the
consummation of the transactions contemplated hereby or thereby.
(b) Except as set forth in Schedule 5.4(b) of the Wang
Disclosure Schedule, there is no requirement applicable to any of the Buyers to
make any filing with, or to obtain any permit, authorization, consent or
approval of, any Governmental Authority in connection with the execution and
delivery of this Agreement or any of the Related Agreements or the consummation
of the transactions contemplated hereby or thereby.
(c) Except as set forth in Schedule 5.4(c) of the Wang
Disclosure Schedule, neither the execution and delivery of this Agreement or any
of the Related Agreements to which any of the Buyers is a party nor the
consummation of the transactions contemplated hereby or thereby will (i)
conflict with or result in a breach of any provision of the certificate of
incorporation or by-laws of any of the Buyers, (ii) result in a breach of or
default under (or give rise to any right of termination, cancellation or
acceleration under) any of any note, bond, mortgage, indenture, license,
agreement, lease or other similar instrument or obligation to which any of the
Buyers is a party or by which their respective properties or assets may be
bound, except for such breaches or defaults (or rights of termination,
cancellation or acceleration) as to which requisite consents have been or, on or
prior to the Closing, shall have been obtained or (iii) violate any order,
judgment, writ, injunction, decree, statute, rule or regulation applica-
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ble to any of the Buyers or any of their respective assets or properties.
5.5 REPORTS. Since June 30, 1996, Wang has filed all required
forms, reports and documents with the SEC (as defined in Section 12.11) required
to be filed by it pursuant to the Securities Act or the Exchange Act (as defined
in Section 12.11), all of which complied at the time of filing in all material
respects with all then applicable requirements of the Securities Act or the
Exchange Act. Schedule 5.5 of the Wang Disclosure Schedule lists all such forms,
reports or documents, complete and correct copies of which have previously been
furnished to Olivetti. 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.
5.6 FINANCIAL STATEMENTS. The balance sheets and financial
statements included in the reports and other documents referred to in Section
5.5 fairly present the financial position of Wang as of the dates therein
indicated and the results of Wang's operations for the periods then ended and
have been prepared in conformity with U.S. GAAP applied on a consistent basis.
5.7 POLITICAL PAYMENTS. No offer, payment, gift, promise to pay or
give, or authorization of the payment or giving of any money or anything of
value has been made by or on behalf of Wang, either directly or through any
intermediary, to any Official of any Governmental Authority, or to any political
party or Official thereof, or to any candidate for governmental or political
office, for the purpose of affecting or influencing any act or decision of such
person or inducing such person to use his influence to affect or influence any
act or decision of any Governmental Authority in order to assist Wang in
obtaining or retaining business for or with, or directing business to, any
person. Wang has not received any communication (written or oral), whether from
a Governmental Authority, competitor, employee or otherwise, alleging that Wang
has engaged in any action that would be inconsistent with the representations
and
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warranties set forth in this Section 5.7. Wang has delivered or otherwise
made available for inspection to Olivetti, true, complete and correct copies of
any and all reports, studies, analyses, or other writings regarding any audits,
inquiries, investigations, reviews or other evaluations that have been conducted
by or on behalf of Wang or its Board of Directors with respect to the possible
occurrence of any action that would be inconsistent with the representations and
warranties set forth in this Section 5.7.
5.8 LITIGATION. (a) Except as set forth in Schedule 5.8(a) of the
Wang Disclosure Schedule, there is no action, suit, proceeding or arbitration,
or (to the best knowledge of Wang) no inquiry, grievance or investigation,
pending (or, to the best knowledge of Wang after due inquiry, threatened) by or
before any court or governmental or other regulatory or administrative agency or
commission involving Wang involving an amount in excess of U.S. $500,000 or
which, in the aggregate, would have or result in a material adverse effect on or
change in the business, assets, properties, liabilities, results of operations
or condition (financial or otherwise) of Wang and its subsidiaries taken as a
whole.
(b) Except as set forth in Schedule 5.8(b) of the Wang
Disclosure Schedule, there is no action, suit, proceeding or arbitration, or (to
the best knowledge of Wang) no inquiry, grievance or investigation, pending (or,
to the best knowledge of Wang after due inquiry, threatened) by or before any
court or governmental or other regulatory or administrative agency or commission
which questions or challenges the validity of this Agreement or any of the
Related Agreements to which Wang is a party or any action taken or to be taken
by Wang pursuant to this Agreement or any of the Related Agreements to which
Wang is a party or in connection with the transactions contemplated hereby or
thereby and Wang does not know or have reason to know of any valid basis for any
such action, suit, inquiry, grievance, proceeding, arbitration or investigation.
5.9 BROKERS AND FINDERS. Except for Greenhill & Co., LLC, which is
serving as financial advisor to, and whose fees will be paid by, Wang, Wang is
not obliged to pay, and has not retained any broker or finder or other person
who is entitled to, any broker's or
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finder's fee based upon any agreement or undertaking made by Wang in connection
with this Agreement or any Related Agreements to which it is a party or the
transactions contemplated hereby or thereby.
5.10 LETTER CONCERNING FINANCING. Wang has previously delivered to
Olivetti a true, complete and correct copy of a letter from Bankers Trust
Company to Wang, dated February 20, 1998, concerning the financing for the
transactions contemplated by this Agreement and related financing, and, as of
the date hereof, such letter has not been withdrawn or modified in writing.
5.11 NET OPERATING LOSS. Based solely on the cumulative owner
shifts of which Wang is aware as of the date of this Agreement, Wang has not
been subject to an "ownership change" (as defined in Section 382(g) of the Code)
which would limit the use of its United States net operating loss ("NOL") under
Section 382 of the Code. Based solely on the cumulative owner shifts of which
Wang is aware as of the date of this Agreement, the issuance of the Wang Shares
pursuant to Section 2.1(b)(ii) herein will not result in an "ownership change"
under Section 382(g) of the Code.
5.12 ABSENCE OF ADVERSE CHANGE. Since December 31, 1997 (and
excluding any effects of the transactions contemplated hereby), Wang and its
subsidiaries, taken as a whole, have not suffered any material adverse change in
their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise).
5.13 DISCLOSURE. No representations or warranties by Wang in this
Agreement or in any Related Agreement to which Wang is a party and no statement
contained in the financial statements referred to in Section 5.6 or the Wang
Disclosure Schedule contain (or, with respect to any of the foregoing which are
completed, amended or supplemented after the date hereof, will contain) any
untrue statement of material fact or omit (or, with respect to any of the
foregoing which are completed, amended or supplemented after the date hereof,
will omit) to state any material fact necessary, in light of the circumstances
under which it was made, in order to make such representation, warranty or
statement not misleading.
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ARTICLE VI
CERTAIN COVENANTS, AGREEMENTS AND
---------------------------------
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
---------------------------------------------
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING. (a) Except as
otherwise expressly provided in this Agreement or in any Related Agreement, or
as expressly required to consummate the transactions contemplated hereby or
thereby, during the period from the date of this Agreement through the Closing
Date, Olivetti shall cause each of Olsy, Olsy Japan, Olsy Brazil and the
Controlled Subsidiaries to conduct its business in the same manner as such
businesses have been conducted prior to the date hereof.
(b) Except as otherwise expressly provided in this Agreement or
in any Related Agreement, or as expressly required to consummate the
transactions contemplated hereby or thereby, during the period from the date of
this Agreement through the Closing Date, without the prior written consent of
Wang to be provided in accordance with Section 6.1(g), Olivetti shall not, shall
not cause and shall not permit:
(i) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to amend their respective certificates or articles of
incorporation, memoranda or articles of association or by-laws (or
other organizational documents), except as required to capitalize Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary in accordance with
the laws of their jurisdiction of incorporation;
(ii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to (aa) issue, sell, deliver, transfer or redeem
any of its capital stock or other ownership interest or issue or sell
any securities convertible into, or options with respect to, or
warrants to purchase or rights to subscribe to, any of its capital
stock or other ownership interest, (bb) organize any new subsidiary or
(cc) take any action that would change the organizational structure of
Olsy, Olsy Japan, Olsy Brazil and the
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Controlled Subsidiaries from that set forth on Schedule 4.2(a) of the
Olivetti Disclosure Schedule;
(iii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to effect any recapitalization, reclassification,
stock dividend, stock split or like change in capitalization;
(iv) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to sell, transfer, convey, assign, deliver or
otherwise dispose of any assets, properties, Contracts, Intellectual
Property, rights, privileges, franchises, operations or business (real,
personal or mixed, tangible or intangible) to Olivetti or any Olivetti
Affiliate, except in exchange for goods or services pursuant to
existing contractual relationships and in compliance with the same;
(v) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary (aa) except in exchange for goods or services pursuant to
existing contractual relationships and in compliance with the same, to
purchase or otherwise acquire any assets, properties, rights,
privileges, franchises, operations or business (real, personal or
mixed, tangible or intangible) from, (bb) to loan or advance any amount
to or (cc) to amend or enter into any new agreement or other
arrangement with, Olivetti or any Olivetti Affiliate;
(vi) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to declare, pay or set aside for payment any
dividend or other distribution (whether in cash, stock or property or
any combination thereof);
(vii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, except in the ordinary course of business and
consistent with past practice, to sell, transfer, convey, assign,
deliver or otherwise dispose of any assets, properties, rights,
privileges, franchises, operations or business (real, personal or
mixed, tangible or intangible);
(viii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to (aa) purchase or other-
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wse acquire any capital stock, assets, properties, rights, privileges,
franchises, operations or business (real, personal or mixed, tangible
or intangible) of, or any other ownership interest in, any Person,
except such of the foregoing as are utilized in the ordinary course of
their respective business consistent with past practice, (bb) enter
into any partnership, joint venture, strategic alliance or sharing of
revenues, profits, losses, costs or liabilities with any Person which
would be required to be disclosed pursuant to Section 4.14(b)(x) or
(cc) enter into any agreement or other arrangement relating to the
development of Software requiring 1,000 or more man hours;
(ix) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to (aa) borrow any funds other than in the
ordinary course of business consistent with past practice or (bb)
incur, assume or become subject to, whether directly or by way of
guarantee or otherwise, any liability or obligation (whether reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or
unsecured), except liabilities and obligations incurred in the ordinary
course of business and consistent with past practice;
(x) Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, except in the ordinary course of business and consistent
with past practice, to pay, discharge or satisfy any liability or
obligation (whether reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured);
(xi) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to permit or allow any of their respective
assets, properties, rights, privileges, franchises, operations or
business (real, personal or mixed, tangible or intangible) to be
subjected to any Lien other than (aa) Liens that will be released or
discharged at or prior to Closing, (bb) Liens for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings
or (cc) statutory Liens arising in the
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ordinary course of business by operation of law (including mechanic's,
workmen's or warehousemen's Liens);
(xii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to write down or write up the value of any assets
or write off as uncollectible any trade accounts receivable;
(xiii) Olivetti (with respect to Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary), Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary to make any change in accounting
methods, principles or practices;
(xiv) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to make any individual expenditure or commitment
for inventory (including consumable spares) in excess of U.S. $500,000
or make aggregate expenditures and commitments for inventory or spares
in excess of U.S. $5,000,000;
(xv) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to make any individual expenditure or commitment
for additions to property, plant or equipment (including repairable
spares) in excess of U.S. $500,000 or make aggregate expenditures and
commitments for additions to property, plant or equipment in excess of
U.S. $5,000,000;
(xvi) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary (aa) to dispose of any rights to the use of any
Intellectual Property or dispose of or disclose to any person any trade
secret, formula, process or know-how not theretofore a matter of public
knowledge, except in accordance with existing contractual commitments
disclosed in the Olivetti Disclosure Schedule or in the ordinary course
of business consistent with past practice or (bb) to permit to lapse
any rights to use any Intellectual Property;
(xvii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to sell, transfer, convey, assign, deliver or
otherwise dispose of any assets, properties, rights, privileges,
franchises, operations or business (real, personal or mixed, tangible
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or intangible) to, or to purchase or otherwise acquire any of the
foregoing from, to pay, loan or advance any amount to, or to enter into
any agreement or other arrangement with, any officer or director of
Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary, any Olsy Japan
Subsidiary or any Affiliate of Olivetti or any Associate of any such
officer or director;
(xviii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to change any of the banking or safe deposit
arrangements;
(xix) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to grant or extend any power of attorney to any
Person (other than full time employees of Olsy, Olsy Japan, Olsy Brazil
or a Controlled Subsidiary or attorneys engaged by Olsy, Olsy Japan,
Olsy Brazil or a Controlled Subsidiary) or act as guarantor, surety,
co-signer, endorser, co-maker, indemnitor or otherwise in respect of
the obligation of any Person other than (aa) Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary or (bb) a supplier of products,
services or support to customers of Olsy, Olsy Japan, Olsy Brazil or a
Controlled Subsidiary in the ordinary course of business consistent
with past practice;
(xx) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to permit any of its current insurance (or
reinsurance) policies to be cancelled or terminated or any of the
coverage thereunder to lapse, unless simultaneously with such
cancellation, termination or lapse, replacement policies providing
coverage equal to or greater than coverage under those policies
cancelled, terminated or lapsed are in full force and effect other than
in the ordinary course of business consistent with past practice;
(xxi) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to increase in any manner the compensation of any
of its directors, officers or employees (including any such increase
under any Plan), except such increases required to comply with
applicable law, any Plan or any applicable collective bargaining
agreement;
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(xxii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to hire any employees of Olivetti or any Olivetti
Affiliate or Olivetti or any Olivetti Affiliate to hire any employees
of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary;
(xxiii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, except in the ordinary course of business
consistent with past practice, to hire any additional employees or
terminate the employment of any existing employees;
(xxiv) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to (aa) amend, terminate or create any Plan or
(bb) enter into any collective bargaining agreement;
(xxv) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary, except in the ordinary course of business and
consistent with past practice, to (aa) make any bid or proposal for, or
enter into any agreement, contract or commitment to, provide products,
service or support to customers or (bb) accept any bid or proposal
from, or enter into any agreement, contract or commitment with, any
supplier;
(xxvi) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to settle any litigation set forth in Schedule
4.23(a) of the Olivetti Disclosure Schedule without Wang's prior
written consent, which shall not be unreasonably withheld;
(xxvii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to give any warranty or representation
specifically with respect to Year 2000 or eurocompliance; or
(xxviii) Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to agree to do any of the foregoing.
(c) Except as otherwise expressly provided in this Agreement or
in any Related Agreement, or as expressly required to consummate the
transactions
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contemplated hereby or thereby, during the period from the date of
this Agreement through the Closing Date, Olivetti shall and shall cause each of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to use its
commercially reasonable best efforts to preserve its corporate existence and
business relationships intact, to keep available to Wang its officers and key
employees and to preserve for Wang its relationships with employees, licensors,
suppliers, distributors, customers and others having business relations with it,
provided that Wang acknowledges that the transactions contemplated by this
Agreement and the Related Agreements may impact relationships with the
foregoing.
(d) During the period from the date of this Agreement through
the Closing Date, neither Olivetti, Olsy, Olsy Japan nor any Controlled
Subsidiary shall do any act or omit to do any act which act or omission would
cause a breach of any of the representations and warranties or covenants or
agreements made by Olivetti in this Agreement.
(e) During the period from the date of this Agreement through
the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries to continue to generate internal reports
on the businesses of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries in the ordinary course of business consistent with past practice
and to provide copies thereof to Wang promptly after the generation thereof. Not
later than February 28, 1998, Olivetti shall prepare and deliver (or cause to be
prepared and delivered) to Wang an unaudited combined profit and loss statement
for Olsy and the Subsidiaries and Olsy Japan and a report on the combined net
financial position of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil for
the twelve month period ended December 31, 1997, in each case, reflecting the
best estimate of the senior management of Olivetti, Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries as of the date thereof.
(f) During the period from the date of this Agreement through
the Closing Date, (i) Olivetti shall and shall cause each of Olsy, Olsy Japan,
Olsy Brazil and the Controlled Subsidiaries to strictly adhere to Italian GAAP
and OLGA as selected and applied in the preparation of the 9/30/97 Italian GAAP
Financial State-
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ents and (ii) except as otherwise provided in this Agreement or
any Related Agreement, Olivetti shall not, and shall cause each of Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries not to, make any change in
any policy or practice relating to non-cash balance sheet accruals or
adjustments.
(g) Not later than two Business Days after the date hereof, each
of Olivetti and Wang shall designate two representatives to address matters
arising under Section 6.1(b) (respectively, the "Olivetti Interim Operating
Representatives" and the "Wang Interim Operating Representatives") and agree to
protocols for the communications contemplated by this Section 6.1(g). In the
event that Olivetti desires to cause Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary to take any action which requires the consent of Wang
pursuant to Section 6.1(b), an Olivetti Interim Operating Representative shall
deliver a notice containing a description of the proposed action and the
rationale therefor to the Wang Interim Operating Representatives at the address
set forth in and in accordance with the provisions of Section 12.3. Within five
Business Days following the receipt of such notice, a Wang Interim Operating
Representative shall deliver a notice to an Olivetti Interim Operating
Representative containing either Wang's consent to such proposed action or
rationale for not consenting to such proposed action. If a Wang Interim
Operating Representative does not deliver such notice within such period, Wang
shall be deemed to have consented to such action.
(h) Notwithstanding anything in this Section 6.1 to the
contrary, Olivetti shall, per Wang's consent prior to the date hereof, cause (i)
Olivetti Belgium SA/NV to sell the 24% interest held in the capital of
Infotechnique S.A. for approximately Luxembourg Fl 70,000,000 (with the proceeds
of such sale remaining with Olsy) and (ii) Olsy to subscribe for its pro-rata
share of the capital increase resolved upon by the shareholders of Oliricerca to
cover 1997 losses.
6.2 NONSOLICITATION. Neither Olivetti, any Affiliates of Olivetti
nor any directors, officers or employees of Olivetti or any such Affiliate
shall, and Olivetti shall use its best efforts to cause its and any such
Affiliate's investment bankers not to, directly or indirectly, (a) (i) initiate
contact with, solicit or
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encourage any inquiries or proposals by, (ii) enter into any discussions or
negotiations with, (iii) disclose, directly or indirectly, any information not
customarily disclosed concerning the Business, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary to or (iv) afford any access to Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary or any properties, books and records
relating to the Business or any of the foregoing to any Person in connection
with any possible proposal regarding a sale or transfer of all or any portion of
or any merger involving (or any similar transaction involving) the assets, stock
or business of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (b)
enter into any agreement with any Person with respect to any such transaction.
Olivetti shall notify Wang immediately if any discussions or negotiations are
sought to be initiated, any inquiry or proposal is made or any such information
is requested, with respect to any such proposal, or if any such proposal is
received or indicated to be forthcoming. If Olivetti, any of its Affiliates, any
of the directors, officers or employees of Olivetti or any of its Affiliates or
any of its or any such Affiliate's investment bankers takes any action
prohibited by this Section 6.2, then Olivetti shall reimburse Wang for one-half
of the documented, external fees, costs and expenses incurred by Wang in
connection with the transactions contemplated by this Agreement including,
without limitation, fees, costs and expenses of investment bankers, accountants,
attorneys and other advisors and potential financial sources and their advisors
and travel expenses of Wang personnel (but excluding the time of such personnel)
(collectively "Wang Transaction Expenses"), by wire transfer of immediately
available funds to an account designated by Wang. Such reimbursement will be
made not later than ten Business Days after the date on which such action was
taken. In addition to the right to reimbursement provided for in this Section
6.2, Wang shall have all other legal and equitable remedies as may be available
to it, with respect to any action taken by Olivetti, any of its Affiliates, any
of the directors, officers or employees of Olivetti or any of its Affiliates or
any agent or representative of Olivetti or any of its Affiliates prohibited by
this Section 6.2 (including, without limitation, the right to initiate
arbitration pursuant to Section 12.12 with respect thereto).
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6.3 FULL ACCESS. (a) From the date of this Agreement to the Closing
Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries to (i) afford to Wang and its authorized
representatives reasonable access (including the time thereof) to all books,
records, plants, offices, warehouses and other facilities and properties of the
Business, Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary and their
respective officers and managers, (ii) permit Wang and its authorized
representatives to make such inspections thereof as Wang may reasonably request
(including the time thereof) and (iii) cause their officers and managers (and,
where appropriate their financial, legal, accounting or other advisory firms) to
furnish Wang with such financial and operating data and other information (which
is not duplicative of the reports delivered by Olivetti to Wang pursuant to
Section 6.1(e)) with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary as Wang may from time to time reasonably request.
(b) From the date of this Agreement to the Closing Date, Wang
shall (i) afford to senior officers of the Olivetti group reasonable access
(including the time thereof) to its senior officers responsible for finance,
legal, human resources and business development and cause such finance, legal,
human resources and business development officers to furnish such senior
officers of the Olivetti group with such financial and operating data and other
information (which is not duplicative of the reports delivered by Wang to
Olivetti pursuant to Section 6.10) with respect to, and to respond to questions
concerning, Wang as they may from time to time reasonably request or ask and
(ii) afford to Olivetti's legal counsel referred to in Section 12.3 reasonable
access (including the time thereof) to the so-called data room established in
connection with the transactions contemplated by this Agreement.
(c) No investigation by, or furnishing of information to, Wang
shall affect the right of Wang to rely on the representations, warranties,
covenants and agreements of Olivetti set forth herein (including, without
limitation, Article IV), and no investigation by, or furnishing of information
to, Olivetti shall affect the right of Olivetti to rely on the representations,
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warranties, covenants and agreements of Wang set forth herein (including,
without limitation, Article V).
6.4 SUPPLEMENTS TO DISCLOSURE SCHEDULES. (a) From time to time
prior to the Closing, Olivetti shall promptly (i) supplement or amend the
Olivetti Disclosure Schedule with respect to (aa) any matter which is required
to be set forth or described in the Olivetti Disclosure Schedule as of the date
hereof of which Olivetti becomes aware after the date hereof or (bb) any matter
hereafter arising which, if existing or occurring on the date hereof, would have
been required to be set forth or described in the Olivetti Disclosure Schedule
and (ii) deliver a copy of such supplement or amendment to Wang. No supplement
or amendment of the Olivetti Disclosure Schedule made pursuant to this Section
6.4(a) shall be deemed to cure any breach of any representation or warranty made
by Olivetti unless Wang specifically agrees thereto in writing.
(b) From time to time prior to the Closing, Wang shall promptly
(i) supplement or amend the Wang Disclosure Schedule with respect to (aa) any
matter which is required to be set forth or described in the Wang Disclosure
Schedule as of the date hereof of which Wang becomes aware after the date hereof
or (bb) any matter hereafter arising which, if existing or occurring on the date
hereof, would have been required to be set forth or described in the Wang
Disclosure Schedule and (ii) deliver a copy of such supplement or amendment to
Olivetti. No supplement or amendment of the Wang Disclosure Schedule made
pursuant to this Section 6.4(b) shall be deemed to cure any breach of any
representation or warranty made by Wang unless Olivetti specifically agrees
thereto in writing.
6.5 NON-GOVERNMENTAL CONSENTS. (a) Each of Wang and Olivetti shall
use its respective commercially reasonable best efforts to give or make or cause
to be given or made in a timely manner all notices to and filings with, and to
obtain or cause to be obtained, prior to Closing, all authorizations, consents
or approvals of, all Persons or Governmental Authority (in its capacity as a
customer of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary) required
to be given, made or obtained by it (or any of its Affiliates) in connection
with the execution and delivery of this Agreement or any
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of the Related Agreements or the consummation of the transactions contemplated
hereby or thereby. In obtaining any authorization, consent or approval of any
Person or Governmental Authority (in its capacity as a customer of Olsy, Olsy
Japan, Olsy Brazil or a Controlled Subsidiary) required to be given, made or
obtained by Olivetti (or any of its Affiliates) in connection with the execution
and delivery of this Agreement or any Related Agreement or the consummation of
the transactions contemplated hereby or thereby, Olivetti (i) shall submit to
such Person or Governmental Authority the standard form attached as Exhibit 11
hereto and shall not agree to any material modification thereof without Wang's
prior consent, which shall not be unreasonably withheld, and (ii) shall not
agree to any modification of any commercial or economic term of any Contract
between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and such
Person or Governmental Authority or the assumption by Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary of any liability or obligation, without
Wang's prior written consent.
(b) Notwithstanding anything herein to the contrary, if (i) the
approval of the Board of Directors of Olsy Japan and (ii) the consent of Toshiba
Corporation under the Shareholders Agreement dated May 13, 1985 required in
connection with the consummation of the transactions contemplated hereby
(collectively, the "Olsy Japan Consents") are not all obtained prior to Closing,
(aa) the delivery of the certificate or certificates representing the Olsy Japan
Shares provided for in Section 3.2(a) shall be delayed until the earlier of (x)
the date all of the Olsy Japan Consents are obtained or (y) the date six months
after the Closing Date (the earlier of (x) and (y) being referred to herein as
the "Olsy Japan Delayed Date"), (bb) 71,200,000,000 Italian lira of the Cash
Portion of the Purchase Price shall be placed in escrow until the Olsy Japan
Delayed Date and (cc) Section 6.1 shall continue to apply to Olsy Japan until
the Olsy Japan Delayed Date. If all of the Olsy Japan Consents are not obtained
by the date six months after the Closing Date, (i) Olivetti shall retain the
certificate or certificates representing the Olsy Japan Shares and (ii) the
71,200,000,000 Italian lira in escrow shall be returned to Wang (together with
all interest thereon).
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(c) Notwithstanding anything herein to the contrary, if the
consents of Bull S.A. under the Shareholders Agreement dated October 10, 1989
between Olivetti and Bull S.A., Master Agreement dated December 20, 1985 between
Olivetti and Bull S.A. and Shareholders Agreement dated December 20, 1985
between Olivetti and Bull S.A. required in connection with the consummation of
the transactions contemplated hereby (collectively the "Bull Consents") are not
obtained prior to Closing, (i) Olivetti shall cause Olsy or a Controlled
Subsidiary to transfer all the outstanding shares of SIAB S.A. to Olivetti or an
Olivetti Affiliate for an amount in cash equal to the net book value thereof at
the time of such transfer, (ii) Olivetti and Wang shall continue to use their
respective commercially reasonable best efforts to obtain the Bull Consents, and
(iii) Wang and Olivetti shall enter into an arrangement (such as a pledge or
usufruct of such shares) providing Wang with control (including, without
limitation, the economic benefit thereof) over SIAB S.A. as nearly as
practicable equal to what Wang would have had if SIAB S.A. remained a Controlled
Subsidiary until the Bull Consents are obtained. When the Bull Consents are
obtained, Olivetti shall transfer all the outstanding shares of SIAB S.A. to
Olsy for an amount in cash equal to the amount referred to in clause (i) of the
preceding sentence.
(d) Notwithstanding anything herein to the contrary, if the
consents of the minority shareholders under the Shareholders Agreement for
Regulus S.p.A. dated July 28, 1994 as amended by Amendment dated March 11, 1996
by and among Olteco - Fin S.p.A. (predecessor to Olsy S.p.A.) Mr. Dalla Valle,
Mr. S. Ghedini, Mr. P. Natali, and Mrs. M. Pasquini required in connection with
the consummation of the transactions contemplated hereby (collectively the
"Regulus Consents") are not obtained prior to Closing, (i) Olivetti shall cause
Olsy or a Controlled Subsidiary to transfer all the outstanding shares of
Regulus S.p.A. to Olivetti or an Olivetti Affiliate for an amount in cash equal
to the net book value thereof at the time of such transfer, (ii) Olivetti and
Wang shall continue to use their respective commercially reasonable best efforts
to obtain the Regulus Consents and (iii) Wang and Olivetti shall enter into an
arrangement (such as a pledge or usufruct of such shares) providing Wang with
ownership and operational control (including, without limitation, the economic
benefit
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thereof) over Regulus S.p.A. as nearly as practicable equal to what Wang
would have had if Regulus S.p.A. remained a Controlled Subsidiary until the
Regulus Consents are obtained. When the Regulus Consents are obtained, Olivetti
shall transfer all the outstanding shares of Regulus S.p.A. to Olsy for an
amount in cash equal to the amount referred to in clause (i) of the preceding
sentence.
(e) If the Master Distribution Agreement, dated December 14,
1993, by and between Olsy and Hitachi Data Systems Europe Holdings BV is not
renewed and as a result of such nonrenewal Olsy (or a Controlled Subsidiary)
terminates all or any portion of the employees of the division known as Olivetti
Informatica Centrale, Olivetti shall reimburse Wang for one-half of all amounts
associated with the termination of up to 150 of such employees (including
without limitation, all termination and incentives payments and reasonable
advisory costs with the exception of any TFR severance payment and of any
payment on account of unused holidays, thirteenth or fourteenth monthly salaries
and reimbursement of expenses).
(f) If the Engagement for Purchasing Services dated 1996 between
Olivetti France and France Telecom or the Agreement #968004795 dated May 17,
1996 between Olivetti France and La Poste are terminated as a result of the
failure to obtain the consents thereunder required in connection with the
transactions contemplated hereby, Olivetti shall indemnify Wang against and hold
it harmless from the consequences (including, without limitation, lost profits)
of such termination.
6.6 GOVERNMENTAL CONSENTS. (a) Each of Wang and Olivetti shall use
its respective commercially reasonable best efforts to make or cause to be made
in a timely manner all filings with, and to obtain or cause to be obtained,
prior to Closing, any permit, authorization, consent or approval of, any
Governmental Authority (in their capacity as such) required to be made or
obtained by it in connection with this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby not specifically provided for in Section 6.6(b).
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(b) As soon as practicable after the date hereof, Olivetti and
Wang will prepare and file (i) any notification or special report with respect
to this Agreement and the transactions contemplated hereby required pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or any other statute, rule or regulation administered by the Antitrust
Division of the United States Department of Justice (the "DOJ") and the Federal
Trade Commission (the "FTC") with the DOJ or the FTC, (ii) pre-closing
notifications with the Italian Competition Authority, German Federal Cartel
Office, Dutch Competition Authority and Australian Foreign Investment Review
Board and (iii) all other foreign pre-closing competition filings or
notifications, the failure of which to make would have or result in a material
adverse effect on either party. Olivetti and Wang shall promptly comply with any
request by any such Governmental Authority for additional documents or
information and shall use their best efforts to obtain early termination of the
waiting period under any of the foregoing.
6.7 BEST EFFORTS. Subject to the terms and conditions of this
Agreement, Wang and Olivetti shall use their respective commercially reasonable
best efforts to take, or cause to be taken, and to do or cause to be done, all
action and all things necessary (including, without limitation, under applicable
laws and regulations) to consummate and make effective the transactions
contemplated by this Agreement or the Related Agreements as soon as practicable
after the date hereof.
6.8 EXPENSES. (a) Except as otherwise provided in Sections 6.2,
6.8(c) or 11.2(c)(i), whether or not the transactions contemplated hereby are
consummated, (i) all costs and expenses incurred through the Closing Date by
Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
connection with this Agreement or any Related Agreement and the transactions
contemplated hereby or thereby shall be paid by Olivetti and (ii) all costs and
expenses incurred through the Closing Date by Wang in connection with this
Agreement or any Related Agreement and the transactions contemplated hereby or
thereby shall be paid by Wang.
(b) All costs and expenses required to be borne by Olivetti
pursuant to Article I and those
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costs and expenses incurred by Olivetti, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary in connection with the preparation,
delivery and audit of the financial statements referred to in Sections 4.6 or
6.12(c) shall be paid by Olivetti.
(c) Olivetti shall pay all expenses associated with actions
required to be taken with regard to any credit facility, loan agreement or
similar agreement pursuant to Section 1.4(a) which were not completed prior to
the Closing and which Wang causes to be taken after the Closing (provided that
if Olivetti and Wang mutually agreed in writing pursuant to the proviso to
Section 1.4(a) to defer any such action with respect to a particular credit
facility, loan agreement or similar arrangement until after the Closing, Wang
shall defer such action as so mutually agreed).
6.9 RECORDS; ACCESS. (a) Not later than two Business Days after the
date hereof, each of Olivetti and Wang shall designate an appropriate number of
representatives (respectively, the "Olivetti Records Representatives" and the
"Wang Records Representatives") to: (i) identify all original agreements,
documents, books, records and files relating to the Business, Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan
Subsidiary, if any) or any asset, property, Contract, Intellectual Property,
right, privilege, franchise, operation, business, liability or obligation of any
of the foregoing which are in the possession of Olivetti or an Olivetti
Affiliate (the "Olsy Records") and (ii) prepare copies of any of the Olsy
Records which also relate to Olivetti or an Olivetti Affiliate which Olivetti
elects to retain. Olivetti and Wang, respectively, shall cause the Olivetti
Records Representatives and the Wang Records Representatives to work in a
cooperative fashion. As soon as practicable after the Closing (but not later
than 90 days thereafter), Olivetti shall deliver the Olsy Records to Olsy. On
the Closing Date, Olivetti shall deliver or cause to be delivered to Olsy or a
Major Subsidiary the contents of the so-called data rooms established in
connection with the transactions contemplated by this Agreement as existing as
of the date hereof; Olivetti may copy the contents of such data rooms prior to
the delivery thereof.
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(b) After the Closing and upon reasonable notice, Olivetti shall
give, or cause to be given, to Wang and its designated representatives access to
any agreements, documents, books, records or files containing information
concerning Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any
Subsidiary or Olsy Japan Subsidiary, if any) or the Drop-Down not delivered
pursuant to Section 6.9(a) relating to periods prior to the Closing, and
Olivetti shall permit such persons to examine and copy such books, records or
files to the extent requested by Wang, at Wang's expense, in connection with tax
and financial reporting matters, tax audits or any pending or threatened
litigation or other proceeding in which Wang, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary is involved. After the Closing, Olivetti shall direct
the employees of Olivetti and Olivetti Affiliates, upon reasonable notice from
Wang or Olsy, to be reasonably available to Wang or Olsy for the purpose of
assisting Wang or Olsy in connection with any matter referred to in the
preceding sentence (provided that if such assistance requires any such personnel
to be absent from their place of employment, Wang or Olsy shall reimburse such
personnel's employer for the cost of such absence and any travel costs incurred
by such employee in providing such assistance).
(c) After the Closing and upon reasonable notice, Wang shall
give, or cause to be given, to Olivetti and its designated representatives
access to any agreements, documents, books, records and files of Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan
Subsidiary, if any) relating to periods prior to the Closing, and Wang shall
permit such persons to examine and copy such books, records and files to the
extent requested by Olivetti, at Olivetti's expense, in connection with tax and
financial reporting matters, tax audits or any pending or threatened litigation
or other proceeding in which Olivetti is involved and which involves or arises
out of the ownership or operation of the Business, Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary by Olivetti. After the Closing, Wang shall direct
the employees of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries,
upon reasonable notice from Olivetti, to be reasonably available to Olivetti for
the purpose of assisting Olivetti in connection with any matter referred to in
the preceding sentence (provided that if such assistance requires any
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such personnel to be absent from their place of employment, Olivetti shall
reimburse such personnel's employer for the cost of such absence and any travel
costs incurred by such employee in providing such assistance).
(d) Olivetti and Wang acknowledge that in certain circumstances
it may be necessary for them and their designated representatives to have access
to, and to present to third parties, the originals of the agreements, documents,
books, records and files referred to in Sections 6.9(a) or (b) and each shall
give, or cause to be given, to the other and its designated representatives
access to such originals and, with the written assurance of the other to return
such originals, shall permit the other to present such originals to third
parties.
(e) Olivetti shall retain, and after the Closing Wang shall
cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to
retain, any agreements, documents, books, records or files relating to the
Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any
Subsidiary or Olsy Japan Subsidiary, if any) for not less than six years, and
Olivetti shall notify Wang, and Wang shall cause each of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries to notify Olivetti, not less than 30 days
prior to the destruction of any documents, books, records or files.
6.10 DELIVERY OF REPORTS BY WANG. Between the date hereof and the
Closing Date, Wang shall deliver to Olivetti promptly after the filing thereof,
copies of all forms, reports and documents filed by Wang with the SEC or
distributed by Wang to its stockholders, all of which shall comply at the time
of filing in all material respects with all then applicable requirements of the
Securities Act and the Exchange Act. Prior to the date hereof, Wang has provided
Olivetti's previously designated representative with four true, complete and
correct copies of the most recent report delivered to Wang's lenders pursuant to
Section 7.1 of that certain Credit Agreement among Wang, Bankers Trust, as agent
and the other persons named therein on Schedule I, dated August 29, 1996;
between the date hereof and the Closing, Wang shall provide Olivetti's
previously designated representative with four true, complete and correct copies
of all other reports delivered to Wang's lenders pursuant to
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such section. Olivetti shall not permit such representative to distribute such
reports or the Financing Plan referred to in Section 9.8, or disclose the
contents thereof, to any Person other than the three Olivetti officers
previously identified. Olivetti shall not permit any reproduction of all or any
portion of any such report.
6.11 FINANCING. (a) From the date of this Agreement to the Closing
Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries to (i) afford to financing sources identified by
Wang and their officers and authorized representatives reasonable access
(including the time thereof) to all books, records, plants, offices, warehouses
and other facilities and properties of each of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries and their respective officers and managers, (ii)
permit such financing sources and their officers and authorized representatives
to make such inspections thereof as they may reasonably (including the time
thereof) request, (iii) cause their officers and managers (and, where
appropriate, their financial, legal, accounting or other advisory firms) to
furnish such financing sources with such financial and operating data and other
information with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary as such financing sources may from time to time reasonably
request and (iv) cause the officers and managers of each of Olivetti, Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries to otherwise assist Wang in
arranging financing from such financing sources, including, without limitation,
by attending meetings with such financing sources; provided, however, that Wang
shall cooperate with Olivetti to minimize any disruption of its business
resulting from the foregoing and to endeavor to satisfy any such financing
source's request for access to books or records from those contained in the
so-called data rooms established in connection with the transactions
contemplated by this Agreement. The terms and conditions of arrangements for
financing satisfying the condition in Section 9.8 shall permit, as of the
Closing, the consummation of the transactions contemplated by this Agreement and
the Related Agreements, including without limitation, the payment of the
Ancillary Consideration.
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(b) Wang shall use its commercially reasonable best efforts to
satisfy the condition in Section 9.8.
6.12 CERTAIN INFORMATION AND FINANCIAL STATEMENTS. (a) Olivetti has
previously delivered to Wang a true, complete and correct copy of a
reclassified, projected consolidated balance sheet of Olsy, Olsy Japan and
certain of the Subsidiaries projected as of December 31, 1997 (the "12/31/97
Projected Balance Sheet"). The 12/31/97 Projected Balance Sheet is attached as
Schedule 6.12(a) hereto. Olivetti hereby represents and warrants to Wang that
(i) the projected consolidated financial position of Olsy, Olsy Japan and such
Subsidiaries presented in the column of the 12/31/97 Projected Balance Sheet
entitled "Projected MRP 31/12/1997" reflected the best estimate of the senior
management of Olivetti, Olsy, Olsy Japan and such Subsidiaries (which was based
on and was consistent with the management reporting package available at that
time), as of the date of the preparation of the 12/31/97 Projected Balance
Sheet, of the projected consolidated financial position of Olsy, Olsy Japan and
such Subsidiaries as of December 31, 1997 and (ii) the pro forma adjustments to
the 12/31/97 Projected Balance Sheet reflected on Schedule 6.12(a) fairly
reflect the adjustments required to be made to reflect the transactions
contemplated by this Agreement and the actions which Olivetti is required to
have taken or to cause to be taken pursuant to Section 1.8(a).
(b) Olivetti acknowledges that during the course of the
negotiation of the transactions contemplated by this Agreement, Olivetti or its
advisors have heretofore supplied Wang with a certain book of written documents,
the table of contents of which is set forth on Schedule 6.12(b) hereto (the
"Information Documents"). Olivetti hereby represents and warrants to Wang that
such Information Documents were prepared from time to time: (i) as to the
historical data contained therein, on the basis of the information available at
Olsy in Ivrea (Italy) or obtained from the controllers of the Controlled
Subsidiaries which information was consistent with the books, records and
systems of Olsy, Olsy Japan or the Controlled Subsidiaries, as the case may be,
and (ii) as to the projected data contained therein, on the basis of then
current best estimates of senior management
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of Olivetti, Olsy, Olsy Japan and the Controlled Subsidiaries of the projected
performance reflected therein.
(c) Not later than April 15, 1998, Olivetti shall prepare and
deliver (or cause to be prepared and delivered) to Wang true, complete and
correct copies of (i) a consolidated balance sheet of Olsy and the Subsidiaries,
a balance sheet of Olsy Japan, a balance sheet of Olsy Brazil and a combined
balance sheet of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each
case as of December 31, 1997 (such combined balance sheet being referred to
herein as the "12/31/97 Balance Sheet"), a consolidated statement of income of
Olsy and the Subsidiaries, a statement of income of Olsy Japan, and a combined
statement of income of Olsy and the Subsidiaries and Olsy Japan (the "12/31/97
Income Statement"), in each case for the twelve month period then ended and a
consolidated statement of cash flows of Olsy and the Subsidiaries, a statement
of cash flows of Olsy Japan and a combined statement of cash flows of Olsy and
the Subsidiaries and Olsy Japan, in each case for the twelve month period then
ended, all (other than statements of cash flows) audited by Coopers & Lybrand,
independent certified public accountants, whose audit report thereon shall be
included therein and accompanied by footnotes (collectively, the "12/31/97
Financial Statements") and (ii) a version of the 12/31/97 Balance Sheet
reclassified consistent with the 12/31/97 Projected Balance Sheet (the
"Reclassified 12/31/97 Balance Sheet"). The 12/31/97 Financial Statements (i)
shall give a true and fair view of the consolidated financial position of Olsy
and the Subsidiaries, the financial position of Olsy Japan, the financial
position of Olsy Brazil and the combined financial position of Olsy and the
Subsidiaries, Olsy Japan and Olsy Brazil, in each case as of December 31, 1997,
and the consolidated results of operations and cash flows of Olsy and the
Subsidiaries, the results of operations and cash flows of Olsy Japan and the
combined results of operations and cash flows of Olsy and the Subsidiaries and
Olsy Japan, in each case, for the period then ended, and (ii) shall be prepared
in accordance with Italian GAAP and OLGA as selected and applied in the
preparation of the 9/30/97 Italian GAAP Financial Statements.
(d) Not later than 105 days after the Closing Date, Wang shall
prepare and deliver (or cause to
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be prepared and delivered) to Olivetti true, complete and correct copies of (i)
a consolidated balance sheet of Olsy and the Subsidiaries, a balance sheet of
Olsy Japan, a balance sheet of Olsy Brazil and a combined balance sheet of Olsy
and the Subsidiaries and Olsy Japan (such combined balance sheet being referred
to herein as the "Closing Balance Sheet"), in each case as of (aa) the Closing
Date or (bb) if the Closing Date is not a month end, as of the month end
immediately preceding the Closing Date (such date being referred to herein as
the "Closing Financial Statements Date"), consolidated statements of income of
Olsy and the Subsidiaries, a statement of income of Olsy Japan, a statement of
income of Olsy Brazil and a combined statement of income of Olsy and the
Subsidiaries, Olsy Japan and Olsy Brazil, in each case for the period beginning
on January 1, 1998 and ending on the Closing Financial Statements Date (the
"Closing Financial Statements Period"), and a consolidated statement of cash
flows of Olsy and the Subsidiaries, a statement of cash flows of Olsy Japan, a
statement of cash flows of Olsy Brazil and a combined statement of cash flows of
Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case for the
Closing Financial Statements Period, all (other than statements of cash flows)
audited by Ernst & Young LLP ("Ernst & Young"), independent certified public
accountants, whose audit report thereon shall be included therein, and
accompanied by footnotes (collectively, the "Closing Financial Statements") and
(ii) a version of the Closing Balance Sheet reclassified consistent with the
12/31/97 Projected Balance Sheet (the "Reclassified Closing Balance Sheet"). The
Closing Financial Statements (i) shall give a true and fair view of the
consolidated financial position of Olsy and the Subsidiaries, the financial
position of Olsy Japan, the financial position of Olsy Brazil and the combined
financial position of Olsy and the Subsidiaries and Olsy Japan, in each case as
of the Closing Financial Statements Date and the consolidated results of
operations and cash flows of Olsy and the Subsidiaries, the results of
operations and cash flows of Olsy Japan, the results of operations and cashflows
of Olsy Brazil and the combined results of operations and cash flows of Olsy and
the Subsidiaries, Olsy Japan and Olsy Brazil, in each case, for the Closing
Financial Statements Period and (ii) shall be prepared in accordance with
Italian GAAP and OLGA as selected and applied in the preparation of the 9/30/97
Italian GAAP Financial Statements, except (aa) if
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such application was improper under Italian GAAP or OLGA or (bb) to the extent
that such application was inconsistent. In connection with the preparation of
the Closing Financial Statements, (i) if any of the actions required to be taken
pursuant to Section 1.8(a) shall not have been taken prior to the Closing
Financial Statements Date, Wang shall cause such actions to be taken effective
as of the date such actions should have been taken pursuant to Section 1.8(a)
and (ii) Wang shall cause all repair costs capitalized by Olsy North America,
Inc. not previously reversed and expensed to be reversed and expensed.
(e) After the date hereof and through the Closing Date, upon
reasonable notice, Olivetti shall give, or cause to be given, to Wang and its
representatives access to the books, records, files and personnel of the
Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries for
purposes of monitoring the preparation or audit of the 12/31/97 Financial
Statements. After the date hereof, upon reasonable notice, Olivetti shall give,
or cause to be given, to Wang and its representatives access to the books,
records and files of Olivetti (and if still in the possession of Olivetti, of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) relating to any
of the financial statements delivered by Olivetti to Wang pursuant to this
Agreement and any work papers, audits or reports thereon and all analyses,
reports, memoranda and documents relating thereto for purposes of performing its
obligations or enforcing its rights under Sections 6.13, 6.14, 6.16, 6.17, 6.18,
6.19, 6.20, 6.21 or 6.22 or with respect to the Earn-Outs.
(f) After the Closing and through the date the Closing Financial
Statements are delivered pursuant to Section 6.12(d), upon reasonable notice,
Wang shall give, or cause to be given, to Olivetti and its representatives
access to the books, records, files and personnel of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries for purposes of preparing or auditing the
12/31/97 Financial Statements and monitoring the preparation or audit of the
Closing Financial Statements. After the Closing, upon reasonable notice, Wang
shall give, or cause to be given, to Olivetti and its representatives access to
the books, records and files of Olsy, Olsy Japan, Olsy Brazil and the Controlled
Subsidiaries
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relating to any of the financial statements delivered by Wang to
Olivetti pursuant to this Agreement and any work papers, audits or reports
thereon and all analyses, reports, memoranda and documents relating thereto for
purposes of performing its obligations or enforcing its rights under Sections
6.13, 6.14, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21 or 6.22 or with respect to the
Earn-Outs.
6.13 1997 EBITDA PURCHASE PRICE ADJUSTMENT. (a) Not later than 60
days after the date Olivetti delivers (or causes to be delivered) the 12/31/97
Financial Statements (the "12/31/97 Objection Period"), Wang shall notify
Olivetti of any and all objections, if any, to the 12/31/97 Financial Statements
(the "12/31/97 Objections"). If Wang fails to notify Olivetti of any 12/31/97
Objections within the 12/31/97 Objection Period, Wang shall be deemed to have
accepted the 12/31/97 Financial Statements. If Wang notifies Olivetti of any
12/31/97 Objections within the 12/31/97 Objection Period, Olivetti and Wang
shall attempt to resolve such 12/31/97 Objections not later than 30 days after
the date Wang notifies Olivetti of such 12/31/97 Objections. If Olivetti and
Wang are unable to resolve all such 12/31/97 Objections within such period,
either party may submit the unresolved 12/31/97 Objections to arbitration in
London, England before three arbitrators, then active certified public
accountants, in accordance with the Rules of Arbitration of the International
Chamber of Commerce (the "Rules") then in effect as modified herein, as the sole
means of resolving such 12/31/97 Objections. Each party shall bear its own costs
in any such proceeding, and the expenses of the arbitration tribunal shall be
borne by Wang and Olivetti in equal portions. The decision of the arbitrators
shall be final and binding upon Wang and Olivetti and may be enforced in any
court of competent jurisdiction. To the fullest extent permitted by law, each
party to this Agreement irrevocably submits to the jurisdiction of such forum
with respect to unresolved 12/31/97 Objections and waives any objection it may
have to either the jurisdiction or venue of such forum with respect to
unresolved 12/31/97 Objections. If any 12/31/97 Objections are to be submitted
to arbitration pursuant to this Section 6.13(a), then each party shall nominate
an active certified public accountant knowledgeable in Italian GAAP to serve as
its party-appointed arbitrator within ten days of submission or its receipt of
notice thereof. The two arbitrators so nomi-
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ated shall mutually nominate a third then active certified public accountant
knowledgeable in Italian GAAP within ten days of the nomination of the second
arbitrator to serve as the chair of the arbitral tribunal. If any party fails to
timely nominate an arbitrator or if the two party-nominated arbitrators fail to
timely agree on a third arbitrator, then any party may request that an active
certified public accountant be appointed by the International Chamber of
Commerce Court of Arbitration within 15 days of such request in accordance with
the Rules. The hearing (if any) shall be held, if possible, within 30 days of
the confirmation of the appointment of the third arbitrator, and the tribunal
shall render its award within 30 days of the conclusion of the hearing or, if
there is no hearing, within 30 days after the parties' final submissions to the
arbitrators. The parties expressly agree that leave to appeal under Section 45
or 69 of the English Arbitration Act 1996 may not be sought with respect to any
question of law arising in the course of the arbitration or with respect to any
award made.
(b) If the amount of 1997 EBITDA (as defined in Section 6.13(d))
is less than 120,000,000,000 Italian lira, then, not later than (i) if Wang
fails to notify Olivetti of any 12/31/97 Objections within the 12/31/97
Objection Period, five days after expiration of the 12/31/97 Objection Period or
(ii) if Wang notifies Olivetti of any 12/31/97 Objections within such 12/31/97
Objection Period, five days after the date all such 12/31/97 Objections are
resolved (by mutual agreement or arbitration) in accordance with Section 6.13(a)
(the later of clause (i) or (ii) being referred to as the "1997 EBITDA
Determination Date"), Olivetti shall pay Wang an amount (the "1997 EBITDA
Determined Cash Payment Amount") in cash, in immediately available funds, equal
to 60,000,000,000 Italian lira minus 4 times the difference between
120,000,000,000 Italian lira and the amount of 1997 EBITDA. If the amount of
1997 EBITDA is equal to or greater than 105,000,000,000 Italian lira, Olivetti
shall not be obligated to make any payment to Wang pursuant to this Section
6.13(b).
(c) If the amount of 1997 EBITDA is greater than 88,750,000,000
Italian lira, then, effective as of the EBITDA Determination Date, the number of
rights shall be adjusted to a number of Rights (the "1997 EBITDA Determined
Number of Rights") equal to (i) if the amount
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of 1997 EBITDA is 105,000,000,000 Italian lira or more, 5,000,000 or (ii) if the
amount of 1997 EBITDA is less than 105,000,000,000 Italian lira but more than
88,750,000,000 Italian lira, then a number determined by multiplying 5,000,000
by a fraction, the numerator of which equals 65,000,000,000 minus 4 times the
difference between 105,000,000,000 Italian lira and the amount of 1997 EBITDA
and the denominator of which is 65,000,000,000. If the amount of 1997 EBITDA is
equal to or less than 88,750,000,000 Italian lira, the Rights shall become
wholly void and of no force or effect.
(d) The term "1997 EBITDA" means the sum of (i) the aggregate
amount of earnings of Olsy and the Subsidiaries and Olsy Japan, before interest
(including securitization and factoring related charges), taxes, depreciation
and amortization and excluding any extraordinary items set forth on Schedule
6.13(d), derived from the 12/31/97 Income Statement (as adjusted to reflect the
resolution of any 12/31/97 Objections, if any, by mutual agreement or
arbitration in accordance with Section 6.13(a)) and (ii) 25,000,000,000 Italian
lira of the share capital increase made pursuant to Sections 1.8(a)(v) and
1.8(b). For purposes of determining 1997 EBITDA, repair costs capitalized by
Olsy North America, Inc. during the nine month period ended September 30, 1997
shall be reversed and expensed and repair costs of Olsy North America, Inc. for
the three month period ended December 31, 1997 shall be expensed. By way of
example and solely for illustration purposes, Schedule 6.13(d) hereto
illustrates how 1997 EBITDA is derived from the 9/30/97 Italian GAAP Income
Statement in accordance with this definition.
6.14 CLOSING BALANCE SHEET PURCHASE PRICE ADJUSTMENT. (a) Not later
than 60 days after the date Wang delivers (or causes to be delivered) the
Closing Financial Statements (plus a number of days equal to the number of days,
if any, in the month of August falling in such period the "Closing Objection
Period"), Olivetti shall notify Wang of any and all objections, if any, to the
Closing Financial Statements (the "Closing Objections"). If Olivetti fails to
notify Wang of any Closing Objections within the Closing Objection Period,
Olivetti shall be deemed to have accepted the Closing Financial Statements. If
Olivetti notifies Wang of any Closing Objections within the Closing Objection
Period, Wang and
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Olivetti shall attempt to resolve such Closing Objections not later than 30 days
after the date Olivetti notifies Wang of such Closing Objections. If Wang and
Olivetti are unable to resolve all such Closing Objections within such period,
either party may submit the unresolved Closing Objections to arbitration in
London, England before three arbitrators, then active certified public
accountants, in accordance with the Rules then in effect as modified herein, as
the sole means of resolving such Closing Objections. Each party shall bear its
own costs in any such proceeding, and the expenses of the arbitration tribunal
shall be borne by Wang and Olivetti in equal portions. The decision of the
arbitrators shall be final and binding upon Wang and Olivetti and may be
enforced in any court of competent jurisdiction. To the fullest extent permitted
by law, each party to this Agreement irrevocably submits to the jurisdiction of
such forum with respect to unresolved Closing Objections and waives any
objection it may have to either the jurisdiction or venue of such forum with
respect to unresolved Closing Objections. If any Closing Objections are to be
submitted to arbitration pursuant to this Section 6.14(a), then each party shall
nominate an active certified public accountant knowledgeable in Italian GAAP to
serve as its party-appointed arbitrator within ten days of submission or its
receipt of notice thereof. The two arbitrators so nominated shall mutually
nominate a third then active certified public accountant knowledgeable in
Italian GAAP within ten days of the nomination of the second arbitrator to serve
as the chair of the tribunal. If any party fails to timely nominate an
arbitrator or if the two party-nominated arbitrators fail to timely nominate on
a third arbitrator, then any party may request that an active certified public
accountant be appointed by the International Chamber of Commerce Court of
Arbitration within 15 days of such request in accordance with the Rules. The
hearing (if any) shall be held, if possible, within 30 days of the confirmation
of the appointment of the third arbitrator, and the tribunal shall render its
award within 30 days of the conclusion of the hearing or, if there is no
hearing, within 30 days after the parties' final submissions to the arbitrators.
The parties expressly agree that leave to appeal under Section 45 or 69 of the
English Arbitration Act 1996 may not be sought with respect to any question of
law arising in the course of the arbitration or with respect to any award made.
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(b) Not later than (i) if Olivetti fails to notify Wang of any
Closing Objections within the applicable Closing Objection Period, five days
after expiration of such Closing Objection Period or (ii) if Olivetti notifies
Wang of any Closing Objections within such Closing Objection Period, five days
after the date all such Closing Objections are resolved (by mutual agreement or
arbitration) in accordance with Section 6.14(a) (the later of clauses (i) or
(ii) being referred to as the "Closing Balance Sheet Determination Date"),
either: (aa) Olivetti shall pay Wang the amount by which the Target Tangible
Equity Value (as defined in Section 6.14(d)) exceeds the sum of (x) the Closing
Tangible Equity Value (as defined in Section 6.14(d)) and (y) the Closing
Tangible Equity Value Adjustment Amount (as defined in Section 6.14(d)); or (bb)
Wang shall pay Olivetti the amount by which the sum of (x) the Closing Tangible
Equity Value and (y) the Closing Tangible Equity Value Adjustment Amount exceeds
the Target Tangible Equity Value. Any payment pursuant to this Section 6.14(b)
by Olivetti shall be made in cash first by the escrow agent under the Cash
Escrow Agreement to Wang by wire transfer of immediately available funds in
escrow in accordance with the Cash Escrow Agreement and, if the amount of such
payment exceeds funds in escrow available therefor, by Olivetti to Wang by wire
transfer of immediately available funds. Any payment pursuant to this Section
6.14(b) by Wang shall be made in cash by Wang to Olivetti by wire transfer of
immediately available funds.
(c) Not later than the Closing Balance Sheet Determination Date,
Olivetti shall pay Wang (i) the amount, if any, by which the 12/31/97 Net
Financial Position was greater than negative 65,000,000,000 Italian lira
(meaning there was less than 65,000,000,000 Italian lira in cash) after giving
effect to the actions required to be taken pursuant to Sections 1.3(a) or (b)
and (ii) an amount equal to the amount of Cash Leakage (as defined in Section
6.14(d)), if any. Any payment pursuant to this Section 6.14(c) by Olivetti shall
be made in cash, to the extent any funds remain in escrow under the Cash Escrow
Agreement after any payment therefrom pursuant to Section 6.14(b), first by the
escrow agent under the Cash Escrow Agreement to Wang by wire transfer of
immediately available funds in escrow in accordance with the Cash Escrow
Agreement and, if the amount of such payment
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exceeds funds in escrow available therefor, by Olivetti to Wang by wire transfer
of immediately available funds.
(d) The following terms shall have the following meanings:
CASH LEAKAGE. The term "Cash Leakage" means the use of cash
(decrease in cash) due to dividends and equity distributions, or payments and
loans out of the ordinary course of business as prohibited and not otherwise
waived pursuant to Section 6.1 for the Closing Financial Statements Period (as
if such Section 6.1 applied throughout the Closing Financial Statements Period);
provided that any such use of cash is not captured in the Closing Tangible
Equity Value and provided that any loan or purchased asset made other than in
the ordinary course of business and not approved in writing by Wang shall be
transferred to Olivetti free of charge other than any related expense of
transfer.
CLOSING TANGIBLE EQUITY VALUE. The term "Closing Tangible Equity
Value" means the result obtained by subtracting the amount of "Intangible
Assets" shown on the Reclassified Closing Balance Sheet (as adjusted to reflect
the resolution of any Closing Objections, if any, by mutual agreement or
arbitration in accordance with Section 6.14(a)) from the amount of "Total
Shareholders' Equity" shown on the Reclassified Closing Balance Sheet (as
adjusted to reflect the resolution of any Closing Objections, if any, by mutual
agreement or arbitration in accordance with Section 6.14(a)).
CLOSING TANGIBLE EQUITY VALUE ADJUSTMENT AMOUNT. The term "Closing
Tangible Equity Value Adjustment Amount" means the amount of the "Loss"
(expressed as a positive number) derived from the Closing Financial Statements
and the books and records relating thereto (as adjusted to reflect the
resolution of any Closing Objections, if any, by mutual agreement or arbitration
in accordance with Section 6.14(a)), less the sum of the following (each of
which shall be expressed as a positive number and similarly derived): (i) the
amortization of intangible assets and the amortization of goodwill for the
Closing Financial Statements Period; (ii) any non-recurring loss, expense or
provision or non ordinary course of business expense for the Closing Financial
Statements Period, including any audit adjustment result-
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ing from the Closing Financial Statements audit that effects shareholders'
equity through the income statement, provided that such non-recurring loss,
expense or provision or non ordinary course of business expense do not result
from any of the actions in accordance with Section 1.8 or Section 6.1(h) or that
have not been agreed in writing by Olivetti and Wang; and (iii) the amount, if
any, by which the 1998 Operating Loss (as defined in this Section 6.14(d))
exceeds 65,000,000,000 Italian lira. By way of example and solely for
illustration purposes, Schedule 6.14(d) hereto sets forth some computations
(using hypothetical numbers) of the Closing Tangible Equity Value Adjustment
Amount in accordance with this definition and based on the assumption that the
"Tangible Equity Value" as of 12/31/97 is equal to the Target Tangible Equity
Value.
12/31/97 NET FINANCIAL POSITION. The term "12/31/97 Net Financial
Position" means the amount, positive or negative, of "Total Net Debt" shown on
the Reclassified 12/31/97 Balance Sheet (as adjusted to reflect the resolution
of any EBITDA Objections, if any, by mutual agreement or arbitration in
accordance with Section 6.13(a)) and, if negative, means there is net cash and,
if positive, means there is net debt.
1998 OPERATING LOSS. The term "1998 Operating Loss" means the
amount of Income/(Loss) for the Closing Financial Statements Period derived from
the Closing Financial Statements and the books and records relating thereto (as
adjusted to reflect the resolution of any Closing Objections, if any, by mutual
agreement or arbitration in accordance with Section 6.14(a)) before the
following (each of which shall be similarly derived): (i) taxes for the Closing
Financial Statements Period; (ii) minority interest for the Closing Financial
Statements Period; (iii) accounting adjustments relating to decisions made by
Wang after the Closing; (iv) any closing costs associated with the transactions
provided for in Sections 1.9 and 1.10; (v) goodwill amortization for the Closing
Financial Statements Period; (vi) non-recurring income, gain, loss, expense or
provision for the Closing Financial Statements Period, including any audit
adjustment resulting from the Closing Financial Statements audit that effects
shareholders' equity through the income statement; and (vii) net financial
charges for the Closing Financial Statements Period.
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TARGET TANGIBLE EQUITY VALUE. The term "Target Tangible Equity
Value" means 361,700,000,000 Italian lira.
(e) For purposes of the adjustments to the Purchase Price set
forth in this Section 6.14, no effect shall be given to (i) any amount which
effected the adjustment to the Purchase Price set forth in Section 6.13 if the
Purchase Price was adjusted pursuant thereto or (ii) any amount covered by the
more specific provisions of Sections 6.18, 6.19, 6.20 or 6.21.
6.15 OLSY GERMANY ASBESTOS CLEAN-UP. After the Closing and while
Wang has authority to do so, Wang shall not permit Olsy Germany to change the
current scope of work of, or the current contractor administering, the clean-up
referred to in Section 10.2(a)(vi) without Olivetti's consent, which consent
shall not be unreasonably withheld. If the clean-up referred to in Section
1.8(a)(vii) is completed in accordance with all Environmental Laws for less than
the restructuring fund therefor referred to in Section 1.8(a)(vii), Wang shall
cause Olsy Germany to refund the difference to Olivetti if Wang then has
authority to do so.
6.16 GUARANTEES. (a) After the Closing, Wang shall use its
commercially reasonable best efforts to replace financial guarantees of Olivetti
with respect to the business of Olsy, Olsy Japan, Olsy Brazil or any Subsidiary,
including, without limitation, financial guarantees with respect to VAT,
customs, import/export, rent deposits or insurance, to be replaced with a
financial guarantee of Wang or Affiliate of Wang. Wang shall indemnify Olivetti
for any amounts paid by Olivetti after the Closing (other than with respect to
events which occurred prior to the Closing and of which Olsy, Olsy Japan, Olsy
Brazil or any Subsidiary had notice) under any such financial guarantees prior
to the replacement thereof pursuant to this Section 6.16(a).
(b) Olivetti hereby represents and warrants to Wang that (i)
Schedule 6.16(b) hereto sets forth all bid, performance, advance payment or
residual bonds (the "Customer Bonds") issued by Olivetti with respect to (aa)
any Customer Contract which as of the date hereof, has not been fully performed
by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and under
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which any product, service or support provided after the date hereof can be
invoiced in accordance with such Customer Contract, (bb) any Customer Contract
with respect to which, as of the date hereof, there is any trade receivable on
the books and records of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, (cc) any Customer Contract which, as of the date hereof, has not
been fully performed by Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary with a customer to whom Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is providing invoiceable products, services or support,
(dd) any Customer Contract which is being performed in substantial part by a
subcontractor of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or
(ee) Customer Contracts or tender mutually agreed by Olivetti and Wang prior to
the date hereof and (ii) Schedule 6.16(b) does not set forth any Customer Bond
issued with respect to any Customer Contract or tender with respect to which any
action, suit or proceeding is pending (or to the Best Knowledge of the Olivetti
Group, threatened). In reliance on the foregoing representation and warranty,
after the Closing, Wang shall indemnify Olivetti if and to the extent any of the
Customer Bonds set forth on Schedule 6.16(b) are called after the Closing as a
result of any breach (other than a breach which occurred prior to the Closing
and of which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary had
notice) by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the
Customer Contract with respect to which Olivetti issued any such Customer Bond
(provided that the sole and exclusive remedy for Wang for any breach of the
foregoing representation and warranty with respect to any particular Customer
Bond or Customer Contract shall be that Wang shall be relieved of the foregoing
indemnification obligation with respect to such Customer Bond or Customer
Contract). Olivetti hereby waives all rights of subrogation or similar rights,
whether arising under law or contract (including, without limitation, any
counter guarantee given by Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary to Olivetti), with respect to all Customer Bonds issued by Olivetti
with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary not listed on Schedule 6.16(b) hereto.
(c) Olivetti hereby represents and warrants to Wang that (i)
Schedule 6.16(c) hereto sets forth all corporate guarantees issued by Olivetti
to
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suppliers of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and
with respect to each such corporate guarantee, the supplier to which it was
issued and the amount outstanding thereunder as of December 31, 1997 and (ii)
that Schedule 6.16(c) does not set forth any such corporate guarantee with
respect to which any action, suit or proceeding is pending (or to the Best
Knowledge of Olivetti, threatened). In reliance on the foregoing representation
and warranty, after the Closing, Wang shall (i) use its commercially reasonable
best efforts to assist Olivetti in obtaining the return of such corporate
guarantees and (ii) indemnify Olivetti for any amounts paid by Olivetti after
the Closing other than with respect to events which occurred prior to the
Closing and of which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
had notice) under any such corporate guarantees prior to the return thereof
pursuant to this Section 6.16(c) (provided that the sole and exclusive remedy
for Wang for any breach of the foregoing representation and warranty with
respect to any particular corporate guarantee shall be that Wang shall be
relieved of the foregoing indemnification obligation with respect to such
corporate guarantee).
6.17 CERTAIN EMPLOYEE BENEFIT MATTERS. (a) Olivetti prior to the
Closing, and Wang on and after the Closing, shall use their respective best
efforts, and shall cause Olsy U.K. Ltd. ("Olsy U.K.") to use its respective best
efforts, take all actions necessary or appropriate to (i) cause the trustees of
the Olsy U.K. Employees Pension Scheme (the "UK Scheme") to declare a full
pension contribution holiday such that, for the period ending on April 1, 2002
(the "Holiday Close Date"), Olsy U.K. will not be required to make any
contributions to the UK Scheme and (ii) amend the UK Scheme such that no
individual first hired after the Closing Date shall become eligible to
participate therein. Olivetti shall promptly reimburse Wang for any
contributions required (whether pursuant to applicable law or as may be required
by the trustees of the UK Scheme) to be made by Wang or Olsy U.K. to the UK
Scheme on or before the Holiday Close Date. Without limiting any other provision
of this Section 6.17(a), (i) Wang shall not take any actions during the period
ending on the Holiday Close Date which would indicate to the trustees of the
U.K. Pension Scheme that (aa) Wang intends to alter the U.K. Pension Scheme in
any manner other than as required
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by applicable law, or (bb) the U.K. Pension Scheme should be funded at more than
105% of the Minimum Funding Requirement (as defined in applicable law), (ii) if
Wang elects to terminate or wind up the U.K. Pension Scheme, Olivetti shall have
no further liability with respect to such scheme, and (iii) if Wang elects to
increase benefits under the U.K. Pension Scheme in any manner, the cost of such
increased benefits shall be borne solely by Wang.
(b) Prior to the Closing, Olivetti shall assume all liabilities
and obligations of Olsy or any Controlled Subsidiary in Italy arising under or
pursuant to or otherwise relating to the FASIDO, FSIO-SI and FSIO-SC plans of
Olsy or any Controlled Subsidiary in Italy (the "Welfare Plans") and shall take
all such actions necessary or appropriate to ensure that neither Wang, Olsy nor
any Controlled Subsidiary has any liability therefore following the Closing.
Without limiting the generality of the foregoing, for so long as Olivetti
provides benefits to its Italian employees under the Welfare Plans or other
similar plans, Olivetti shall provide benefits to employees and former employees
of Olsy or any Controlled Subsidiary in Italy and their respective dependents
and beneficiaries (other than any individual (and his or her dependents and
beneficiaries) who first becomes employed by Olsy or any Controlled Subsidiary
in Italy after the Closing Date) under the Welfare Plans or such other similar
Plans, as applicable, which benefits shall not be materially less favorable to
the participants therein as those in effect with respect to other participants
therein at any relevant time. Wang shall, or shall cause Olsy or any Controlled
Subsidiary in Italy to, reimburse Olivetti for the normal contributions incurred
by Olivetti in providing such benefits to employees of Olsy or any Controlled
Subsidiary in Italy and their dependents and beneficiaries but shall have no
obligation to pay any amounts in respect of the benefits provided by Olivetti,
the Welfare Plans or such other similar plans to (i) any individual who, at the
time such benefits are provided, is a former employee or retiree of Olsy or any
Controlled Subsidiary in Italy or (ii) their respective dependents and
beneficiaries. The amount required to be reimbursed by Wang pursuant to the
preceding sentence shall be determined on the same basis as is applied with
respect to other participating employers for the applicable year.
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(c) As soon as practicable after the date hereof, Olivetti shall
provide to Wang a complete and accurate list of all active and inactive
participants and beneficiaries in the pension plans of any Controlled Subsidiary
in Germany, the United Kingdom or Spain and all information required in order
for Wang to effectively administer each such plan including, but not limited to,
with respect to each such participant and beneficiary, the (i) date of birth,
(ii) date of hire, (iii) gender, (iv) pensionable earnings, (v) marital status,
(vi) frozen benefit amount (in the case of the frozen pension plans of
Controlled Subsidiaries in Germany, the United Kingdom or Spain only) and (vii)
date of termination and/or retirement and benefit amounts (in the case of
inactive participants and beneficiaries only).
(d) Olivetti shall pay to Wang an amount equal to any amounts
required to be contributed by Wang, Olsy or any Controlled Subsidiary in Spain
to or in respect of the retirement or death benefits of former employees of
Controlled Subsidiaries in Spain accrued as of the date hereof. Such payment or
payments shall be made no later than the third Business Day preceding the day
any such amounts are required to be paid by Wang, Olsy or any Controlled
Subsidiary in Spain.
6.18 DETERMINATION OF FUNDING STATUS OF OCJ PENSION PLAN. (a)
Olivetti shall promptly reimburse Wang for all amounts paid by Wang, Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary during the period commencing on
the Closing Date and ending on December 31, 2000 in respect of benefits accrued
under the Olivetti Corporation of Japan Employee Benefit Fund (the "OCJ Pension
Plan") as of the Closing Date as described in clause (A)(iii) of the definition
of Part I Assets in Section 6.18(b) below.
(b) For purposes of this Agreement, the following terms shall
have the following meanings:
OCJ ASSET REQUIREMENT. The term "OCJ Asset Requirement" means the
present value of all benefits, whether or not vested, accrued under the OCJ
Pension Plan for each OCJ Designated Employee as of December 31, 2000,
determined under U.S. Benefit Accounting Standards. For purposes of the
foregoing, (a) all service of the OCJ Designated Employees through the Closing
Date, projected
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future increases in remuneration, and cost of living adjustments to pensions
shall be taken into account, (b) the actuarial method to be used will be the
Projected Unit Credit Method as prescribed in U.S. Benefit Accounting Standards,
and (c) the actuarial assumptions to be used shall be the assumptions specified
in Schedule 6.18(b). If an actuarial assumption is required but is not specified
in Schedule 6.18(b), an assumption proposed by Wang (on a basis which is in
accordance with U.S. Benefit Accounting Standards) and consented to by Olivetti,
which consent shall not be unreasonably withheld, shall be used.
OCJ BENEFIT DEFICIT. The term "OCJ Benefit Deficit" means the
excess, if any, of (a) the OCJ Asset Requirement over (b) the fair market value,
determined as of December 31, 2000, of the Part I Assets held under the OCJ
Pension Plan to the extent such Part I Assets are transferred to or remain with
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or a trust or
other funding arrangement to which Wang, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is a party) as of such date.
OCJ BENEFIT SURPLUS. The term "OCJ Benefit Surplus" means the
excess, if any, of (a) the fair market value, determined as of December 31,
2000, of the Part I Assets held under the OCJ Pension Plan to the extent such
assets are transferred to or remain with Wang, Olsy, Olsy Japan, Olsy Brazil or
any Controlled Subsidiary (or a trust or other funding arrangement to which
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party) as
of such date over (b) the OCJ Asset Requirement; provided however, that the
amount taken into account under clause (a) of this definition shall not exceed
the OCJ Asset Requirement, except to the extent that Wang could, consistent with
applicable law, either withdraw such excess from the OCJ Pension Plan or utilize
such excess to reduce the contributions it would otherwise be required to make
thereto, in either case, during the five-year period immediately following
December 31, 2000.
OCJ DESIGNATED EMPLOYEE. The term "OCJ Designated Employee" means
an employee of Olivetti, any Affiliate of Olivetti, Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary who will continue as or become an
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employee of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary as of the
Closing and who participates in the OCJ Pension Plan. The term shall also
include any other person for whom liabilities under the OCJ Pension Plan are
assumed by Wang, Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or
retained by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) as of
the Closing.
OLIVETTI ACTUARY. The term "Olivetti Actuary" shall mean an
actuarial consulting firm selected by Olivetti to perform the functions
described in Section 6.18(c).
OLIVETTI TAX ADJUSTMENT. The term "Olivetti Tax Adjustment" means
the number one (1) minus the highest marginal rate of tax (expressed as a
decimal number) actually applicable to the income of Olivetti in its fiscal year
in which the payment, if any, required to be made to Olivetti under Section
6.18(d) below is required to be made.
PART I ASSETS. The term "Part I Assets" means the excess, if any,
of (A) the sum of (i) the assets held under the OCJ Pension Plan as of the
Closing Date, (ii) a pro rata portion, determined on a monthly basis (based upon
the ratio of the value of the Part I Assets to the value of all assets held
under the OCJ Pension Plan) of the income, gains and losses of the OCJ Pension
Plan after the Closing Date and prior to January 1, 2001 and (iii) the amount,
if any, by which the amount of the contributions made to the OCJ Pension Plan
after the Closing Date and prior to January 1, 2001 in respect of individuals
who were participants in the OCJ Pension Plan as of the Closing Date exceeds the
normal cost funding contributions during such period in respect of individuals
who were participants in the OCJ Pension Plan as of the Closing Date (excluding
any such amounts attributable to any enhancement of the benefit formula under
the OCJ Pension Plan adopted after the Closing Date) over (B) all amounts paid
or distributed from the OCJ Pension Plan after the Closing Date and prior to
January 1, 2001 in respect of benefits accrued thereunder as of the Closing
Date.
U.S. BENEFIT ACCOUNTING STANDARDS. The term "U.S. Benefit
Accounting Standards" means the U.S. GAAP
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relating to Employee Benefit Plans under FAS 87 and 88, and other relevant
principles and, in particular, shall refer to the methodology used to determine
the projected benefit obligation (as that term is defined in FAS 87).
WANG ACTUARY. The term "Wang Actuary" shall mean an actuarial
consulting firm selected by Wang to perform the functions described in Section
6.18(c).
WANG TAX ADJUSTMENT. The term "Wang Tax Adjustment" means the
number one (1) minus the highest marginal rate of tax (expressed as a decimal
number) actually applicable to the income of Olsy Japan in its fiscal year in
which the payment, if any, required to be made to Wang under Section 6.18(d)
below is required to be made.
(c) As soon as practicable following December 31, 2000, but in
no event more than 90 days following the later of (i) December 31, 2000 and (ii)
the date Olivetti or the Olivetti Actuary delivers to the Wang Actuary all
information requested by the Wang Actuary pursuant to the last sentence of this
Section 6.18(c), Wang shall cause the Wang Actuary to compute the OCJ Benefit
Deficit or OCJ Benefit Surplus, as the case may be, and to deliver its
calculations together with reasonable supporting information with respect
thereto, to the Olivetti Actuary. If the Olivetti Actuary objects to the manner
in which the actuarial assumptions specified in Schedule 6.18(b) are applied in
such calculations, it shall notify the Wang Actuary of its objections, and shall
supply to the Wang Actuary reasonable detail supporting its objections, no later
than 15 days following its receipt of the calculations of the Wang Actuary. If
the Olivetti Actuary fails to so object during such 15 day period, the
calculations of the Wang Actuary shall be final and binding upon the parties. If
the Olivetti Actuary shall notify the Wang Actuary of its objections during such
15 day period, the Wang Actuary and the Olivetti Actuary shall consult with one
another and attempt to agree upon the correct application of the actuarial
assumptions. If, at the end of the 15 day period commencing on the date the
Olivetti Actuary notifies the Wang Actuary of its objections to the
calculations, the Wang Actuary and the Olivetti Actuary shall fail to so agree,
the appropriate application of such actuarial assumptions shall be determined by
arbitration
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by an actuary mutually agreeable to the Wang Actuary and the Olivetti Actuary,
which determination shall be final and binding upon the parties and may be
enforced in any court having jurisdiction. If the Wang Actuary and the Olivetti
Actuary fail to agree on an actuary arbitrator within 20 days after the
expiration of the 15 day period in the preceding sentence, then either Wang or
Olivetti may request that the International Chamber of Commerce Court of
Arbitration appoint such actuary arbitrator within 30 days of such request. Wang
shall be responsible for all fees and expenses of the Wang Actuary, Olivetti
shall be responsible for all fees and expenses of the Olivetti Actuary, and Wang
and Olivetti shall each be responsible for 50% of the fees and expenses incurred
by any actuary appointed in accordance with the preceding sentences. Olivetti
shall, or shall cause the Olivetti Actuary to, provide to the Wang Actuary, as
soon as reasonably practicable following any such request, such information with
respect to the OCJ Pension Plan and the OCJ Designated Employees as the Wang
Actuary shall reasonably request in order to perform the calculations required
of it pursuant to this Section 6.18(c). The arbitrator shall render an award if
possible within 90 days of his or her appointment.
(d) As soon as practicable following the final determination of
the OCJ Benefit Deficit and the OCJ Benefit Surplus, but in no event more than
10 days following such determination, Olivetti shall pay to Wang an amount equal
to eighty percent (80%) of the OCJ Benefit Deficit multiplied by the Wang Tax
Adjustment or Wang shall pay to Olivetti an amount equal to eighty percent (80%)
of the OCJ Benefit Surplus multiplied by the Olivetti Tax Adjustment.
6.19 SPARES. In preparing (or causing to be prepared) the Closing
Financial Statements, Wang shall (a) conduct (or cause to be conducted) a
physical inventory of all of the fixed assets of Olsy, Olsy Japan, Olsy Brazil
or any Controlled Subsidiary and (b) prepare (or cause to be prepared) a report
with respect to the spares ("Repairable Spares") of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary which are accounted for in accordance with
OLGA as fixed assets (the "Repairable Spares Report") reflecting (i) by part
number, the number of Repaired Repairable Spares, (ii) by part number, the
number of Repairable Spares which would have to be ac-
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quired or repaired by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
to reach target stocking levels for such part number set by Olsy as of December
31, 1997 (the "12/31/97 TSLs") and (iii) by part number, the aggregate cost of
acquiring or repairing, whichever is less, a number of Repairable Spares to
reach the 12/31/97 TSLs for such part number and the total of such costs for all
part numbers (the "Total Repairable Spares Cost"). If Olivetti objects to the
Repairable Spares Report, Olivetti shall notify Wang of such objections within
not later than 60 days after receipt thereof and Wang and Olivetti shall attempt
to resolve such objections, or failing that submit such objections to
arbitration, in conjunction with any Closing Objections in accordance with
Section 6.14(a). Not later than five days after Wang delivers the Spares Report
to Olivetti (or if Olivetti notifies Wang of any objections to the Repairable
Spares Report, five days after the resolution thereof by mutual agreement or
arbitration), Olivetti shall pay Wang an amount in cash equal to the lesser of
(a) the Total Repairable Spares Cost or (b) 20% of the net book value of the
Repairable Spares on the 12/31/97 Balance Sheet (excluding any residual
capitalized repair costs). Olivetti shall have the right to participate in the
physical inventory referred to in this Section 6.19.
6.20 TRADE RECEIVABLES. As promptly as practicable after the end of
each month following the Closing, Wang shall cause Olsy to deliver to Olivetti
an ageing report for the trade receivables of Olsy, Olsy Japan, Olsy Brazil and
the Controlled Subsidiaries as of the Closing Financial Statements Date (other
than trade receivables owed from Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary), classified according to the categories set forth on Schedule 6.20
hereto (each a "Trade Receivables Ageing Report"). Within ten Business Days of
receipt of a Trade Receivables Ageing Report, Olivetti shall purchase any trade
receivable of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary
reflected on such report which has not been collected, from the date of billing,
within the period specified for trade receivables of such category on Schedule
6.20 hereto, plus 45 days, for an amount in cash, in immediately available
funds, equal to the amount of such trade receivable (less the amount of any
reserve specifically matched in the books and records of Olsy, Olsy Japan, Olsy
Brazil or a Controlled Subsidiary to such trade
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receivable as of the Closing Date, if any); provided, however, that Olivetti
shall not be obligated to purchase any trade receivables pursuant to this
Section 6.20 until an amount in trade receivable equal to the aggregate general
reserve therefor reflected in the books and records of Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries as of the Closing Financial Statements
Date shall not have been collected, from the date of billing, within the
applicable periods specified on Schedule 6.20 hereto, plus 45 days. If Olsy,
Olsy Japan, Olsy Brazil or any Controlled Subsidiary subsequently receives any
payment with respect to any trade receivable sold to Olivetti pursuant to this
Section 6.20, such payment shall be promptly (and in any event, within ten
Business Days of receipt) paid over to Olivetti. At the request of Olivetti,
Wang shall cause Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary to
continue its collection efforts, in its ordinary course of business and
consistent with its past practice, with respect to any trade receivable
purchased from it pursuant to this Section 6.20; with respect to any such trade
receivable collected, Olsy, Olsy Japan, Olsy Brazil or the Controlled
Subsidiary, as the case may be, shall retain 5% of the amount collected and
promptly (and in any event, within ten Business Days of receipt) pay the balance
of the amount collected over to Olivetti.
6.21 WORK IN PROGRESS. (a) Attached as Schedule 6.21 hereto is a
report on the Customer Contracts with respect to which unbilled trade
receivables for work in progress are reflected in the books and records of Olsy
as of December 31, 1997 (the "Unbilled Trade Receivables") which sets forth (i)
each such Customer Contract and (ii) with respect to each such Customer Contract
the date by which the Unbilled Trade Receivables relating thereto will be paid.
As promptly as practicable after the end of each month following the Closing,
Wang shall cause Olsy to deliver to Olivetti an ageing report for the Unbilled
Trade Receivables (each, a "WIP Ageing Report"). Within ten Business Days of
receipt of a WIP Ageing Report, Olivetti shall purchase any Unbilled Trade
Receivable on such report which has not been paid by the date specified therefor
on Schedule 6.21 hereto for an amount in cash, in immediately available funds,
equal to the amount of such Unbilled Trade Receivable. If Olsy subsequently
receives any payment with respect to any Unbilled Trade Receivable sold to
Olivetti
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pursuant to this Section 6.21, such payment shall be promptly (and in
any event, within ten Business Days of receipt) paid over to Olivetti. At the
request of Olivetti, Wang shall cause Olsy to continue its collection efforts,
in its ordinary course of business and consistent with its past practice, with
respect to any Unbilled Trade Receivables purchased from it pursuant to this
Section 6.21; with respect to any such trade receivable collected, Olsy shall
retain 5% of the amount collected and promptly (an in any event, within ten
Business Days of receipt) pay the balance of the amount collected over to
Olivetti. After the Closing, Wang shall cause Olsy to use its commercially
reasonable best efforts to continue to perform the Customer Contracts set forth
on Schedule 6.21 relating to the work in progress in substantially the same
manner as such Customer Contract was being performed prior to the Closing.
(b) As promptly as practicable at the end of the year ending
December 31, 1999, Wang shall deliver (or cause to be delivered) to Olivetti a
report with respect to the work in progress receivables and inventories of
"Poste Italiane" set forth on Schedule 6.21 hereto showing the amount thereof
which remained unpaid as of December 31, 1999, and within ten Business Days of
receipt of such report Olivetti shall pay Wang an amount in cash, in immediately
available funds, equal to the amount of such work in progress receivables and
inventories which remained unpaid as of December 31, 1999. If Olsy subsequently
receives any payment with respect to any such work in progress receivables and
inventories, such payment shall be promptly (and in any event, within ten
Business Days of receipt) paid over to Olivetti.
6.22 STATUTORY RECAPITALIZATION. As soon as practicable after the
Closing, Wang shall recapitalize (or shall cause to be recapitalized) any
Controlled Subsidiary which was not, as of the Closing Date, capitalized in
accordance with local law, and Olivetti shall reimburse Wang for all Taxes and
costs associated with such recapitalization (up to the amount required by local
law) within ten days of the receipt of a notice from Wang specifying the amount
of such Taxes and costs.
6.23 COOPERS & LYBRAND CONSENT. (a) Simultaneously with the
execution and delivery of this Agree-
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ment, Coopers and Lybrand delivered to Wang a duly executed letter in which
Coopers & Lybrand (i) acknowledged that it understood that Wang intends to file
the U.S. GAAP Financial Statements in statements and reports required to be
filed by Wang from time to time with the SEC pursuant to the Securities Act and
the Exchange Act ("SEC Filings") and (ii) subject to its usual procedures and
professional standards and after being given reasonable opportunity to review
such SEC Filings and documents incorporated by reference therein, has agreed
that it shall consent to the inclusion of any of its audit reports on the U.S.
GAAP Financial Statements in any SEC Filing. Olivetti shall use its commercially
reasonable best efforts to cause Coopers & Lybrand to consent to the inclusion
of any of its audit reports on the U.S. GAAP Financial Statements in any SEC
Filing.
(b) If Coopers & Lybrand fails, for any reason whatsoever, to
consent to the inclusion of any such audit report in any SEC filing, Olivetti
(i) shall provide Wang and its representatives access to its books, records,
files and personnel commensurate with what it provided to Coopers & Lybrand in
connection with its audit of the 12/31/96 Italian GAAP Financial Statements, the
9/30/97 Italian GAAP Financial Statements or the U.S. GAAP Financial Statements
so that Wang may expeditiously cause any or all or such financial statements to
be reaudited and (ii) shall use its commercially reasonable best efforts to
cause Coopers & Lybrand to cooperate with the auditors engaged by Wang to
conduct such audit. Olivetti acknowledges that if Coopers & Lybrand fails to
consent to the inclusion of any such audit report in any SEC filing and Wang is
denied in any manner whatsoever the access provided for in this Section 6.23(b),
Wang will suffer irreparable injury and damage. Therefore, Olivetti agrees that
if Wang is denied the access provided for in this Section 6.23(b) in any manner
whatsoever Wang will be entitled to, in addition to all other remedies available
to it, injunctive relief and specific performance to prevent a breach of and to
secure the enforcement of this Section 6.23(b) hereof.
(c) Wang acknowledges that the U.S. GAAP Financial Statements
are not being delivered for purposes of the adjustments to the Purchase Price
pursuant to Sections 6.13 or 6.14.
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6.24 COOPERATION IN ITALY. (a) (i) For a period of two years
following the Closing, Olivetti will cause Olivetti executives to use their
commercially reasonable best efforts to provide Wang executives with personal
introductions to significant customers of Olsy and customer prospects with whom
Olivetti or its officers maintain relationships.
(ii) For a period of two years following the
Closing, Olivetti will cause Olivetti executives to provide Wang, upon
Wang's request, with advice and the benefit of Olivetti's past
experience relating to the handling of industrial relations and
government relations issues and relations with banks and other
financial institutions in Italy.
(iii) For a period of two years following the
Closing, and provided that Wang or Olsy has advised Olivetti of its
position regarding the matters concerned and Wang or Olsy's position is
not unreasonable, or adverse to Olivetti, Olivetti will afford Wang or
Olsy reasonable access to Olivetti's personnel who deal with
industrial, labor and governmental relations issues with respect to
industrial relations matters for consultation on such issues and will
cause its executives (aa) to assist in arranging meetings relating to
industrial relations matters with industrial, labor and governmental
officials and (bb) at Wang or Olsy's request, with reasonable notice
and at reasonable times, attend such meetings and assist Wang or Olsy
in negotiating with such officials.
(iv) For a period of two years following the
Closing, and provided that Wang or Olsy has advised Olivetti of its
position regarding the matters concerned and Wang or Olsy's position is
not unreasonable or adverse to Olivetti, Olivetti will afford Wang and
Olsy reasonable access to Olivetti's personnel who deal with
governmental officials and officers of banks and financial institutions
for consultations on such issues and will cause its executive (aa) to
assist Wang or Olsy in arranging meetings with governmental officials
and officers of banks and financial institutions and (bb) at Wang or
Olsy's request, with reasonable notice and at rea-
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sonable times, attend such meetings and assist Wang and Olsy in
negotiations with such officials.
(b) Each party agrees to comply with all applicable laws,
regulations, court orders and ethical rules in the performance of the
obligations described herein. Olivetti and Wang expressly agree and understand
that nothing contained in this Section 6.24 shall be construed as any inducement
or invitation to violate any law, regulation, court order or ethical rule.
6.25 COOPERATION WITH RESPECT TO CERTAIN BUSINESS ITEMS AND
NONBUSINESS ITEMS. (a) Wang acknowledges that there may be Business Items which
are being used in providing products, services or support to customers of the
Business and other customers of Olivetti or an Olivetti Affiliate or pursuant to
or under which products, services or support are being provided to customers of
the Business and other customers of Olivetti or an Olivetti Affiliate, and for a
period of two years following the Closing, shall cause Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary to cooperate with Olivetti or such Olivetti
Affiliate to permit Olivetti or such Olivetti Affiliate to continue to use such
Business Items to provide products, services or support to their respective
customers or to continue to provide products, services or support pursuant to or
under such Business Items to their respective customers in substantially the
same manner as used or provided prior to the Closing as is practicable.
(b) Olivetti acknowledges that there may be NonBusiness Items
which are being used in providing products, services or support to customers of
the Business or pursuant to or under which products, services or support are
being provided to customers of the Business, and for a period of two years
following the Closing, Olivetti shall (or shall cause an Olivetti Affiliate to)
cooperate with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to
permit Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to continue to
use such NonBusiness Items to provide products, services or support to their
respective customers or to continue to provide products, services or support
pursuant to or under such NonBusiness Items to their respective customers in
substantially the same manner as used or provided prior to the Closing as is
practicable.
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6.26 CERTAIN INTELLECTUAL PROPERTY COVENANTS. (a) OLIVETTI
TRADEMARKS. Wang acknowledges, accepts and respectively undertakes, as follows:
(i) Olivetti is and shall remain the sole and
exclusive owner of any and all rights to the exclusive use of any and
all Trademarks (as defined in Section 4.15(a)(viii) consisting of or
including the words "Olivetti" and/or any other word including as a
prefix the combination of letters "OLI", howsoever written, pronounced
or spelled and in whatever form of written, verbal or visual
communication, which constitute a family of Trademarks (collectively,
the "Olivetti Trademarks"), in any form and for any purpose.
(ii) Olsy, Olsy Brazil, Olsy Japan and certain
Subsidiaries have used heretofore and will continue to use hereafter
until Closing the Olivetti Trademarks in the carrying out of the
Business on the strength of license rights and privileges which have
been granted or as has been otherwise consented by Olivetti to Olsy,
Olsy Brazil, Olsy Japan and the relevant Subsidiaries solely in
consideration of their belonging to the group of companies controlled
by Olivetti, and only so long as such group relationship continues to
exist, and any and all such license rights and privileges or consents
granted by Olivetti to Olsy, Olsy Brazil, Olsy Japan and the
Subsidiaries shall and shall to all effects be deemed to be
automatically terminated or revoked forthwith upon Closing and of no
further effect.
(iii) Any Olivetti Trademark which is registered or
applied for registration by Olsy, Olsy Brazil, Olsy Japan or any
Subsidiary anywhere in the world: (aa) if registered or applied for
registration at any time before Closing, shall qualify as a Non
Business Item for the purposes of Section 1.2 hereof and (bb) if
registered or applied for registration after Closing by Wang or any
Affiliate of Wang in violation of the Transitional Authorization and
Trademark License Agreement substantially in the form of Exhibit 12
hereto (the "Transitional Authorization and Trademark License
Agreement"), shall be deemed for all purposes to be the sole and
exclusive property of Olivetti, and the registration or appli-
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cation for registration thereof shall be promptly transferred by Wang
or the relevant Affiliate of Wang (at Wang's expense and without any
consideration from Olivetti) to Olivetti or any Affiliate of Olivetti,
as Olivetti may direct, without prejudice of any other right or remedy
available to Olivetti against Wang, Olsy, Olsy Brazil, Olsy Japan or
any Subsidiary under the Transitional Authorization and Trademark
License Agreement or the applicable laws of any country of competent
jurisdiction.
(iv) All rights or consents granted to Olsy, Olsy
Brazil, Olsy Japan and all Subsidiaries in the Olivetti Trademarks are
terminated upon the Closing and all future rights to use the Olivetti
Trademarks shall be governed by the Transitional Authorization and
Trademark License Agreement.
(b) LICENSED OLIVETTI INTELLECTUAL PROPERTY.
(i) Olivetti hereby grants to Wang, Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries, to the extent it is
entitled to do so, a perpetual, worldwide, non-exclusive license to
use, copy, modify, enhance, maintain, distribute and create derivative
works of the Licensed Olivetti Intellectual Property (except Olivetti
Trademarks the use of which shall be governed by the Transitional
Authorization and Trademark License Agreement) in a manner and for
purposes consistent with, and to an extent not exceeding, the manner,
purposes and extent in and for which such Licensed Olivetti
Intellectual Property was in use by Olsy, Olsy Japan, Olsy Brazil and
the relevant Controlled Subsidiaries during the two-year period ending
on the date of Closing and in connection with any direct and immediate
evolution thereof imposed by technological evolution or by the market.
(ii) If subsequent to Closing Wang wishes (whether
directly or through Olsy, Olsy Brazil, Olsy Japan or any Subsidiary) to
use, copy, modify, enhance, maintain, distribute and create derivative
works of the Licensed Olivetti Intellectual Property in a manner, for
purposes and/or to an extent exceeding that specified in Paragraph (i)
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above, then, in such event, Wang shall notify Olivetti thereof, in
writing, and the terms and conditions of any such new license to use,
copy, modify, enhance, maintain, distribute and/or create derivative
works of such Licensed Olivetti Intellectual Property shall be
negotiated and agreed upon by Olivetti and Wang on an arms-length
basis.
(iii) After Closing Wang shall and shall cause
Olsy, Olsy Brazil, Olsy Japan and any relevant Subsidiary to extend to
Olivetti or the relevant Affiliate of Olivetti all reasonable
co-operation in respect of the foregoing. After Closing Olivetti shall
extend to Wang and the Controlled Subsidiaries all reasonable
co-operation in respect of the foregoing. To the extent Wang or a
Controlled Subsidiary reasonably requires a copy of any Licensed
Olivetti Intellectual Property to continue the use of such Licensed
Olivetti Intellectual Property, Olivetti shall deliver such copy to
Wang or the Controlled Subsidiary.
(c) REGISTRATION OF OWNERSHIP.
(i) Olivetti agrees that promptly upon execution of
this Agreement it shall or shall cause any relevant Affiliate of
Olivetti to file the necessary documents to record Olsy, Olsy Japan,
Olsy Brazil or a Controlled Subsidiary, as applicable, as the
registered owner of such Patents as constitute an Olsy Intellectual
Property (as identified in Schedule 4.15(b)(i)(aa) or Schedule
4.15(b)(ii)(aa) of Olivetti Disclosure Schedule) and are not so
recorded as at the date hereof. Olivetti and Wang shall each pay
one-half of all costs and expenses for such filings.
(ii) Olivetti further agrees that promptly upon
request by Wang it shall or shall cause any relevant Affiliate of
Olivetti to file the necessary documents to record Olsy, Olsy Brazil,
Olsy Japan or a Controlled Subsidiary, as applicable, as the registered
owner of such registered Trademarks as constitute an Olsy Intellectual
Property (as identified in Schedule 4.15(b)(i)(bb) or Schedule
4.15(b)(ii)(bb) of Olivetti Disclosure Schedule) and are not so
recorded as at the date
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hereof; provided however that Wang agrees that it shall not require
without reason the filing of such documents in respect of such
Trademarks as consist of or contain the word Olsy and such other
Trademarks which are not in use by Olsy, Olsy Brazil, Olsy Japan or the
Controlled Subsidiaries. Olivetti shall pay all costs and expenses for
such filings.
6.27 SUBLEASES. Prior to the Closing Date, Olivetti shall have
caused the terms of those sublease agreements listed on Schedule 6.27 to be
amended in the manner set forth on Schedule 6.27.
ARTICLE VII
TAX MATTERS
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7.1 PREPARATION AND FILING OF TAX RETURNS; PAYMENT OF TAXES. (a)
Olivetti shall prepare or cause to be prepared (at its own cost and expense and
in a manner consistent with past practice) all Tax Returns of Olsy, Olsy Japan,
Olsy Brazil and/or each Controlled Subsidiary (including the Tax Returns of any
affiliated, combined, consolidated, unitary or aggregate Tax Return of which
Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary is a member
before the Closing Date) required to be filed on or before the Closing Date.
Olivetti shall, on a timely basis, file the Tax Return and pay the amount due
with the Tax Return to the appropriate taxing authority. At or prior to the
Closing Date, Olivetti shall deliver a copy of such Tax Return (or that portion
of such Tax Return as it relates to Olsy, Olsy Japan, Olsy Brazil and/or any
Controlled Subsidiary) to Wang.
(b) Wang shall cause Olsy, Olsy Japan, Olsy Brazil and each
Controlled Subsidiary (or the common parent of any affiliated, combined,
consolidated, unitary or aggregate group of which Olsy, Olsy Japan, Olsy Brazil
and/or any Controlled Subsidiary is a member after the Closing Date) to prepare
and file, on a timely basis, all Tax Returns (other than those provided for in
Section 7.1(a)) of Olsy, Olsy Japan, Olsy Brazil and/or each Controlled
Subsidiary. With respect to any Tax Return for any taxable period beginning
before the Closing Date and ending after the Closing Date (such period, a
"Strad-
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dle Period"), not less than 30 Business Days prior to the date on which
any such Tax Return is due to be filed (taking into account any applicable
extensions), Wang shall deliver a draft of each such Tax Return (or that portion
of such Tax Return as it relates to Olsy, Olsy Japan, Olsy Brazil and/or each
Controlled Subsidiary) to Olivetti. Wang shall timely pay or cause the
appropriate company to timely pay the amount shown to be due with such Tax
Return to the appropriate taxing authority.
(c) Any disputes with respect to such Tax Returns shall be
resolved by arbitration by an independent accounting firm, or such other
independent expert as may be mutually agreed upon by Olivetti and Wang (the "Tax
Arbitrator"), whose determination shall be binding upon the parties and may be
enforced in any court having jurisdiction. The fees and expenses of the Tax
Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang
fail to agree on a Tax Arbitrator within 20 days of receipt of notice of a
dispute with respect to Tax Returns, then at the request of either party, the
International Chamber of Commerce Court of Arbitration shall appoint an
independent accounting firm or independent expert to serve as the Tax Arbitrator
within 30 days of such request. The Tax Arbitrator shall, if possible, render an
award within 90 days of his or her appointment.
7.2 TAX INDEMNIFICATION. (a) Subject to Section 10.2(b)(ii) and to
the extent not accrued on the Closing Balance Sheet, Olivetti shall indemnify,
defend and hold harmless Wang and its Affiliates (including, after the Closing
Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) and their
respective officers, directors, employees and agents (collectively, the "Wang
Tax Indemnified Parties") from and against any and all Taxes, claims or damages
imposed on, sustained, incurred or suffered by any Wang Tax Indemnified Party,
directly or indirectly, by reason of or resulting from any and all Taxes imposed
upon Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (other than
claims or damages solely arising as a result of any Taxes imposed due to any
failure by Wang or its Affiliates, including, after the Closing Date, Olsy, Olsy
Japan, Olsy Brazil or the Controlled Subsidiaries, to fully comply with any
applicable law or regulation relating to Taxes) with respect or pursuant to (i)
any Pre-Closing Period, (ii) any
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Straddle Period, but only with respect to the portion of such Straddle Period
ending on the Closing Date and in the manner provided in Section 7.2(c) (such
portion, a "Pre-Closing Straddle Period"), and (iii) Treasury Regulations
section 1.1502-6 (or any comparable provision under state, local or foreign law
or regulation imposing several liability upon members of a consolidated,
combined, affiliated or unitary group) for any Pre-Closing Period or Pre-Closing
Straddle Period. Notwithstanding anything to the contrary herein, the amount
that Olivetti shall be obligated to indemnify Wang under this Section 7.2(a)
with respect to Pre-Closing Straddle Periods shall not exceed the amount by
which the sum of the 1998 Operating Loss and the aggregate amount of Taxes,
claims or damages with respect to such Pre-Closing Straddle Periods exceeds
65,000,000,000 Italian lira. For purposes of this Article VII, Taxes with
respect to a Pre-Closing Straddle Period shall be considered accrued on the
Closing Balance Sheet only to the extent such accrual is specifically designated
on the Closing Balance Sheet as attributable to a Pre-Closing Straddle Period.
(b) Subject to Section 10.3(b)(ii), Wang shall indemnify, defend
and hold harmless Olivetti and its Affiliates and their respective officers,
directors, employees and agents (collectively, the "Olivetti Tax Indemnified
Parties") from and against any and all Taxes, claims or damages imposed on,
sustained, incurred or suffered by any Olivetti Tax Indemnified Party, directly
or indirectly, by reason of or resulting from any and all Taxes imposed upon
Olsy, Olsy Japan, Olsy Brazil, or any Controlled Subsidiary (other than claims
or damages solely arising as a result of any Taxes imposed due to a failure by
Olivetti or its Affiliates, including, prior to the Closing Date, Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries, to fully comply with any
applicable law or regulation relating to Taxes) with respect or pursuant to (i)
any taxable period beginning after the Closing Date (such period, a
"Post-Closing Period") and (ii) any Straddle Period, but only with respect to
the portion of such Straddle Period beginning the day after the Closing Date and
in the manner provided in Section 7.2(c) (such portion, a "Post-Closing Straddle
Period").
(c) For purposes of calculating the Taxes imposed which relate
to a Straddle Period and must
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be allocated between a Pre-Closing Straddle Period and a Post-Closing Straddle
Period, the Taxes attributable to the Pre-Closing Straddle Period shall be
computed as if such taxable period ended on and included the Closing Date and
the Taxes attributable to the Post-Closing Straddle Period shall be computed as
if such taxable period began on the day immediately following the Closing Date.
7.3 ENTITY CLASSIFICATION ELECTION. With respect to the acquisition
of the Olsy Shares, the Olsy Japan Shares, the Olsy Brazil Shares and the
capital stock of any Controlled Subsidiary pursuant to this Agreement, at the
sole option and discretion of Wang and with the assumption of and payment by
Wang of all costs, expenses or damages payable by Olivetti as a result of or
attributable thereto, Olivetti, prior to the Closing Date, shall make an
election under Treasury Regulations section 301.7701-3(c) to have Olsy, Olsy
Japan, Olsy Brazil or any Controlled Subsidiary classified as a partnership or
disregarded as a separate entity for United States federal income tax purposes.
7.4 TAX CLAIMS. (a) Except as otherwise provided in this Section
7.4, if a notice of deficiency, proposed adjustment, adjustment, audit,
examination or other administrative or court proceeding, suit, dispute or other
claim (a "Tax Claim") is delivered, sent, commenced or initiated to or against
Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by any taxing
authority and, as of the date such Tax Claim is so delivered, sent, commenced or
initiated, such entity has any Tax credits or net operating losses ("Tax
Benefits"), Wang shall be solely responsible for controlling the defense of such
Tax Claim. Notwithstanding anything to the contrary herein and to the extent
that a Tax Claim relates to a Pre-Closing Period or a Pre-Closing Straddle
Period for which Olivetti is responsible pursuant to Section 7.2(a), (i)
Olivetti and its Affiliates agree to cooperate with Wang in pursuing such
contest, (ii) Wang shall consult with Olivetti and shall not enter into any
settlement with respect to any such Tax Claim without Olivetti's prior written
consent, which shall not be unreasonably withheld, (iii) Wang shall keep
Olivetti informed of all material developments and events relating to such Tax
Claim, (iv) at its own cost and expense, Olivetti shall have the right to
participate in (but not
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control) the defense of such Tax Claim and (iv) Wang shall be responsible for
all costs and expenses incurred in connection with such Tax Claim, excluding
costs and expenses incurred by Olivetti in connection with its participation in
the defense of such Tax Claim pursuant to (iv) above.
(b) Any disputes with respect to Olivetti's consent to settle a
Tax Claim described in Section 7.4(a) shall be resolved by arbitration by the
Tax Arbitrator, whose determination shall be binding upon the parties and may be
enforced in any court having jurisdiction. The fees and expenses of the Tax
Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang
fail to agree on a Tax Arbitrator with respect to such dispute within 20 days of
receipt by Wang of notice of a settlement offer with respect to such Tax Claim,
then at the request of either party, the International Chamber of Commerce Court
of Arbitration shall appoint an independent accounting firm or independent
expert to serve as the Tax Arbitrator within 30 days of such request. The Tax
Arbitrator shall, if possible, render a decision within 90 days of his or her
appointment.
(c) If a Tax Claim involving Taxes for any Pre-Closing Period
for which Olivetti is responsible pursuant to Section 7.2(a) is delivered, sent,
commenced or initiated to or against Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary by any taxing authority and, as of the date such Tax Claim
is so delivered, sent, commenced or initiated, such entity does not have any Tax
Benefits, Olivetti shall be solely responsible for controlling the defense of
such Tax Claim. Notwithstanding anything to the contrary herein, (i) Wang and
its Affiliates (including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil
and each Controlled Subsidiary) agree to cooperate with Olivetti in pursuing
such contest, (ii) Olivetti shall consult with Wang and shall not enter into any
settlement with respect to any such Tax Claim without Wang's prior written
consent, which shall not be unreasonably withheld, (iii) Olivetti shall keep
Wang informed of all material developments and events relating to such Tax
Claim, (iv) at its own cost and expense, Wang shall have the right to
participate in (but not control) the defense of such Tax Claim and (v) Olivetti
shall be responsible for all costs and expenses incurred in con-
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nection with such Tax Claim, excluding costs and expenses incurred by Wang in
connection with its participation in the defense of such Tax Claim pursuant to
(iv) above.
(d) If Wang has withheld its consent with respect to a bona fide
settlement offer by any taxing authority for any Tax Claim described in Section
7.4(c), Olivetti may, at its election and in lieu of continuing to control the
defense of such Tax Claim, pay to Wang the amount that would be necessary to
settle such Tax Claim, as determined by the bona fide settlement offer. Upon
such payment to Wang, (i) Olivetti shall be released from any further liability
with respect to further adjustments related to such Tax Claim, (ii) Wang shall
assume and control the defense of such Tax Claim and (iii) regardless of the
final outcome of such Tax Claim, Wang shall be entitled to retain the full
amount of Olivetti's payment to Wang pursuant to the preceding sentence and
Olivetti shall have no right to any reimbursement or refund of any kind with
respect to such payment.
(e) If Olivetti or any of its Affiliates (including, before the
Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary)
receives notice of a Tax Claim by any taxing authority with respect to a
Pre-Closing Period or Pre-Closing Straddle Period, Olivetti or such Affiliate
shall notify Wang of such notice and the nature of such Tax Claim within five
days of receipt of such notice by Olivetti or such Affiliate. If Wang or any of
its Affiliates (including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil
and any Controlled Subsidiary) receives notice of a Tax Claim by any taxing
authority with respect to a Pre-Closing Period or Pre-Closing Straddle Period,
Wang or such Affiliate shall notify Olivetti of such notice and the nature of
such Tax Claim within five days of receipt of such notice by Wang or such
Affiliate.
7.5 REFUNDS. To the extent not accrued on the Closing Balance
Sheet, any refund of Taxes (including any statutory interest thereon) received
by Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary attributable
to any Pre-Closing Period, or that are attributable to amounts paid by Olivetti
pursuant to this Article VII, shall be for the benefit of Olivetti, and Wang
shall cause any such refund to be paid to Olivetti
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within ten (10) Business Days after Wang, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary receives such refund.
7.6 TAX PAYMENTS RESULTING FROM AUDIT ADJUSTMENT. (a) To the extent
not accrued on the Closing Balance Sheet, if there is an adjustment to any item
reported on a Tax Return with respect to a Pre-Closing Period or Pre-Closing
Straddle Period that results in an increase in the Taxes payable by Olivetti,
and such adjustment results in a corresponding adjustment to items reported on a
Tax Return with respect to a Post-Closing Period with the result that the Taxes
payable either by Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary
or any consolidated, affiliated, combined or unitary group of companies of which
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member are
reduced, or a refund of Taxes is increased, then Wang shall pay to Olivetti the
amount by which such Taxes are reduced or such refund is increased within five
Business Days following the date on which a payment or refund of such Taxes is
made or received. The amount of such payment shall be the excess of (i) the Tax
liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or,
if applicable, any consolidated, affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the taxable period in question computed without
regard to such adjustment or amendment, over (ii) the actual Tax liability of
Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or, if
applicable, any consolidated, affiliated, combined or unitary group of companies
of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a
member for the taxable period in question. Notwithstanding the foregoing, the
amount that Wang shall pay to Olivetti pursuant to this Section 7.6 with respect
to Pre-Closing Straddle Periods shall not exceed the amount that Olivetti is
obligated to indemnify Wang pursuant to Section 7.2(a) with respect to such
Pre-Closing Straddle Periods.
(b) To the extent not accrued on the Closing Balance Sheet, if
there is an adjustment to any item reported on a Tax Return with respect to a
Pre-Closing Period or Pre-Closing Straddle Period that results in a decrease in
the Taxes payable by Olivetti, and
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such adjustment results in a corresponding adjustment to items reported on a Tax
Return with respect to a Post-Closing-Period with the result that the Taxes
payable either by Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary
or any consolidated, affiliated, combined or unitary group of companies of which
Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member are
increased, or a refund of Taxes is decreased, then Olivetti shall pay to Wang
the amount by which such Taxes are increased or such refund is decreased within
five Business Days following the date on which a payment or refund of such Taxes
is made or received. The amount of such payment shall be the excess of (i) the
actual Tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled
Subsidiary or, if applicable, any consolidated affiliated, combined or unitary
group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any
Controlled Subsidiary is a member for the tax period in question, over (ii) the
tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary
or, if applicable, any consolidated, affiliated, combined or unitary group of
companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a member for the tax period in question computed without regard to
such adjustment or amendment.
7.7 AMNESTY. In the event that, at any time between the Closing
Date and the date upon which the liability of Olivetti for Taxes shall expire
pursuant to this Agreement, any law, regulation, order or decree should be
enacted in any relevant jurisdiction having as an effect the right to settle, in
whole or in part, the Tax obligation of any entity covered by Olivetti's
indemnity obligation hereunder (any such law, regulation, order or decree is
hereinafter referred to as an "Amnesty"), (a) Olivetti shall have the right to
request Wang to cause such entity to avail itself of the Amnesty, (b) Wang shall
have the right to determine, in its sole discretion (irrespective of any request
of Olivetti under Section 7.7(a)), whether or not to cause such entity to avail
itself of the Amnesty, (c) if Wang elects to proceed with the Amnesty without
the prior agreement or request of Olivetti, all cost and expenses of such
Amnesty shall be borne by Wang or such entity, without recourse against
Olivetti, (d) if Wang elects to proceed with the Amnesty in agreement with
Olivetti or pursuant
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to Olivetti's request hereunder, all costs and expenses of such Amnesty shall be
borne by Olivetti, and (e) if Wang elects not to proceed with an Amnesty
notwithstanding Olivetti's request pursuant to Section 7.7(a) preceding, Wang
shall be free to do so, but Olivetti's liability in respect of the matter
constituting the subject of such Amnesty shall be limited to the amount that
would have been paid by Olivetti had Wang elected to proceed with the Amnesty in
accordance with Olivetti's request.
7.8 TRANSFER AND SIMILAR TAXES. Olivetti and Wang shall each pay
one-half of all sales, use, transfer, recording, ad valorem, privilege,
documentary, gains, stamp, duties, or similar Taxes and fees (collectively, the
"Transfer Taxes"), arising out of, in connection with or attributable to the
transactions contemplated by this Agreement, including, without limitation, the
sales, transfers, conveyances, assignments and deliveries contemplated by
Section 2.1(a) or (b); provided, however, Olsy shall pay all Transfer Taxes
arising out of, in connection with or attributable to the transactions
contemplated by Sections 1.9 or 1.10. The party which has primary responsibility
for the payment of any particular Transfer Tax shall prepare and timely file all
relevant Tax Returns required to be filed in respect of such Transfer Tax, pay
the Transfer Tax shown on such Tax Return, and notify the other party in writing
of the Transfer Tax shown on such Tax Return and how such Transfer Tax was
calculated, and the other party shall reimburse the party paying such Transfer
Tax for its applicable share of such Transfer Tax in immediately available funds
within five days of receipt of such notice.
7.9 FIRPTA COMPLIANCE. Olivetti shall deliver to Wang at the
Closing a certification of non-foreign status for Olivetti in a form which
complies with the requirements of section 1445 of the Code and the regulations
promulgated thereunder; provided, however, that if Olivetti shall fail to
deliver any such certification of non-foreign status, Wang shall withhold at the
Closing and pay over to the appropriate taxing authority an amount equal to ten
percent (10%) of the total "amount realized" as defined in section 1445 of the
Code.
7.10 ASSISTANCE AND COOPERATION. Olivetti and Wang agree that,
after the Closing Date:
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(a) each party shall assist (and cause their respective
Affiliates to assist) the other party in preparing any Tax Returns (including,
without limitation, making available personnel) which such other party is
responsible for preparing and filing in accordance with Section 7.1;
(b) each party shall cooperate fully in preparing for any audits
of, or disputes or litigation with, any taxing authority regarding, any Tax
Return with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary, and payments in respect thereof;
(c) each party shall make available to the other party and to
any taxing authority as reasonably requested all information, records and
documents relating to Taxes of Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary;
(d) each party shall provide timely notice to the other in
writing of any pending, proposed or threatened Tax audits, assessments or
litigation with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary for which the other party may have an indemnification obligation
under Section 7.2; and
(e) each party shall furnish the other party with copies of all
relevant correspondence received from any taxing authority in connection with
any Tax audit or information request with respect to any taxable period for
which the other may have an indemnification obligation under Section 7.2.
7.11 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. All amounts paid
by Olivetti to Wang or by Wang to Olivetti pursuant to Article VII or Article X
shall be treated as adjustments to the Purchase Price for all Tax purposes.
7.12 INDEMNITY PAYMENTS. (a) All amounts payable or to be paid to
Wang or to Olivetti under Section 7.2 ("Indemnity Payments") shall be paid in
immediately available funds within 20 Business Days after the later of (a)
receipt of a written request from the party entitled to such Indemnity Payment
which demonstrates to the reasonable satisfaction of the party receiving such
request that the party providing such request is entitled
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to such payment under the terms of the Agreement and (b) the day of payment of
the amount that is the subject of the Indemnity Payment by the party entitled to
receive the Indemnity Payment. All such Indemnity Payments shall be made to the
accounts and in the manner specified in such written notice. If the party
receiving a request for an Indemnity Payment notifies the party providing such
request within such 20 Business Day period that it rejects such request for an
Indemnity Payment, in whole or in part, the matter shall be resolved in
accordance with Section 12.12. In addition to the right of payment in this
Section 7.12(a), Wang has, at its option and without any further action, the
right to be paid for any Indemnity Payment not paid by Olivetti within ten days
of Olivetti becoming obligated to pay such Indemnity Payment pursuant to (a) the
Letter of Credit until the Original Amount (as defined therein) is reduced to
zero or the issuing bank thereof shall refuse to honor any proper draw of Wang
thereunder and then (b) the Stock Escrow Agreement.
(b) The amount due any Wang Tax Indemnified Party or Olivetti
Tax Indemnified Party (for purposes of this provision, a "Tax Indemnified
Party"), as the case may be, under Sections 7.2 with respect to any Taxes,
claims or damages (for purposes of this provision, a "Tax Loss") shall be
determined after taking into account (i) any insurance proceeds or other
indemnity payments actually received by such Tax Indemnified Party with respect
to such Tax Loss at the time the amount of such obligation is determined and
paid and (ii) if the Tax Indemnified Party owns, directly or indirectly, less
than all of the outstanding capital stock of the Person to which such Tax Loss
relates, the percentage of the outstanding capital stock of the Person to which
such Tax Loss relates that is owned, directly or indirectly, by the Tax
Indemnified Party. Tax Indemnified Parties shall use their commercially
reasonable best efforts to collect any insurance proceeds or other indemnity
payments to which they may be entitled with respect to any Tax Loss, but the
collection thereto shall not be a condition to or defer the obligation of any
indemnifying party under Section 7.2. If any Tax Indemnified Party receives any
insurance proceeds or other indemnity payments with respect to a Tax Loss after
such Tax Loss has been determined and paid, such Tax Indemnified Party shall
promptly
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turn over such proceeds or payments to the indemnifying party who paid such Tax
Loss.
7.13 SURVIVAL. (a) The respective covenants and agreements of
Olivetti and Wang in this Article VII shall be unconditional and absolute and,
notwithstanding any other provision of this Agreement to the contrary, including
Article X, shall remain in effect as long as any taxing authority could issue an
assessment for Taxes for any Pre-Closing Period.
(b) Notwithstanding any other provision of this Agreement to the
contrary (other than Sections 10.2(b) and 10.3(b)), including Article 7.6(b)
(other than Sections 10.2(b) and 10.3(b)), any indemnification for matters
relating to Taxes shall be governed by this Article VII.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF SELLERS
----------------------------------------
The obligations of the Sellers under this Agreement to consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
on or before the Closing, of each of the following conditions, unless waived in
writing by Olivetti:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Wang in this Agreement shall be true, complete and correct as of
the date hereof, except for representations and warranties made as of a
specified date, which will be true, complete and correct as of such date, except
for changes expressly permitted or contemplated by this Agreement.
8.2 PERFORMANCE. Wang shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or prior to the Closing.
8.3 OFFICERS' CERTIFICATE. Wang shall have delivered to Olivetti
a certificate, dated the Closing Date and signed by its president and the chief
financial officer certifying, to the best of their knowledge, to
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the fulfillment of the conditions specified in Sections 8.1 and 8.2.
8.4 NON-GOVERNMENTAL CONSENTS. The authorizations, consents or
approvals of Persons required to be obtained by Wang in connection with the
transactions contemplated by this Agreement or any Related Agreement set forth
on Schedule 8.4 hereto shall have been obtained.
8.5 WAITING PERIODS. All waiting or review periods applicable to
this Agreement and the transactions contemplated hereby under the HSR Act, the
German 1990 Act Against Restraints of Competition, the Italian Law on the
Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the
Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions
and Takeovers Act 1975 shall have expired or been earlier terminated.
8.6 NO INJUNCTION. Olivetti shall not be prohibited by any order,
judgment, writ, injunction, decree, statute, rule or regulation of any
Governmental Authority of competent jurisdiction from consummating the
transactions contemplated by this Agreement or any Related Agreement.
8.7 GOVERNMENTAL ACTIONS. No suit, action or other proceeding shall
have been initiated and remain in effect by any Governmental Authority seeking
to enjoin or otherwise restrain the consummation of the transactions
contemplated by this Agreement or any Related Agreement.
8.8 ABSENCE OF ADVERSE CHANGE. Excluding any effects of the
transactions contemplated hereby, Wang and its subsidiaries, taken as a whole,
shall not have suffered any material adverse change in their business, assets,
properties, liabilities, results of operations or condition (financial or
otherwise).
8.9 RELATED AGREEMENTS. The Related Agreements to which Olivetti or
any Olivetti Affiliate is a party shall have executed and delivered by Wang and
the other parties thereto in a form reasonably satisfactory to Olivetti.
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8.10 OPINIONS. Wang shall have delivered to Olivetti the
opinions of counsel reasonably acceptable to Olivetti, dated the Closing Date,
covering the matters set forth on Exhibit 13 hereto.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF BUYERS
---------------------------------------
The obligations of the Buyers under this Agreement to consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
on or before the Closing, of each of the following conditions, unless waived in
writing by Wang:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Olivetti in this Agreement shall be true, complete and correct as
of the date hereof, except for representations and warranties made as of a
specified date, which will be true, complete and correct as of such date, and
except for changes expressly permitted or contemplated by this Agreement.
9.2 PERFORMANCE; OLSY SHARES; PRE-CLOSING. (a) Each of the
Sellers, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries shall
have performed and complied with all covenants and agreements (including,
without limitation, the covenants and agreements in Article I) required by this
Agreement to be performed or complied with by them on or prior to the Closing.
(b) The Olsy Shares to be issued in connection with the share
capital increase resolved at the extraordinary shareholders meeting of Olsy held
on January 30, 1998 referred to in Sections 1.8(a)(v) and 1.8(b) shall have been
duly and validly issued.
(c) The transactions contemplated by Sections 1.9, 1.10, 1.11
and 1.12 shall have been consummated prior to or at the Pre-Closing.
9.3 OFFICERS' CERTIFICATE. Olivetti shall have delivered to Wang a
certificate, dated the Closing Date and signed by its chief executive officer
and chief financial officer (in any case duly authorized to bind Olivetti by
resolution of its Board of Directors), certi-
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fying, to the best of their knowledge, to the fulfillment of the conditions
specified in Sections 9.1 and 9.2.
9.4 OLIVETTI NON-GOVERNMENTAL NOTICES. The notices required to be
given by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in
connection with the transactions contemplated by this Agreement or any Related
Agreement set forth on Schedule 9.4 hereto shall have been given.
9.5 WAITING PERIODS. All waiting or review periods applicable to
this Agreement and the transactions contemplated hereby under the HSR Act or,
the German 1990 Act Against Restraint of Competition, the Italian Law on the
Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the
Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions
and Takeovers Act 1975 shall have expired or been earlier terminated.
9.6 NO INJUNCTION. Wang shall not be prohibited by any order,
judgment, writ, injunction, decree, statute, rule or regulation of any
Governmental Authority of competent jurisdiction from consummating the
transactions contemplated by this Agreement or any Related Agreement.
9.7 GOVERNMENTAL ACTIONS. No suit, action or other proceeding
shall have been initiated and remain in effect by any Governmental Authority
seeking to enjoin or otherwise restrain the consummation of the transactions
contemplated by this Agreement or any Related Agreement.
9.8 FINANCING. Wang shall have completed arrangements for
financing with a group of lenders led by Bankers Trust Company in an aggregate
principal amount of no less than U.S. $500,000,000 and on terms and conditions
consistent with the Financing Plan of Wang dated February 12, 1998, a copy of
which was made available to Olivetti prior to the date hereof, and shall have
the availability of the aggregate principal amount able to be drawn thereunder.
9.9 ABSENCE OF ADVERSE CHANGE. Neither Olsy, Olsy Japan, Olsy
Brazil and the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the
Major
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Subsidiaries, taken separately, shall have suffered any material adverse change
in their business, assets, properties, liabilities, results of operations or
condition (financial or otherwise).
9.10 RELATED AGREEMENTS. The Related Agreements to which any of
Wang, any Affiliate of Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled
Subsidiary is a party shall have been executed and delivered by Olivetti and the
other parties thereto in a form reasonably satisfactory to Wang.
9.11 OPINIONS. Olivetti shall have delivered to Wang the opinions
of counsel reasonably acceptable to Wang, dated the Closing Date, covering the
matters set forth on Exhibit 14 hereto.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
----------------------------
10.1 SURVIVAL. (a) The respective representations and warranties of
Wang and Olivetti in this Agreement shall survive the Closing for a period of
three years and shall terminate and be of no further force or effect as of the
date three years after the Closing Date, except that (i) the representations and
warranties of Olivetti in Sections 4.2, 4.3, 4.4 and 4.26 shall survive the
Closing forever and shall not terminate, (ii) the representations and warranties
of Olivetti in Section 4.18 shall survive the Closing for so long as any taxing
authority could issue an assessment for Taxes for any Pre-Closing Period, (iii)
the representations and warranties of Olivetti in Section 6.12(a) shall
terminate and be of no further force or effect as of the Closing Balance Sheet
Determination Date and (iv) the representations and warranties of Wang in
Sections 5.2, 5.3 and 5.9 shall survive the Closing forever and shall not
terminate.
(b) The respective covenants and agreements of Olivetti and Wang
in this Agreement shall survive the Closing and shall be fully effective and
enforceable for the periods therein indicated or where not indicated, forever.
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(c) Neither Olivetti nor Wang shall be entitled to any
indemnification under Section 10.2 or 10.3 with respect to any breach of a
representation or warranty, covenant or agreement after the termination thereof
pursuant to Sections 10.1(a) or (b), except for claims previously asserted
pursuant to Section 10.4(a).
10.2 INDEMNIFICATION BY OLIVETTI. (a) In addition to the
indemnification pursuant to Section 7.2(a), Olivetti shall indemnify Wang and
its Affiliates (including, without limitation, after the Closing Olsy, Olsy
Japan, Olsy Brazil and the Controlled Subsidiaries) and their respective
directors, officers, employees, agents and representatives (individually a "Wang
Indemnified Person" and collectively the "Wang Indemnified Persons") against and
hold them harmless from any loss, liability, damage, demand, claim, payment,
cost, suit, action, cause of action, investigation, inquiry, judgment, award,
assessment, interest, penalty or expense (including, without limitation,
reasonable out-of-pocket expenses of investigation and reasonable attorneys' and
consultants' fees) (any of the foregoing being hereinafter referred to
individually as a "Loss" and collectively as "Losses") suffered or incurred by
any such indemnified person for or on account of or arising from or in
connection with:
(i) any breach of any representation or warranty of
Olivetti in this Agreement or any of the Indemnified Related Agreements
(as defined in Section 12.11) or of any representation or warranty of
Oliricerca in the Oliricerca Development and Corporation Agreement;
(ii) any breach of any covenant or agreement of
Olivetti in this Agreement or any of the Indemnified Related Agreements
or of any covenant or agreement of Oliricerca in the Oliricerca
Development and Cooperation Agreement;
(iii) the La Defense Agreement;
(iv) any of the Retained Liabilities (as defined in
Section 12.11);
(v) subject to the Indemnification Agreement (MIS)
to be entered into by and among
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Wang, Olsy and Olivetti simultaneously with the Closing, the IT Frame
Agreement, dated as of July 24, 1996, among Olivetti, Syntax Processing
S.p.A. and Sema Group plc to which Olsy became a party pursuant to a
letter dated July 10, 1997;
(vi) the amount by which the costs and expenses
associated with the clean-up referred to in Section 1.8(a)(vii) exceeds
the restructuring fund established therefor referred to in Section
1.8(a)(vii);
(vii) UNITED STATES V. HELEN KRAMER, ET AL., STATE
OF NEW JERSEY V. ALMO ANTIPOLLUTION SERVICES CORP. ET AL. or the Buzby
Bros. landfill environmental matters;
(viii) all civil cases pending in Italy against
Olsy or any Controlled Subsidiary set forth on Schedule 10.2(a)(viii)
hereto;
(ix) any decision of the competent Italian
authorities taken in relation to or arising out of the inquiries and
investigations disclosed or required to be disclosed to Wang in the
review referred to in Section 4.21(c) which affects the qualification
of Olsy to participate in bids or auctions for supply of products
services or support to Governmental Authorities in Italy; or
(x) any matter set forth on an amendment or
supplement to the Olivetti Disclosure Schedule (aa) pursuant to Section
6.4(a)(i)(aa) to the extent any such matter materially changes the
disclosures on the Olivetti Disclosure Schedule or has an adverse
effect on the business, assets, properties, liabilities, results of
operation or condition (financial or otherwise) of Olsy, Olsy Japan,
Olsy Brazil or any Controlled Subsidiary or (bb) pursuant to Section
6.4(a)(i)(bb).
(b) Notwithstanding anything herein to the contrary: (i)
Olivetti shall have no obligation to indemnify any Wang Indemnified Person
pursuant to Sections 10.2(a)(i) or (ii) unless and until the aggregate amount of
Losses incurred by Wang Indemnified Persons with respect thereto exceeds
20,000,000,000 Italian lira
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(the "Olivetti Indemnification Threshold"), and then, subject to the immediately
following clause (ii), Olivetti's obligation shall be to indemnify Wang
Indemnified Persons to the full extent of such Losses (provided, however, that
the representations and warranties of Olivetti in Sections 4.2, 4.4, 4.18 or
4.27 and the covenants or agreements of Olivetti in Articles I, II or III or
Sections 4.5(a) (last sentence), 6.1(b)(xxvii), 6.5(b)-(f), 6.12(c), 6.13, 6.14,
6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.25(b), 6.26, 7.2(a), 7.6(b) or
10.2(a)(iii)-(x) shall not be subject to the Olivetti Indemnification
Threshold); and (ii) Olivetti shall have no obligation to indemnify any Wang
Indemnified Person or Wang Tax Indemnified Person pursuant to Sections
10.2(a)(i) or (ii) or 7.2(a) after it has paid an aggregate amount pursuant
thereto equal to 500,000,000,000 Italian lira (the "Olivetti Indemnification
Cap") (provided, however, that the representations and warranties of Olivetti in
Sections 4.2, 4.4 or 4.27 and the covenants or agreements of Olivetti in
Articles I, II or III or Sections 6.5(b)-(f), 6.12(c), 6.13, 6.14, 6.17, 6.18,
6.19, 6.20, 6.21, 6.22, 6.25(b), 6.26, or 10.2(a)(iii)-(x) shall not be subject
to the Olivetti Indemnification Cap). Notwithstanding anything herein to the
contrary, Olivetti shall have no obligation to indemnify any Wang Indemnified
Person for Losses pursuant to Section 10.2(a)(i) with respect to Section 4.6(c)
unless such Loss is suffered or incurred by such Wang Indemnified Person as a
result of a demand, claim, suit, action, cause of action, investigation or
inquiry made or brought by a Person not party to this Agreement or a
Governmental Authority. Notwithstanding anything herein to the contrary,
Olivetti shall have no obligation to indemnify Wang pursuant to Section
10.2(a)(ix) if the qualification can be re-obtained (or the striking of Olsy
from any relevant log can be avoided) by a sale by Olivetti to Wang of all or
part of the Wang Shares and Olivetti offers to sell the relevant number of Wang
Shares to Wang at the then market value thereof. If Olivetti tenders all or part
of the Wang Shares to Wang in order to avoid any obligation to indemnify Wang
pursuant to Section 10.2(a)(ix) by sending Wang written notice to that effect,
Wang shall have the obligation to acquire the Wang Shares so tendered by
Olivetti at a per share price equal to the Average Market Price (as defined in
Section 12.11) for the date of the written notice from Olivetti.
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10.3 INDEMNIFICATION BY WANG. (a) In addition to the
indemnification pursuant to Section 7.2(b), Wang shall indemnify Olivetti and
the Olivetti Affiliates and their respective directors, officers, employees,
agents and representatives (individually an "Olivetti Indemnified Person" and
collectively the "Olivetti Indemnified Persons") against, and hold them harmless
from, any Losses suffered or incurred by any such indemnified person for or on
account of or arising from or in connection with:
(i) any breach of any representation or warranty of
Wang contained in this Agreement or any of the Indemnified Related
Agreements; or
(ii) any breach of any covenant or agreement of
Wang contained in this Agreement or any of the Indemnified Related
Agreements.
(b) Notwithstanding anything herein to the contrary: (i) Wang
shall have no obligation to indemnify any Olivetti Indemnified Person for Losses
pursuant to Sections 10.3(a)(i) or (ii) unless and until the aggregate amount of
Losses incurred by Olivetti Indemnified Persons with respect thereto exceeds
20,000,000,000 Italian lira (the "Wang Indemnification Threshold"), and then,
subject to the immediately following clause (ii), Wang's obligation shall be to
indemnify Olivetti Indemnified Persons to the full extent of such Losses
(provided, however, that the representations and warranties of Wang in Sections
5.2, 5.3 or 5.13 and the covenants or agreements of Wang in Articles II or III
or Sections 6.12(d), 6.13, 6.14, 6.17, 6.18, 6.25(a), 6.26, 7.2(b), 7.5 or
7.6(a) or the Ancillary Consideration Agreement shall not be subject to the Wang
Indemnification Threshold); and (ii) Wang shall have no obligation to indemnify
any Olivetti Indemnified Person or Olivetti Tax Indemnified Person pursuant to
Sections 10.3(a)(i) or (ii) or 7.2(b) after it has paid an aggregate amount
pursuant thereto equal to 500,000,000,000 Italian lira (the "Wang
Indemnification Cap") (provided, however, that the representation and warranties
of Wang in Sections 5.2, 5.3 or 5.13 and the covenants or agreements of Wang in
Articles II or III or Sections 6.12(d), 6.13, 6.14, 6.17, 6.18, 6.25(a) or 6.26
or the Ancillary Consideration Agreement shall not be subject to the Wang
Indemnification Cap).
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10.4 PROCEDURES RELATING TO INDEMNIFICATION. (a) An indemnified
person under Sections 10.2 or 10.3 (the "Indemnified Party") shall give prompt
written notice to the indemnifying party (the "Indemnifying Party") of any Loss
in respect of which such Indemnifying Party is obligated to indemnify such
Indemnified Party under Sections 10.2 or 10.3, specifying in reasonable detail
the nature of such Loss, the section or sections of this Agreement or any
Related Agreement to which the Loss relates, and the amount of such Loss (or if
not then determinable, its best estimate of the amount of such Loss), except
that any delay or failure so to notify the Indemnifying Party shall only relieve
the Indemnifying Party of its obligations hereunder to the extent, if at all,
that it is prejudiced by reason of such delay or failure.
(b) If a Loss is suffered or incurred for or on account of or
arises from or in connection with any demand, claim, suit, action, cause of
action, investigation or inquiry by a Person not party to this Agreement or a
Governmental Authority (a "Third Party Claim"), the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
Indemnified Party shall have the right to employ separate counsel in such Third
Party Claim and participate in such defense thereof, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Party. If the
Indemnifying Party fails to assume the defense of any Third Party Claim within
20 days after notice thereof, the Indemnified Party shall have the right to
undertake the defense, compromise or settlement of such Third Party Claim for
the account of the Indemnifying Party, subject to the right of the Indemnifying
Party to assume the defense of such Third Party Claim with counsel reasonably
satisfactory to the Indemnified Party at any time prior to the compromise,
settlement or final determination thereof. Anything in this Section 10.4 to the
contrary notwithstanding, the Indemnifying Party shall not, without the
Indemnified Party's prior written consent, settle or compromise any Third Party
Claim or consent to the entry of any judgment with respect to any Third Party
Claim which would have an adverse effect on the Indemnified Party. The
Indemnifying Party may, without the Indemnified Party's prior written consent,
compromise or settle any such Third
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Party Claim or consent to entry of any judgment with respect to any Third Party
Claim which requires solely money damages paid by the Indemnifying Party, and
which includes as an unconditional term thereof the release by the claimant or
the plaintiff of the Indemnified Party from all liability in respect of such
Third Party Claim. If an Indemnifying Party refuses to pay, in whole or in part,
any Loss suffered or incurred for or on account of or arising from or in
connection with any Third Party Claim within 20 Business Days of receipt of
notice from the Indemnified Party of such Loss, the matter shall be resolved in
accordance with Section 12.12.
(c) With respect to any Loss (other than any Loss suffered or
incurred for or on account of or arising from or in connection with any Third
Party Claim), the Indemnifying Party shall have 20 Business Days from receipt of
notice from the Indemnified Party of such Loss within which to respond thereto.
If the Indemnifying Party does not respond within such 20 Business Day period,
the Indemnifying Party shall be deemed to have accepted responsibility to make
payment and shall have no further right to contest the validity of such Loss. If
the Indemnifying Party notifies the Indemnified Party within such 20 Business
Day period that it rejects such Loss, in whole or in part, the matter shall be
resolved in accordance with Section 12.12.
(d) The amount of the obligation of any Indemnifying Party to
any Indemnified Party under Sections 10.2 or 10.3 with respect to any Loss shall
be determined after taking into account (i) any insurance proceeds or other
indemnity payments actually received by such Indemnified Party with respect to
such Loss at the time the amount of such obligation is determined and paid, (ii)
the then present value of any reduction in Taxes to be paid by such Indemnified
Party as result of such Loss, (iii) if the Indemnified Person owns, directly or
indirectly, less than all of the outstanding capital stock of the Person to
which such Loss relates, the percentage of the outstanding capital stock of the
Person to which such Loss relates owned, directly or indirectly, by the
Indemnified Person and (iv)(aa) in the case of any Wang Indemnified Person, any
reserve specifically for the matter resulting in such Loss on the Closing
Balance Sheet or (bb) in the case of any Olivetti Indemnified Party, any reserve
specifically for the matter resulting
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in such Loss on the books and records of Wang or its subsidiaries as of the
Closing Date. Indemnified Parties shall use their commercially reasonable best
efforts to collect any insurance proceeds or other indemnity payments to which
they may be entitled with respect to any Loss, but the collection thereto shall
not be a condition to or defer the obligation of any Indemnifying Party under
Sections 10.2 or 10.3. If any Indemnified Party receives any insurance proceeds
or other indemnity payments with respect to a Loss after such Loss has been
determined and paid, such Indemnified Party shall promptly turn over such
proceeds or payments to the Indemnifying Party who paid such Loss.
(e) The procedures set forth in Sections 10.4(a), (b), (c) or
(d) (and to the extent set forth in Sections 10.4(b) or (c), the dispute
resolution procedures set forth in Section 12.12) shall apply to any Loss
suffered or incurred for or on account of or arising from or in connection with
any breach of any representation or warranty or covenant or agreement in any
Indemnified Related Agreement unless such Indemnified Related Agreement
specifically provides for alternative procedures and any such Loss shall remain
subject to indemnification pursuant to Section 10.2 or 10.3, as the case may be,
irrespective of which procedures apply.
10.5 CONSIDERATION FOR PAYMENT OF INDEMNIFICATION OBLIGATIONS. With
respect to any indemnification obligation under this Article X, 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 Wang has, in addition to any other
rights it may have, at its option and without any further action, the right to
be paid for any Loss not paid by Olivetti within ten days of Olivetti becoming
obligated to pay such Loss pursuant to Sections 10.4(b), (c) or (d) pursuant to
(a) the Letter of Credit until the Original Amount (as defined therein) is
reduced to zero or the issuing bank thereof shall refuse to honor any proper
draw of Wang thereunder and then (b) the Stock Escrow Agreement.
10.6 RECOVERY PRINCIPLES. (a) If the transactions contemplated by
this Agreement are consummated, the indemnification provisions of Section 7.2
shall be
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the sole and exclusive remedy of the parties hereto against one another with
respect to the matters covered by Section 7.2.
(b) If the transactions contemplated by this Agreement are
consummated, the indemnification provisions of this Article X shall be the sole
and exclusive remedy of the parties hereto against one another with respect to
the matters covered by this Article X.
(c) Whenever a party hereto may have more than one remedy
hereunder for any matter, the remedy most specifically relating to such matter
(and any indemnification hereunder for such remedy) shall be such party's sole
and exclusive remedy hereunder for such matter. For avoidance of doubt, no party
hereto may recover hereunder more than once for the same matter.
(d) For avoidance of doubt, no party hereto may recover
hereunder for any underfunding or overfunding of the plans set forth on Schedule
10.6(d).
ARTICLE XI
TERMINATION AND ABANDONMENT
---------------------------
11.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date under the following circumstances:
(a) by mutual consent of Wang and Olivetti;
(b) by Wang at any time after April 20, 1998, if the Closing
shall not have occurred by such date, unless the failure of such consummation
shall be due to failure of Wang to have satisfied the conditions to Closing in
Sections 8.1 or 8.2; or
(c) by Olivetti at any time after April 20, 1998, if the Closing
shall not have occurred by such date, unless the failure of such consummation
shall be due to the failure of Olivetti to have satisfied the conditions to
Closing in Sections 9.1 or 9.2.
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11.2 PROCEDURE UPON TERMINATION. In the event of termination of
this Agreement and abandonment of the transactions contemplated hereby by one of
the parties hereto pursuant to Sections 11.1(b) or (c), notice thereof shall
forthwith be given to the other party hereto and the transactions contemplated
by this Agreement shall be abandoned, without further action by either of the
parties hereto. If this Agreement is terminated as provided herein:
(a) Olivetti and each of its Affiliates will redeliver to Wang
or destroy (and if Olivetti elects to destroy, Olivetti shall certify as to the
destruction of) all documents, work papers and other material of Wang relating
to the transactions contemplated hereby, whether obtained before or after the
execution hereof, and Wang will redeliver to Olivetti or destroy (and if Wang
elects to destroy, Wang shall certify as to the destruction of) all documents,
work papers and other material of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any
Subsidiary or any Olsy Japan Subsidiary relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof;
(b) all confidential information received by any party hereto
with respect to the business of any other party shall be treated in accordance
with the Confidential Disclosure Agreements, dated as of December 11, 1996 and
February 18, 1997 (the "Confidentiality Agreements"), between Olivetti and Wang;
(c) this Agreement shall become wholly void and of no force or
effect and no party hereto, nor its respective directors, officers, affiliates,
representatives or advisors, shall have any liability or further obligation to
any other party to this Agreement, except (i) for any breach of this Agreement
by such party prior to the termination hereof, (ii) for any action taken prior
to the termination hereof by Olivetti, any of its Affiliates, any of the
directors, officers or employees of Olivetti or any of its Affiliates or any of
its or any such Affiliate's investment bankers inconsistent with Section 6.2 and
(iii) that Sections 6.8, 11.2(a) and 11.2(b) and (to the extent applicable to
any breach referred to in clause (i), any action referred to in clause (ii) or
Sections 6.8, 11.2(a) or 11.2(b)) Article
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X and the Confidentiality Agreements shall survive any termination of this
Agreement; and
(d) all filings, applications and other submissions made
pursuant to Section 6.6 shall, to the extent practicable, be withdrawn from the
Governmental Authority to which made.
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
12.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified and supplemented only by written agreement of Wang and Olivetti.
12.2 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the notice provisions set forth in Section 12.3 and the requirements for a
waiver of compliance as set forth in this Section 12.2.
12.3 NOTICES. All notices and other communications hereunder shall
be in writing and shall be sent by hand delivery or overnight courier, in each
case receipt acknowledged, registered or certified mail, in each case with
postage prepaid and return receipt requested, to the respective parties at the
following addresses:
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If to Wang, to
Wang Laboratories, Inc.
600 Technology Park Drive
Billerica, MA 01821
United States
Attention: Albert A. Notini, Senior
Vice President, General
Counsel and Secretary
with a copy to
Skadden, Arps, Slate, Meagher
& Flom LLP
One Beacon Street
Boston, MA 02108
United States
Attention: David T. Brewster, Esq.
and
Gianni, Origoni & Partners
20121 Milano
Piazza Belgioioso, 2
Italy
Attention: Avv. Mario Amoroso
If to Olivetti, to
Ing. C. Olivetti & C. S.p.A.
Via Jervis, 77
10015 Ivrea
Italy
Attention: Dott. Vincenzo Cassibba
Ing. Marino Bonamico
with a copy to
Erede & Associati
Via Serbelloni, 12
20122 Milano
Italy
Attention: Avv. Umberto Nicodano
and
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Rogers & Wells
40 Basinghall Street
London EC2V 5DE
England
Attention: Michael S. Immordino, Esq.
Any party may change its address for receiving notice by written notice given to
the other parties. All notices and other communications hereunder shall be
deemed to have been duly given as of the earlier of (x) the date received at the
address and in the manner provided above or (y) the date receipt is
acknowledged.
12.4 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except (a) by operation of law, (b) that Wang may assign any of its rights (but
not its obligations to the Sellers) under this Agreement to any one or more of
its majority-owned subsidiaries, foreign or domestic, and (c) that Wang may
grant a security interest in its entire right, title and interest in this
Agreement to the party or parties from which it obtains the financing for the
transactions contemplated hereby (provided, however, that until foreclosure of
such security interest Wang shall at all times be the sole counterparty of
Olivetti for any matter arising under this Agreement).
12.5 PUBLICITY. Neither Olivetti, on the one hand, nor Wang, on the
other hand, shall make, issue or publish, or cause to be made, issued or
published, any announcement or written statement concerning this Agreement, the
Related Agreements or the transactions contemplated hereby or thereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any Governmental
Authority 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.
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12.6 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New York (without giving effect to the principles of conflicts
of law thereof except for General Obligations Law Sections 5-1401 and 5-1402) as
to all matters, including but not limited to, matters of validity, construction,
effect, performance and remedies. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision.
12.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 HEADINGS. The table of contents, headings of the sections and
articles of this Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or interpretation of
this Agreement.
12.9 ENTIRE AGREEMENT. This Agreement (including the Olivetti
Disclosure Schedule, the Wang Disclosure Schedule and the other documents and
certificates delivered pursuant hereto), the Related Agreements, the Indemnified
Related Agreements, and the Confidentiality Agreements embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. This Agreement supersedes all prior agreements,
promises, covenants, arrangements, communications or representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto (other than the Confidentiality Agreements which shall
remain in full force and effect), including, without limitation, (a) the
Memorandum of Understanding dated as of November 12, 1997, by and among Wang,
Olivetti and Olsy, as amended by Amendment No. 1 thereto dated as of November
25, 1997 and Amendment No. 2 thereto dated as of December 17, 1997 and (b) the
Letter of Intent, by and among Wang, Olivetti and Olsy dated as of January 31,
1998.
12.10 THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or
corporation other than the parties hereto and their successors or assigns, any
rights or remedies under or by reason of this Agreement.
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12.11 CERTAIN DEFINED TERMS. The following terms shall have the
following meanings:
AFFILIATE. The term "Affiliate" means, with respect to any Person,
each Person, directly or indirectly, controlling, controlled by or under common
control with such Person.
ASSOCIATE. The term "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 5% 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 spouse or child of such Person who has
the same home as such Person.
AVERAGE MARKET PRICE. The term "Average Market Price" means the
average of the daily Current Market Prices of a share of Wang Common Stock
during the 45 consecutive trading days immediately prior to the day in question.
BEST KNOWLEDGE OF OLIVETTI. The term "Best Knowledge of Olivetti"
means the knowledge of the Managing Director of Olivetti, any of the finance,
treasury, legal, administration, human resources, industrial relations, real
estate, intellectual property, tax or corporate development staff function
directors of Olivetti or Marco De Benedetti acquired (a) in the performance of
their respective duties in the ordinary course of business or (b) in the course
of consulting (directly or indirectly and including, without limitation, through
the distribution of questionnaires) with the general managers and controllers of
each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries and the
functional reports of such staff function directors of Olivetti in connection
with the transactions contemplated by this Agreement with respect to the subject
matter of the pertinent representations or warranties or covenants or agreements
of Olivetti herein (which consulting (including, without limitation, through the
distribution of questionnaires) Olivetti hereby represents and warrants to Wang
was conducted).
BUSINESS DAY. The term "Business Day" means any day other than a
Saturday, Sunday or a day on which commer-
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cial banks in New York, New York or Milan, Italy are required or permitted by
law to close.
CONTRACT. The term "Contract" means any written or oral agreement,
contract, understanding or other legally binding arrangement of any nature.
CONTROL. The term "Control" (including the terms "controlling",
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction or the management
and policies of a Person, whether through ownership of voting securities or
otherwise.
CONTROLLED SUBSIDIARY. The term "Controlled Subsidiary" means
any partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or groups including
any of the foregoing), directly or indirectly, controlled by Olsy as of the date
hereof. Olsy shall be deemed to control any partnership, corporation,
association, trust, joint venture, unincorporated organization, consortia
(including, without limitations, pure consortia, mandatory consortia or societa
consortili) or other entity (or groups including any of the foregoing) in which
Olsy, directly or indirectly, owns or controls any shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other governing body of such partnership, corporation,
association, trust, joint venture, unincorporated organization, consortia
(including, without limitations, pure consortia, mandatory consortia or societa
consortili) or other entity (or groups including any of the foregoing) as of the
date hereof. For the avoidance of any doubt, the term "Controlled Subsidiary"
shall include, without limitation, Olsy France, Olsy UK and Olsy Germany.
The term "Controlled Subsidiaries" means all of the foregoing.
CURRENT MARKET PRICE. The term "Current Market Price" of share of
Wang Common Stock means the last reported sales price, regular way on such day,
or, if no sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the
Nasdaq National Market System of the National Association of Securities Dealers,
or, if such security is not quoted on such Nasdaq National Market, on the
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principal national securities exchange on which such security is listed or
admitted for trading on any national securities exchange, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by Nasdaq or, if bid and asked prices for such security on such day
shall not have been reported through Nasdaq, the average of the bid and asked
prices on such day as furnished by any New York Stock Exchange member firm
regularly making a market in such security selected for such purpose by Wang.
DROP-DOWN. The term "Drop-Down" means the contribution of the
assets and liabilities constituting the portion of the Business directly
operated by Olivetti as well as the contribution of the equity participation in
certain Subsidiaries made by Olivetti to Olsy (effective as of January 1, 1997)
by the deed of contribution dated December 23, 1996 n. 38,550 (Rep n. 14,772
Notary Public Soudaz of Ivrea) as supplemented by the supplementary expertise
dated June 16, 1997 approved at Olsy's Board of Directors Meeting held on June
30, 1997 and subsequent Olsy Shareholders' Meeting held on September 2, 1997
(Rep. n. 15,123 Notary Public Soudaz of Ivrea).
EXCHANGE ACT. The term "Exchange Act" means the United States
Securities and Exchange Act of 1934, as amended.
GOVERNMENTAL AUTHORITY. The term "Governmental Authority" means any
federal, state, local or foreign government, or any regulatory or administrative
agency or instrumentality thereof (or any department, bureau or division
thereof).
INDEMNIFIED RELATED AGREEMENT. The term "Indemnified Related
Agreement" means any agreement by and among or between any of the parties hereto
that specifically provides that it is an Indemnified Related Agreement within
the meaning of this Agreement and any agreement set forth on Schedule 12.11(a)
hereto.
ITALIAN GAAP. The term "Italian GAAP" means the accounting
standards approved by the National Councils of "Dottori Commercialisti e
Ragioneri," and in the absence thereof, those issued by the International
Accounting Standards Committee.
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LIEN. The term "Lien" means any title defect or objection, lien,
claim, charge, security interest, easement, restriction, tenancy or other
encumbrance of any nature whatsoever.
MAJOR SUBSIDIARIES. The term "Major Subsidiaries" means the
entities set forth in Schedule 12.11(b) hereto.
MATERIAL ADVERSE EFFECT. The term "Material Adverse Effect" means a
material adverse effect on or change in the business, assets, properties,
liabilities, results of operations or condition (financial or otherwise) of
Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, taken as a whole,
or Olsy or any of the Major Subsidiaries, taken separately.
NONCONTROLLED SUBSIDIARY. The term "Noncontrolled Subsidiary" means
any partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or group including
any of the foregoing) in which Olsy, directly or indirectly, owns or controls
any shares of stock or other ownership interest as of the date hereof other than
a Controlled Subsidiary. The term "Noncontrolled Subsidiaries" means all of the
foregoing.
OFFICIAL. The term "Official" means any officer or employee of a
Governmental Authority or political party, or any person acting in an official
capacity for or on behalf of such Governmental Authority or political party.
OLGA. The term "OLGA" means general accounting policies reflected
in the "OLGA II - 1997 Accounting Manual O.S." previously delivered by Olivetti
to Wang.
OLIVETTI AFFILIATE. The term "Olivetti Affiliate" means any
Affiliate of Olivetti other than Olsy, Olsy Japan, Olsy Brazil, any Subsidiary
or any Olsy Japan Subsidiary.
OLSY JAPAN SUBSIDIARY. The term "Olsy Japan Subsidiary" means any
partnership, corporation, association, trust, joint venture, unincorporated
organization, consortia (including, without limitations, pure consortia,
mandatory consortia or societa consortili) or other entity (or groups including
any of the foregoing) in which Olsy Japan, di-
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rectly or indirectly, owns or controls any shares of stock or other ownership
interest as of the date hereof.
PERSON. The term "Person" means any individual, partnership,
corporation, association, trust, joint venture, unincorporated organization,
consortia (including, without limitations, pure consortia, mandatory consortia
or societa consortili) or other entity (or group including any of the foregoing)
other than any Governmental Authority.
REAL ESTATE AGREEMENT. The term "Real Estate Agreement" means any
agreement set forth on Schedule 12.11(c) hereto.
RELATED AGREEMENT. The term "Related Agreement" means any agreement
by and among or between any of the parties hereto that specifically provides
that it is an Indemnified Related Agreement within the meaning of this
Agreement, any Real Estate Agreement and any agreement set forth on Schedule
12.11(d) hereto.
RETAINED LIABILITIES. The term "Retained Liabilities" means (a) all
liabilities or obligations of Olivetti or any Affiliate of Olivetti (whether
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured) other
than the liabilities or obligations of Olsy, Olsy Japan, Olsy Brazil or any
Subsidiary (including, without limitation, the liabilities of Olsy, Olsy Japan,
Olsy Brazil or any Subsidiary reflected on the 9/30/97 Italian GAAP Balance
Sheet or incurred after the date of the 9/30/97 Italian GAAP Balance Sheet by
any of them in the ordinary course of business and consistent with past
practice) and (b) the liabilities or obligations of Olsy, Olsy Japan, Olsy
Brazil or any Controlled Subsidiary transferred to Olivetti or an Olivetti
Affiliate pursuant to Sections 1.2, 1.3, 1.4, 1.5, 1.6, 1.8, 1.13 or otherwise
pursuant to this Agreement.
SECURITIES ACT. The term "Securities Act" means the United States
Securities Act of 1933, as amended.
SEC. The term "SEC" means the United States Securities Exchange
Commission.
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SUBSIDIARY. The term "Subsidiary" means any Controlled Subsidiary
or Noncontrolled Subsidiary. The terms "Subsidiaries" means all of the
foregoing.
WHOLLY-OWNED SUBSIDIARY. The term "Wholly-Owned Subsidiary" means
any Controlled Subsidiary in which Olsy owns or controls all of the outstanding
shares of stock or other ownership interest.
12.12 DISPUTE RESOLUTION. (a) Except as otherwise provided in
Sections 6.2, 6.13, 6.14, 6.18(c), 6.19, 7.1(c) or 12.12(c) or any Related
Agreement, any dispute, controversy or claim arising out of or relating to this
Agreement or any of the Related Agreements, or the breach, termination or
validity thereof ("Dispute"), shall be finally resolved in accordance with the
Rules (as defined in Section 6.13) then in effect, except as modified herein.
(b) The arbitration shall be held in London, England. The
arbitration proceedings shall be conducted and the award shall be rendered in
the English language. There shall be three arbitrators of whom each the claimant
and the respondent shall nominate one. The claimant shall nominate its
arbitrator in its Request For Arbitration which shall also include its statement
of claim. The respondent shall nominate its arbitrator in its Answer. The two
arbitrators so appointed shall nominate a third arbitrator to serve as presiding
arbitrator, such nomination to be made within 30 days of the nomination of the
second arbitrator. If any arbitrator has not been nominated within the time
limits specified herein, such appointment shall be made by the International
Chamber of Commerce Court of Arbitration in accordance with the Rules. The
hearing shall be held, if possible, within 120 days of the confirmation of the
third arbitrator, and the tribunal shall render its award within 30 days of the
conclusion of the hearing.
(c) By agreeing to arbitration the parties do not intend to
deprive any court of its jurisdiction to issue a prearbitral injunction,
prearbitral attachment or other order in aid of arbitration proceedings or the
enforcement of any award. Without prejudice to such provisional remedies as may
be available under the jurisdiction of a national court, the arbitral tribunal
shall have full authority to grant provisional remedies and to award damages for
the failure of any party to respect the arbitral tribunal's order to that
effect. Nothing in this Agreement shall
159
<PAGE> 168
limit the rights of either party, either before or during the pendency of the
arbitration proceedings, to seize and foreclose (through judicial foreclosure or
otherwise) against any funds, securities or any other real or personal property
placed as collateral, guarantee, bond or security under this Agreement.
(d) The arbitrators shall have the authority to award any remedy
or relief that is not in conflict with the provisions of this Agreement
including, without limitation, specific performance of any obligation created
hereunder and the issuance of permanent injunctive relief; provided, however,
that the arbitrators shall have no authority to award punitive or exemplary
damages or any other monetary damages not measured by the prevailing party's
actual damages.
(e) The award shall be final and binding upon the parties and
shall be the sole and exclusive remedy between the parties regarding any claims,
counter-claims, issues, or accounting presented to the arbitral tribunal.
Judgment upon any award may be entered in any court having jurisdiction thereof.
Any monetary award shall be made and promptly payable in U.S. dollars, and the
arbitral tribunal shall have the authority in its discretion to grant pre-award
and post-award interest at commercial rates. Any arbitration proceedings,
decision or award rendered hereunder shall be governed by the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.
(f) Service of all notices, statements and written
communications shall be at the addresses specified in Section 12.3 of this
Agreement and in accordance with the Rules.
(g) The rights and obligations of the parties shall remain in
full force and effect pending the award in any arbitration proceeding hereunder,
except that if this Agreement is terminated in accordance with Article XI, only
the rights and obligations which survive such termination shall so remain in
full force and effect.
(h) The arbitration conducted pursuant to this Agreement shall
be confidential. Neither party shall disclose or permit the disclosure of any of
the documents produced by the other party in the arbitration proceedings
160
<PAGE> 169
or the existence, contents or results of any proceeding except as may be
required by a Governmental Authority or as required in an action in aid of
arbitration or for enforcement of an arbitral award. Before making any
disclosure permitted by the preceding sentence, the party intending to make such
disclosure shall if practicable give the other party reasonable written notice
of the intended disclosure and afford the other party a reasonable opportunity
to protect its interests.
(i) The parties unconditionally and irrevocably agree to submit
to the non-exclusive jurisdiction of the courts located in London, England for
the purpose of any proceedings in aid of arbitration, for pre-arbitral
attachment or injunction, for enforcement of an arbitral award or for any claim
by Wang under Section 6.2 and unconditionally and irrevocably waive any
objections which they may have now or in the future to such jurisdiction
including, without limitation, objections by reason of lack of personal
jurisdiction, improper venue, or inconvenient forum. The parties expressly agree
that leave to appeal under Section 45 or 69 of the English Arbitration Act 1996
may not be sought with respect to any question of law arising in the course of
the arbitration or with respect to any award made.
(j) The arbitral tribunal may consolidate any arbitration
arising under or relating to this Agreement, with any arbitration arising under
or relating to any of the Related Agreements, if the subject matter of the
Dispute arises out of or relates essentially to the same set of facts or
transactions. In any consolidated proceedings, any or all of Wang, Wang
Nederland and their respective Affiliates that participate shall be treated as
one party and any or all of Olivetti, Olivetti Sistemas, Olivetti Brazil and
their respective Affiliates that participate shall be treated as one party. Such
consolidated arbitration shall be determined by the arbitral tribunal appointed
for the arbitration proceeding that was commenced first in time.
12.13. MISCELLANEOUS. A chart of all defined terms used in this
Agreement and the respective section in which they are defined is set forth on
Schedule 12.13.
161
<PAGE> 170
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their duly authorized officers as of the date first above
written.
WANG LABORATORIES, INC.
Attest: By: /s/ JOSEPH M. TUCCI
-----------------------------------
Name: JOSEPH M. TUCCI
Title: CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
- ----------------------------
Title:
WANG NEDERLAND BV
Attest: By: /s/ ALBERT A. NOTINI
-----------------------------------
Name: ALBERT A. NOTINI
Title: DIRECTOR
- -----------------------------
Title:
ING. C. OLIVETTI & C. S.P.A.
Attest: By: /s/ ROBERTO COUANINNO
-----------------------------------
Name: ROBERTO COUANINNO
Title: ???????????????
- -----------------------------
Title:
<PAGE> 171
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their duly authorized officers as of the date first above
written.
WANG LABORATORIES, INC.
Attest: By: /s/
-----------------------------------
Name:
Title:
- ----------------------------
Title:
WANG NEDERLAND BV
Attest: By: /s/
-----------------------------------
Name:
Title:
- -----------------------------
Title:
ING. C. OLIVETTI & C. S.P.A.
Attest: By: /s/ ROBERTO COUANINNO
-----------------------------------
Name: ROBERTO COUANINNO
Title: ???????????????
- -----------------------------
Title:
<PAGE> 172
OLIVETTI SISTEMAS E SERVICIOS
LIMITADA
Attest: By: /s/ MARINO BONARICO
------------------------------------
Name: MARINO BONARICO
Title: ATTORNEY-IN-FACT
- --------------------------------
Title:
OLIVETTI DO BRASIL S.A.
Attest: By: /s/ MARINO BONARICO
-----------------------------------
Name: MARINO BONARICO
Title: ATTORNEY-IN-FACT
- --------------------------------
Title:
<PAGE> 1
Exhibit 3
================================================================================
CREDIT AGREEMENT
among
WANG LABORATORIES, INC.,
VARIOUS SUBSIDIARY BORROWERS,
VARIOUS LENDING INSTITUTIONS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT AND ARRANGER
and
NATIONAL WESTMINSTER BANK PLC,
AS SYNDICATION AGENT AND ARRANGER
and
LEHMAN COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT AND CO-ARRANGER
------------------------------------
Dated as of March 13, 1998
------------------------------------
$500,000,000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Amount and Terms of Credit................................. 1
1.01 Commitment................................................. 1
1.02 Minimum Borrowing Amounts, etc............................. 4
1.03 Notice of Borrowing........................................ 4
1.04 Disbursement of Funds...................................... 5
1.05 Notes ..................................................... 6
1.06 Conversions................................................ 6
1.07 Pro Rata Borrowings, etc................................... 7
1.08 Interest................................................... 7
1.09 Interest Periods........................................... 8
1.10 Increased Costs, Illegality, etc........................... 10
1.11 Compensation............................................... 12
1.12 Change of Lending Office................................... 13
1.13 Replacement of Lenders..................................... 13
SECTION 2. Letters of Credit.......................................... 14
2.01 Letters of Credit.......................................... 14
2.02 Lender Default............................................. 15
2.03 Letter of Credit Requests; Notices of Issuance............. 15
2.04 Agreement to Repay Letter of Credit Drawings............... 16
2.05 Letter of Credit Participations............................ 16
2.06 Increased Costs............................................ 19
SECTION 3. Fees; Commitments.......................................... 20
3.01 Fees ..................................................... 20
3.02 Voluntary Reduction of Commitments......................... 21
3.03 Mandatory Adjustments of Commitments, etc.................. 21
SECTION 4. Payments................................................... 22
4.01 Voluntary Prepayments...................................... 22
4.02 Mandatory Prepayments...................................... 23
4.03 Method and Place of Payment................................ 24
4.04 Net Payments............................................... 25
SECTION 5. Conditions Precedent....................................... 28
5.01 Conditions Precedent to Closing Date....................... 28
5.02 Conditions Precedent to the Full Utilization Date.......... 32
5.03 Conditions Precedent to All Credit Events.................. 34
SECTION 6. Representations, Warranties and Agreements................. 34
6.01 Corporate Status........................................... 34
6.02 Corporate Power and Authority.............................. 35
<PAGE> 3
Page
----
6.03 No Violation............................................... 35
6.04 Litigation................................................. 35
6.05 Use of Proceeds; Margin Regulations........................ 35
6.06 Governmental Approvals..................................... 36
6.07 Investment Company Act..................................... 36
6.08 Public Utility Holding Company Act......................... 36
6.09 True and Complete Disclosure............................... 36
6.10 Financial Condition; Financial Statements.................. 37
6.11 Security Interests......................................... 38
6.12 Representations and Warranties in Documents................ 38
6.13 Tax Returns and Payments................................... 39
6.14 Compliance with ERISA...................................... 39
6.15 Subsidiaries............................................... 40
6.16 Intellectual Property...................................... 40
6.17 Environmental Matters...................................... 41
6.18 Labor Relations............................................ 42
6.19 Existing Indebtedness...................................... 42
6.20 Compliance with Statutes, etc.............................. 42
6.21 Acquisition................................................ 42
SECTION 7. Affirmative Covenants...................................... 42
7.01 Information Covenants...................................... 43
7.02 Books, Records and Inspections............................. 45
7.03 Insurance.................................................. 45
7.04 Payment of Taxes........................................... 45
7.05 Corporate Franchises....................................... 46
7.06 Compliance with Statutes, etc.............................. 46
7.07 ERISA ..................................................... 46
7.08 Good Working Order......................................... 47
7.09 End of Fiscal Years; Fiscal Quarters....................... 47
7.10 Additional Security; Further Assurances.................... 48
7.11 Compliance with Environmental Laws......................... 48
7.12 Material Subsidiaries...................................... 48
SECTION 8. Negative Covenants......................................... 49
8.01 Changes in Business........................................ 49
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc..... 49
8.03 Liens ..................................................... 51
8.04 Indebtedness............................................... 53
8.05 Capital Expenditures....................................... 55
8.06 Advances, Investments and Loans............................ 55
8.07 Prepayments of Indebtedness, etc........................... 56
8.08 Dividends, etc............................................. 57
(ii)
<PAGE> 4
Page
----
8.09 Transactions with Affiliates............................... 58
8.10 Current Ratio.............................................. 58
8.11 Leverage Ratio............................................. 59
8.12 Minimum Consolidated EBITDA................................ 59
8.13 Minimum Interest Coverage.................................. 59
8.14 Minimum Consolidated Net Worth............................. 60
8.15 Limitation On Issuance of Stock............................ 60
8.16 Creation of Subsidiaries................................... 60
SECTION 9. Events of Default.......................................... 60
9.01 Payments................................................... 60
9.02 Representations, etc....................................... 60
9.03 Covenants.................................................. 60
9.04 Default Under Other Agreements............................. 61
9.05 Bankruptcy, etc............................................ 61
9.06 ERISA ..................................................... 62
9.07 Security Documents......................................... 62
9.08 Guaranties................................................. 62
9.09 Judgments.................................................. 63
9.10 Full Utilization Date...................................... 63
SECTION 10. Definitions............................................... 64
SECTION 11. Agents, etc............................................... 98
11.01 Appointment............................................... 98
11.02 Nature of Duties.......................................... 98
11.03 Lack of Reliance on the Agents............................ 98
11.04 Certain Rights of the Agents.............................. 99
11.05 Reliance.................................................. 99
11.06 Indemnification........................................... 99
11.07 The Agents in Their Individual Capacities.................100
11.08 Holders...................................................100
11.09 Resignation by an Agent...................................100
SECTION 12. Miscellaneous.............................................101
12.01 Payment of Expenses, etc..................................101
12.02 Right of Setoff...........................................102
12.03 Notices...................................................102
12.04 Benefit of Agreement......................................102
12.05 No Waiver; Remedies Cumulative............................104
12.06 Payments Pro Rata.........................................105
(iii)
<PAGE> 5
Page
----
12.07 Calculations; Computations................................105
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial...................................106
12.09 Counterparts..............................................107
12.10 Effectiveness.............................................107
12.11 Headings Descriptive......................................108
12.12 Amendment or Waiver.......................................108
12.13 Survival..................................................108
12.14 Domicile of Loans.........................................108
12.15 Confidentiality...........................................108
12.16 Lender Register...........................................109
12.17 Judgment Currency.........................................109
12.18 Euro .....................................................110
12.19 Covenant to Pay...........................................110
12.20 Sharing...................................................111
SECTION 13. Guaranty..................................................111
13.01 The Guaranty..............................................111
13.02 Bankruptcy................................................112
13.03 Nature of Liability.......................................112
13.04 Independent Obligation....................................112
13.05 Authorization.............................................113
13.06 Reliance..................................................114
13.07 Subordination.............................................114
13.08 Waiver....................................................114
13.09 Enforcement...............................................115
ANNEX I -- Commitments
ANNEX II -- Lenders Addresses
ANNEX III -- Plans
ANNEX IV -- Subsidiaries
ANNEX V -- Proposed Dispositions
ANNEX VI -- Existing Indebtedness
ANNEX VII -- Existing Liens
ANNEX VIII -- Existing Investments
ANNEX IX -- Affiliate Transactions
ANNEX X -- Limits on Foreign Subsidiary Investments
EXHIBIT A -- Form of Notice of Borrowing
(iv)
<PAGE> 6
EXHIBIT B-1 -- Form of USF Note
EXHIBIT B-2 -- Form of MCF Note
EXHIBIT B-3 -- Form of Lira Note
EXHIBIT B-4 -- Form of Swingline Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04 Certificate
EXHIBIT E-1 -- Form of Opinions of Skadden, Arps, Slate, Meagher & Flom LLP
and Alan Cormier, Esq.
EXHIBIT E-2 -- Form of Opinion of White & Case LLP
EXHIBIT F-1 -- Form of Officers' Certificate - Closing Date
EXHIBIT F-2 -- Form of Officers' Certificate - Full Utilization Date
EXHIBIT G -- Form of US Guaranty
EXHIBIT H -- Form of US Pledge Agreement
EXHIBIT I -- Form of US Security Agreement
EXHIBIT J -- Form of Consent Letter
EXHIBIT K -- Form of Solvency Certificate
EXHIBIT L -- Form of Assignment Agreement
(v)
<PAGE> 7
CREDIT AGREEMENT, dated as of March 13, 1998, among WANG
LABORATORIES, INC., a Delaware corporation, WANG NEDERLAND B.V., a Dutch company
and upon its becoming party hereto as contemplated by Section 5.02(a) OLIVETTI
SOLUTIONS SPA, the lenders from time to time party hereto (each, a "Lender" and,
collectively, the "Lenders"), BANKERS TRUST COMPANY as Administrative Agent and
Arranger, NATIONAL WESTMINSTER BANK PLC, as Syndication Agent and Arranger and
LEHMAN COMMERCIAL PAPER INC. as Documentation Agent and Co-Arranger. Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 10 are used herein as so defined.
W I T N E S E T H :
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lenders are willing to make available to the Borrowers the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENT. (A) Subject to and upon the terms and
conditions herein set forth, each USF Lender severally agrees, at any time and
from time to time on and after the Closing Date and prior to the Final Maturity
Date, to make a loan or loans (each, a "USF Loan" and, collectively, the "USF
Loans") to WLI, which USF Loans (i) shall be made and maintained in Dollars;
(ii) except as hereinafter provided, may, at the option of WLI, be incurred and
maintained, and/or converted into Base Rate Loans or Eurodollar Loans, provided
that all USF Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of USF Loans of the same Type; (iii) may
be repaid and reborrowed in accordance with the provisions hereof; and (iv)
shall not exceed for any USF Lender at the time of the making of any such USF
Loan, and after giving effect thereto, that aggregate Principal Amount which,
when added to the sum of (I) the aggregate Principal Amount of all other USF
Loans made by such USF Lenders then outstanding and (II) such USF Lender's
Percentage of (x) the USF Letter of Credit Outstandings at such time and (y) the
outstanding principal amount of Swingline Loans at such time, equals the USF
Commitment of such USF Lender at such time.
(B) Subject to and upon the terms and conditions herein set
forth, each MCF Lender severally agrees, at any time and from time to time on
and after the Closing Date and prior to the Final Maturity Date, to make a loan
or loans (each, a "MCF Loan" and, collect-
<PAGE> 8
ively, the "MCF Loans") to one or more of the MCF Borrowers (on a several
basis), which MCF Loans (i) may be made and maintained in such Approved Currency
as is requested by the applicable MCF Borrower; (ii) may be repaid and
reborrowed in accordance with the provisions hereof; (iii) shall not (w) be
made to the Italian Borrower prior to the Full Utilization Date, (x) exceed
$150,000,000 in Principal Amount at any time outstanding prior to the Full
Utilization Date, (y) in the case of MCF Loans made to WLI, exceed $150,000,000
in Principal Amount at any time outstanding or (z) in the case of MCF Loans
denominated in Spanish Pesetas, Danish Krone, Belgian Francs and Dutch Guilders,
exceed $50,000,000 in Principal Amount for any one such currency at any time
outstanding; and (iv) shall not exceed for any MCF Lender at the time of the
making of any such MCF Loan, and after giving effect thereto, that aggregate
Principal Amount which, when added to (I) the aggregate Principal Amount of all
other MCF Loans made by such MCF Lender then outstanding and (II) such MCF
Lender's Percentage of the MCF Letter of Credit Outstandings at such time,
equals the MCF Commitment of such MCF Lender at such time, PROVIDED that all
then outstanding MCF Loans denominated in Italian Lira shall be repaid on the
Full Utilization Date and then and thereafter the Lira Lender shall alone make
all Lira Loans.
(C) The Lira Lender shall not be required to make any Lira
Loan while a Lender Default exists with respect to a MCF Lender unless the Lira
Lender has entered into arrangements satisfactory to it and the Italian Borrower
to eliminate its risk with respect to the participation of the Defaulting Lender
or Lenders in any such Lira Loan (including by way of example cash
collateralization of each such Defaulting Lender's MCF Percentage of such
requested Lira Loan). The Lira Lender will not make any Lira Loan after it has
received a written notice (not subsequently withdrawn) from WLI or the Required
Lenders that one or more of the applicable conditions to the Credit Events
specified in Section 5.02 are not then satisfied.
(D) At any time when an Acceleration Event has occurred and/or
a default in the payment of principal or interest on the Lira Loans exists, the
Lira Lender may, on any Business Day and in its sole discretion, give notice
(which notice shall be deemed to be given upon the occurrence of any
Acceleration Event or any other bankruptcy, insolvency or similar proceedings in
respect of any Designated Party if the Lira Lender is prohibited from giving
such notice under applicable law) to each MCF Lender that each such MCF Lender
is required to purchase, and each such MCF Lender (other than the Lira Lender)
hereby irrevocably agrees to promptly purchase from the Lira Lender (without
recourse or warranty), an assignment of the outstanding Lira Loans as shall be
necessary to cause each such MCF Lender, to share in the outstanding Lira Loans
ratably based on its respective MCF Percentage, PROVIDED that all interest
payable on each outstanding Lira Loan shall, not withstanding any other
provision of this Agreement, be for the account of the Lira Lender from the date
of any such notice until the date the respective participation or assignment is
purchased by such Lender. Each purchase of a participation or assignment by a
MCF Lender under this Section 1.01(D) shall
-2-
<PAGE> 9
be effected in Italian Lira. The Lira Lender shall not make any Lira Loan on and
after the date on which it gives any notice contemplated by this Section
1.01(D).
(E) Subject to and upon the terms and conditions herein set
forth, the Swingline Lender agrees to make at any time and from time to time
after the Closing Date and prior to the Swingline Expiry Date, a loan or loans
to WLI (each, a "Swingline Loan" and, collectively, the "Swingline Loans"),
which Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii)
may be repaid and reborrowed in accordance with the provisions hereof, (iii)
shall not exceed (giving effect to any incurrence thereof and the use of the
proceeds of such incurrence) in aggregate principal amount at any time
outstanding that amount which, when combined with the aggregate principal amount
of all USF Loans made by Non-Defaulting Lenders then outstanding and the USF
Letter of Credit Outstandings at such time, equals the Adjusted Total USF
Commitment then in effect (after giving effect to any changes thereto on such
date) and (iv) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. The Swingline Lender will not make a
Swingline Loan after it has received written notice from the Required Lenders
that one or more of the applicable conditions to Credit Events specified in
Section 5.02 are not then satisfied until such conditions are satisfied.
(F) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the USF Lenders that its outstanding Swingline Loans
shall be funded with a Borrowing of USF Loans (PROVIDED that each such notice
shall be deemed to have been automatically given upon the occurrence of an Event
of Default under Section 9.05 with respect to WLI or upon the exercise of any of
the remedies provided in the last paragraph of Section 9), in which case a
Borrowing of USF Loans constituting Base Rate Loans (each such Borrowing, a
"Mandatory Borrowing") shall be made on the immediately succeeding Business Day
by all USF Lenders that are Non-Defaulting Lenders PRO RATA based on each such
USF Lender's Percentage, and the proceeds thereof shall be applied directly to
repay the Swingline Lender for such outstanding Swingline Loans. Each USF Lender
hereby irrevocably agrees to make Base Rate Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by the Swingline
Lender notwithstanding: (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5.02 are then satisfied, (iii)
whether a Default or an Event of Default has occurred and is continuing, (iv)
the date of such Mandatory Borrowing and (v) the amount of the Total USF
Commitment at such time. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of the Borrower), each USF Lender that is a Non-Defaulting
Lender (other than BTCo) hereby agrees that it shall forthwith purchase from the
Swingline Lender (without recourse or warranty) such assignment of the
outstanding
-3-
<PAGE> 10
Swingline Loans as shall be necessary to cause such USF Lenders to share in such
Swingline Loans ratably based upon their respective Percentages, PROVIDED that
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date the respective assignment is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the USF
Lender purchasing same from and after such date of purchase.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount.
More than one Borrowing may be incurred on any day, PROVIDED that at no time
shall there be outstanding more than 10 Borrowings of Eurodollar Loans under the
US Facility and no more than 20 Borrowings under the MC Facility.
1.03 NOTICE OF BORROWING. (a) Whenever (I) WLI desires to
incur USF Loans, it shall give the Administrative Agent at its Notice Office,
(x) prior to 12:00 Noon (New York time) at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and (y) prior to 12:00 Noon (New York time) at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Base Rate Loans and (II) a Borrower
desires to incur MCF Loans, it shall give the Administrative Agent at its Notice
Office prior to 12:00 Noon (London time) at least three Business Days' (one
Business Day in the case of Pound Sterling-denominated Loans) prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
such MCF Loans, provided that Lira Loans will be made upon such written notice
(or telephonic notice promptly confirmed in writing) being given to the Lira
Lender (with a copy to the Administrative Agent) by the Italian Borrower as
agreed by such parties. Each such notice (each, a "Notice of Borrowing") shall
be in the form of Exhibit A and shall be irrevocable and shall specify (i) the
identity of the Borrower, (ii) the Facility pursuant to which such Borrowing is
being made and, in the case of MCF Loans, the Approved Currency for such Loans,
(iii) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing (stated in the applicable Approved Currency), (iv) the date of
Borrowing (which shall be a Business Day), (v) in the case of USF Loans, whether
the respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans
and (vi) if MCF Loans or Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of the portion, if any, thereof to be funded by such Lender
and of the other matters covered by the Notice of Borrowing.
(b) (i) Whenever WLI desires to incur Swingline Loans, it
shall give the Swingline Lender, prior to 2:00 P.M. (New York time) on the day
such Swingline Loan is to be made, written notice (or telephonic notice promptly
confirmed in writing) of each Swingline Loan to be made hereunder. Each such
notice shall be irrevocable and shall specify in each case (x) the date of such
Borrowing (which shall be a Business Day) and (y) the aggregate principal amount
of the Swingline Loans to be made pursuant to such Borrowing.
-4-
<PAGE> 11
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(F), with WLI irrevocably agreeing, by its incurrence
of any Swingline Loan, to the making of Mandatory Borrowings as set forth in
such Section 1.01(F).
(c) Without in any way limiting the obligation of any Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the Lira Lender (in the case of Lira Loans) may prior to
receipt of written confirmation act without liability upon the basis of such
telephonic notice, believed by it in good faith to be from an Authorized Officer
of such Borrower. In each such case, each Borrower hereby waives the right to
dispute the Administrative Agent's or Lira Lender's record of the terms of such
telephonic notice absent manifest error.
1.04 DISBURSEMENT OF FUNDS. (a) No later than (i) 12:00 Noon
(Local time) on the date specified in each Notice of Borrowing, each Lender
required to participate in a Syndicated Borrowing will make available its PRO
RATA share of such Borrowing requested to be made on such date and (ii) 2:00
P.M. (New York time) on each date for the making of Swingline Loans, the
Swingline Lender will make available the amount of such Swingline Loans, in each
case in the manner provided below. All such amounts shall be made available to
the Administrative Agent in the relevant Approved Currency and immediately
available funds at the Payment Office and the Administrative Agent promptly will
make available to the applicable Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Lira Loans shall be made available by the Lira Lender to the
Italian Borrower no later than 12:00 Noon (Milan time) in such manner as is
agreed by such parties. Unless the Administrative Agent shall have been notified
by any Lender required to participate in a Syndicated Borrowing prior to the
date of Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Syndicated Borrowing or Borrowings to be
made on such date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such date of Borrowing, and
the Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the applicable
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the applicable Borrower, the Administrative
Agent shall be entitled to recover such corresponding amount from such Lender.
If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the applicable Borrower, and such Borrower shall pay such corresponding
amount to the Administrative Agent within three Business Days of receipt of such
notice unless previously paid by such Lender. The Administrative Agent shall
also be entitled to recover on demand from such Lender or such Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to such Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by
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such Lender, the overnight Federal Funds Effective Rate or (y) if paid by such
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which any Borrower may have against any Lender as a result of any default by
such Lender hereunder.
1.05 NOTES. (a) A Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by each Lender shall be evidenced (i)
if USF Loans, by a promissory note substantially in the form of Exhibit B-1 with
blanks appropriately completed (each, a "USF Note" and, collectively, the "USF
Notes"), (ii) if MCF Loans other than Lira Loans and if requested by the
respective MCF Lender, by a promissory note substantially in the form of Exhibit
B-2 with blanks appropriately completed (each, a "MCF Note" and, collectively,
the "MCF Notes"), (iii) if Lira Loans, by a promissory note substantially in the
form of Exhibit B-3, with blanks appropriately completed (the "Lira Note") and
(iv) if Swingline Loans, by a promissory note substantially in the form of
Exhibit B-4 with the blanks appropriately completed (the "Swingline Note").
(b) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will, prior to
any transfer of any of its Notes, endorse on the reverse side thereof the
outstanding Principal Amount of Loans evidenced thereby. Failure to make any
such notation shall not affect a Borrower's obligations in respect of such
Loans.
1.06 CONVERSIONS. WLI shall have the option to convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of its USF Loans of one Type into a Borrowing or Borrowings of USF Loans
of the other Type, provided that (i) no partial conversion shall reduce the
outstanding principal amount of the available to the applicable Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the applicable Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the applicable
Borrower, and such Borrower shall pay such corresponding amount to the
Administrative Agent within three Business Days of receipt of such notice unless
previously paid by such Lender. The Administrative Agent shall also be entitled
to recover on demand from such Lender or such Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to such
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by Eurodollar
Loans made pursuant to a Borrowing to less than the Minimum Borrowing Amount
applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar
Loans (x) when a Default under Section 9.01 or Event of Default is then in
existence if the Administrative Agent or the Required Lenders shall have
determined in its or their sole discretion not to permit such conversion or (y)
prior to the Syndication Date except for a conversion into Eurodollar Loans with
a PSD Interest Period and (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02. Each
such conversion shall be effected by WLI giving the Administrative Agent at the
Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days' (or one Business Day in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing) (each,
a "Notice of Conversion") specifying the Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall
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give each USF Lender prompt notice of any such proposed conversion affecting any
of its USF Loans.
1.07 PRO RATA BORROWINGS, ETC. All Loans incurred pursuant to
a Syndicated Borrowing shall be made by the Lenders required to participate
therein PRO RATA on the basis of their respective USF Commitments or MCF
Commitments, as the case may be. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) or conversion at a rate per
annum which shall at all times be the Applicable Margin plus the Base Rate
applicable to such Loan in effect from time to time.
(b) The unpaid principal amount of each Loan (other than Base
Rate Loans) shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) or conversion at a rate per
annum which shall at all times during each Interest Period applicable thereto be
the Applicable Margin plus the relevant LIBOR for such Interest Period.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of any Loans shall bear interest at the Base Rate in
effect from time to time PLUS the sum of (i) 2% and (ii) the Applicable Margin
then in effect for Base Rate Loans, provided that principal in respect of
Eurodollar Loans and MCF Loans shall bear interest from the date same becomes
due (whether by acceleration or otherwise) until (x) in the case of Eurodollar
Loans, the end of the Interest Period applicable to such Eurodollar Loans at
such maturity or (y) in the case of MCF Loans, until paid in full, at a rate per
annum equal to 2% in excess of the rate of interest applicable thereto at such
maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, (ii) in respect of
each Eurodollar Loan and each MCF Loan, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iii) in respect of each Loan, on any prepayment or
conversion (other than the prepayment or conversion of any Base Rate Loan) (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
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(e) Subject to the provisions of Section 1.01(D), the Lira
Lender shall (x) retain for itself the LL Portion of all interest payments it
receives on Lira Loans in respect of all periods prior to the purchase of
assignments thereof by the MCF Lenders pursuant to Section 1.01(D) (subject to
the rights of MCF Lenders who purchased participations therein to their PRO RATA
share of such interest under such participations) and (y) pay over to the
Administrative Agent for prompt payment to all MCF Lenders that are
Non-Defaulting Lenders (for application, PRO RATA among them on the basis of
their MCF Percentages) the remaining portion of such interest payments (with the
Lira Lender to be paid all such interest otherwise payable to Defaulting
Lenders).
(f) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(g) The Administrative Agent, upon determining the interest
rate for any Borrowing for any Interest Period, shall promptly notify the
applicable Borrower and the Lenders thereof.
1.09 INTEREST PERIODS. (a) At the time a Borrower gives a
Notice of Borrowing (or WLI gives a Notice of Conversion) in respect of the
making of, or conversion into, a Borrowing of Eurodollar Loans or MCF Loans (in
the case of the initial Interest Period applicable thereto) or prior to 12:00
Noon (Local Time) on the third Business Day prior to the expiration of an
Interest Period applicable to a Borrowing of Eurodollar Loans or MCF Loans, it
shall have the right to elect by giving the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of such
Borrower, be a one, two, three or six month period (or if prior to the
Syndication Date and to the extent then available in the relevant currency in
the opinion of the Administrative Agent, a 7, 14 or 21 day period or such other
period less than one month as is agreed by the respective Borrower and the
Administrative Agent). Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing shall
commence on the date of such Borrowing (including, where relevant, the
date of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period begins on (x) the last Business Day
of a month, it shall end on the last Business Day of the month in which
it is to end and (y) a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month;
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(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) subject to the foregoing clauses (i) through (iii),
inclusive, all Interest Periods selected prior to the Syndication Date
must end (I) if selected prior thereto, on the date one month after the
Closing Date, (II) if selected on or after such one month date and
prior to the date two months after the Closing Date, on the date two
months after the Closing Date, (III) if selected on or after such two
month date and on or prior to the date three months after the Closing
Date, on the date three months after the Closing Date and (IV) if
selected on or after such three month date, on the date four months
after the Closing Date;
(v) no Interest Period may be elected that would extend beyond
the Final Maturity Date;
(vi) no Interest Period may be elected at any time when a
Default under Section 9.01 or an Event of Default is then in existence
if the Administrative Agent or the Required Lenders shall have
determined in its or their sole discretion not to permit such election;
(vii) all Eurodollar Loans or MCF Loans comprising a Borrowing
shall at all times have the same Interest Period.
(b) If upon the expiration of any Interest Period, the
applicable Borrower has failed to (or may not) elect a new Interest Period to be
applicable to the Loans subject to the expiring Interest Period as provided
above, such Borrower shall be deemed to have elected, in the case of Eurodollar
Loans, to convert such Borrowing into a Borrowing of Base Rate Loans effective
as of the expiration date of such current Interest Period and, in the case of
all MCF Loans, to continue such Loans pursuant to a one-month Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that
(x) in the case of clause (i) or (iv) below, the Administrative Agent or (y) in
the case of clauses (ii) and (iii) below, any Lender shall have determined
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining any LIBOR for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the relevant interbank market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of the respective LIBOR; or
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(ii) at any time, that such Lender shall actually incur
increased costs or reductions in the amounts received or receivable
hereunder with respect to any Eurodollar Loans or MCF Loans (other than
any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or
similar charges) because of (x) any change since the Effective Date in
any applicable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline
or order) (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
payable pursuant to Section 1.10(c) and those included in determining
any Associated Costs Rate) and/or (y) other circumstances occurring
since the Effective Date affecting the relevant interbank market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loans or MCF Loans has become unlawful by compliance by such
Lender in good faith with any law, governmental rule, regulation,
guideline, or has become impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely
affects the relevant interbank market; or
(iv) at any time that any Alternate Currency is not available
in sufficient amounts, as determined in good faith by the
Administrative Agent, to fund any Borrowing of Loans denominated in
such Alternate Currency;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) or (iv) above) shall (x) on such date and (y) within ten
Business Days of the date on which such event no longer exists give notice (by
telephone confirmed in writing) to the respective Borrower and, except in the
case of clause (i) or (iv) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter and for so long as the applicable
circumstance continues to exist (w) in the case of clause (i) above, Loans
priced in respect of the affected LIBOR shall no longer be available until such
time as the Administrative Agent notifies the respective Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist in accordance with clause (y) of the preceding sentence,
and any Notice of Borrowing or Notice of Conversion given by a Borrower with
respect to such Loans which have not yet been incurred shall be deemed rescinded
by the relevant Borrower, (x) in the case of clause (ii) above, the applicable
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, showing the basis for the calculation
thereof in reasonable detail, submitted to the applicable Borrower by such
Lender shall, absent manifest error, be
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final and conclusive and binding upon all parties hereto), (y) in the case of
clause (iii) above, the applicable Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law and (z) in the case of clause (iv) above, Loans
in the affected Alternate Currency shall no longer be available until such time
as the Administrative Agent notifies the respective Borrower and the Lenders
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist in accordance with clause (y) of the preceding sentence, and any
Notice of Borrowing given by a Borrower with respect to such Alternate Currency
Loans which have not yet been incurred shall be deemed rescinded by such
Borrower.
(b) At any time when any Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the applicable Borrower may (and in
the case of a Loan affected pursuant to Section 1.10(a)(iii), the applicable
Borrower shall) either (i) if the affected Loan is then being made pursuant to a
Borrowing, cancel said Borrowing (or, in the case of clause (iii) at a time when
no Default under Section 9.01 or Event of Default exists, the proposed MCF Loan
of the affected MCF Lender) by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the respective
Borrower was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii), or
(ii) if the affected Loan is then outstanding, upon at least three Business
Days' notice to the Administrative Agent, (A) in the case of a Eurodollar Loan,
require the affected Lender to convert each such Eurodollar Loan into a Base
Rate Loan, and (B) in the case of any other Loan, repay all such Loans in full
(or, in the case of clause (iii) at a time when no Default under Section 9.01 or
Event of Default exists, the affected Loans of the affected MCF Lender),
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that after the
Effective Date, the adoption or effectiveness 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, or compliance by such Lender or any corporation
controlling such Lender 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, has or would have the effect of reducing the rate of return
on such Lender's or such corporation's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender or
such other corporation could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Lender's or such other
corporation's policies with respect to capital adequacy), then from time to
time, within 15 days after written demand by such Lender (with a copy to the
Administrative Agent), WLI will pay to such Lender such additional amount or
amounts as will compensate such Lender or such other corporation for such
reduction. In determining such additional amounts, each Lender will act
reasonably and in good faith and will use averaging and attribution methods that
are
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reasonable. Each Lender, upon so determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to WLI, which notice shall set forth in reasonable detail the basis of
the calculation of such additional amounts, although the failure to give any
such notice shall not, subject to Section 1.11(b), release or diminish any
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(c) upon the subsequent receipt of such notice.
1.11 COMPENSATION. (a) Each Borrower shall compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund any Eurodollar Loans or MCF Loans made, or to be
made, by it to such Borrower but excluding in any event the loss of anticipated
profits) which such Lender may actually sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of
Eurodollar Loans or MCF Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion, given by such Borrower (whether or
not withdrawn by such Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any prepayment, repayment or conversion of any such Eurodollar Loans or
MCF Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any such Eurodollar Loans or MCF
Loans is not made on any date specified in a notice of prepayment given by such
Borrower; or (iv) as a consequence of (x) any other default by such Borrower to
repay its Eurodollar Loans or MCF Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.10(b).
(b) Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 1.10, 1.11, 2.06 or 4.04
is given by any Lender more than 90 days after such Lender obtained, or
reasonably should have obtained, knowledge of the occurrence of the event giving
rise to the additional costs of the type described in such Section, such Lender
shall not be entitled to compensation under Section 1.10, 1.11, 2.06 or 4.04 for
any amounts incurred or accruing prior to the giving of such notice to the
respective Borrower.
1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), 1.10(c), 2.06 or 4.04 with respect to such Lender, it will, if
requested by the applicable Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Commitments affected by such event, PROVIDED that such designation
is made on such terms that such Lender and its lending office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding or
materially mitigating the consequence of the event giving rise to the operation
of any such Section. Nothing in this Section 1.12 shall affect or postpone any
of the obligations of any Borrower or the right of any Lender provided in
Section 1.10, 2.06 or 4.04.
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1.13 REPLACEMENT OF LENDERS. (x) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Lender which results
in such Lender charging to any Borrower in creased costs in excess of those
being generally charged by the other Lenders, (y) if a Lender becomes a
Defaulting Lender and/or (z) in the case of a refusal by a Lender to consent to
a proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Lenders, WLI shall have the
right, if no Default under Section 9.01 or Event of Default then exists, to
replace such Lender (the "Replaced Lender"), upon prior written notice to the
Administrative Agent and such Replaced Lender, with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Lender at
the time of such replacement (collectively, the "Replacement Lender") reasonably
acceptable to the Administrative Agent, the Letter of Credit Issuers, to the
extent assuming any USF Commitment, the Swingline Lender, and, to extent
assuming any MCF Commitment, the Lira Lender PROVIDED that (i) at the time of
any replacement pursuant to this Section 1.13, the Replacement Lender and the
Replaced Lender shall enter into one or more Assignment Agreements pursuant to
Section 12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to
be paid by the Replacement Lender) pursuant to which the Replacement Lender
shall acquire all of the Commitments and outstanding Loans of, and in each case
participations in Letters of Credit and Swingline Loans (if any) by, the
Replaced Lender and, in connection therewith, shall pay to (x) the Replaced
Lender in respect thereof an amount equal to the sum of (A) an amount equal to
the Principal Amount of, and all accrued but unpaid interest on, all outstanding
Loans of the Replaced Lender and the Principal Amount of all participations in
Lira Loans funded by the Replaced Lender (and not reimbursed), (B) an amount
equal to the Principal Amount of all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Lender, together with all then unpaid
interest with respect thereto at such time, and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 3.01 and (y) the Letter of Credit Issuer an amount equal to such
Replaced Lender's Percentage of the principal amount of any Unpaid Drawing
(which at such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender, in each case in the applicable
currency, and (ii) all obligations of the Borrowers owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the relevant Borrowers, the Replacement Lender shall become
a Lender hereunder and the Replaced Lender shall cease to constitute a Lender
here under, except with respect to indemnification provisions applicable to the
Replaced Lender under this Agreement, which shall survive as to such Replaced
Lender. In connection with any replacement of Lenders pursuant to, and as
contemplated by, this Section 1.13, each of the Borrowers (other than WLI)
hereby irrevocably authorizes WLI to take all necessary action, in the name of
such Borrowers, as described above in this Section
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1.13 in order to effect the replacement of the respective Lender or Lenders in
accordance with the preceding provisions of this Section 1.13.
SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, (x) WLI, in the case of USF Letters of Credit and
(y) WLI (to the extent issued in support of obligations of or relating to Other
Foreign Subsidiaries), EU Holdco and the Italian Borrower, in the case of MCF
Letters of Credit, may request that a Letter of Credit Issuer at any time and
from time to time on or after the Closing Date and prior to the tenth Business
Day preceding the Final Maturity Date issue, for the account of such Borrower
denominated in Dollars (in the case of USF Letters of Credit) or an Approved
Currency (in the case of MCF Letters of Credit) and in support of (x)
obligations arising in the ordinary course of business of such Borrower and its
Subsidiaries, (y) such other obligations of such Borrower and its Subsidiaries
as could be financed through the incurrence by such Borrower of Loans and (z)
such other obligations that are acceptable to the respective Letter of Credit
Issuer and, subject to and upon the terms and conditions herein set forth, each
Letter of Credit Issuer agrees to issue from time to time, irrevocable standby
letters of credit and/or bank guaranties (to the extent issued outside the
United States) in such form as may be approved by such Letter of Credit Issuer.
The term "Letter of Credit" shall include each such letter of credit and bank
guaranty and all Existing Letters of Credit (each of which Existing Letters of
Credit shall be deemed issued for all purposes of this Agreement on the Closing
Date) (each such letter of credit and bank guaranty, a "Letter of Credit" and,
collectively, the "Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued if after giving effect thereto, (A) the USF Letter of Credit
Outstandings would exceed either (x) $100 million in Principal Amount or (y)
when added to the aggregate outstanding Principal Amount of all USF Loans and
Swingline Loans, the Total USF Commitment at such time or (B) the MCF Letter of
Credit Outstandings would exceed either (x) $100 million in Principal Amount or
(y) when added to the aggregate outstanding Principal Amount of all MCF Loans,
the Total MCF Commitment at such time and (ii) each Letter of Credit shall have
an expiry date occurring not later than one year after such Letter of Credit's
date of issuance, provided that any standby Letter of Credit may be extendable
for successive periods of up to 12 months on terms acceptable to the Letter of
Credit Issuer and in no event shall any Letter of Credit have an expiry date
occurring later than the fifth Business Day preceding the Final Maturity Date
provided that a Letter of Credit may be issued with an expiry date extending
past the Final Maturity Date if arrangements are entered into at such time,
satisfactory to the Administrative Agent and the respective Letter of Credit
Issuer, for cash collateralizing the respective Borrower's obligations under
such Letter of Credit on the Final Maturity Date (at 103% of the Stated Amount
of such Letter of Credit), it being agreed that all participations of the
Lenders in such Letter of Credit will terminate on the Final Maturity Date.
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2.02 LENDER DEFAULT. In the event a Lender Default exists,
each Letter of Credit Issuer shall not be required to issue any Letter of Credit
in which the Defaulting Lender is required to participate unless such Letter of
Credit Issuer has entered into arrangements satisfactory to it with the
respective Borrower or Borrowers to eliminate the Letter of Credit Issuer's risk
with respect to the participation in Letters of Credit of the Defaulting Lender
or Lenders (including by way of example, cash collateralization of such
Defaulting Lender's or Lenders' Percentage of the USF Letter of Credit
Outstandings and/or MCF Letters of Credit Outstandings).
2.03 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a)
Whenever it desires that a Letter of Credit be issued as provided in Section
2.01, the respective Borrower shall give the Administrative Agent and the Letter
of Credit Issuer written notice thereof (including by way of facsimile
transmission) in the form of Exhibit C prior to 1:00 P.M. (Local Time) at least
three Business Days (or such shorter period as may be acceptable to the Letter
of Credit Issuer) prior to the proposed date of issuance (which shall be a
Business Day) (each, a "Letter of Credit Request"), which Letter of Credit
Request shall include any other documents that the Letter of Credit Issuer
customarily requires in connection therewith.
(b) The Letter of Credit Issuer shall, promptly after each
issuance of or amendment to a Letter of Credit by it, give the Administrative
Agent (who will in turn give written notice to each USF Lender and/or MCF Lender
(depending on the Facility being utilized)) and WLI written notice of such
issuance or amendment, accompanied by a copy to the Administrative Agent of such
Letter of Credit or amendment.
2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) Each
Borrower hereby agrees, to reimburse each Letter of Credit Issuer for any
payment or disbursement made by such Letter of Credit Issuer under any Letter of
Credit issued for the account of such Borrower (each such amount so paid or
disbursed until reimbursed, an "Unpaid Drawing") by making payment to the
Administrative Agent at the Payment Office and in the relevant Approved
Currency, immediately after, and in any event on the date on which such Borrower
is notified by such Letter of Credit Issuer of such payment or disbursement,
with interest on the amount so paid or disbursed by such Letter of Credit
Issuer, to the extent not reimbursed prior to 1:00 P.M. (Local Time) on the date
of such payment or disbursement, from and including the date paid or disbursed
to but not including the date the Letter of Credit Issuer is reimbursed therefor
at a rate per annum which shall be the Base Rate as in effect from time to time
plus the Applicable Margin (plus, in each case, an additional 2% per annum if
not reimbursed by the third Business Day after the date of such notice of
payment or disbursement), such interest also to be payable on demand.
(b) Each Borrower's obligation under this Section 2.04 to
reimburse each Letter of Credit Issuer with respect to Unpaid Drawings under
Letters of Credit issued by such Letter of Credit Issuer for such Borrower's
account (including, in each case, interest thereon)
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shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which such
Borrower may have or have had against any Letter of Credit Issuer, the
Administrative Agent or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform
substantially to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing; PROVIDED,
HOWEVER, that such Borrower shall not be obligated to reimburse a Letter of
Credit Issuer for any wrongful payment made by such Letter of Credit Issuer
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer as
determined by a court of competent jurisdiction.
2.05 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance of any Letter of Credit under a Facility, the Letter of Credit Issuer
issuing same shall be deemed to have sold and transferred to each other Lender
under such Facility, and each such Lender (each, a "Participant") shall be
deemed irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage for such Facility,
in such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the respective Borrower under this Agreement
with respect thereto (although the Letter of Credit Fee shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in Section 3.01(c) and the Participants shall have no right to receive any
portion of any Facing Fees) and any security therefor or guaranty pertaining
thereto. Upon any change in the USF Commitments or MCF Commitments, as the case
may be, pursuant to Section 1.13 and/or 12.04(b), it is hereby agreed that, with
respect to all out standing Letters of Credit and Unpaid Drawings affected
thereby, there shall be an automatic adjustment to the participations pursuant
to this Section 2.05 to reflect the new Percentages of the assigning and
assignee Lender or of all Lenders, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
issued by it, a Letter of Credit Issuer shall not have any obligation relative
to the Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by a Letter of Credit Issuer
under or in connection with any Letter of Credit if taken or omitted in the
absence of gross negligence or willful misconduct as determined by a court of
competent jurisdiction, shall not create for such Letter of Credit Issuer any
resulting liability.
(c) In the event that a Letter of Credit Issuer makes any
payment under any Letter of Credit and the respective Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant under the respective Facility of such failure, and each such
Participant shall
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promptly and unconditionally pay to the Administrative Agent for the account of
such Letter of Credit Issuer, the amount of such Participant's Percentage of
such payment in the applicable currency and in same day funds, PROVIDED that no
Participant shall be obligated to pay to the Administrative Agent its
applicable Percentage of such unreimbursed amount for any wrongful payment made
by a Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer as determined by a court of competent
jurisdiction. If the Administrative Agent so notifies any Participant required
to fund an Unpaid Drawing under a Letter of Credit prior to 11:00 A.M. (Local
Time) on any Business Day, such Participant shall make available to the
Administrative Agent for the account of the respective Letter of Credit Issuer
such Participant's Percentage of the Principal Amount of such Unpaid Drawing on
such Business Day in the applicable currency and in same day funds. If and to
the extent such Participant shall not have so made its Percentage of the
Principal Amount of such Unpaid Drawing available to the Administrative Agent
for the account of the respective Letter of Credit Issuer, such Participant
agrees to pay to the Administrative Agent for the account of the respective
Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent for the account of the respective Letter of
Credit Issuer at the overnight Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of
the respective Letter of Credit Issuer its Percentage of the Principal Amounts
of any Unpaid Drawing under any Letter of Credit on which it is a Participant
shall not relieve any other Participant of its obligation hereunder to make
avail able to the Administrative Agent for the account of the respective Letter
of Credit Issuer its Percentage of such Unpaid Drawing on the date required, as
specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to the Administrative Agent for the
account of a Letter of Credit Issuer such other Participant's Percentage of any
such Unpaid Drawing.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the respective
Participants pursuant to clause (c) above, such Letter of Credit Issuer shall
pay to the Administrative Agent and the Administrative Agent shall promptly pay
to each such Participant which has paid its Percentage thereof, in the
applicable currency and in same day funds, an amount equal to such Participant's
Percentage of the principal amount of such payment and interest thereon accruing
at the overnight Federal Funds Effective Rate after the purchase of the
respective participations.
(e) The obligations of the Participants hereunder to make
payments to the Administrative Agent for the account of the Letter of Credit
Issuers with respect to Letters of Credit shall be irrevocable and not subject
to counterclaim, set-off or other defense or any other qualification or
exception whatsoever (provided that no Participant shall be required to make
payments resulting from a Letter of Credit Issuer's gross negligence or willful
misconduct, as determined by a court of competent jurisdiction) and shall be
made in
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accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which WLI or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), any Agent, any Letter of Credit Issuer, any Lender or other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between a Designated
Party or any Subsidiary and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under
the 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; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent a Letter of Credit Issuer is not indemnified
by a Borrower as provided above, each Participant will reimburse and indemnify
such Letter of Credit Issuer, in proportion to its aggregate Percentages, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Letter
of Credit Issuer in performing its respective duties in any way relating to or
arising out of its issuance of Letters of Credit; PROVIDED that no Participant
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from a Letter of Credit Issuer's gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
2.06 INCREASED COSTS. If at any time after the Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation, 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, or compliance by a Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar
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requirement against Letters of Credit issued by such Letter of Credit Issuer or
such Participant's participation therein, or (ii) shall impose on such Letter of
Credit Issuer or any Participant any other conditions affecting this Agreement,
any Letter of Credit or such Participant's participation therein; and the result
of any of the foregoing is to increase the cost to such Letter of Credit Issuer
or such Participant of issuing, maintaining or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by such Letter
of Credit Issuer or such Participant hereunder (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges), then, upon demand to WLI
by such Letter of Credit Issuer or such Participant (a copy of which notice
shall be sent by the Letter of Credit Issuer or such Participant to the
Administrative Agent), the Borrowers, jointly and severally, shall pay to such
Letter of Credit Issuer or such Participant such additional amount or amounts as
will compensate such Letter of Credit Issuer or such Participant for such
increased cost or reduction. A certificate submitted to WLI by a Letter of
Credit Issuer or such Participant, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Participant to
the Administrative Agent), setting forth in reasonable detail the basis for the
determination of such additional amount or amounts necessary to compensate such
Letter of Credit Issuer or such Participant as aforesaid shall be conclusive and
binding on the Borrowers absent manifest error, although the failure to deliver
any such certificate shall not, subject to Section 1.11(b), release or diminish
any of the Borrowers, obligations to pay additional amounts pursuant to this
Section 2.06 upon the subsequent receipt thereof.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) WLI agrees to pay to the Administrative Agent a
commitment fee (the "USF Commitment Fee") for the account of each USF Lender
that is a Non- Defaulting Lender for the period from and including the Closing
Date to, but not including, the day upon which the Total USF Commitment has been
terminated, computed for each day at a per annum rate equal to the Applicable CF
Percentage on an amount equal to such USF Lender's Unutilized USF Commitment on
such date. Such USF Commitment Fees shall be due and payable in arrears on the
last Business Day of each March, June, September and December and on the date
upon which the Total USF Commitment is terminated.
(b) The MCF Borrowers jointly and severally agree to pay to
the Administrative Agent a commitment fee (the "MCF Commitment Fee") for the
account of each MCF Lender that is a Non-Defaulting Lender for the period from
and including the Closing Date to, but not including, the day upon which the
Total MCF Commitment has been terminated, computed for each day at a per annum
rate equal to the Applicable CF Percentage on an amount equal to such MCF
Lender's Unutilized MCF Commitment on such date. Such MCF Commitment Fees shall
be due and payable in arrears on the last Business Day of each March, June,
September and December and on the date upon which the Total MCF Commitment is
terminated.
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(c) Each Borrower agrees to pay to the Administrative Agent,
for the account of each Lender that is a Non-Defaulting Lender that is
participating in a Letter of Credit issued for the account of such Borrower, PRO
RATA on the basis of its respective applicable Percentage, a fee in respect of
each Letter of Credit (the "Letter of Credit Fee") issued for the account of
such Borrower, computed for each day at a per annum rate equal to the Applicable
Margin for Eurodollar Loans for such day multiplied by the then daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December of each year and on the date upon which the Total
Commitment is terminated.
(d) Each Borrower agrees to pay to each Letter of Credit
Issuer a fee in respect of each Letter of Credit (the "Facing Fee") issued by
such Letter of Credit Issuer for the account of such Borrower, computed for each
day at the rate of .25% per annum on the then Stated Amount of such Letter of
Credit (but in any event not less than $500 per year). Accrued Facing Fees shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December of each year and on the date upon which the Total
Commitment is terminated.
(e) Each Borrower agrees to pay directly to each Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit issued by such Letter of Credit Issuer for the account of such
Borrower, such amount as shall at the time of such issuance, payment or
amendment be the administrative charge which the Letter of Credit Issuer is
customarily charging for issuances of, drawings under or amendments of, letters
of credit issued by it.
(f) The Italian Borrower agrees to pay the Lira Lender until
such time, if any, as assignments of the Lira Loans are made to the MCF Lenders
pursuant to Section 1.01(D) a fee (the "LL Fee"), computed for each day at the
rate of .25% per annum on the then aggregate outstanding Principal Amount of all
Lira Loans. Accrued LL Fees shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December of each year and
on the Final Maturity Date.
(g) WLI shall pay to (x) each Agent on the Closing Date, for
its own account and/or for distribution to the Lenders, such fees as heretofore
agreed by WLI and the Agents and (y) the Administrative Agent, for its own
account, such other fees as agreed to between WLI and the Administrative Agent,
when and as due.
(h) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent
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at the Notice Office (which notice shall be deemed to be given on a certain day
only if given before 12:00 Noon (New York time) on such day and shall be
promptly transmitted by the Administrative Agent to each of the Lenders), WLI
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized USF Commitment and/or the Total Unutilized MCF
Commitment, PROVIDED that (x) any such termination shall apply to
proportionately and permanently reduce the USF Commitment or the MCF Commitment,
as the case may be, of each Lender and (y) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $5,000,000.
3.03 MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total
Commitment (and the USF Commitment and MCF Commitment of each Lender) shall
terminate in its entirety on April 30, 1998 unless the Closing Date has occurred
on or before such date.
(b) The Total USF Commitment and the Total MCF Commitment
shall terminate in its entirety on the Final Maturity Date.
(c) On the third Business Day following the date of receipt
thereof by WLI and/or any of its Subsidiaries of any Net Cash Proceeds from any
Excluded Asset Sale, the Total Commitment shall be reduced in an amount equal to
100% of such Net Cash Proceeds.
(d) On the date specified in a written notice given by the
Administrative Agent (at the direction of the Required Lenders) to WLI after a
Change of Control has occurred, the Total Commitment shall terminate.
(e) Each mandatory reduction of the Total Commitment required
to be made pursuant to Section 3.03(c) shall be applied to reduce the Total USF
Commitment, if any, in an amount equal to the USF Percentage of such reduction
and to reduce the Total MCF Commitment, if any, in an amount equal to the MCF
Percentage of such reduction.
(f) Each partial reduction of the Total USF Commitment and/or
the Total MCF Commitment pursuant to this Section 3.03 shall apply
proportionately to the USF Commitment or the MCF Commitment, as the case may be,
of each USF Lender or MCF Lender, as the case may be.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. Each of WLI and EU Holdco shall
have the right to prepay Loans made to it in whole or in part, without premium
or penalty, from time to time on the following terms and conditions: (i) such
Borrower shall give the Administrative Agent at the Payment Office written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay the Loans, whether such Loans are USF Loans or MCF Loans, the amount of
such prepayment, the currency in which such Loans are denominated and (in the
case of
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LIBOR Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be given by such Borrower at least one Business Day (six Business Days in
the case of MCF Loans) prior to the date of such prepayment and which notice
shall promptly be transmitted by the Administrative Agent to each of the
Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $1,000,000 (or the Dollar Equivalent thereof)
($100,000 in the case of Swingline Loans), provided that no partial prepayment
of Eurodollar Loans or MCF Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto; and
(iii) each prepayment in respect of any Loans made pursuant to a Borrowing shall
be applied PRO RATA among such Loans. The Italian Borrower may prepay Lira Loans
upon such notice and in such amounts as may be agreed from time to time by the
Italian Borrower and the Lira Lender.
4.02 MANDATORY PREPAYMENTS.
(A) REQUIREMENTS:
(a) (i) If on any date the sum of (A) the aggregate
outstanding Principal Amount of (x) Swingline Loans and (y) USF Loans made by
Non-Defaulting Lenders and (B) the USF Letter of Credit Outstandings exceeds the
Adjusted Total USF Commitment as then in effect, WLI shall repay no later than
the next following Business Day the principal amount of Swingline Loans and,
once all outstanding Swingline Loans are paid in full, USF Loans made by
Non-Defaulting Lenders (and after all such USF Loans have been repaid in full,
Unpaid Drawings in respect of Letters of Credit issued under the US Facility),
in an aggregate Principal Amount equal to such excess. If, after giving effect
to the repayment of all such outstanding Swingline Loans, and USF Loans and all
such Unpaid Drawings, the aggregate USF Letter of Credit Outstandings exceeds
the Total USF Commitment then in effect, WLI shall pay to the Administrative
Agent an amount in cash and/or Cash Equivalents equal to such excess and the
Administrative Agent shall hold such payment as security for the obligations of
WLI hereunder pursuant to a cash collateral agreement to be entered into in form
and substance satisfactory to the Administrative Agent (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative Agent
until the proceeds are applied to the secured obligations pursuant to this
Agreement).
(ii) If on any date on which Dollar Equivalents are
determined, pursuant to Section 12.07(c), the sum of the aggregate outstanding
Principal Amount of MCF Loans made by Non-Defaulting Lenders and the MCF Letter
of Credit Outstandings exceeds the Total MCF Commitment as then in effect, the
MCF Borrowers, jointly and severally, shall repay no later than the next
following Business Day the principal amount of MCF Loans made by Non-Defaulting
Lenders (and after all such MCF Loans have been repaid in full, Unpaid Drawings
in respect of Letters of Credit issued under the MC Facility), in an aggregate
Principal Amount equal to such excess. If, after giving effect to the repayment
of all such outstanding MCF
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Loans and all such Unpaid Drawings, the aggregate MCF Letter of Credit
Outstandings exceeds the Total MCF Commitment then in effect, the MCF Borrowers,
jointly and severally, shall pay to the Administrative Agent an amount in cash
and/or Cash Equivalents equal to such excess and the Administrative Agent shall
hold such payment as security for the obligations of the respective MCF
Borrowers hereunder pursuant to a cash collateral agreement to be entered into
in form and substance satisfactory to the Administrative Agent (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent until the proceeds are applied to the secured obligations
pursuant to this Agreement).
(b) Following (x) the consummation of any Asset Sale and (y)
any date on which the cash purchase price of the Acquisition is reduced as a
result of a post-closing adjustment (effected through repayment to WLI, release
from escrow of funds contained therein or otherwise), the Loans shall be repaid
in an amount equal to the Net Cash Proceeds of such Asset Sale or to such
reduction, as the case may be, with such repayment (x) to be made as promptly as
possible after receipt of such Net Cash Proceeds or reduction amount provided
that such repayments may be delayed to the extent necessary to avoid breakage
costs under Section 1.11(a), (y) subject to the preceding clause (x), to be
applied among the Loans as elected by WLI and (z) not to reduce the Total
Commitment.
(c) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, all outstanding USF Loans and MCF Revolving Loans
shall be repaid in full on the Final Maturity Date.
(B) APPLICATION:
(a) With respect to each prepayment of Loans required by
Section 4.02(A), the applicable Borrower may designate the Types of Loans which
are to be prepaid and the specific Borrowing(s) under the affected Facility
pursuant to which made, provided that (i) if any prepayment of Eurodollar Loans
or MCF Loans made pursuant to a single Borrowing shall reduce the outstanding
Loans made pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount for such Borrowing, then all Loans outstanding pursuant to such
Borrowing shall be immediately converted into Base Rate Loans (or repaid if
outstanding in any Alternate Currency) and (ii) each prepayment of any Loans
made pursuant to a Borrowing shall be applied PRO RATA among such Loans. In the
absence of a designation by a Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the above, make such designation in
its sole discretion with a view, but no obligation, to minimize breakage costs
owing under Section 1.11.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Administrative Agent for the ratable (based on its PRO RATA share)
account of the Lenders entitled thereto (provided that until such time, if any,
that the Lira Lender's obligation to make Lira Loans terminates, payments
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in respect of the Lira Loans will be made by the Italian Borrower to the Lira
Lender at such times and in such manner as agreed between them), not later than
12:00 Noon (Local Time) on the date when due and shall be made in immediately
available funds at the Payment Office in: (x) Dollars, if such payment is made
in respect of any obligation of the Borrowers under this Agreement except as
otherwise provided in the immediately succeeding clause (y); and (y) the
appropriate Alternate Currency, if such payment is made in respect of principal
of or interest on Alternate Currency Loans or on any Unpaid Drawing arising
under a MCF Letter of Credit denominated in an Alternate Currency, it being
understood that written notice by a Borrower to the Administrative Agent to make
a payment from the funds in such Borrower's account at the Payment Office shall
constitute the making of such payment to the extent of such funds held in such
account. Except as may otherwise be agreed upon by the Italian Borrower and the
Lira Lender, any payments under this Agreement which are made later than 12:00
Noon (Local Time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension. The Administrative Agent will make
available to each Lender its pro rata share of each payment so received by the
Administrative Agent in the funds and currency so received.
4.04 NET PAYMENTS. () All payments made by each Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction (or by any
political subdivision or taxing authority thereof or therein) with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax levy, impost, duty, fee, assessment or other governmental
charge imposed on or measured by the net income or net profits of a Lender
(including, without limitation, any franchise tax imposed on or measured by net
income or net profits and any branch profits taxes) pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located (or any
subdivision or taxing authority thereof or therein)) and all interest, penalties
or similar liabilities with respect to such non-excluded taxes, levies, imposts,
duties, fees, assessments or other governmental charges (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other governmental charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the relevant Borrower shall pay the full amount of such Taxes to the
relevant taxing authority in accordance with applicable law and shall pay to the
relevant Lender such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the relevant Borrower
agrees to reimburse each Lender lending to
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such Borrower, upon the written request of such Lender, for taxes imposed on or
measured by the net income or net profits of such Lender (including, without
limitation, any franchise tax imposed on or measured by net income or net
profits and any branch profits taxes imposed by the United States of America or
similar taxes imposed by any political subdivision thereof) pursuant to the laws
of the jurisdiction in which such Lender is organized or in which the principal
office or applicable lending office of such Lender is located (or of any
subdivision or taxing authority therein or thereof) and for any withholding of
taxes as such Lender shall determine are payable by, or withheld from, such
Lender in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence. Each Borrower will furnish to
the Administrative Agent within 45 days after the date the payment of any Taxes
is due pursuant to applicable law certified copies of tax receipts, if any,
issued by such taxing authority or other evidence reasonably acceptable to the
Administrative Agent evidencing such payment by such Borrower (or, if such
Borrower has not received such certified copies of tax receipts within such time
period, then such Borrower shall furnish such certified copies of tax receipts
to the Administrative Agent within 15 days after such Borrower has received such
certified copies of tax receipts). Each Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender, other then
penalties, additions to tax, interest and expenses arising as a result of the
willful misconduct or gross negligence of such Lender. Such indemnification
shall be made within 30 days after the date upon which such Lender makes written
demand therefor, which demand shall identify the nature and the amount of Taxes
for which indemnification is sought and shall include a copy of any written
assessment thereof.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes agrees to deliver to WLI and the Administrative Agent on or prior to
the Effective Date, or in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 12.04 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made by WLI under this Agreement and under any Note or
(ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04 Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made by WLI under this Agreement and under any Note. In addition,
each such Lender agrees that, from time to time after the Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or
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inaccurate in any material respect, it will deliver to WLI and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section 4.04
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments made by WLI under this Agreement and any Note, or, if legally unable to
deliver such forms, it shall immediately notify WLI and the Administrative Agent
of its inability to deliver any such Form or Certificate in which case such
Lender shall not be required to deliver any such Form or Certificate pursuant to
this Section 4.04(b). Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) WLI shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or similar taxes imposed by the United States
(or any political subdivision or taxing authority hereof or therein) from
interest, fees or other amounts payable hereunder by WLI for the account of any
Lender which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes to the extent that such
Lender has not provided to WLI Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) WLI shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
any such Lender in respect of income or similar taxes imposed by the United
States if (I) such Lender has not provided to WLI the Internal Revenue Service
Forms required to be provided to WLI pursuant to this Section 4.04(b) or (II) in
the case of a payment, other than interest, to a Lender described in clause (ii)
of the last sentence of this Section 4.04(b) above, to the extent that such
Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), WLI
agrees to pay additional amounts and to indemnify each Lender in the manner set
forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of such Taxes.
(c) If a Borrower pays any additional amount under this
Section 4.04 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that such Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit. Such amount shall be
paid as soon as practicable after receipt or realization by such Lender of such
refund, reduction or credit. Nothing in this Section 4.04(c) shall require any
Lender to disclose or detail the basis of its
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calculation of the amount of any refund or reduction of, or credit against, its
tax liabilities or any other information to any Borrower or any other Person.
(d) Each Lender shall use reasonable efforts (consistent with
legal and regula tory restrictions and subject to overall policy considerations
of such Lender) to file any certificate or document or to furnish any
information as reasonably requested by a Borrower pursuant to any applicable
treaty, law or regulation, if the making of such filing or the furnishing of
such information would avoid the need for or reduce the amount of any amounts
payable by a Borrower under Section 4.04(a) and would not, in the reasonable
judgment of such Lender, be disadvantageous to such Lender.
SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS PRECEDENT TO CLOSING DATE. The obligation of
the Lenders to make Loans, and of the Letter of Credit Issuer to issue Letters
of Credit, on the Closing Date is subject to the satisfaction of each of the
following conditions at such time:
(a) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been delivered
to the Administrative Agent for the account of each Lender the appropriate Note
or Notes executed by WLI and EU Holdco, in each case, in the amount, maturity
and as otherwise provided herein.
(b) OPINIONS OF COUNSEL. On the Closing Date, the
Administrative Agent shall have received opinions, addressed to each Agent and
each of the Lenders and dated the Closing Date, from (i) Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to WLI and Alan R. Cormier, Esq., Corporate
Counsel of WLI, which opinions shall cover the matters contained in Exhibit E-1
hereto, (ii) White & Case LLP, special counsel to the Administrative Agent,
which opinion shall cover the matters contained in Exhibit E-2 hereto and (iii)
such counsel in the Netherlands as is satisfactory to the Agents, which opinion
shall cover certain matters relating to the Credit Documents executed by EU
Holdco and such other matters incident to the transactions contemplated herein
as the Agents may reasonably request and shall be in form and substance
satisfactory to the Agents.
(c) CORPORATE PROCEEDINGS. (I) On the Closing Date, the
Administrative Agent shall have received from WLI a certificate, dated the
Closing Date, signed by its President, any Vice-President or its Secretary in
the form of Exhibit F-1 with appropriate insertions and deletions, together with
(x) copies of the certificate of incorporation, by-laws or other organizational
documents of each Domestic Credit Party and EU Holdco, (y) the resolutions of
each Domestic Credit Party and EU Holdco relating to the Credit Documents and,
to the extent relevant, the Transaction, which shall be satisfactory to the
Agents, and (z) a statement that all of the applicable conditions set forth in
Sections 5.01(h) and (i) and 5.03 exist as of such date.
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(II) On the Closing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Transaction Documents shall be
satisfactory in form and substance to the Agents, and the Administrative Agent
shall have received all information and copies of all certificates, documents
and papers, including good standing certificates and any other records of
corporate proceedings and governmental approvals, if any, which the Agents may
have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental authorities.
(d) PLANS; ETC. On or prior to the Closing Date, there shall
have been made available to the Administrative Agent:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor), Foreign Pension Plans (and all actuarial evaluations
prepared therefor), Multiemployer Plans and any other "employee benefit
plans," as defined in Section 3(3) of ERISA, and any other material
agreements, plans or arrangements, with or for the benefit of current
or former employees of any Designated Party or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
Multiemployer Plan, only to the extent that any document described
therein is in the possession of a Designated Party or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee
of any such plan);
(ii) any material collective bargaining agreements or any
other similar agreement or arrangements covering the
employees of any Designated Party;
(iii) all agreements evidencing or relating to the Existing
Indebtedness listed on Annex VI;
(iv) all agreements entered into by any Designated Party
governing the terms and relative rights of its
capital stock;
(v) any agreement with respect to the management of any
Designated Party;
(vi) any material employment agreements entered into by
any Designated Party; and
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(vii) any tax sharing, tax allocation and other similar
agreements entered into by any Designated Party;
all of which shall be in form and substance satisfactory to the Agents and shall
be in full force and effect on the Closing Date.
(e) ADVERSE CHANGE, ETC. Since September 30, 1997,
nothing shall have occurred (and neither any Lender nor any Agent shall have
become aware of any facts or conditions not previously known) which either Agent
or the Required Lenders shall deter mine has had, or is reasonably likely to
have, a Material Adverse Effect.
(f) CONSENT LETTER. On the Closing Date, the
Administrative Agent shall have received a letter from CT Corporation System,
substantially in the form of Exhibit J hereto, indicating its consent to its
present or future appointment by each Designated Party as its agent to receive
service of process.
(g) APPROVALS. On the Closing Date, all material
necessary govern mental and third party approvals in connection with the
Acquisition shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains or prevents the Acquisition or imposes, in
the judgment of the Required Lenders or either Agent, materially adverse
conditions upon the consummation of the Acquisition.
(h) CONSUMMATION OF THE ACQUISITION, ETC. (I) On
or prior to the Closing Date, (i) all conditions precedent set forth in the
Acquisition Documents shall have been satisfied and not waived (unless waived
with the consent of the Agents), (ii) WLI shall have effected the Equity
Issuance and (iii) the Acquisition shall have been consummated in accordance
with the Acquisition Documents and all applicable laws.
(II) On or prior to the Closing Date, the
Administrative Agent shall have received true and correct copies of each of the
Transaction Documents certified as such by an Authorized Officer of WLI, each of
which shall have been duly authorized, executed and delivered by the parties
thereto and shall be in full force and effect and in form and sub stance
(including all terms and conditions thereof) reasonably satisfactory to the
Agents (including, without limitation, the percentage of the Equity Issuance
comprised of SARs and the timing of any required payment in respect of the SARs
so issued).
(i) INDEBTEDNESS. On the Closing Date and after
giving effect to the Acquisition and the refinancing of existing Indebtedness of
WLI and its Subsidiaries on such date, WLI and its Subsidiaries shall have no
outstanding Indebtedness other than (x) the Loans hereunder and (y) the Existing
Indebtedness.
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(j) GUARANTIES. On the Closing Date, each Domestic
Subsidiary shall have duly authorized, executed and delivered a guaranty of all
the Obligations in the form of Exhibit G hereto (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "US Guaranty"), and the US Guaranty shall be in full force and effect.
(k) SECURITY DOCUMENTS. (I) On the Closing Date,
each Domestic Credit Party shall have each duly authorized, executed and
delivered a pledge agreement in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms thereof and hereof,
the "US Pledge Agreement") and (except as provided therein) shall have delivered
to the Collateral Agent, as pledgee thereunder, certificates representing all
the Pledged Securities referred to therein and then existing, endorsed in blank
or accompanied by executed and undated stock powers, and the US Pledge Agreement
shall be in full force and effect.
(II) On the Closing Date, each Domestic Credit Party shall
have each duly authorized, executed and delivered a security agreement
substantially in the form of Exhibit I (as modified, supplemented or amended
from time to time, the "US Security Agreement") covering all the Collateral
described therein, in each case together with:
(i) executed copies of Financing Statements (Form UCC-1)
in appropriate form for filing under the UCC of each jurisdiction as
may be necessary to perfect the security interests purported to be
created by the U.S. Security Agreement;
(ii) copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of recent date listing all
effective financing statements that name any Domestic Credit Party as
debtor and that are filed in the jurisdictions referred to in clause
(i), together with copies of such financing statements (none of which
shall cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been filed or delivered to the Administrative Agent
and (y) to the extent evidencing Permitted Liens);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the US Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the US Security Agreement (or arrangements satisfactory to the
Administrative Agent providing for the subsequent completion thereof);
and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported
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to be created by the US Security Agreement have been taken or provided
for in a manner satisfactory to the Administrative Agent;
and the US Security Agreement shall be in full force and effect.
(III) On the Closing Date, EU Holdco shall have duly
authorized, executed and delivered a pledge agreement and/or security agreement
in form and substance, and purporting to cover collateral (which will in any
event include the pledge of all EU Intercompany Notes), satisfactory to the
Agents (as modified, supplemented or amended from time to time, the "EU Holdco
Security Documents") securing EU Holdco's obligations hereunder and under its
Foreign Guaranty (once executed).
(l) SOLVENCY. On the Closing Date, the Administrative Agent
shall receive from the vice president and treasurer of WLI, a certificate in the
form of Exhibit K hereto.
(m) FEES. On the Closing Date, the Borrowers shall have paid
to the Agents and the Lenders all Fees and expenses agreed upon by such parties
to be paid on or prior to such date.
(n) LITIGATION. There shall be no actions, suits or
proceedings pending or threatened with respect to the Acquisition, this
Agreement or any other Credit Document or which the Agents or Required Lenders
shall determine has had or is reasonably likely to have a Material Adverse
Effect.
5.02 CONDITIONS PRECEDENT TO THE FULL UTILIZATION DATE. The
occurrence of the Full Utilization Date is subject to the satisfaction of each
of the following conditions at such time:
(a) EXECUTION; NOTES. On or prior to the Full Utilization
Date, (i) the Italian Borrower shall have become party to this Agreement by
authorizing, executing and delivering to the Agents a counterpart of this
Agreement (executed on the signature line provided for the Italian Borrower) and
(ii) there shall have been delivered to the Lira Lender the Lira Note executed
by the Italian Borrower in the amount, maturity and as otherwise provided
herein.
(b) OPINIONS OF COUNSEL. On the Full Utilization Date, the
Administrative Agent shall have received opinions, addressed to each Agent and
each of the Lenders and dated the Full Utilization Date, from such counsel in
the United Kingdom, France, Germany, Denmark, the Netherlands, Spain and Italy
as are satisfactory to the Agents, which opinions shall cover certain matters
relating to the Credit Documents executed by the Designated Parties located in
such countries and/or security interests granted pursuant to such Credit
Documents and such other matters incident to the transactions contemplated
herein as the Agents may reasonably request and shall be in form and substance
satisfactory to the Agents.
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(c) CORPORATE PROCEEDINGS. (I) On the Full Utilization Date,
the Administrative Agent shall have received from WLI a certificate, dated the
Full Utilization Date, signed by its President, any Vice-President or its
Secretary in the form of Exhibit F-2 with appropriate insertions and deletions,
together with (x) copies of the certificate of incorporation, by-laws or other
organizational documents of each Designated Party not delivered pursuant to
Section 5.01(c) and required by the Agents and (y) the resolutions of each such
Designated Party relating to the Credit Documents, which shall be satisfactory
to the Agents.
(II) On the Full Utilization Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to the Agents, and the Administrative Agent shall have received all
information and copies of all certificates, documents and papers, including good
standing certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Agents may have requested and required
in connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.
(d) GUARANTIES. (I) On or prior to the Full Utilization Date,
each Foreign Subsidiary that is listed on Annex IV, Part II shall have duly
authorized, executed and delivered a guaranty in respect of all Obligations
owing by the Foreign Borrowers in form and substance satisfactory to the Agents
to achieve substantially the same result as the US Guaranty but subject to the
requirements of local law (as modified, amended or supplemented from time to
time in accordance with the terms hereof and thereof, the "Foreign Guaranties"),
and the Foreign Guaranties shall be in full force and effect.
(II) On or prior to the Full Utilization Date, each Subsidiary
of EU Holdco that (x) is a Material Subsidiary or (y) has outstanding
intercompany loans and or advances owing to EU Holdco shall have duly
authorized, executed and delivered to EU Holdco a EU Intercompany Note, each of
which shall be in full force and effect.
(e) SECURITY DOCUMENTS. On or prior to the Full Utilization
Date, each Foreign Subsidiary listed on Annex IV, Part III shall have duly
authorized, executed and delivered a pledge agreement and/or security agreement
in form and substance, and purporting to cover collateral, satisfactory to the
Agents (together with the EU Holdco Security Documents and any of such
agreements executed in compliance with Section 7.12, and as modified,
supplemented or amended from time to time, the "EU Holdco Security Documents")
securing such Foreign Subsidiary's obligations hereunder, under its Foreign
Guaranty (if any) and/or its EU Intercompany Note (if any) and, in each case
together with evidence of the completion of all deliveries under, and recordings
and filings of, or with respect to, the Foreign Security Documents as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable to
perfect the security interest intended to be created by the Foreign Security
Documents.
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5.03 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation
of each Lender to make Loans and the obligation of the Letter of Credit Issuer
to issue any Letter of Credit (including in each case Loans made, and Letters of
Credit issued, on the Closing Date) is subject, at the time of each such Credit
Event, to the satisfaction of the following conditions:
(a) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. The
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.02 with respect to the incurrence of Loans or a Letter
of Credit Request meeting the requirements of Section 2.03 with respect to the
issuance of a Letter of Credit.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties made by
any Designated Party contained herein or in the other Credit Documents shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the respective Borrower to the
Agents and each of the Lenders that all of the applicable conditions specified
in Section 5.01 (in the case of the Credit Events occurring on the Closing
Date), 5.02 (in the case of the occurrence of the Full Utilization Date) and/or
5.03, as the case may be, exist as of that time. All of the certificates, legal
opinions and other documents and papers referred to in Section 5.01, 5.02 or
5.03, unless otherwise specified, shall be delivered to the Administrative Agent
at its Notice Office for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts for each of the Lenders and shall be
satisfactory in form and substance to the Agents.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In
order to induce the Lenders to enter into this Agreement and to make the Loans
and issue and/or participate in Letters of Credit provided for herein, WLI
makes the following representations and warranties to, and agreements with, the
Lenders, all of which shall survive the execution and delivery of this Agreement
and the making of the Loans:
6.01 CORPORATE STATUS. Each of WLI and each of its Material
Subsidiaries (i) is a duly organized and validly existing Company in good
standing under the laws of the juris diction of its organization and has the
Company power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (ii) has
duly qualified and is authorized to do business and is in good standing in all
juris dictions where it is required to be so qualified and where the failure to
be so qualified would have a Material Adverse Effect.
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6.02 CORPORATE POWER AND AUTHORITY. Each Designated Party has
the Company power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary Company action to authorize the execution, delivery and performance of
the Credit Documents to which it is a party. Each Designated Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Person enforceable in accordance with its terms except to the extent the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
6.03 NO VIOLATION. Neither the execution, delivery and
performance by any Designated Party of the Credit Documents to which it is a
party nor compliance with the terms and provisions thereof, nor the consummation
of the transactions contemplated therein (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or assets
of WLI or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which WLI or any of
its Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation, by-laws or equivalent organizational documents of
WLI or any of its Subsidiaries.
6.04 LITIGATION. There are no actions, suits or proceedings
pending or to WLI's knowledge threatened with respect to WLI or any of its
Subsidiaries that have had or are reasonably likely to have (i) a Material
Adverse Effect or (ii) a material adverse effect on the rights or remedies of
the Lenders or on the ability of the Designated Parties to perform their
obligations to them hereunder and under the other Credit Documents.
6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of
all Loans may be used (x) on the Closing Date to finance the Net Cash Payment
owing on the Closing Date under the Acquisition Agreement, to refinance
Indebtedness of WLI and its Subsidiaries outstanding on the Closing Date and to
pay fees and expenses incurred in connection with the Acquisition, provided that
(x) only Loans incurred by WLI may be used to finance the Acquisition (including
payments pursuant to the Deferred Payment Agreement) and (y) no more than $100
million in Principal Amount of Loans may be incurred for such purposes plus
Loans incurred to finance any cash payment obligation of WLI under the Deferred
Payment Agreement and (y) after the Closing Date, (i) in the case of borrowings
by WLI for the general corporate and working capital purposes of WLI and the
Domestic Subsidiaries, to make advances to Other Foreign Subsidiaries to finance
their respective general corporate and
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working capital requirements to the extent such advances are permitted by
Section 8.04(b) and, on and after the Full Utilization Date, are evidenced by
WLI Intercompany Notes and to make investments to the extent permitted by
Section 8.06(l), (ii) in the case of borrowings by EU Holdco, to make advances
to its Subsidiaries to finance their respective general corporate and working
capital requirements (but excluding increases of capital to the Italian Borrower
and its Subsidiaries) to the extent such advances are permitted by Section
8.04(b) and, on and after the Full Utilization Date, are evidenced by EU
Intercompany Notes and (z) in the case of the Italian Borrower, to finance its
and its Subsidiaries' general corporate and working capital needs.
(b) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
and no part of the proceeds of any Loan will be used to purchase or carry any
Margin Stock or to extend credit for the purpose of purchasing or carrying any
Margin Stock.
6.06 GOVERNMENTAL APPROVALS. Except for filings and recordings
in connection with the Security Documents, no order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is required
in connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
6.07 INVESTMENT COMPANY ACT. Neither WLI nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither WLI nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.09 TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
(at the direction or with the knowledge of) WLI or any of its Subsidiaries
(giving effect to the Acquisition) in writing to the Agents for purposes of or
in connection with this Agreement or any transaction contemplated herein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of any such Person in writing to the Agents will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in light of
the circumstances under which such information was provided. The projections and
PRO FORMA financial information contained in
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such materials are based on good faith estimates and assumptions believed by WLI
to be reasonable at the time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts or an assurance of
performance and that actual results during the period or periods covered by any
such projections may differ from the projected results. There is no fact known
to WLI which is reasonably likely to have a Material Adverse Effect, which has
not been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as
of the Closing Date, on a PRO FORMA basis after giving effect to the Transaction
and all Indebtedness incurred, and to be incurred (including, without
limitation, the Loans), and Liens created, and to be created, by each Designated
Party in connection therewith, (x) the sum of the assets, at a fair valuation,
of WLI and its Subsidiaries taken as a whole will exceed their debts, (y) WLI
and its Subsidiaries taken as a whole will not have incurred or intended to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature and (z) WLI and its Subsidiaries taken as a whole would not
have unreasonably small capital with which to conduct their business. For
purposes of this Section 6.10, "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) (i) The audited consolidated balance sheets of WLI as at
June 30, 1996 and June 30, 1997, and the related consolidated statements of
operations and cash flows of WLI for the periods ended as of said dates, which
have been examined by Ernst & Young LLP, independent certified public
accountants, (ii) the unaudited consolidated and consolidating balance sheet of
WLI as at December 31, 1997, and the related consolidated and consolidating
statements of operations and cash flows of WLI for the six-month period ended as
of such date, (iii) the audited combined consolidated balance sheets of the
Acquired Businesses as at December 31, 1996 and September 30, 1997, and the
related combined consolidated statements of operations and cash flows of the
Acquired Businesses for the periods ended as of said dates, which have been
examined by Coopers & Lybrand, independent certified public accountants, (iv) an
unaudited combined profit and loss statement for Olivetti Solutions S.p.A. and
the Subsidiaries and Olivetti Corporation of Japan and a report on the combined
net financial position of Olivetti Solutions S.p.A. and the Subsidiaries,
Olivetti Corporation of Japan and Olsy do Brasil Ltda for the twelve month
period ended December 31, 1997, in each case, reflecting the best estimate of
the senior management of Ing. C. Olivetti & C.S.p.A., Olivetti Solutions S.p.A.,
Olivetti Corporation of Japan, Olsy do Brasil Ltda and their Subsidiaries as of
the date thereof, and (v) the PRO FORMA projected consolidated balance sheet of
WLI dated
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as of December 31, 1997 after giving effect to the Transaction, copies of which
have heretofore been furnished to each Lender, present fairly the consolidated
financial position of such entities at the dates of said statements and the
consolidated results for the periods covered thereby (or, in the case of the PRO
FORMA balance sheet, presents a good faith estimate of the consolidated PRO
FORMA consolidated financial position of WLI (after giving effect to the
Transaction) at the date thereof) in conformity with GAAP, except to the extent
provided in the notes to said financial statements and, with respect to such
interim financial statements, subject to changes resulting from audit and normal
year-end audit adjustments. All such financial statements (other than the
aforesaid PRO FORMA balance sheet) have been prepared in conformity with GAAP
consistently applied except to the extent provided in the notes to said
financial statements and, with respect to interim financial statements, subject
to changes resulting from audit and normal year-end audit adjustments. Since
December 31, 1997 nothing has occurred that has had or is reasonably likely to
have a Material Adverse Effect.
(c) Except as reflected in the financial statements and the
notes thereto described in Section 6.10(b), there were as of the Closing Date
(and after giving effect to the Transaction) no liabilities or obligations with
respect to WLI or any of its Subsidiaries of a nature (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be material to WLI and its Subsidiaries
taken as a whole, except as incurred in the ordinary course of business
consistent with past practices subsequent to December 31, 1997.
6.11 SECURITY INTERESTS. Once executed and delivered as
required by the terms of this Agreement or the other Credit Documents and all
filings, recordings and deliveries required thereunder have been accomplished,
each of the Security Documents creates, as security for the Obligations
purported to be secured thereby, a valid and enforce able perfected security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons and subject to no other Liens (except
Permitted Liens relating thereto), in favor of the Collateral Agent for the
benefit of the Lenders.
6.12 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS. All
representations and warranties of WLI and EU Holdco, and to WLI's knowledge, of
Sellers, set forth in the Acquisition Documents were true and correct in all
material respects as of the time such representations and warranties were made
and shall be true and correct in all material respects as of the Closing Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date.
6.13 TAX RETURNS AND PAYMENTS. Each of WLI and each of its
Subsidiaries has filed all income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
(x) those contested in good faith and adequately disclosed and fully provided
for on the financial statements of WLI and its Subsidiaries in accordance with
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generally accepted accounting principles and (y) those of Foreign Subsidiaries
acquired pursuant to the Acquisition to the extent (i) occurring or arising
prior to the Closing Date and (ii) the aggregate tax liabilities (not
indemnified by the Sellers) for all such Foreign Subsidiaries do not exceed
$5,000,000 (or the equivalent thereof).
6.14 COMPLIANCE WITH ERISA. (a) Annex III sets forth each Plan
and Multiemployer Plan; each Plan (and each related trust, insurance contract or
fund) is in substantial compliance with its terms and with all applicable laws,
including, without limitation, ERISA and the Code; each Plan which is intended
to be qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and its related trust, if any, meets the
requirements of Section 501(a) of the Code; no Reportable Event has occurred; to
the knowledge of WLI, any Subsidiary or any ERISA Affiliate, Multiemployer Plan
is insolvent or in reorganization; no Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans, is reasonably likely to have a Material Adverse
Effect; no Plan which is subject to Section 412 of the Code or Section 302 of
ERISA has an accumulated funding deficiency, within the meaning of such sections
of the Code or ERISA, or has applied for or received a waiver of an accumulated
funding deficiency or an extension of any amortization period, within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all
contributions required to be made by WLI, any Subsidiary or any ERISA Affiliate
with respect to a Plan or Multiemployer Plan have been timely made; neither WLI
nor any of its Subsidiaries nor any ERISA Affiliate has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Plan or Multiemployer Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or expects to incur any such material liability under
any of the foregoing sections with respect to any Plan or Multiemployer Plan; no
condition exists which presents a material risk to WLI or any of its
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of
a Plan or Multiemployer Plan pursuant to the foregoing provisions of ERISA and
the Code; no proceedings have been instituted to terminate or appoint a trustee
to administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or threatened; using actuarial assumptions and
compilation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of WLI and its Subsidiaries and its ERISA Affiliates
to all Multiemployer Plans in the event of a complete withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the most recent Credit Event, would not be reasonably likely to have a
Material Adverse Effect; each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees
or former employees of WLI, any Subsidiary or any ERISA Affiliate has at all
times been operated in substantial compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code and any failure to
so comply would not
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result in a material liability; no lien that can be imposed under the Code or
ERISA on the assets of WLI or any Subsidiary or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and WLI and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any liability that would have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities, except in each case where the failure to so maintain any such
Foreign Pension Plan is not reasonably likely to have a Material Adverse Effect.
Neither WLI nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of WLI's most recently
ended fiscal year on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities to an extent which is
reasonably likely to have a Material Adverse Effect.
6.15 SUBSIDIARIES. On and as of the Closing Date and after
giving effect to the consummation of the Transaction, WLI has no Material
Subsidiaries other than those Subsidiaries listed on Annex IV, Part I. Annex IV,
Part I correctly sets forth, as of the Closing Date and after giving effect to
the Transaction, the percentage ownership (direct and indirect) of WLI in each
class of equity securities of each of its Material Subsidiaries and also
identifies the direct owner thereof. All outstanding shares of equity securities
of each Material Subsidiary of WLI have been duly and validly issued, are fully
paid and non-assessable and have been issued free of preemptive rights. As of
the Closing Date, WLI and the Material Subsidiaries then in existence accounted
for at least 85% of the combined revenues of WLI and its Subsidiaries (prior to
the Acquisition) and the Acquired Business for the 12 months ending on December
31, 1997.
6.16 INTELLECTUAL PROPERTY. WLI and each of its Subsidiaries
have obtained all patents, trademarks, service marks, trade names, copyrights,
licenses and other rights that are necessary for the operation of their
businesses taken as a whole as presently conducted and as proposed to be
conducted without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, has had or is reasonably likely to
have a Material Adverse Effect.
6.17 ENVIRONMENTAL MATTERS. (a) Each of WLI and each of its
Subsidiaries is in compliance with all applicable Environmental Laws governing
its business for which failure to comply has had or is reasonably likely to have
a Material Adverse Effect, and neither WLI nor any of its Subsidiaries is liable
for any penalties, fines or forfeitures for failure to comply
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with any of the foregoing which has had or is reasonably likely to have a
Material Adverse Effect. All licenses, permits, registrations or approvals
required for the business of WLI and each of its Subsidiaries, as conducted as
of the Closing Date, under any Environmental Law have been secured and WLI and
each of its Subsidiaries is in substantial compliance therewith, except such
licenses, permits, registrations or approvals the failure to secure which or to
comply with which is not reasonably likely to have a Material Adverse Effect.
Neither WLI nor any of its Subsidiaries is in any respect in noncompliance with,
breach of or default under any applicable writ, order, judgment, injunction, or
decree to which WLI or such Subsidiary is a party or which would affect the
ability of WLI or such Subsidiary to operate any real property and no event has
occurred and is continuing which, with the passage of time or the giving of
notice or both, would constitute noncompliance, breach of or default thereunder,
except in each such case, such noncompliance, breaches or defaults as have not
had and are not reasonably likely to, in the aggregate, have a Material Adverse
Effect. There are as of the Closing Date no Environmental Claims pending or, to
the knowledge of WLI, threatened which is reasonably likely to have a Material
Adverse Effect. There are no facts, circumstances, conditions or occurrences on
any real property at any time owned or operated by WLI or any of its
Subsidiaries or, to the knowledge of WLI, on any property adjacent to any such
real property that are reasonably likely to (i) to form the basis of an
Environmental Claim against WLI, any of its Subsidiaries or any currently owned
or operated real property of WLI or any of its Subsidiaries, or (ii) to cause
such currently owned or operated real property to be subject to any restrictions
on the ownership, occupancy, use or transferability of such Real Property under
any Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually, or in the aggregate, have not had and are not
reasonably likely to have a Material Adverse Effect.
(b) Hazardous Materials have not been (to the knowledge of WLI
with respect to any time prior to WLI's or any of its Subsidiaries' ownership or
operation of any such real property) (i) generated, used, treated or stored on,
or transported to or from, any real property owned or operated by WLI or any of
its Subsidiaries or (ii) released on or from any real property, in each case
where such occurrence or event individually or in the aggregate has had and is
reasonably likely to have a Material Adverse Effect.
6.18 LABOR RELATIONS. No Designated Party is engaged in any
unfair labor practice that could reasonably be expected to have a Material
Adverse Effect. There is (i) no unfair labor practice complaint pending against
any Designated Party or threatened against any of them, before any governmental
authority or regulatory body, and no grievance or arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against any
Designated Party or threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against any Designated Party or threatened
against any Designated Party and (iii) no union representation question existing
with respect to the employees of any Designated Party and no union organizing
activities are taking place, except with respect to
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any matter specified in clause (i), (ii) or (iii) above, either individually or
in the aggregate, such as has not had and is not reasonably likely to have a
Material Adverse Effect.
6.19 EXISTING INDEBTEDNESS. Annex VI sets forth a true and
complete list of all Indebtedness of WLI and each of its Subsidiaries as of the
Closing Date in excess of $1,000,000 (or the equivalent) individually and which
is to remain outstanding after giving effect to the Transaction (excluding the
Loans, the Letters of Credit and intercompany Indebtedness permitted by 8.04(b),
the "Existing Indebtedness"), in each case showing the aggregate principal
amount thereof and the name of the respective borrower (or issuer) and any other
entity which directly or indirectly guaranteed such debt.
6.20 COMPLIANCE WITH STATUTES, ETC. Each of WLI and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such non-compliance as has not had and is not reasonably
likely to, individually or in the aggregate, have a Material Adverse Effect.
6.21 ACQUISITION. On and as of the Closing Date, (i) all
material consents and approvals of, and filings and registrations with, and all
other actions in respect of, all governmental agencies, authorities or
instrumentalities required to be obtained, given, filed or taken in order to
make or consummate the Acquisition will have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto will have been obtained) and (ii) the Acquisition shall
have been consummated in accordance, in all material respects, with the
applicable Acquisition Documents and in compliance, in all material respects,
with all applicable laws.
SECTION 7. AFFIRMATIVE COVENANTS. WLI hereby covenants and
agrees that on the Closing Date and thereafter until the Commitments have
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 12.13 which are not then owing)
incurred hereunder, are paid in full:
7.01 INFORMATION COVENANTS. WLI will furnish to each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each fiscal year of WLI, the consolidated balance sheet of WLI and its
Subsidiaries, as at the end of such fiscal year and the related consolidated
statements of income, changes in stockholders equity and cash flows for such
fiscal year, in each case setting forth comparative figures for the preceding
fiscal year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to the
scope of audit and as to the status of WLI and its Subsidiaries as a going
concern, together with a certificate of such
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accounting firm stating that in the course of its regular audit of the business
of WLI and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm has obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or Event
of Default has occurred and is continuing, a statement as to the nature thereof.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year, the consolidated balance sheet of WLI
and its Subsidiaries, as at the end of such quarterly period and the related
consolidated statements of income, changes in stockholders equity and cash flows
for such quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, and in each case setting forth
comparative figures for the related periods in the prior fiscal year, all of
which shall be certified by the chief financial officer, controller or treasurer
of WLI, subject to changes resulting from audit and normal year-end audit
adjustments.
(c) BUDGETS; ETC. Not more than 90 days after the commencement
of each fiscal year of WLI, a consolidated budget of WLI and its Subsidiaries in
reasonable detail for each quarter of such fiscal year. Together with each
delivery of consolidated financial statements pursuant to Sections 7.01(a) and
(b), a comparison of the current year-to-date quarterly financial results
against the budgets required to be submitted pursuant to this clause (d) shall
be presented.
(d) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b) a certificate of
the chief financial officer, controller, treasurer or other Authorized Officer
of WLI to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall set forth the calculations required to
establish (I) the Leverage Ratio for the Test Period ending on the last day of
the fiscal year or quarter covered by such financial statements and (II) whether
WLI and its Subsidiaries were in compliance with the provisions of Sections 8.10
through 8.14 as at the end of such fiscal year or quarter, as the case may be.
(e) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any
event within five Business Days after any executive officer of WLI obtains
knowledge thereof, notice of (x) the occurrence of any event which constitutes a
Default or Event of Default and (y) the commencement of or any significant
development in any litigation or governmental proceeding pending against WLI or
any of its Subsidiaries which is likely to have a Material Adverse Effect or is
likely to have a material adverse effect on the ability of WLI or any of its
Subsidiaries to perform its obligations hereunder or under any other Credit
Document.
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(f) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge
of any of the following (but only to the extent that any of the following could
reasonably be expected to (x) have a Material Adverse Effect, either
individually or in the aggregate, or (y) result in a remedial cost to WLI or any
of its Subsidiaries in excess of $5,000,000, written notice of:
(i) any pending or threatened Environmental Claim against
WLI or any of its Subsidiaries or any Real Property owned or operated
by WLI or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned
or operated by WLI or any of its Subsidiaries that (x) results in
noncompliance by WLI or any of its Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the
basis of an Environmental Claim against WLI or any of its Subsidiaries
or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by WLI or any of its Subsidiaries that could reasonably be
anticipated to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by WLI
or its Subsidiary, as the case may be, of its interest in such Real
Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by WLI or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
respective Borrower's response or proposed response thereto. In addition, WLI
agrees to provide the Lenders with copies of all material communications by WLI
or any of its Subsidiaries with any Person, government or governmental agency
relating to any of the matters set forth in clauses (i)-(iv) above, and such
detailed reports relating to any of the matters set forth in clauses (i)-(iv)
above (subject to clauses (x) and (y) above) as may reasonably be requested by
the Administrative Agent or the Required Lenders.
(g) OTHER INFORMATION. Promptly upon transmission thereof, (i)
copies of any filings and registrations with, and reports to, the U.S.
Securities and Exchange Commission (the "SEC") by WLI or any of its
Subsidiaries, (ii) copies of all financial statements, proxy statements, notices
and reports as WLI or any of its Subsidiaries shall send generally to analysts
and the holders of their capital stock in their capacity as such holders (to the
extent not theretofore delivered to the Lenders pursuant to this Agreement) and
with reasonable promptness, such other information or documents (financial or
otherwise) as either Agent on its own behalf or on behalf of the Required
Lenders may reasonably request from time to time.
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7.02 BOOKS, RECORDS AND INSPECTIONS. WLI will, and will cause
its Subsidiaries to, permit, upon reasonable notice to, and coordination with,
the chief financial officer, controller or any other Authorized Officer of WLI,
officers and designated representatives of the Agents or the Required Lenders to
visit and inspect any of the properties or assets of WLI and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
WLI and any of its Subsidiaries and discuss the affairs, finances and accounts
of WLI and of any of its Subsidiaries with, and be advised as to the same by,
its and their officers and independent accountants, all at such reasonable times
and intervals and to such reasonable extent as the Agents or the Required
Lenders may desire, PROVIDED that no such visits, meetings or discussions with
the independent accountants will be held without WLI and/or its Subsidiaries
being given any opportunity to participate therein through their senior
officers.
7.03 INSURANCE. WLI will at all times maintain in full force
and effect insurance in respect of itself and its Subsidiaries in such amounts,
covering such risks and liabilities and with such deductibles or self-insured
retentions as are in accordance with normal industry practice.
7.04 PAYMENT OF TAXES. WLI will pay and discharge, and will
cause each of its Material Subsidiaries to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which material penalties attach thereto, and all material lawful claims for
sums that have become due and payable which, if unpaid, might become a Lien or
charge upon any properties of WLI or any of its Material Subsidiaries, PROVIDED
that neither WLI nor any Material Subsidiary shall be required to pay any such
material tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves (in the
good faith judgment of the management of WLI) with respect thereto in conformity
with GAAP.
7.05 CORPORATE FRANCHISES. Except as may be waived by the
Agents, WLI will do, and will cause each Material Subsidiary to do, or cause to
be done, all things necessary to preserve and keep in full force and effect its
existence, material rights, franchises and authority, PROVIDED that (x) any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05 and (y) any Material Subsidiary may withdraw from doing business in
any jurisdiction not the situs of its principal operations to the extent any
such withdrawal, individually or in the aggregate, is not reasonably likely to
have a Material Adverse Effect.
7.06 COMPLIANCE WITH STATUTES, ETC. WLI will, and will cause
each Subsidiary to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the con duct of its business and the
ownership of its property (including in all events Environmental Laws) other
than those the non-compliance with which would not have a Material Adverse
Effect or would not
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have a material adverse effect on the ability of the Designated Parties as a
whole to perform their obligations under any Credit Document.
7.07 ERISA. As soon as possible and, in any event, within fifteen
(15) days after WLI, any Subsidiary or any ERISA Affiliate knows or has reason
to know of the occurrence of any of the following, WLI will deliver to each of
the Lenders a certificate of the chief financial officer of WLI setting forth
the full details as to such occurrence and the action, if any, that WLI, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by WLI,
the Subsidiary, the ERISA Affiliate, the PBGC, a Plan or Multiemployer Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that WLI has previously delivered to
the Lenders a certificate and notices (if any) concerning such event pursuant to
the next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirements of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b) (1) thereof), and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA, has been incurred or an application may be
or has been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of ERISA
with respect to a Plan or Multiemployer Plan; that any contribution required to
be made with respect to a Plan or a Multiemployer Plan has not been timely made;
that a Plan or Multiemployer Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability which, when added to aggregate amount of Unfunded
Current Liabilities with respect to all other Plans could reasonably be expected
to have a Material Adverse Effect; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted against WLI,
any Subsidiary or any ERISA Affiliate pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan or Multiemployer Plan; that WLI, any
Subsidiary or any ERISA Affiliate will or may incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan or Multiemployer Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan or
Multiemployer Plans under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that WLI or any Subsidiary may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan or
Multiemployer Plans or any Foreign Pension Plan. WLI will deliver to each of the
Lenders (i) a complete copy of the annual report (on Internal
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Revenue Service Form 5500-series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service and (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates
or notices delivered to the Lenders pursuant to the first sentence hereof,
copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by WLI,
any Subsidiary or any ERISA Affiliate from any government agency with respect to
any Plan or Multiemployer Plans or any Foreign Pension Plan shall be delivered
to the Lenders no later than fifteen (15) days after the date such annual report
has been filed with the Internal Revenue Service or such records, documents
and/or information has been furnished to the PBGC or such notice has been
received by WLI, such Subsidiary or such ERISA Affiliate, as applicable.
7.08 GOOD WORKING ORDER. WLI will, and will cause each of its
Material Subsidiaries to, ensure that its material properties and equipment
required in the conduct of its business in whomsoever's possession they may be,
are kept in good working order and condition, normal wear and tear excepted.
7.09 END OF FISCAL YEARS; FISCAL QUARTERS. WLI will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' (except as disclosed to the Agents on or prior to the Closing
Date and with such other exceptions as are acceptable to the Administrative
Agent) fiscal years to end on June 30 of each year (provided that upon prior
written notice from WLI to the Administrative Agent such fiscal year end may be
changed to December 31) and (ii) each of its, and each of its Subsidiaries'
(except as disclosed to the Agents on or prior to the Closing Date and with
such other exceptions as are acceptable to the Administrative Agent) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each
year.
7.10 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) WLI will, and
will cause its Material Subsidiaries to, at the expense of such Person make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. Furthermore, WLI shall cause to be
delivered to the Collateral Agent such opinions of counsel and other related
documents as may be reasonably requested by the Administrative Agent to assure
itself that this Section 7.10 has been complied with.
(b) Each action required above by this Section 7.10 shall be
completed as soon as possible, but in no event later than 90 days after such
action is requested in writing to be
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taken by the Administrative Agent or the Collateral Agent, PROVIDED that
in no event shall any Borrower be required to take any action, other than using
its reasonable commercial efforts without any material expenditure, to obtain
consents from third parties with respect to its compliance with this Section
7.10.
7.11 COMPLIANCE WITH ENVIRONMENTAL LAWS. (i) WLI will comply, and
will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership, lease or use of all real property now or hereafter
owned, leased or operated by WLI or any of its Subsidiaries, will promptly pay
or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such real property free and
clear of any Liens imposed pursuant to such Environmental Laws and (ii) neither
WLI nor any of its Subsidiaries will generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release or
disposal of Hazardous Materials on any real property now or hereafter owned,
leased or operated by WLI or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such real property, except
in accordance with, in all material respects, applicable Environmental Laws or
otherwise to the extent that the failure to comply with the requirements
specified in clause (i) or (ii) above, either individually or in the aggregate,
has not had and is not reasonably likely to have a Material Adverse Effect.
7.12 MATERIAL SUBSIDIARIES. (a) WLI will cause (i) each Material
Subsidiary acquired or first established after the Closing Date and (ii) each
existing Subsidiary that first becomes a Material Subsidiary after the Closing
Date pursuant to clauses (iv) and (v) of the definitions of Material Subsidiary
(the "Relevant Clauses") to execute a Guaranty (except in the case of a Foreign
Subsidiary to the extent it is not permitted to execute a Guaranty under local
law), an EU Intercompany Note (if a Subsidiary of EU Holdco), and/or a WLI
Intercompany Note (if an Other Foreign Subsidiary) and all related U.S. Security
Documents or (unless and to the extent waived by the Agents) all related Foreign
Security Documents, and to execute and deliver, or cause to be delivered, all
other certificates and opinions in each case as would have had to have been
delivered on the Closing Date (if a Domestic Subsidiary) or the Full Utilization
Date (if a Foreign Subsidiary) if such new Material Subsidiary were in existence
at such date, with all of the foregoing to be effected (I) if such new Material
Subsidiary is a Domestic Subsidiary, within 15 Business Days after the
acquisition or creation thereof, or of the date it became a Material Subsidiary
pursuant to the Relevant Clauses and (II) if such new Material Subsidiary is a
Foreign Subsidiary, within 45 days after the acquisition or creation thereof, or
of the date it became a Material Subsidiary pursuant to the Relevant Clauses.
(b) WLI will make a Material Subsidiary Determination within 90
days after the end of each calendar year (commencing with the calendar year
ended December 31, 1998) and promptly convey in writing the results of such
determination to the Administrative Agent.
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(c) WLI will cause the aggregate revenues of WLI and all Material
Subsidiaries for each fiscal year of WLI to account for at least 85% of the
aggregate revenues of WLI and all of its Subsidiaries for such fiscal year.
SECTION 8. NEGATIVE COVENANTS. WLI hereby covenants and agrees
that on the Closing Date and thereafter until the Commitments have terminated,
no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 12.13 which are not then owing) incurred
hereunder, are paid in full:
8.01 CHANGES IN BUSINESS. WLI will not, and will not permit any
of its Subsidiaries to, materially alter the character of the business of WLI
and its Subsidiaries from the business conducted and presently proposed to be
conducted by WLI and its Subsidiaries on the Closing Date (giving effect to the
Acquisition).
8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. WLI
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or sell
or otherwise dispose of all or any part of its property or assets or purchase,
lease or otherwise acquire all or any part of the property or assets of any
Person (other than purchases or other acquisitions of inventory, leases,
materials and equipment in the ordinary course of business) or agree to do any
of the foregoing at any future time (without a contingency relating to obtaining
any required approval hereunder or the prior or contemporaneous satisfaction of
the Obligations), except that the following shall be permitted:
(a) (I) any Domestic Credit Party may be merged or
consolidated with or into, or be liquidated into, or transfer all or
any part of its business, properties and assets to another Domestic
Credit Party that is a Material Subsidiary (provided that in any such
transaction involving (x) WLI, WLI shall be the surviving party or (y)
a Material Subsidiary (where WLI is not a party), a Material
Subsidiary shall be the surviving party), (II) any Foreign Subsidiary
that is a Guarantor may be merged or consolidated with or into, or be
liquidated into, another Foreign Subsidiary that is a Guarantor, (III)
any Foreign Subsidiary that is not a Guarantor may be merged or
consolidated with or into, or be liquidated into, another Foreign
Subsidiary (provided that in any such transaction involving a
Guarantor, such Guarantor is the surviving party), (IV) all or any
part of the business, properties and assets of a Foreign Subsidiary
that is not a Guarantor may be conveyed or otherwise transferred to
another Foreign Subsidiary, (V) any Foreign Subsidiary that is not a
Material Subsidiary (or, if not a Guarantor, whose liquidation is
consented to by the Agents) may be liquidated and (VI) assets of WLI,
any Domestic Credit Party and/or any Foreign Subsidiary that is a
Guarantor may be conveyed or otherwise transferred to Foreign
Subsidiaries that are not
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Guarantors provided that after giving effect thereto the NFG
Investments shall not exceed $30,000,000;
(b) capital expenditures to the extent not prohibited by
Section 8.05 hereof;
(c) the investments, acquisitions and transfers or
dispositions of properties permitted pursuant to Section 8.06;
(d) WLI and each Subsidiary may lease (as lessee) real or
personal property in the ordinary course of business (so long as such
lease does not create a Capitalized Lease Obligation not otherwise
permitted by Section 8.04(d) or would not violate Section 8.07);
(e) licenses or sublicenses by WLI or any Subsidiary of
intellectual property in the ordinary course of business;
(f) the Acquisition (including all intercompany loans,
advances and investments made on the Closing Date to effectuate same);
(g) any Borrower or Guarantor may acquire (other than through
an unsolicited public offer) assets constituting all or substantially
all of a business, business unit, division or product line of any
Person not already a Subsidiary of such Person or capital stock of any
such Person (including any such acquisition by way of merger or
consolidation) to the extent (x) if such acquired Person or the
surviving entity of such merger or consolidation will be a Material
Subsidiary, such Person or surviving entity becomes a Guarantor
(unless not permitted to do so under local law) and executes
appropriate Security Documents to secure its Guaranty with its assets
(unless waived by the Administrative Agent) and (y) the capital stock
of such Person or surviving entity is pledged pursuant to a Pledge
Agreement (any such acquisition permitted by this clause (g), a
"Permitted Acquisition"), so long as (i) after giving effect to such
Permitted Acquisition WLI is in compliance with Section 8.01, (ii) no
Default under Section 9.01 or Event of Default then exists, (iii) PRO
FORMA compliance is established to the Agents' satisfaction with the
covenants contained in Sections 8.10 through 8.13 after giving effect
to such Permitted Acquisition as if such Permitted Acquisition were
consummated on the first day of the Test Period then last ending, (iv)
the Agents have received financial projections for the acquired
business or Person, (v) the Required Lenders' consent shall have been
obtained if the total cash consideration paid for (I) any such
acquisition or related series of acquisitions exceeds $100 million or
(II) all Permitted Acquisitions after the Closing Date exceeds $250
million and (vi) after giving effect to such Permitted Acquisition and
the Loans, if any, incurred to finance same the Total Unutilized
Commitment is at least $150 million;
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(h) acquisitions (other than through an unsolicited public
offer) not otherwise permitted pursuant to the foregoing provisions of
this Section 8.02 to the extent that the aggregate amount of cash
consideration paid for all such acquisitions does not exceed $50
million (or the equivalent) provided that at the time of each such
acquisition PRO FORMA compliance is established to the Agents'
satisfaction with the covenants contained in Sections 8.10 through 8.13
after giving effect to such acquisition as if such acquisition were
consummated on the first day of the Test Period then last ended; and
(i) other sales or dispositions of assets PROVIDED that (w)
the provisions of Sections 3.03(c) and/or 4.02(A)(b)(x) are complied
with in connection therewith (to the extent applicable), (x) each such
sale shall be in an amount at least equal to the fair market value
thereof and, in the case of sales for Net Proceeds in excess of $10
million, for proceeds consisting of at least 75% cash, (y) other than
in the case of any such sale or disposition listed on Annex V hereto,
the Agents shall have consented thereto to the extent the Net Proceeds
of any such sale or disposition, or related series of sales or
disposition, exceed $100 million (or the equivalent) and (z) the sale
or disposition of the capital stock of (i) any Borrower shall be
prohibited and (ii) any other Subsidiary shall be prohibited unless it
is for all of the outstanding capital stock of such Subsidiary owned by
WLI and its other Subsidiaries.
8.03 LIENS. WLI will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of WLI or any such Subsidiary whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to WLI or any of
its Subsidi aries) or assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(a) Liens for taxes, assessments or other governmental charges
not yet due or Liens for taxes, assessment or other governmental
charges being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the
management of the applicable Designated Party) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', materialmen's, warehousemen's and mechanics' Liens,
statutory and common law landlord's Liens, and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business
of any such Subsidiary and (y) which are being
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contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property
or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the
other Credit Documents;
(d) Liens to the extent existing on the Closing Date and
listed on Annex VII hereto (specifically or generally) without giving
effect to any subsequent extensions or renewals thereof not consented
to by the Agents;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
(f) Liens (i) (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money) and (ii) on
assets of Subsidiaries that are not Material Subsidiaries provided that
the Indebtedness secured by all Liens permitted by this clause (ii)
shall be permitted by Section 8.04(j);
(g) leases or subleases granted to others not interfering in
any material respect with the business of WLI or any Subsidiary;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title, encroachments and other similar charges or
encumbrances and minor title deficiencies, in each case not interfering
in any material respect with the ordinary conduct of the business of
WLI or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases, consignments and similar arrangements
entered into in the ordinary course of business and not otherwise
prohibited by this Agreement;
(j) purchase money Liens securing payables arising from the
purchase of any equipment or goods in the normal course of business
provided that such payables shall not constitute Indebtedness;
(k) any interest or title of a lessor under any lease
permitted by this Agreement;
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(l) Liens arising pursuant to purchase money mortgages or
security interests securing Indebtedness representing the purchase
price of assets acquired after the Closing Date (which purchase price
shall not exceed the fair market value of the purchased assets),
provided that any such Liens attach only to the assets so acquired and
are created contemporaneously with, or within 90 days following, such
acquisition, and the Indebtedness secured by Liens created pursuant to
this clause (l) so permitted pursuant to Section 8.04(c);
(m) Liens created pursuant to Capital Leases permitted
pursuant to Section 8.04(c) or pursuant to Customer Associated Leases;
and
(n) Liens on property or assets acquired pursuant to a
Permitted Acquisition or other acquisition permitted by Section 8.02(h)
or on property or assets of a Person in existence at the time such
Person is acquired pursuant to a Permitted Acquisition or any such
other acquisition, in each case securing Permitted Acquired Debt,
PROVIDED that such Liens existed prior to, and were not incurred in
contemplation of, such Permitted Acquisition or any such other
acquisition, and do not attach to any other asset of WLI or any of its
Subsidiaries.
8.04 INDEBTEDNESS. WLI will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
Credit Documents;
(b) Indebtedness owing by (i) any Domestic Credit Party to
another Domestic Credit Party (in each case to the extent a Material
Subsidiary); (ii) a Foreign Subsidiary (other than, on and after the
Full Utilization Date, Italian Borrower) to EU Holdco (or if an Other
Foreign Subsidiary, to WLI) to the extent (x) evidenced on and after
the Full Utilization Date by an EU Intercompany Note (or WLI
Intercompany Note if owed to WLI) and (y) in the case of each such
Foreign Subsidiary, within the limits, if any, for intercompany
Indebtedness owing by such Foreign Subsidiary as set forth on Annex X,
Part I; and (iii) a Foreign Subsidiary that is not a Guarantor to
another Foreign Subsidiary that is not a Guarantor;
(c) Capitalized Lease Obligations of WLI and its Subsidiaries
and Indebtedness incurred pursuant to purchase money mortgages or
security interests permitted by Section 8.03(l) to the extent that the
sum thereof does not exceed $30 million (or the equivalent) at any time
outstanding;
(d) Existing Indebtedness, without giving effect to any
subsequent extension, renewal or refinancing thereof not consented to
by the Agents;
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(e) Contingent Obligations constituting (x) the guaranty by a
Guarantor of the obligations (not otherwise in violation of this
Agreement) of other Guarantors and (y) the guaranty by a Subsidiary
that is not a Guarantor of the obligations (not otherwise in violation
of this Agreement) of other Subsidiaries;
(f) Indebtedness under Interest Rate Agreements to the extent
satisfactory in amount and in substance to the Agents;
(g) Permitted Subordinated Debt;
(h) Permitted Training Advances;
(i) Permitted Acquired Debt in an amount not to exceed
$50,000,000 provided that (x) all the terms and conditions of such
Permitted Acquired Debt are satisfactory to the Agents and (y) the
principal amount of any Permitted Acquired Debt incurred pursuant to
this clause (i) shall reduce the amount of cash consideration that may
otherwise be paid under Section 8.02(g) or (h) as appropriate to the
acquisition in connection with which such Permitted Acquired Debt was
incurred; and
(j) Indebtedness not otherwise permitted by the foregoing
provisions of this Section 8.04 in an aggregate outstanding principal
amount not to exceed $50 million (or the equivalent).
8.05 CAPITAL EXPENDITURES. (a) WLI will not, and will not
permit any of its Subsidiaries to, incur Consolidated Capital Expenditures,
provided that WLI and its Subsidiaries may make Consolidated Capital
Expenditures in any fiscal year in an aggregate amount of up to the Permitted
CAPEX Amount for such fiscal year.
(b) In the event that the Consolidated Capital Expenditures
equal to the Permitted CAPEX Amount for a fiscal year (without giving effect to
this clause (b)) are not expended during such fiscal year, the maximum amount of
Consolidated Capital Expenditures which may be expended during the immediately
succeeding fiscal year pursuant to Section 8.05(a) shall be increased by such
unutilized amount.
8.06 ADVANCES, INVESTMENTS AND LOANS. WLI will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to any Person, except:
(a) WLI and any of its Subsidiaries may invest in cash and
Cash Equivalents;
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(b) WLI and any Subsidiary may acquire and hold receivables
owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary
trade terms;
(c) the intercompany Indebtedness described in Section 8.04
(b) shall be permitted;
(d) loans and advances to officers, directors and employees
(x) in the ordinary course of business for business, travel,
entertainment and relocation purposes and/or representing the deferred
purchase price of the capital stock of WLI purchased by such persons
from WLI and (y) otherwise in an aggregate principal amount not to
exceed $5 million (or the equivalent) at any time outstanding shall be
permitted;
(e) WLI or any Subsidiary may acquire and own investments
(including debt obligations) received (x) in connection with the
bankruptcy or reorganization of suppliers and customers and (y) in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(f) (i) any Domestic Credit Party may make investments in any
Domestic Credit Party that is a Material Subsidiary, (ii) WLI and/or EU
Holdco may make investments (other than intercompany Indebtedness) in
Foreign Subsidiaries that are Material Subsidiaries within the
limitations, if any, specified in Annex X, Part I, (iii) WLI, any
Domestic Credit Party and/or any Foreign Subsidiary that is a Guarantor
may make investments in Foreign Subsidiaries that are not Guarantors
provided that after giving effect thereto the NFG Investments shall not
exceed $30,000,000 and (iv) any Foreign Subsidiary that is not a
Guarantor may make investments in a Foreign Subsidiary that is a
Guarantor;
(g) investments outstanding on the Closing Date and listed on
Annex VIII, without giving effect to any extension or renewal thereof;
(h) promissory notes and other securities received as
proceeds of asset dispositions permitted by Section 8.02(i);
(i) Permitted Acquisitions and/or acquisitions permitted by
Section 8.02(h);
(j) issuances of WLI common stock pursuant to the Convertible
Instruments;
(k) investments to the extent made with WLI common stock;
(l) at any time prior to the Full Utilization Date,
investments in the Italian Borrower not exceeding in aggregate amount
$20 million (or the equivalent); and
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(m) other investments not permitted by the foregoing
provisions of this Section 8.06 not exceeding in aggregate amount $30
million (or the equivalent).
8.07 PREPAYMENTS OF INDEBTEDNESS, ETC. WLI will not, and
will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary
or optional payment or prepayment or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange of any Permitted Subordinated
Debt (once issued);
(b) amend or modify, or permit the amendment or modification
in any manner adverse to the Lenders of, any provisions of any
Permitted Subordinated Debt (once issued); and/or
(c) amend, modify or change in any manner adverse to the
interests of the Lenders the certificate of incorporation (including
the certificate of description for the WLI Preferred and, without
limitation, in each case, by the filing of any certificate of
designation), by-laws or equivalent organizational documents of any
Designated Party or any of the Acquisition Documents.
8.08 DIVIDENDS, ETC. (a) WLI will not, and will not permit any
of its Subsidiaries to, make any cash payments on or in respect of the SARs
("SAR Cash Payments"), make Excess Deferred Payments and/or declare or pay any
dividends (other than dividends payable solely in capital stock of such Person)
or return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for a consideration, any shares of any class of its capital stock now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock of WLI or
any other Subsidiary, as the case may be, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by such Person with
respect to its capital stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary that is not a Material Subsidiary and Japan
Subsidiary may pay dividends to its shareholders, provided that the
amounts paid to any shareholder that is WLI or a Subsidiary of WLI
shall not be less than such shareholder's PRO RATA share of the
dividends being paid based on ownership interests in such Subsidiary;
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(ii) any Subsidiary that is a Material Subsidiary may pay
dividends to any Guarantor;
(iii) issuances of WLI common stock pursuant to the
Convertible Instruments;
(iv) provided that no Default under Section 9.01 or Event of
Default is then in existence or would arise therefrom (determined for
the purposes of Sections 8.10 through 8.14 on a PRO FORMA basis as if
the Dividends and Repurchases referred to below were effected on the
last day of the Test Period last ended) WLI may (A) pay dividends in
cash on the WLI Preferred when due and payable in accordance with its
terms, (B) make Excess Deferred Payments, (C) make SAR Cash Payments
and/or (D) purchase, redeem, retire or otherwise acquire
("Repurchases") capital stock of WLI now or hereafter outstanding (or
any warrants for or stock appreciation rights (other than SARs) in
respect of any such shares), provided that (w) WLI may not expend more
than $50 million during the first two years following the Closing Date
or $150 million in the aggregate after the Closing Date to make
Repurchases and Excess Deferred Payments, (x) after giving effect to
any Repurchase or Excess Deferred Payment, the Total Unutilized
Commitment shall equal at least $150 million, (y) no more than $10
million may be expended in connection with Repurchases of WLI stock
held by officers and directors and (z) after giving effect to any SAR
Cash Payment, the Total Unutilized Commitment shall equal at least $100
million.
(b) WLI will not, and will not permit any of its Material
Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or
restriction which prohibits or otherwise restricts (A) the ability of any
Subsidiary to (a) pay dividends or make other distributions or pay any
Indebtedness owed to any Designated Party, (b) make loans or advances to any
Designated Party or (c) transfer any of its properties or assets to any
Designated Party or (B) the ability of any Designated Party to create, incur,
assume or suffer to exist any Lien upon its property or assets to secure the
Obligations, other than prohibitions or restrictions existing under or by reason
of (i) this Agreement and the other Credit Documents; (ii) applicable law;
(iii) customary provisions restricting subletting or assignments of leases
and/or non-assignment provisions entered into in the ordinary course of business
and consistent with past practices; (iv) any restriction or encumbrance with
respect to a Subsidiary imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition is
permitted under this Agreement; and (v) Liens permitted under Section 8.03 and
any documents or instruments governing the terms of any Indebtedness or other
obligations secured by any such Liens, provided that such prohibitions or
restrictions apply only to the assets subject to such Liens.
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8.09 TRANSACTIONS WITH AFFILIATES. WLI will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
after the Closing Date whether or not in the ordinary course of business, with
any Affiliate other than on terms and conditions substantially as favorable to
WLI or such Subsidiary as would be obtainable by WLI or such Subsidiary at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate, except that: (i) each such Person may pay reasonable fees and
compensation to and indemnity provided on behalf of, their respective officers,
directors and employees as determined in good faith by such Person's Board of
Directors or senior management to the extent not otherwise prohibited by the
terms of this Agreement; (ii) transactions among WLI and its Wholly-Owned
Subsidiaries; and (iii) the transaction listed on Annex IX.
8.10 CURRENT RATIO. WLI will not permit the ratio of (i)
Consolidated Current Assets to (ii) Consolidated Current Liabilities as at the
end of any fiscal quarter to be less than 1.00 to 1.0.
8.11 LEVERAGE RATIO. WLI will not permit the Leverage Ratio as at
the end of any fiscal quarter set forth below to exceed the ratio set forth
opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 1998 through
December 31, 1999 2.75 to 1.0
March 31, 2000 and
June 30, 2000 2.70 to 1.0
September 30, 2000 2.60 to 1.0
Thereafter 2.50 to 1.0
8.12 MINIMUM CONSOLIDATED EBITDA. WLI will not permit
Consolidated EBITDA for any Test Period ending on the last day of any fiscal
quarter set forth below to be less than the amount set forth opposite such
fiscal quarter:
Fiscal Quarter Ending Amount
--------------------- ------
June 30, 1998 $125.0 million
September 30, 1998 150.0 million
December 31, 1998 175.0 million
March 31, 1999 200.0 million
June 30, 1999 200.0 million
September 30, 1999 210.0 million
December 31, 1999 210.0 million
March 31, 2000 220.0 million
June 30, 2000 230.0 million
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September 30, 2000 240.0 million
Thereafter 250.0 million
8.13 MINIMUM INTEREST COVERAGE. WLI will not permit the ratio
of (x) Consolidated EBITA to (y) Consolidated Adjusted Interest Expense for any
Test Period ending on the last day of any fiscal quarter set forth below to be
less than the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
December 31, 1998 and March 31, 1999 3.5 to 1.0
June 30, 1999 and September 30, 1999 4.0 to 1.0
December 31, 1999 and March 31, 2000 4.5 to 1.0
June 30, 2000 to March 31, 2001 5.0 to 1.0
Thereafter 6.0 to 1.0
8.14 MINIMUM CONSOLIDATED NET WORTH. WLI will not permit
Consolidated Net Worth at any time to be less than the Minimum Net Worth Amount.
8.15 LIMITATION ON ISSUANCE OF STOCK. WLI will not permit any
Subsidiary, directly or indirectly, to issue any shares of its capital stock or
other equity securities (or warrants, rights or options to acquire shares or
other equity securities), except, to the extent permitted by Section 8.06, to
any Designated Party or to qualify directors if required by applicable law.
8.16 CREATION OF SUBSIDIARIES. WLI will not permit (i) any
Material Subsidiary to be created or acquired after the Closing Date unless such
Person is a Wholly- Owned Subsidiary and (ii) any Subsidiary that is not a
Material Subsidiary to have gross revenues in any fiscal year of WLI of $50
million (or the equivalent) or more unless such Subsidiary becomes a
Wholly-Owned Subsidiary by the date of the relevant Material Subsidiary
Determination.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):
9.01 PAYMENTS. Any Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
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9.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by any Designated Party herein or in any other Credit Document or
in any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
9.03 COVENANTS. Any Designated Party shall (a) default in the
due performance or observance by it of any term, covenant or agreement contained
in Section 7.10, 7.12 or 8, or (b) default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in
Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least 30
days after written notice to the defaulting party by the Administrative Agent or
the Required Lenders; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) WLI or any of its
Material Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond any originally applicable
period of grace, if any, applicable thereto or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its stated
maturity; or (b) any such Indebtedness of WLI or any of its Material
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof, PROVIDED that it shall not constitute an Event of Default
pursuant to this Section 9.04 unless the aggregate amount of all Indebtedness
referred to in clauses (a) and (b) above exceeds $5 million (or the equivalent
thereof) at any one time; or
9.05 BANKRUPTCY, ETC. WLI or any of its Material Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy", as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against WLI or any of its Material Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
WLI or any of its Material Subsidiaries; or WLI or any of its Material
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to WLI or any of its Subsidiaries; or there is commenced against
WLI or any of its Material Subsidiaries any such proceeding which remains
undismissed for a period of 60 days; or WLI or any of its Material Subsidiaries
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; WLI or any of its Material
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Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or WLI or any of its Material Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by WLI
or any of its Material Subsidiaries for the purpose of effecting any of the
foregoing (provided that none of the foregoing, as they affect a Material
Subsidiary that is a Foreign Subsidiary but not a Guarantor, shall constitute an
Event of Default to the extent waived by the Agents); or any event similar to
any of the foregoing shall occur under the law of any other jurisdiction
relating to WLI or any of its Material Subsidiaries; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) or ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirements of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or
.68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan which is subject to Title IV of ERISA is, shall
have been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made by WLI, any Subsidiary or any ERISA Affiliate
with respect to a Plan, a Multiemployer Plan or a Foreign Pension Plan has not
been timely made, WLI or any Subsidiary of WLI or any ERISA Affiliate has
incurred or is likely to incur any liability to or on account of a Plan or
Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or WLI or
any Subsidiary of WLI has incurred or is likely to incur liabilities pursuant to
one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits to retired employees or other former employees (other than
as required by Section 601 of ERISA) or Plans or Multiemployer Plans or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the reasonable opinion of
the Required Lenders, has had, or is reasonably likely to have, a Material
Adverse Effect; or
9.07 SECURITY DOCUMENTS. (a) Any Security Document shall cease
to be in full force and effect, or shall cease to give the Collateral Agent the
material Liens, rights, powers and privileges purported to be created thereby in
favor of the Collateral Agent, or (b) any Designated Party shall default in the
due performance or observance of any term, covenant or
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agreement on its part to be performed or observed pursuant to any such Security
Document and such default shall continue unremedied for a period of at least 30
days after written notice to the defaulting party by the Collateral Agent; or
9.08 GUARANTIES. The Guaranties or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting by
or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under any Guaranty or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
9.09 JUDGMENTS. One or more judgments or decrees shall be
entered against WLI or any of its Material Subsidiaries involving a liability of
$5 million (or the equivalent thereof) or more in the aggregate for all such
judgments and decrees for WLI and its Material Subsidiaries (not paid or to the
extent not covered by insurance) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 60 days
from the entry thereof; or
9.10 FULL UTILIZATION DATE. The Full Utilization Date shall
not have occurred on or prior to the date 45 days after the Closing Date and the
Administrative Agent shall, upon the written request of the Required Lenders,
have delivered to WLI written notice that same shall constitute an Event of
Default;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to WLI, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent or any Lender to enforce its claims against any Guarantor or WLI, except
as otherwise specifically provided for in this Agreement (provided that, if an
Event of Default specified in Section 9.05 shall occur with respect to WLI, the
result which would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon the Commitment of each Lender shall forthwith terminate
immediately and any Commitment Fees shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and all obligations owing hereunder
(including Unpaid Drawings) and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct each Borrower to pay (and each
Borrower hereby agrees upon receipt of such notice, or upon the occurrence of
any Event of Default specified in Section 9.05 in respect of such Borrower, it
will pay) to the Collateral Agent at the appropriate Payment Office such
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additional amounts of cash, to be held as security for such Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding equal
to the aggregate Stated Amount of all Letters of Credit of such Borrower then
outstanding.
SECTION 10. DEFINITIONS. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acceleration Event" shall have the meaning provided in
Section 12.20.
"Acquired Businesses" shall mean the information technology
solutions and services businesses of Olivetti Solutions S.p.A. and its
subsidiaries, Olivetti Corporation of Japan and Olsy do Brasil Ltda. being
acquired pursuant to the Acquisition Agreement.
"Acquisition" shall mean the acquisition by WLI and its
Subsidiaries of the Acquired Businesses in accordance with the Acquisition
Documents.
"Acquisition Agreement" shall mean the Stock Purchase
Agreement dated as of February 28, 1998 among the Sellers, WLI and EU Holdco.
"Acquisition Documents" shall mean the Acquisition Agreement
and all other material agreements relating to the Acquisition (including the
Deferred Payment Agreement and the SARs) as in effect on the Closing Date and as
the same may be supplemented, amended or modified from time to time in
accordance with the terms hereof and thereof.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the
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Administrative Agent to the Federal Deposit Insurance Corporation for insuring
three-month certificates of deposit.
"Adjusted Total MCF Commitment" shall mean at any time the
Total MCF Commitment less the aggregate MCF Commitments of all Defaulting
Lenders.
"Adjusted Total USF Commitment" shall mean at any time the
Total USF Commitment less the aggregate USF Commitments of all Defaulting
Lenders.
"Administrative Agent" shall mean Bankers Trust Company and
shall include any successor to the Administrative Agent appointed pursuant to
Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agents" shall mean the Administrative Agent, the Syndication
Agent and the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time further modified, amended and/or supplemented.
"Alternate Currency" shall mean each Approved Currency other
than Dollars.
"Alternate Currency Loan" shall mean any Loan denominated in
an Alternate Currency.
"Applicable CF Percentage" shall mean .50%, provided that at
any time the Applicable Margin then in effect for Eurodollar Loans is 0.75%, the
Applicable CF Percentage shall instead be .375%.
"Applicable Margin" shall mean the applicable percentage set
forth below based upon the Level then in effect:
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Level LIBOR Base Rate
----- ----- ---------
Level I 1.50% 0.50%
Level II 1.25% 0.25%
Level III 1.00% 0.00%
Level IV 0.75% 0.00%
The Leverage Ratio utilized in connection with any determination of the
foregoing Levels and the related Applicable Margins shall be determined for each
Relevant Test Period by delivery of an officer's certificate of WLI to the
Lenders pursuant to Section 7.01(e), which certificate shall set forth the
calculation of the Leverage Ratio. The Level and Applicable Margin so determined
shall apply, except as set forth below, from the date on which such officer's
certificate is delivered to the Administrative Agent to the earlier of (x) the
date on which the next certificate is delivered to the Administrative Agent
pursuant to Section 7.01(e) and (y) the 45th day following the end of the fiscal
quarter in which such first certificate was delivered to the Administrative
Agent (or 90 days if such fiscal quarter was the last fiscal quarter of a fiscal
year). Notwithstanding anything to the contrary contained above, the Applicable
Margins in effect, (w) until an officer's certificate is delivered under Section
7.01(e) in respect of the fiscal quarter ending September 30, 1998, shall be
based on Level I pricing, (x) shall be based upon Level I pricing if no
officer's certificate which sets forth the Leverage Ratio for the Relevant Test
Period has been delivered to the Lenders pursuant to Section 7.01(e) within the
time period specified therein or the financial statements upon which any such
calculations are based have not been delivered, until such a certificate and/or
financial statements are delivered and (y) shall be based upon Level I pricing
at all times when there shall exist a Default under Section 9.01 or an Event of
Default.
"Approved Currency" shall mean each of Dollars, Deutsche
Marks, Euros, Pounds Sterling, French Francs, Italian Lira, Japanese Yen,
Spanish Pesetas, Danish Krone, Belgian Francs, Dutch Guilder and any other
freely transferable currency requested by WLI and acceptable to the MCF Lenders
and the Administrative Agent.
"Approved Currency Equivalent" shall mean the Dollar
Equivalent, the Deutsche Mark Equivalent, the Euro Equivalent, the Sterling
Equivalent, French Franc Equivalent, the Italian Lira Equivalent, Japanese Yen
Equivalent, Spanish Pesetas Equivalent, Danish Krone Equivalent or Dutch Guilder
Equivalent or the comparable equivalent of any other Alternate Currency, as the
case may be.
"Asset Sale" shall mean and include (x) the sale, transfer or
other disposition by WLI or any Subsidiary of any of their assets (including,
without limitation, in the case of any Subsidiary of WLI, any issuance of equity
by each Subsidiary) to any Person other than any Designated Party (other than
(i) sales, transfers or other dispositions in the ordinary course of business of
inventory or worn-out, unuseful, obsolete or excess equipment and (ii) other
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sales that generate in the aggregate less than $1,000,000 (or the equivalent) of
proceeds in any calendar year) and (y) the receipt of casualty insurance and/or
condemnation proceeds, in each case in excess of $5,000,000 (or the equivalent)
and not utilized to repair or replace the asset damaged or condemned.
"Assignment Agreement" shall mean the Assignment Agreement in
the form of Exhibit L (appropriately completed).
"Associated Cost Rate" shall mean, with respect to each
Interest Period for Pounds Sterling-denominated MCF Loans, the costs (expressed
as a percentage rounded up to the nearest four decimal places and as determined
on the first day of such Interest Period and any three month anniversary thereof
by the Administrative Agent) of compliance with then existing requirements of
the Bank of England in respect of MCF Loans denominated in Pounds Sterling.
"Authorized Officer" shall mean any senior officer of any
Borrower designated as such in writing to the Administrative Agent by such
Borrower.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean, at any time, the highest of (i) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate, (ii) the
Prime Lending Rate and (iii) 1/2 of 1% in excess of the Adjusted Certificate of
Deposit Rate.
"Base Rate Loan" shall mean (x) each USF Loan that is not a
Eurodollar Loan and (y) each Swingline Loan.
"Belgian Franc Equivalent" shall mean, at any time for the
determination thereof, the amount of Belgian Francs which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Belgian Franc LIBOR" shall mean, for each Interest Period
applicable to any MCF Loan denominated in Belgian Francs, the rate per annum
that appears on page 3750 of the Dow Jones Telerate Screen (or any successor
page) for Belgian Franc deposits with maturities comparable to such Interest
Period as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period or, if such a rate does not
appear on page 3750 of the Dow Jones Telerate Screen (or any successor page),
the average of the offered quotations to first-class banks in the London
interbank market by each Reference Bank that reports same to the Administrative
Agent for Belgian Franc deposits of amounts in same day funds comparable to the
outstanding principal amount of such MCF
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Loan with maturities comparable to such Interest Period determined as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period.
"Belgian Francs" shall mean freely transferable lawful money
of Belgium.
"Borrowers" shall mean and include WLI, EU Holdco and Italian
Borrower.
"Borrowing" shall mean the incurrence of (i) Lira Loans from
the Lira Lender, (ii) USF Loans that are Base Rate Loans on a PRO RATA basis
from all of the USF Lenders, (iii) Eurodollar Loans on a PRO RATA basis from all
USF Lenders and (iv) MCF Loans of a single Approved Currency by a Borrower on a
PRO RATA basis from all of MCF Lenders, in each case on a given date (or
resulting from conversions on a given date), having in the case of Eurodollar
Loans or MCF Loans the same Interest Period provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual
capacity.
"Business Day" shall mean (i) for all purposes other than as
covered by clauses (ii) and (iii) below, any day excluding Saturday, Sunday and
any day which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close, (ii) (except as provided in clause (iii) below) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, MCF Loans and/or MCF Letters of Credit (and
Unpaid Drawings thereunder), any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in the London
interbank Eurodollar market and, with respect to any notices or determinations
in respect of Euros, which is customarily a "Business Day" for such notices or
determinations and (iii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, any Lira Loan and/or
a MCF Letter of Credit issued for the account of the Italian Borrower (and
Unpaid Drawings thereunder), any day which is a Business Day described in clause
(i) and (ii) above and which shall not be a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close in Milan, Italy.
"Capital Lease" as applied to any Person shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrowers or any of their respective Subsidiaries in
each case taken at the
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amount thereof accounted for as liabilities in conformity with GAAP provided
that Customer Associated Leases shall not constitute Capitalized Lease
Obligations.
"Cash Equivalents" shall mean (i) securities (I) issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) and (II) issued by
such non-U.S. governmental entities as are acceptable to the Agents and WLI, in
each case having maturities of not more than one year from the date of
acquisition, (ii) time deposits, certificates of deposit and bankers'
acceptances denominated in Dollars, and such other Approved Currencies as are
acceptable to the Agents and WLI of (x) any Lender or (y) any bank (or the
parent company of such bank) whose short-term commercial paper rating from
Standard & Poor's Ratings Services, a division of McGraw- Hill, Inc. ("S&P") is
at least A-1 or the equivalent thereof or from Moody's Investors Service, Inc.
("Moody's") is at least P-1 or the equivalent thereof (any such bank, an
"Approved Bank"), in each case with maturities of not more than one year from
the date of acquisition, (iii) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Lender or Approved Bank or by
the parent company of any Lender or Approved Bank and commercial paper issued
by, or guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody's (any such company, an "Approved
Company"), or guaranteed by any industrial company with a long term unsecured
debt rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within one year after the
date of acquisition, (v) investments in money market funds substantially all of
whose assets are comprised of securities of the type described in clauses (i)
through (iv) above and (vi) overnight and/or demand deposits in the respective
local currencies maintained by a Foreign Subsidiary.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale,
other than the portion of such deferred payment constituting interest, but only
as and when so received) received by the WLI and/or any Subsidiary from such
Asset Sale.
"Change of Control" shall mean an occurrence whereby (i) any
person or group (as such terms are used in sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as defined in rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of WLI representing 40% or
more of the combined voting power of WLI's then outstanding securities; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors, and any new director whose
election by WLI's Board of Directors or nomination for election by WLI's
shareholders was
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approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, (iii) the shareholders of WLI approve a plan of
complete liquidation of WLI or an agreement for the sale or disposition by WLI
of all of substantially all of the WLI's assets or (iv) any "Change of Control"
or similar term as defined in any other agreement evidencing or governing
Indebtedness of WLI or any Subsidiary in an amount of $20 million or more (or
the equivalent).
"Closing Date" shall mean the date upon which the Acquisition
is consummated (or if the Acquired Businesses are to be acquired on more than
one date, upon which the Italian Acquired Business is consummated)
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
Effective Date and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in,
and/or all the properties subject to the Lien created under, each of the
Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Lenders.
"Commitment" shall mean, with respect to each Lender, such
Lender's USF Commitment and MCF Commitment.
"Commitment Fees" shall mean and include the USF Commitment
Fee and the MCF Commitment Fee.
"Company" shall mean any corporation, limited liability
company, partner ship or other business entity (or the adjectival form thereof,
where appropriate).
"Consolidated Adjusted Interest Expense" shall mean, for any
period, the sum of (i) Consolidated Interest Expense for such period plus (ii)
cash dividends payable on the WLI Preferred during such period.
"Consolidated Capital Expenditures" shall mean, for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including in all events all amounts expended or capitalized
under Capital Leases but excluding any amount representing capitalized interest
or payable under Customer Associated Leases) by WLI and its Subsidiaries during
that period that, in conformity with GAAP, are or are required to be
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included in the property, plant or equipment reflected in the consolidated
balance sheet of WLI and its Subsidiaries, including in any event for spare
parts, provided that Consolidated Capital Expenditures shall in any event (x)
exclude the purchase price paid in cash in connection with any Permitted
Acquisition including any portion thereof allocable to property, plant and
equipment, (y) only include the amount thereof actually paid in cash during such
period and (z) exclude amounts expended with casualty insurance or condemnation
proceeds.
"Consolidated Current Assets" shall mean, as to any Person at
any time, the current assets (other than, to the extent otherwise included
therein, cash, Cash Equivalents and receivables relating to Customer Associated
Leases) of such Person and its Subsidiaries determined on a consolidated basis
in conformity with GAAP.
"Consolidated Current Liabilities" shall mean, as to any
Person at any time, the current liabilities of such Person and its Subsidiaries
determined on a consolidated basis in conformity with GAAP, but excluding, to
the extent otherwise included therein, all Loans, all restructuring and
integration costs and the short-term portion of Customer Associated Leases.
"Consolidated Debt" shall mean, as of any date of
determination (I) the aggregate stated balance sheet amount of all Indebtedness
(excluding any amounts owing under Customer Associated Leases and Permitted
Training Advances) of WLI and its Subsidiaries on a consolidated basis as
determined in conformity with GAAP plus any Indebtedness for borrowed money of
any other Person as to which WLI and/or any of its Subsidiaries has created a
guarantee or other Contingent Obligation, with the then Dollar Equivalent of all
such indebtedness denominated other than in Dollars to be used in any
determination of Consolidated Debt less (if a positive number) (II) the excess
of the aggregate of all cash on such consolidated balance sheet over $100
million.
"Consolidated EBIT" shall mean, for any period, (A) the sum of
the amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or
write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary losses LESS (B) the
amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined on
a consolidated basis in conformity with GAAP.
"Consolidated EBITA" shall mean, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT and (ii) amortization
expense, all as determined on a consolidated basis in conformity with GAAP.
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"Consolidated EBITDA" shall mean, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense
and (iii) amortization expense, all as determined on a consolidated basis in
conformity with GAAP.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases in
conformity with GAAP) of WLI and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of WLI and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements and Other Hedging Arrangements, but
excluding (x) amortization of deferred financing costs incurred in connection
with this Agreement, (y) interest expense on Customer Associated Leases and (z)
imputed noncash interest on Permitted Training Advances.
"Consolidated Net Income" shall mean for any period, the net
income (or loss) of WLI and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
PROVIDED that there shall be excluded (i) the income (or loss) of any Person
(other than Material Subsidiaries) in which any other Person (other than WLI or
any of its Material Subsidiaries) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to WLI or any of
its Material Subsidiaries by such Person during such period, (ii) except for
determinations of Consolidated Net Income to be made on a PRO FORMA basis in
connection with a Permitted Acquisition pursuant to Section 8.02(g), the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary of WLI
or is merged into or consolidated with WLI or any of its Subsidiaries or that
Person's assets are acquired by WLI or any of its Subsidiaries, (iii) the income
of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) one time costs and expenses relating to the Transaction
and (v) all restructuring and integration related costs and expenses resulting
from the Transaction.
"Consolidated Net Worth" shall mean, at any time for the
determination thereof, all amounts which, in conformity with GAAP, would be
included under the caption "Total Shareholders' Equity" (or any like caption) on
a consolidated balance sheet of WLI and its Subsidiaries as of such date
provided that the WLI Preferred shall be included in Consolidated Net Worth
whether or not otherwise included pursuant to the foregoing.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contin-
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gent, (a) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (b) to advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof,
provided that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if such primary obligation is not stated
or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Convertible Instruments" shall mean the Intercompany
Convertible Instruments outstanding on the Closing Date and without any
amendment or modification thereof, or transfer by any Subsidiary holding same,
not consented to by the Agents.
"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents, the Guaranties, the EU Intercompany Notes and the WLI
Intercompany Notes.
"Credit Event" shall mean and include the making of a Loan or
the issuance of a Letter of Credit.
"Customer Associated Leases" shall mean leases entered into by
WLI and its Subsidiaries of equipment or other tangible or intangible assets to
be made available to customers to the extent that the lease costs thereunder are
reimbursed to WLI and its Subsidiaries by such customers (pursuant to a single
transaction or series of transactions), with such leases to be treated for all
purposes of this Agreement as if they were operating leases.
"Danish Krone Equivalent" shall mean, at any time for the
determination thereof, the amount of Danish Krone which could be purchased with
the amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Danish Krone LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Danish Krones, the average of the
offered quotations to first-class banks in the London interbank market by each
Reference Bank that reports same to the Administrative Agent for Danish Krone
deposits of amounts in same day funds comparable to the outstanding principal
amount of such MCF Loan with maturities comparable to such
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Interest Period determined as of 11:00 A.M. (London time) on the date which is
two Business Days prior to the commencement of such Interest Period.
"Danish Krone" shall mean freely transferable lawful money of
Denmark.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Deferred Payment Agreement" shall mean the agreement
deferring a portion of the purchase price of the Acquisition equal to 1,500,000
shares of WLI until December 25, 1998, at which time, if such shares are not
paid to the Sellers, the cash value of such shares must be paid by WLI to the
Sellers, as in effect on the Closing Date and as the same may be subsequently
amended, modified or supplemented in accordance with the terms thereof and
hereof.
"Designated Party" shall mean each Guarantor and each other
Material Subsidiary.
"Deutsche Mark Equivalent" shall mean, at any time for the
determination thereof, the amount of Deutsche Marks which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Deutsche Mark LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Deutsche Marks, the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for Deutsche Mark deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
each Reference Bank that reports same to the Administrative Agent for Deutsche
Mark deposits of amounts in same day funds comparable to the outstanding
principal amount of such MCF Loan with maturities comparable to such Interest
Period determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period.
"Deutsche Marks" shall mean freely transferable lawful money
of Germany.
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"Dividends" shall have the meaning provided in Section 8.08.
"Documentation Agent" shall mean Lehman Commercial Paper Inc.
"Dollar Equivalent" shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with the
amount of the relevant Alternate Currency involved in such computation at the
spot exchange rate therefor as quoted by the Administrative Agent as of 11:00
A.M. (London time) on the date two Business Days prior to the date of any
determination thereof for purchase on such date.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Credit Party" shall mean WLI and each Domestic
Subsidiary party to the U.S. Guaranty.
"Domestic Subsidiary" shall mean each Subsidiary of WLI that
is incorporated or formed under the laws of the United States of America or any
state thereof or the District of Columbia.
"Dutch Guilder Equivalent" shall mean, at any time for the
determination thereof, the amount of Dutch Guilders which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Dutch Guilder LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Dutch Guilders, the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for Dutch Guilder deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
each Reference Bank that reports same to the Administrative Agent for Dutch
Guilder deposits of amounts in same day funds comparable to the outstanding
principal amount of such MCF Loan with maturities comparable to such Interest
Period determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period.
"Dutch Guilders" shall mean freely transferable lawful money
of the Netherlands.
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"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other institutional "accredited investor" as
defined in Regulation D of the Securities Act.
"EMU Legislation" shall mean the legislative measures of the
European Council for the introduction of, changeover to or operation of a single
or unified European currency.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by WLI or any of its Subsidiaries solely in the ordinary course
of such Person's business and not in response to any third party action or
request of any kind) or proceedings relating in any way to any Environmental Law
or any permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.
"Environmental Law" means any applicable U.S. Federal, state
or local or any foreign statute, law, rule, regulation, ordinance, code and rule
of common law now or hereafter in effect and in each case as amended, and any
judicial or administrative decision, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials.
"Equity Issuance" shall mean WLI's issuance of its common
equity, and granting of stock appreciation rights (the "SARs") in respect of its
common equity, as part of the aggregate purchase price for the Acquisition.
"Equity Issuance Documents" shall mean all of the agreements
governing, or relating to, the Equity Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued there under. Section references to ERISA are to ERISA, as in
effect as of the Effective Date and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with WLI or a Subsidiary would be deemed
to be a "single employer" (i) within the meaning of Sections 414(b), (c), (m)
and (o) of the Code or (ii) as a result of WLI or a Subsidiary being or having
been a general partner of such person.
"EU Holdco" shall mean Wang Nederland B.V., a Dutch company.
"EU Holdco Security Documents" shall have the meaning provided
in Section 5.01(k)(III).
"EU Intercompany Notes" shall mean the promissory notes in
form and substance satisfactory to the Agents evidencing intercompany advances
made by EU Holdco to its various Subsidiaries provided that, in the case of any
such note issued by a Material Subsidiary after the Full Utilization Date (x)
the Administrative Agent shall have received an opinion in form and substance,
and from counsel, satisfactory to the Administrative Agent as to the due
authorization, execution and enforceability thereof and (y) such note shall be
secured pursuant to appropriate Foreign Security Documents, unless waived by the
Agents.
"Euro" shall mean the single currency of participating member
states of the European Union.
"Euro Equivalent" shall mean, at any time for the
determination thereof, the amount of Euros which could be purchased with the
amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Euro LIBOR" shall mean, for each Interest Period applicable
to an MCF Loan denominated in Euros, the rate per annum that appears on the
appropriate page of the Dow Jones Telerate Screen (or any successor page) for
Euro deposits with maturities comparable to such Interest Period as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on the
Dow Jones Telerate Screen (or any successor page), the average of the offered
quotations to first-class banks in the London interbank market by each Reference
Bank that reports same to the Administrative Agent for Euro deposits of amounts
in same day funds comparable to the outstanding principal amount of such MCF
Loan with maturities comparable to such Interest Period determined as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Loan" shall mean each USF Loan that at the
election of WLI is bearing interest by reference to US LIBOR.
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"Event of Default" shall have the meaning provided in Section
9.
"Excess Deferred Payment" shall mean the aggregate cash
payments made by WLI in excess of $50 million pursuant to the Deferred Payment
Agreement.
"Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as amended.
"Excluded Asset Sale" shall mean each Asset Sale consummated
after the Closing Date other than (i) the proposed asset dispositions listed on
Annex V hereto, (ii) Asset Sales in any fiscal year to the extent that the
aggregate Net Proceeds resulting therefrom do not exceed $50 million (or the
equivalent) (plus the amount, if any, by which the Net Proceeds of all Asset
Sales during the previous fiscal year were less than $50 million (or the
equivalent)) provided that the Net Proceeds of all Asset Sales provided for in
this clause (ii) shall not exceed $150 million in the aggregate and (iii) any
Asset Sale, in whole or in part, to the extent that after giving effect thereto
the ratio of the Total Commitment to Consolidated EBITDA for the four quarters
then last ended (determined on a PRO FORMA basis as if such Asset Sale had been
consummated on the first day of such four quarter period) is less than 2.0 to
1.0 (provided that if the application of only a portion of the Net Proceeds of
any such Asset Sale to reduce the Total Commitment would result in such ratio
being 2.0 to 1.0 or less then the portion of such Asset Sale generating the
remaining Net Proceeds shall not constitute an Excluded Asset Sale).
"Existing Indebtedness" shall have the meaning provided in
Section 6.19.
"Existing Letters of Credit" shall mean each letter of credit
outstanding on the Closing Date that is (x) issued by BTCo, (y) to remain
outstanding after the Closing Date and (z) listed on Annex VI, Part II.
"Facility" shall mean any of the credit facilities established
under this Agreement, I.E., the US Facility or the MC Facility.
"Facing Fee" shall have the meaning provided in Section
3.01(d).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate 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 which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
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"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Final Maturity Date" shall mean the fifth anniversary of the
Closing Date.
"Foreign Borrower" shall mean EU Holdco and the Italian
Borrower.
"Foreign Guaranties" shall have the meaning provided in
Section 5.02(d).
"Foreign Security Documents" shall have the meaning provided
in Section 5.02(e).
"Foreign Subsidiary" shall mean each Subsidiary of WLI that is
not a Domestic Subsidiary.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by WLI or any one
or more of its Subsidiaries primarily for the benefit of employees of WLI or
such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"French Franc Equivalent" shall mean, at any time for the
determination thereof, the amount of French Francs which could be purchased with
the amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"French Franc LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in French Francs, the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for French Franc deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
such Reference Bank that reports same to the Administrative Agent for French
Franc deposits of amounts in same day funds comparable to the outstanding
principal amount of such MCF Loan with maturities comparable to such Interest
Period as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period.
"French Francs" shall mean freely transferable lawful money of
France.
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"Full Utilization Date" shall mean the date on which all the
conditions specified in Section 5.02 are first satisfied.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on the date of this Agreement; it
being understood and agreed that determinations in conformity with GAAP for
purposes of Section 8, including defined terms as used therein, are subject (to
the extent provided therein) to Section 12.07(a).
"Guaranteed Creditors" shall mean and include each of the
Agents, the Collateral Agent and the Lenders.
"Guaranteed Obligations" shall mean the principal and interest
on each Note issued by each Foreign Borrower, and Loans made to each Foreign
Borrower, under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit issued for the account of a Foreign
Borrower, together with all the other obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities (including, without limitation, indemnities, fees
and interest thereon) of each Foreign Borrower to any Lender or any Agent and/or
the Collateral Agent now existing or hereafter incurred under, arising out of or
in connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by each Foreign Borrower.
"Guarantor" shall mean, at any time, each Designated Party
that has executed, or is then executing a Guaranty.
"Guaranty" shall mean and include the guaranty of WLI set
forth in Section 13, the US Guaranty, each Foreign Guaranty and any counterpart
of the foregoing guaranties executed and delivered after the Closing Date.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radio active materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contained, electric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or sub stances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants" or "pollutants"
under any applicable Environmental Law.
"Immaterial Subsidiary" shall mean any Domestic Subsidiary
that has annual revenues of less than $100,000 and a book value for all its
assets of less than $100,000.
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"Indebtedness" of any Person shall mean, without duplication,
(i) all indebted ness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in conformity with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations, (vii) all net obligations
of such Person under Interest Rate Agreements and Other Hedging Arrangements and
(viii) all Contingent Obligations of such Person (other than Contingent
Obligations arising from the guaranty by such Person of the obligations of WLI
and/or its Subsidiaries to the extent such guaranteed obligations do not
constitute Indebtedness and are otherwise not prohibited hereunder), provided
that Indebtedness shall not include trade payables and accrued expenses, in each
case arising in the ordinary course of business and all lease obligations under
Customer Associated Leases.
"Interest Period" with respect to any Eurodollar Loan or MCF
Loan shall mean the interest period applicable thereto, as determined pursuant
to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect any Person against
fluctuations in interest rates.
"Italian Borrower" shall mean Olivetti Solutions SpA, an
Italian company.
"Italian Lira Equivalent" shall mean, at any time for the
determination thereof, the amount of Italian Liras which could be purchased with
the amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Italian Lira LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Italian Liras, the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for Italian Lira deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
Reference Banks that report same to the Administrative Agent for Italian Lira
deposits of amounts in same day funds comparable to the outstanding principal
amount of such MCF Loan with
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maturities comparable to such Interest Period determined as of 11:00 A.M.
(London time) on the date which is two Business Days prior to the commencement
of such Interest Period.
"Italian Liras" shall mean freely transferable lawful money of
Italy.
"Japan Subsidiary" shall mean Olivetti Corp. Japan.
"Japanese Yen" shall mean freely transferable lawful money of
Japan.
"Japanese Yen Equivalent" shall mean, at any time for the
determination thereof, the amount of Japanese Yen which could be purchased with
the amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Japanese Yen LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Japanese Yen, the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for Japanese Yen deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
Reference Banks that report same to the Administrative Agent for Japanese Yen
deposits of amounts in same day funds comparable to the outstanding principal
amount of such MCF Loan with maturities comparable to such Interest Period
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period.
"Judgment Currency" shall have the meaning provided in Section
12.17(a).
"Judgment Currency Conversion Date" shall have the meaning
provided in Section 12.17(a).
"L/C Allocation Basis" shall have the meaning provided in
Section 12.20.
"Lehman" shall mean Lehman Commercial Paper Inc.
"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender to make available its portion of any incurrence of
Loans or to fund its portion of any unreimbursed payment under Section 2.05(c)
or (ii) a Lender having notified the
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Administrative Agent and/or any Borrower that it does not intend to comply with
its obligations under Section 1.01 or under Section 2.05(c), in the case of
either clause (i) or (ii) as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
"Lender Register" shall have the meaning provided in Section
12.16.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(c).
"Letter of Credit Issuer" shall mean BTCo or NatWest (MCF
Letters of Credit only), as requested by WLI with respect to any particular
Letter of Credit.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (x) the USF Letter of Credit Outstandings and (ii) the MCF Letter of
Credit Outstandings, in each case at such time.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Level" shall mean and include Level I, Level II, Level III or
Level IV, whichever is then in effect.
"Level I" shall exist at any time that the Leverage Ratio for
the Relevant Test Period is equal to or greater than 2.00:1.0.
"Level II" shall exist at any time that the Leverage Ratio for
the Relevant Test Period is less than 2.00:1.0 and greater than or equal to
1.50:1.0.
"Level III" shall exist at any time that the Total Leverage
Ratio for the Relevant Test Period is less than 1.50:1.0 and greater than or
equal to 1.00:1.0.
"Level IV" shall exist at any time the Total Leverage Ratio
for the Relevant Test Period is less than 1.00:1.0.
"Leverage Ratio" shall mean, at any date of determination, the
ratio of Consolidated Debt on such date to Consolidated EBITDA for the Test
Period ending on such date (or most recently ended).
"LIBOR" shall mean (i) any Borrowing of Eurodollar Loans, the
US LIBOR Rate determined with respect thereto and (ii) any Borrowing of MCF
Loans of an Approved Currency, the relevant interest rate, I.E., U.S. LIBOR,
Deutsche Mark LIBOR, Euro LIBOR,
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Sterling LIBOR, French Franc LIBOR, Italian Lira LIBOR, Japanese Yen LIBOR,
Spanish Peseta LIBOR, Danish Krone LIBOR, Belgian Franc LIBOR, Dutch Guilder
LIBOR and such rate per annum as may be agreed upon by the respective Borrower
and the MCF Lenders, as the case may be, for any other Approved Currency.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Lira Lender" shall mean Bankers Trust International Plc
(which shall become party to this Agreement by executing a counterpart hereof in
the space provided below on or prior to the Full Utilization Date) or such other
Lender acceptable to the Agents that agrees with WLI to become the Lira Lender
hereunder, it being understood that the Lira Lender shall be a Lender for all
purposes of this Agreement.
"Lira Loan" shall mean each MCF Loan denominated in Italian
Lira that is made on and after the Full Utilization Date, all of which MCF Loans
may only be made to the Italian Borrower, provided that the aggregate Principal
Amount of outstanding Lira Loans shall not exceed at any time $100 million (or
such greater amount not in excess of $200 million as is agreed to by the Lira
Lender).
"Lira Note" shall have the meaning provided in Section
1.05(a).
"LL Fee" shall have the meaning provided in Section 3.01(f).
"LL Portion" of any interest payment made in respect of a Lira
Loan shall mean the portion of such interest payment that would have been
payable had the interest rate for such Lira Loan been equal to the relevant
Italian Lira LIBOR.
"Loan" shall mean each MCF Loan, each USF Loan and each
Swingline Loan.
"Loan Allocation Basis" shall mean have the meaning provided
in Section 12.20.
"Local Time" shall mean the local time in effect at (x) the
applicable Notice Office (in the case of Notices of Borrowings, Notices of
Conversions and Letter of Credit Requests) and (y) the applicable Payment Office
in the case of all payments and disbursements of Loans or Letters of Credit.
"Margin Stock" shall have the meaning provided in
Regulation U.
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"Material Adverse Effect" shall mean a material adverse effect
on the business, assets, liabilities, operations or condition (financial or
otherwise) of WLI and its Subsidiaries taken as a whole after giving effect to
the Acquisition.
"Material Subsidiary" shall mean (i) each Subsidiary listed on
Annex IV, Part I (which will include all Domestic Subsidiaries (other than
Immaterial Subsidiaries) in existence on the Closing Date), (ii) each newly
created Domestic Subsidiary, (iii) each Foreign Subsidiary first acquired after
the Closing Date to the extent that it had gross revenues for the last full 12
months prior to such acquisition of at least $50 million (or the equivalent),
(iv) each existing Subsidiary that becomes a Material Subsidiary as a result of
a Material Subsidiary Determination and (v) each other existing Wholly-Owned
Subsidiary that has been designated in writing by WLI to the Administrative
Agent as a Material Subsidiary.
"Material Subsidiary Determination" shall mean a
determination, made by WLI within the time parameters provided for in Section
7.12(b) and promptly conveyed in writing to the Administrative Agent, as to
whether any existing Subsidiary that was not theretofore a Material Subsidiary
had gross revenues for the 12 months ended as of the last day of the calendar
year last ended aggregating at least $50 million (or the equivalent), with any
Subsidiary having such revenues of at least $50 million (or the equivalent) to
become a Material Subsidiary on the date of such determination.
"Maximum Swingline Amount" shall mean the lesser of
$25,000,000 and the amount of the Total USF Commitment.
"MC Facility" shall mean the Facility evidenced by the Total
MC Commitment.
"MCF Borrowers" shall mean and include WLI, EU Holdco and
Italian Borrower.
"MCF Commitment" shall mean, with respect to each MCF Lender,
the amount set forth opposite such MCF Lender's name in Annex I hereto directly
below the column entitled "MCF Commitment," as the same may be reduced or
terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 12.04.
"MCF Commitment Fee" shall have the meaning provided in
Section 3.01(b).
"MCF Lender" shall mean each Lender with a MCF Commitment or
that has outstanding MCF Loans.
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"MCF Letter of Credit Outstandings" shall mean, at any time,
the sum of, without duplication, (i) the Dollar Equivalent of the Stated Amount
of all outstanding MCF Letters of Credit and (ii) the Dollar Equivalent of the
aggregate principal amount of all Unpaid Drawings in respect of all such MCF
Letters of Credit.
"MCF Letters of Credit" shall mean Letters of Credit issued
pursuant to the MC Facility.
"MCF Loan" shall have the meaning provided in Section 1.01(B).
"MCF Note" shall have the meaning provided in Section 1.05(a).
"MCF Obligations" shall mean any and all of the Obligations to
the extent arising under, or relating solely to, the MC Facility.
"MCF Percentage" shall mean, at any time, the percentage
obtained by dividing the Total MCF Commitment at such time by the Total
Commitment at such time.
"Minimum Borrowing Amount" shall mean for (i) Swingline Loans
$250,000, (ii) USF Loans that are (x) Base Rate Loans, $1,000,000 and (y)
Eurodollar Loans, $5,000,000, (iii) MCF Loans that are Dollar denominated,
$5,000,000 and (iv) Alternate Currency Loans, an amount in the respective
Alternate Currency having a Dollar Equivalent (determined at the time a Notice
of Borrowing is received or a prepayment made) of $5,000,000.
"Minimum Net Worth Amount" shall mean, at any time, the sum of
(x) $630,000,000 (as adjusted for purchase accounting adjustments after the
Closing Date and restructuring and integration related charges, in each case
related to the Acquisition, all as approved by the Agents in their reasonable
discretion) plus (y) (to the extent zero or positive) (i) 50% of an amount equal
to Consolidated Net Income less the aggregate amount of all cash dividends paid
in respect of WLI Preferred for the period (taken as one accounting period)
commencing on the first day of the fiscal quarter after which the Closing Date
occurs and ending on the last day of the fiscal quarter then last ended plus
(ii) 100% of the proceeds received by WLI from issuances of equity after the
Closing Date and (without duplication) any other increases in Consolidated Net
Worth after the Closing Date, not resulting from Consolidated Net Income.
"Multiemployer Plan" shall mean a plan within the meaning of
Section 4001(a)(3) of ERISA to which WLI, a Subsidiary or an ERISA Affiliate is
required to contribute.
"NatWest" shall mean National Westminster Bank Plc.
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"Net Cash Payment" shall mean the portion of the total
purchase price to be paid in cash by WLI and its Subsidiaries in respect of the
Acquisition net of the free cash on hand of the Acquired Businesses on the
Closing Date and after giving effect to the Acquisition, which Net Cash Payment
shall not exceed 97 billion Italian Liras.
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, (x) the Cash Proceeds resulting therefrom net of (y) reasonable
transaction costs, the amount of such proceeds required to be used (and used) to
repay any Indebtedness (other than the Obligations) which is secured by the
respective assets which were sold, the amount of such proceeds that are in good
faith reserved for post-closing adjustments (it being understood and agreed that
on the day that all such post-closing adjustments have been determined
definitively, the amount (if any) by which the reserved amount in respect of
such asset sale exceeds the actual post-closing adjustments payable, shall
constitute proceeds on such date), and the estimated incremental taxes paid or
payable by WLI or any of its Subsidiaries as a result thereof (all the foregoing
costs and expenses in this clause (y), "Net Proceeds Deductions").
"Net Proceeds" shall mean, with respect to any Asset Sale, (x)
the proceeds resulting therefrom net of (y) the Net Proceeds Deductions for such
Asset Sale.
"Net Proceeds Deductions" shall have the meaning provided in
the definition of Net Cash Proceeds.
"NFG Investments" shall mean at any time the then aggregate
net amount of all investments in Foreign Subsidiaries that are not Guarantors
pursuant to Section 8.02(a)(VI) and 8.06 (f)(ii) determined for the purposes of
Section 8.02(a)(vi) by subtracting from the value of assets transferred
thereunder the amount of liabilities of the transferring party transferred with
such assets to the extent such liabilities cease under law to be liabilities of
the transferring party.
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Note" shall mean and include each USF Note, each MCF Note,
the Lira Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean for all matters arising under (x)
the US Facility, the office of the Administrative Agent at 130 Liberty Street,
New York, New York and, (y) the MCF Facility, the office of the Administrative
Agent at 1 Appold Street, Broadgate, London
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EC1A 2HE (Fax: 011-44171-982-3419) provided that with respect to Lira Loans, the
Notice Office shall be the offices of the Lira Lender in Milan, Italy as
specified by the Lira Lender to the Italian Borrower, or in any such case, such
other office as the Administrative Agent may designate to WLI from time to time.
"Obligation Currency" shall have the meaning provided in
Section 12.17(a).
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent, the Collateral Agent or any Lender pursuant
to the terms of this Agreement or any other Credit Document.
"Other Foreign Subsidiary" shall mean each Foreign Subsidiary
other than EU Holdco and each Subsidiary of EU Holdco.
"Other Hedging Arrangements" shall mean agreements or
arrangements designed to protect any Person against fluctuations in currency
rates or commodity prices other than any such agreement or arrangement entered
into in the ordinary course of business and not for speculative purposes.
"Participant" shall have the meaning provided in Section
2.05(a).
"Payment Office" shall mean (i) for all purposes other than as
specified in clause (ii) below, the office of the Administrative Agent at 130
Liberty Street, New York, New York and (ii) in the case of all payments on MCF
Loans the office of the Administrative Agent at 1 Appold Street, Broadgate,
London EC1A 2HE (Fax: 011-44171-982-3419) provided that the Payment Office for
Lira Loans shall be the offices of the Italian Lender in Milan, Italy as
specified by the Lira Lender to the Italian Borrower, or in each case such other
office as the Administrative Agent may designate to WLI from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean for any Lender at any time (x) with
respect to the US Facility, the percentage obtained by dividing such Lender's
USF Commitment, if any, by the Total USF Commitment or if the Total USF
Commitment has been terminated, by dividing such Lender's USF Commitment, if
any, immediately prior to such termination by the Total USF Commitment
immediately prior to such termination and (y) with respect to the MC Facility,
the percentage obtained by dividing such Lender's MCF Commitment, if any, by the
Total MCF Commitment or if the Total MCF Commitment has been terminated, by
dividing such Lender's MCF Commitment, if any, immediately prior to such
termination by the Total MCF Commitment immediately prior to such termination.
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"Permitted Acquired Debt" shall mean Indebtedness of a
Subsidiary acquired after the Closing Date pursuant to a Permitted Acquisition
or other acquisition permitted by Section 8.02(h), to the extent such
Indebtedness was outstanding prior to the consummation of such Permitted
Acquisition or other acquisition and remains outstanding as Indebtedness of the
respective Subsidiary after giving effect thereto, provided that (i) such
Indebtedness was not incurred in connection with or in anticipation of such
Permitted Acquisition or other acquisition or the respective Person becoming a
Subsidiary, (ii) such Indebtedness does not constitute Indebtedness of WLI or
any of its Subsidiaries other than the respective Subsidiary acquired pursuant
to the respective Permitted Acquisition or other acquisition and shall not be
secured by any assets of any Person other than assets of the Subsidiary so
acquired serving as security therefor at the time of the respective Permitted
Acquisition or other acquisition, (iii) no Person other than the respective
Subsidiary shall have any liability (contingent or otherwise) with respect to
any Permitted Acquired Debt and (iv) all such Indebtedness shall be permitted by
Section 8.04(i) or 8.04(j).
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(g).
"Permitted CAPEX Amount" shall mean (i) for the period from
January 1, 1998 to and including December 31, 1998, $150 million, and (ii) for
each fiscal year thereafter, $150 million, in each case increased by an amount
satisfactory to the Agents to give effect to each Permitted Acquisition and
acquisition pursuant to Section 8.02(h) effected during such fiscal year or, in
the case of clause (ii), prior thereto but after the Closing Date.
"Permitted Liens" shall mean Liens permitted by Section 8.03.
"Permitted Subordinated Debt" shall mean unsecured
Indebtedness of WLI not exceeding $100 million in aggregate outstanding
principal amount on terms and conditions (including subordination provisions)
acceptable to the Agents provided that after giving effect to the incurrence
thereof and the use of the proceeds thereof (in each case as if effected on the
last day of the Test Period then last ended) Section 8.11 would have been
complied with on the last day of the Test Period then last ended.
"Permitted Training Advances" shall mean unsecured
Indebtedness of WLI or its Subsidiaries resulting from the obligation to make
payments owing for training services rendered to WLI or such Subsidiary, with
all such Indebtedness on terms and conditions satisfactory to the Agents.
"Person" shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or other
enterprise or business entity or any government or political subdivision or any
agency, department or instrumentality thereof.
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"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) WLI, a Subsidiary or an ERISA Affiliate, and each
such plan for the five year period immediately following the latest date on
which WLI, a Subsidiary, or an ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan but excluding all Foreign Pension Plans
and Multiemployer Plans.
"Pledge Agreement" shall mean the US Pledge Agreement and any
pledge agreement constituting a Foreign Security Document.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the relevant Pledge Agreement.
"Pounds Sterling" shall mean freely transferable lawful money
of the United Kingdom.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Principal Amount" shall mean (i) the stated principal amount
of each Loan denominated in Dollars, (ii) the aggregate amount of all Unpaid
Drawings under each Letter of Credit denominated in Dollars, (iii) the Dollar
Equivalent of the stated principal amount of each Alternate Currency Loan,
and/or (iv) the Dollar Equivalent of the aggregate amount of all Unpaid Drawings
under Letters of Credit denominated in any Alternate Currency, as the context
may require.
"PSD Interest Period" shall mean an Interest Period commenced
prior to the Syndication Date, each of which Interest Periods must satisfy the
requirements of Section 1.09(iv).
"Reference Banks" shall mean BTCo, NatWest and Lehman.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
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"Relevant Test Period" shall mean, at any time, the Test
Period ending on the last day of the then most recently ended fiscal quarter of
WLI with respect to which an officer's certificate has been delivered to the
Lenders pursuant to Section 7.01(d).
"Replaced Lender" shall have the meaning provided in Section
1.13.
"Replacement Lender" shall have the meaning provided in
Section 1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV or ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Repurchases" shall have the meaning provided in Section 8.08.
"Required Lenders" shall mean Non-Defaulting Lenders whose USF
Commitments (or, if after the Total USF Commitment has been terminated,
outstanding Principal Amount of USF Loans and Swingline Loans plus an amount
equal to their Percentages times the USF Letter of Credit Outstandings) and MCF
Commitments (or, if after the Total MCF Commitment has been terminated,
outstanding Principal Amount of MCF Loans plus an amount equal to their
Percentages times the MCF Letter of Credit Outstandings) constitute greater than
66-2/3% of the sum of (i) the Adjusted Total USF Commitment (or, if after the
Total USF Commitment has been terminated, the total outstanding Principal Amount
of USF Loans of Non-Defaulting Lenders and of Swingline Loans and the USF Letter
of Credit Outstandings) and (ii) the Adjusted Total MCF Commitment (or, if after
the Total MCF Commitment has been terminated, the total outstanding Principal
Amount of MCF Loans of Non-Defaulting Lenders and the MCF Letter of Credit
Outstandings).
"Required MCF Lenders" shall mean (i) Non-Defaulting Lenders
whose MCF Commitments (or, if after the Total MCF Commitment has been
terminated, outstanding Principal Amount of MCF Loans plus an amount equal to
their Percentages times the MCF Letter of Credit Outstandings) represents an
amount greater than 66-2/3% of the sum of all MCF Commitments of Non-Defaulting
Lenders (or, it after the Total MCF Commitment has been terminated, the total
outstanding Principal Amount of MCF Loans of Non-Defaulting Lenders and the MCF
Letter of Credit Outstandings).
"Required USF Lenders" shall mean (i) Non-Defaulting Lenders
whose USF Commitments (or, if after the Total USF Commitment has been
terminated, outstanding Principal Amount of USF Loans and Swingline Loans plus
an amount equal to their Percentage times the USF Letter of Credit Outstandings)
represents an amount greater than 66-2/3% of the sum of all USF Commitments of
Non-Defaulting Lenders (or, it after the Total USF
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Commitment has been terminated, the total outstanding Principal Amount of USF
Loans of Non-Defaulting Lenders and of Swingline Loans and the USF Letter of
Credit Outstandings).
"SAR Cash Payment" shall have the meaning provided in Section
8.08(a).
"SARs" shall have the meaning set forth in the definition of
Equity Issuance.
"SEC" shall have the meaning provided in Section 7.01(g).
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Section 4.04 Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Security Documents" shall mean and include the US Security
Documents and the Foreign Security Documents.
"Sellers" shall mean ING. C. Olivetti & C. S.P.A., Olivetti
Sistemas e Servicios Limitada and Olivetti do Brasil S.A.
"Spanish Peseta Equivalent" shall mean, at any time for the
determination thereof, the amount of Spanish Pesetas which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Spanish Peseta LIBOR" shall mean, for each Interest Period
applicable to an MCF Loan denominated in Spanish Pesetas, the rate per annum
that appears on page 3750 of the Dow Jones Telerate Screen (or any successor
page) for Spanish Peseta deposits with maturities comparable to such Interest
Period as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period or, if such a rate does not
appear on page 3750 of the Dow Jones Telerate Screen (or any successor page),
the average of the offered quotations to first-class banks in the London
interbank market by each Reference Bank that reports same to the Administrative
Agent for Spanish Peseta deposits of amounts in same day funds comparable to the
outstanding principal amount of such MCF Loan with maturities comparable to such
Interest Period determined as of 11:00 A.M. (London time) on the date which is
two Business Days prior to the commencement of such Interest Period.
"Spanish Pesetas" shall mean freely transferable lawful money
of Spain.
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"Stated Amount" of each Letter of Credit shall mean the
maximum available to be drawn thereunder (regardless of whether any conditions
for drawing could then be met), or the Dollar Equivalent thereof if such Letter
of Credit is denominated in an Alternate Currency.
"Sterling Equivalent" shall mean, at any time for the
determination thereof, the amount of Pounds Sterling which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"Sterling LIBOR" shall mean, with respect to each Interest
Period for MCF Loans denominated in Pounds Sterling, (I) the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successive page)
with maturities comparable to such Interest Period as of 11:00 A.M. (London
time) on the date which is the commencement date of such Interest Period or, if
such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or
any successor page) the average of the offered quotations to first-class banks
in the London interbank Eurodollar market by each Reference Bank that reports
same to the Administrative Agent for Pounds Sterling deposits of amounts in same
day funds comparable to the outstanding principal amount of such MCF Loans with
maturities comparable to such Interest Period determined as of 11:00 A.M.
(London time) on the date which is the commencement of such Interest Period plus
(II) the Associated Cost Rate for such Loans for such Interest Period.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of WLI.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Final Maturity Date.
"Swingline Lender" shall mean BTCo or, in the event BTCo
ceases to be Swingline Lender upon agreement with WLI, any Lender which at the
request of WLI and the consent of the Administrative Agent agrees in such
Lender's sole discretion to become the Swingline Lender.
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"Swingline Loan" shall have the meaning provided in Section
1.01(E).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndicated Borrowing" shall mean the incurrence of Loans
(other than Lira Loans) under a Facility from all Lenders with a Commitment
under such Facility.
"Syndication Agent" shall mean National Westminster Bank Plc.
"Syndication Date" shall mean the earlier of (x) the date
which is 120 days after the Closing Date and (y) the date upon which the
Arrangers determine in their sole discretion (and notify WLI) that the primary
syndication (and the resulting addition of Lenders pursuant to Section 12.04)
has been completed.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean (x) in the case of any determination
under Section 8.13 made as of the end of any fiscal quarter ending on or prior
to December 31, 1998, a period (taken as one accounting period) commencing on
the Closing Date and ending at the end of such fiscal quarter of WLI, and (y)
for all other determinations, the four consecutive fiscal quarters of WLI (taken
as one accounting period) ending on the last day of the last fiscal quarter of
WLI then or theretofore ended.
"Total Commitment" shall mean the sum of the Total USF
Commitment and the Total MCF Commitment.
"Total MCF Commitment" shall mean the sum of the MCF
Commitments of each of the MCF Lenders.
"Total Unutilized Commitment" shall mean, at any time, (i) the
Total Commitment at such time less (ii) the sum of the aggregate Principal
Amount of all outstanding Loans at such time plus the Letter of Credit
Outstandings at such time.
"Total Unutilized MCF Commitment" shall mean, at any time, (i)
the Total MCF Commitment at such time less (ii) sum of the aggregate Principal
Amount of all outstanding MCF Loans at such time plus the MCF Letter of Credit
Outstandings at such time.
"Total Unutilized USF Commitment" shall mean, at any time, (i)
the Total USF Commitment at such time LESS (ii) the sum of the aggregate
Principal Amount of all outstanding USF Loans and Swingline Loans at such time
PLUS the USF Letter of Credit Outstandings at such time.
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"Total USF Commitment" shall mean the sum of the USF
Commitments of each of the USF Lenders.
"Transaction" shall mean (i) the Acquisition, (ii) the
consummation of the Equity Issuance, (iii) the refinancing on the Closing Date
of existing Indebtedness of WLI and its Subsidiaries and (iv) the incurrence of
Loans and issuance of Letters of Credit, on the Closing Date.
"Transaction Documents" shall mean and include the Credit
Documents, the Acquisition Documents, the Equity Issuance Documents and all
other documents entered into to effectuate with the Transaction.
"Type" shall mean any type of Loan determined with respect to
currency and the interest option applicable thereto.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section
2.04(a).
"Unutilized MCF Commitment" shall mean, at any time for any
MCF Lender, (i) its MCF Commitment at such time less (ii) the sum of (x) the
aggregate Principal Amount of all outstanding MCF Loans (other than Lira Loans)
made by it and (y) its Percentage of (i) MCF Letter of Credit Outstandings at
such time and (ii) the aggregate outstanding principal amount of Lira Loans at
such time.
"Unutilized USF Commitment" shall mean, at any time for any
USF Lender, (i) its USF Commitment at such time less (ii) the sum of (x) the
aggregate Principal Amount of all outstanding USF Loans and Swingline Loans made
by it and (y) its Percentage of USF Letter of Credit Outstandings at such time.
"US Facility" shall mean the Facility evidenced by the Total
USF Commitment.
"US Guaranty" shall have the meaning provided in Section
5.01(j)(I).
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"US LIBOR" shall mean for each Interest Period applicable to a
Loan denominated in Dollars (other than a Base Rate Loan), the rate per annum
that appears on page 3750 of the Dow Jones Telerate Screen (or any successor
page) for Dollar deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones Telerate Screen (or any successor page), the average of
the offered quotations to first-class banks in the London interbank market by
each Reference Bank that reports same to the Administrative Agent for Dollar
deposits of amounts in same day funds comparable to the outstanding principal
amount of such Dollar denominated Loan with maturities comparable to such
Interest Period determined as of 11:00 A.M. (London time) on the date which is
two Business Days prior to the commencement of such Interest Period.
"US Pledge Agreement" shall have the meaning provided in
Section 5.01(k)(I).
"US Security Agreement" shall have the meaning provided in
Section 5.01(k)(II).
"US Security Documents" shall mean the US Pledge Agreement and
the US Security Agreement.
"USF Commitment" shall mean, with respect to each USF Lender,
the amount set forth opposite such USF Lender's name in Annex I hereto directly
below the column entitled "USF Commitment," as the same may be reduced or
terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 12.04.
"USF Commitment Fee" shall have the meaning provided in
Section 3.01(a).
"USF Lender" shall mean each Lender with USF Commitment or
that has outstanding USF Loans.
"USF Letter of Credit Outstandings" shall mean at any time,
the sum of, without duplication, (i) the aggregate Stated Amount of all
outstanding USF Letters of Credit and (ii) the aggregate principal amount of all
Unpaid Drawings in respect of all such USF Letters of Credit.
"USF Letters of Credit" shall mean Letters of Credit issued
pursuant to the US Facility.
"USF Loan" shall have the meaning provided in Section 1.01(A).
"USF Note" shall have the meaning provided in Section 1.05(a).
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"USF Obligations" shall mean any and all Obligations to the
extent arising under, or relating solely to, the US Facility.
"USF Percentage" shall mean, at any time, 100% minus the MCF
Percentage at such time.
"Wholly-Owned Subsidiary" of any Person shall mean any other
Person to the extent all of the capital stock or other ownership interests in
such other Person, other than directors' qualifying shares, is owned directly or
indirectly by such first Person.
"WLI" shall mean Wang Laboratories, Inc., a Delaware
corporation.
"WLI Intercompany Note" shall mean the promissory notes in
form and substance satisfactory to the Agents evidencing intercompany advances
by WLI to Other Foreign Subsidiaries provided that, in the case of any such note
issued by a Material Subsidiary, the Administrative Agent shall have received an
opinion in form and substance, and from counsel, satisfactory to the
Administrative Agent as to the due authorization, execution and enforceability
thereof.
"WLI Preferred" shall mean WLI's Series A Preferred Stock and
Series B Preferred Stock outstanding on the Closing Date and as subsequently
amended or modified pursuant to the terms thereof and hereof.
"Working Capital" shall mean the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
SECTION 11. AGENTS, ETC.
11.01 APPOINTMENT. The Lenders hereby designate BTCo as
Administrative Agent (for purposes of this Section 11, the terms "Administrative
Agent" shall include BTCo in its capacity as Collateral Agent pursuant to the
Security Documents) NatWest as Syndication Agent and Lehman as Documentation
Agent to act as specified herein and in the other Credit Documents. Each Lender
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, each Agent to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of such Agent by the terms hereof
and thereof and such other powers
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as are reasonably incidental thereto. The Agents may perform any of their duties
hereunder by or through their respective officers, directors, agents, employees
or affiliates.
11.02 NATURE OF DUTIES. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and the
Other Credit Documents. No Agent or any of its respective officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by them hereunder or under any other Credit Document or in connection herewith
or therewith, unless caused by their gross negligence or willful misconduct. The
duties of each Agent shall be mechanical and administrative in nature; no Agent
shall have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Lender or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon either Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein with respect to such Agent.
11.03 LACK OF RELIANCE ON THE AGENTS. Independently and
without reliance upon either Agent, each Lender and the holder of each Note, to
the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of WLI and
its Subsidiaries in connection with the making and the continuance of the Loans
and the taking or not taking of any action in connection herewith and (ii) its
own appraisal of the creditworthiness of WLI and its Subsidiaries and, except as
expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note 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. No Agent shall be responsible to any Lender or the
holder of any Note 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, perfection, collectibility, priority or sufficiency of
this Agreement or any other Credit Document or the financial condition of WLI
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of WLI and
its Subsidiaries or the existence or possible existence of any Default or Event
of Default.
11.04 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and no Agent shall incur liability to any Person by reason of
so refraining. Without limiting the foregoing, neither any Lender nor the holder
of any Note shall have any right of action whatsoever against an Agent as a
result of such Agent acting or
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refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
11.05 RELIANCE. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, tele type, facsimile or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that such Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by such Agent.
11.06 INDEMNIFICATION. To the extent an Agent is not
reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify such Agent, in proportion to their respective "percentages" as used in
determining the Required Lenders, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judg ments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agent in performing its respective duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or willful misconduct of such Agent.
11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITIES. With respect
to its obligation to make Loans under this Agreement, each Agent shall have the
rights and powers specified herein for a "Lender" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Lenders," "Required Lenders," "holders of Notes" or any similar
terms shall, unless the context clearly otherwise indicates, include the Agents
in their individual capacities. Each Agent may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
any Designated Party or any Affiliate of any Designated Party as if they were
not performing the duties specified herein, and may accept fees and other
consideration from any Borrower or any other Designated Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
11.08 HOLDERS. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative 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 Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
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11.09 RESIGNATION BY AN AGENT. (a) The Administrative Agent
may resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Borrowers and the Lenders. Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder who shall
be a Lender, commercial bank or trust company reasonably acceptable to the
Borrowers.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrowers, shall then appoint a successor Administrative Agent
who shall serve as Administrative Agent hereunder or thereunder until such time,
if any, as the Lenders appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Lenders appoint
a successor Administrative Agent as provided above.
(e) The Syndication Agent and the Documentation Agent may each
resign from the performance of all of its functions and duties hereunder and/or
under the other Credit Documents in such capacity at any time by giving 5
Business Days' prior written notice to the Lenders. Such resignation shall take
effect at the end of such 5 Business Days.
SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. The Borrowers jointly and
severally agree to: (i) whether or not the transactions herein contemplated are
consummated, pay all reason able out-of-pocket costs and expenses of the Agents
in connection with the negotiation, syndication, preparation, execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees and disbursements of White & Case LLP)
and of the Agents and each of the Lenders in connection with the enforcement of
the Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of
counsel for each Agent and for each of the Lenders); (ii) pay and hold each of
the Agents and Lenders harmless from and against any and all present and future
stamp, VAT and other similar taxes with respect to the foregoing matters and/or
fees and save each of the Lenders harmless from and against any and all
liabilities with respect
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to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender
(including in its capacity as Agent or Letter of Credit Issuer), its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) an investigation, litigation or other proceeding
(whether or not an Agent or any Lender is a party thereto and whether or not any
such investigation, litigation or other proceeding is between or among an Agent,
any Lender, any Designated Party or any third Person or otherwise) related to
the entering into and/or performance of any Transaction Document or the use of
the proceeds of any Loans hereunder or the Transaction or the consummation of
any transactions contemplated in any Credit Document, and (b) any such
investigation, litigation or other proceeding relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of WLI, any of its Subsidiaries or any real property owned or
operated by them, or the actual or alleged presence or release of Hazardous
Materials on, under or from any real property at any time owned or operated by
WLI or any of its Subsidiaries, and in each case including, without limitation,
the reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
12.02 RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each Lender
is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to any Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of such Borrower against and on account of the
Obligations (regardless of the currency thereof) and liabilities of such
Borrower to such Lender under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of such
Borrower purchased by such Lender pursuant to Section 12.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
12.03 NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telecopier or facsimile) and mailed, telecopied, faxed or delivered,
if to a Borrower, at the address specified opposite its signature below or in
the other relevant Credit Documents, as the case may be; if to any Lender or
Agent, at its address specified for such Lender or Agent on Annex II hereto;
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or, at such other address as shall be designated by any party in a written
notice to the other parties hereto. All such notices and communications shall be
mailed, telecopied or sent by overnight courier, and shall be effective when
received.
12.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that no Borrower may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Lenders. Each Lender may at any time grant participations
in any of its rights hereunder or under any of the Notes to an Eligible
Transferee, provided that (x) in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrowers hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 1.10, 2.06 and 4.04 of this Agreement to the extent that such Lender
would be entitled to such benefits if the participation had not been entered
into or sold and (y) no Lender shall transfer, grant or assign any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any Loan or
Note in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of the applicability of any post-default increase in interest rates), or
reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory prepayment, shall
not constitute a change in the terms of any Commitment), (ii) release all or
substantially all of the Collateral or (iii) consent to the assignment or
transfer by any Designated Party of any of its rights and obligations under this
Agreement or any other Credit Document.
(b) Notwithstanding the foregoing, (x) any Lender may assign
all or a portion of its USF Commitment and/or MCF Commitment and its rights and
obligations hereunder to another Lender (or an Affiliate of such assigning
Lender), and (y) with the consent of (I) the Administrative Agent, the Lira
Lender (in the case of assignments of MCF Commitments), the Swingline Lender (in
the case of assignments of USF Commitments) and each Letter of Credit Issuer and
(II) so long as no Default under Section 9.01 or 9.05 or Event of Default
exists, WLI (which consent shall not be unreasonably withheld), any Lender may
assign all or a portion of its USF Commitment and/or MCF Commitment and its
rights and obligations hereunder to one or more Eligible Transferees. No
assignment pursuant to the immediately preceding sentence by a Lender (or by
Lenders which are Affiliates of each other) shall to the extent such assignment
represents an assignment to an institution other than one or more Lenders
hereunder (or to an Affiliate of an assigning Lender), be in an aggregate amount
less than
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$10,000,000 unless the entire Commitment of the assigning Lender (or group of
Lenders which are Affiliates) is so assigned. If any Lender so sells or assigns
all or a part of its rights hereunder or under the Notes, any reference in this
Agreement or the Notes to such assigning Lender shall thereafter refer to such
Lender and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would if it were such assigning Lender. Each assignment pursuant to this
Section 12.04(b) shall be effected by the assigning Lender and the assignee
Lender executing an Assignment Agreement (appropriately completed). At the time
of any such assignment, (i) either the assigning or the assignee Lender shall
pay to the Administrative Agent a nonrefundable assignment fee of $3,500, (ii)
Annex I shall be deemed to be amended to reflect the Commitment of the
respective assignee (which shall result in a direct reduction to the Commitment
of the assigning Lender) and of the other Lenders, and (iii) the relevant
Borrower or Borrowers will issue new Notes to the respective assignee and to the
assigning Lender in conformity with the requirements of Section 1.05. To the
extent any assignment pursuant to this Section 12.04(b) is to a Person which is
not already a Lender hereunder and which is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to WLI and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 4.04 Certificate) described in Section 4.04(b). To the
extent that an assignment of all or any portion of a Lender's Commitments and
related outstanding Obligations pursuant to this Section 12.04(b) would, at the
time of such assignment, result in increased costs under Section 1.10, 2.06 or
4.04 from those being charged by the respective assigning bank prior to such
assignment, then the Borrowers shall not be obligated to pay such increased
costs (although the Borrowers shall be obligated to pay any other increased
costs of the type described above resulting from changes specified in said
Section 1.10, 2.06 or 4.04 occurring after the date of the respective
assignment). Each Lender and the Borrowers agree to execute such documents
(including without limitation amendments to this Agreement and the other Credit
Documents) as shall be necessary to effect the foregoing. Nothing in this clause
(b) shall prevent or prohibit any Lender from pledging its Notes or Loans to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
12.04, no transfer or assignment of the interests or obligations of any Lender
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require any Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(d) Each Lender initially party to this Agreement hereby
represents, and each Person that became a Lender pursuant to an assignment
permitted by this Section 12 will, upon its becoming party to this Agreement,
represent that it is an Eligible Transferee which makes loans in the ordinary
course of its business and that it will make or acquire Loans for its own
account in the ordinary course of such business, PROVIDED that subject to the
preceding clauses
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(a) and (b), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Lender shall at all times be within its
exclusive control.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of any Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Designated Party and either Agent or any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any Agent or any
Lender would otherwise have. No notice to or demand on any Designated Party in
any case shall entitle any Designated Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Agents or the Lenders to any other or further action in any circumstances
without notice or demand.
12.06 PAYMENTS PRO RATA. (a) Subject to the provisions of
Sections 1.01(D) and 1.08(e), the Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of any Designated Party in
respect of any Obligations of such Designated Party hereunder, it shall
distribute such payment to the Lenders (other than any Lender that has expressly
waived its right to receive its pro rata share thereof) PRO RATA based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount here under (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Designated Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount, PROVIDED that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 12.06(a) and (b) shall be subject to
the express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
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12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements
to be furnished to the Lenders pursuant hereto shall be made and prepared in
conformity with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by WLI to the Lenders and with respect to any interim financial statements,
subject to changes resulting from audit and normal year-end audit adjustments,
provided that (x) except as otherwise specifically provided herein, all
computations determining compliance with Section 8, including definitions used
therein, shall utilize accounting principles and policies in effect at the time
of the preparation of, and in conformity with those used to prepare, the
December 31, 1997 financial statements delivered to the Lenders pursuant to
Section 6.10(b), (y) that if at any time the computations determining compliance
with Section 8 utilize accounting principles different from those utilized in
the financial statements furnished to the Lenders, such financial statements
shall be accompanied by reconciliation work-sheets and (z) for purposes of
determining compliance with any tests set forth in Sections 8 and/or 9
(excluding Sections 8.10 through 8.13), any amounts so incurred or expended (to
the extent incurred or expended in a currency other than Dollars) should be
converted into Dollars on the basis of the Dollar Equivalent of the respective
such amounts as in effect on the date of such incurrence or expenditure under
any provision of any such Section that has an aggregate Dollar limitation
provided for therein (and to the extent the respective incurrence test regulates
the aggregate amount outstanding at any time as expressed in terms of Dollars,
all outstanding amounts originally incurred or spent in currencies other than
Dollars shall be converted into Dollars on the basis of the Dollar Equivalent of
the respective such amounts as in effect on the date any new incurrence or
expenditures made under any provision of any such Section that regulates the
Dollar Amount outstanding at any time).
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days (365-366 days
for interest on Base Rate Loans and 365 days for interest on Pounds Sterling and
Belgian Francs denominated MCF Loans).
(c) For purposes of this Agreement, the Dollar Equivalent of
(x) each MCF Loan that is an Alternate Currency Loan shall be calculated on the
date when any such MCF Loan is made or repaid, each MCF Letter of Credit issued
in an Alternate Currency shall be calculated on the date when any such Letter of
Credit is issued, on any date drawn on and on any date on which such drawing is
repaid and (y) all outstanding Loans denominated in Alternate Currencies and all
MCF Letter of Credit Outstandings denominated in Alternate Currencies, on the
second Business Day of each month and at such other times as designated by the
Administrative Agent at any time when a Default under Section 9.01 or an Event
of Default exists. Such Dollar Equivalent shall remain in effect until the same
is recalculated by the Administrative Agent as provided above and notice of such
recalculation is received by WLI, it being understood that until such notice is
received, the Dollar Equivalent shall be that Dollar Equivalent as last reported
to WLI by the Administrative Agent. The Administrative
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Agent shall promptly notify WLI and the Banks of each such determination of the
Dollar Equivalent.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) This Agreement and the other Credit Documents (other than the
EU Intercompany Notes to the extent set forth therein) and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the law of the state of New York. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Agreement, each Borrower hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Borrower further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
it, to the extent located outside New York City, or by hand, to the extent
located within New York City, at its address for notices pursuant to Section
12.03, such service to become effective 30 days after such mailing. Each
Borrower hereby irrevocably designates appoints and empowers CT Corporation
System, with offices on the date hereof located at 1633 Broadway, New York, New
York 10019, as its agent for service of process in respect of any such action or
proceeding. Nothing herein shall affect the right of any Agent or any Lender to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Borrower in any other jurisdiction.
(b) Each Borrower each hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement, the other Credit Documents or the
transactions contemplated hereby or thereby.
12.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on 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. A set of
counterparts executed by all the parties hereto shall be lodged with each
Borrower and the Administrative Agent.
12.10 EFFECTIVENESS. This Agreement shall become effective on
the date (the "Effective Date") on which WLI, EU Holdco, each Agent and each of
the Lenders other than
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the Lira Lender shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at its
Notice Office or, in the case of the Lenders and the Agents, shall have given to
the Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.11 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12 AMENDMENT OR WAIVER. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrowers and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender (other than a Defaulting Lender) directly affected thereby, (i) extend
the Final Maturity Date, or extend the stated maturity of any Letter of Credit
beyond the Final Maturity Date (except as contemplated by Section 2.01(b)), or
reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees or other amounts payable hereunder, or reduce the principal
amount thereof, or increase the Commitment of any Lender over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment shall not constitute
a change in the terms of any Commitment of any Lender), (ii) amend, modify or
waive any provision of this Section 12.12, (iii) reduce the percentage specified
in, or (except to give effect to any additional facilities hereunder) otherwise
modify, the definition of Required Lenders, (iv) consent to the assignment or
transfer by any Borrower of any of its rights and obligations under this
Agreement or (v) release all or substantially all of the Collateral, PROVIDED
FURTHER, that no such change, waiver, discharge or termination shall, without
the consent of the Required USF Lenders and the Required MCF Lenders, amend the
definition of Required USF Lender or Required MCF Lenders (as applicable) or
amend in a manner adverse to the respective Facility the allocation between the
USF Facility and the MCF Facility of mandatory commitment reductions. No
provision of Section 1.01(B), 1.01(D) and (E), 2 or 11 may be amended without
the consent of the Lira Lender, the Swingline Lender, any Letter of Credit
Issuer affected thereby or any Agent affected thereby, respectively.
12.13 SURVIVAL. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.06, 4.04, 11.06 or 12.01 shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
12.14 DOMICILE OF LOANS. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender, provided that the Borrowers shall not be responsible
for costs arising under Section 1.10, 2.06 or 4.04
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resulting from any such transfer (other than a transfer pursuant to Section 1.12
or 1.13) to the extent not otherwise applicable to such Lender prior to such
transfer.
12.15 CONFIDENTIALITY. Subject to Section 12.04, the Lenders
shall hold all non-public information obtained pursuant to the requirements of
this Agreement in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure to its Affiliates,
employees, auditors, advisors or counsel or as reasonably required by any BONA
FIDE transferee or participant in connection with the contemplated transfer of
any Loans or participation therein (so long as such transferee or participant
agrees to be bound by the provisions of this Section 12.15) or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process, provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify WLI of any request by any governmental
agency or representative thereof (other than any such request in connection with
an examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information, and provided further that in no event shall any Lender be
obligated or required to return any materials furnished by WLI or any
Subsidiary.
12.16 LENDER REGISTER. Each Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
12.16, to maintain a register (the "Lender Register") on which it will record
the Commitments from time to time of each of the Lenders, the Loans made by each
of the Lenders and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrowers' obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to Section 12.04(b). The Borrowers jointly and severally agree to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 12.16 other than those resulting from the Administrative Agent's
willful misconduct or gross negligence.
12.17 JUDGMENT CURRENCY. (a) The Designated Parties'
obligations hereunder and under the other Credit Documents to make payments in
the applicable Approved Currency
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(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent, the
Collateral Agent or the respective Lender of the full amount of the Obligation
Currency expressed to be payable to the Administrative Agent, the Collateral
Agent or such Lender under this Agreement or the other Credit Documents. If, for
the purpose of obtaining or enforcing judgment against any Designated Party in
any court or in any jurisdiction, it becomes necessary to convert into or from
any currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made at the Approved Currency
Equivalent, and, in the case of other currencies, the rate of exchange (as
quoted by the Administrative Agent or if the Administrative Agent does not quote
a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent determined, in each case, as of the
Business Day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrowers covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Approved Currency
Equivalent or any other rate of exchange for this Section, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
12.18 EURO. If at any time that an Alternate Currency Loan is
outstanding, the relevant Alternative Currency is fully replaced as the lawful
currency of the country that issued such Alternate Currency (the "Issuing
Country") by the Euro so that all payments are to be made in the Issuing Country
in Euros and not in the Alternate Currency previously the lawful currency of
such country then such Alternate Currency Loan shall be automatically converted
into a Loan denominated in Euros in a principal amount equal to the amount of
Euros into which the principal amount of such Alternate Currency Loan would be
converted pursuant to the EMU Legislation and thereafter no further Loans will
be available in such Alternate Currency, with the basis of accrual of interest,
notices requirements and payment offices with respect to such converted Loans to
be that consistent with the convention and practices in the London interbank
market for Euro denominated Loans.
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12.19 COVENANT TO PAY. Each Borrower, as a separate and
independent obligation, hereby irrevocably undertakes to pay to BTCo at the
first request of BTCo and at any time, an amount equal to the aggregate amount
which has theretofore become due and payable by such Borrower to the Lenders
under the Credit Agreement and the other Credit Documents, it being understood
that (i) the right of BTCo to claim payment from such Borrower hereunder shall
be an independent right of BTCo in its individual capacity and (ii) BTCo shall
apply the amount so paid as if such amounts were received by BTCo in its
capacity as Collateral Agent.
12.20 SHARING. At the time, if any, that the Loans are
accelerated pursuant to Section 9, including any automatic acceleration provided
therein (an "Acceleration Event"), each USF Lender shall purchase assignments of
MCF Commitments (if still in existence) and in any event assignments of MCF
Loans and participations in MCF Letter of Credit Outstandings from MCF Lenders,
and each MCF Lender shall purchase assignments of USF Commitments (if still in
existence) and in any event assignments of USF Loans and participations in USF
Letter of Credit Outstandings from USF Lenders so that after giving effect
thereto (I) each USF Lender shall have outstanding USF Loans and MCF Loans in an
aggregate Principal Amount equal to the Principal Amount of its USF Loans
immediately prior to the Acceleration Event, divided between the USF Loans and
MCF Loans on the basis of the respective aggregate Principal Amount of the USF
Loans and the MCF Loans out standing immediately prior to the Acceleration Event
(the "Loan Allocation Basis"), (II) each MCF Lender shall have outstanding USF
Loans and MCF Loans in an aggregate Principal Amount equal to the Principal
Amount of its MCF Loans immediately prior to the Acceleration Event, divided
between the USF Loans and MCF Loans on the Loan Allocation Basis, (III) each USF
Lender shall have outstanding participations in the USF Letter of Credit
Outstandings and the MCF Letter of Credit Outstandings in an aggregate Principal
Amount equal to the aggregate Principal Amount of its participations in the USF
Letter of Credit Outstandings immediately prior to the Acceleration Event,
divided among each Letter of Credit and each Unpaid Drawing on the basis of the
respective Principal Amount of each Letter of Credit and each Unpaid Drawing
outstanding immediately prior to the Acceleration Event (the "L/C Allocation
Basis") and (IV) each MCF Lender shall have outstanding participations in the
USF Letter of Credit Outstandings and the MCF Letter of Credit Outstandings in
an aggregate Principal Amount equal to the aggregate Principal Amount of its
participation in the MCF Letter of Credit Outstandings immediately prior to the
Acceleration Event, divided among each Letter of Credit and each Unpaid Drawing
on the L/C Allocation Basis, it being of agreed that all Mandatory Borrowings
and the assignments of outstanding Lira Loans to MCF Lenders required by Section
1.01 (D) shall be effected immediately prior to the purchase of assignments by
all Lenders pursuant to this Section 12.20.
SECTION 13. GUARANTY.
13.01 THE GUARANTY. In order to induce the Lenders to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be
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received by WLI from the proceeds of the Loans made to the Foreign Borrowers and
the issuance of the Letters of Credit issued for the account of the Foreign
Borrowers, WLI hereby unconditionally and irrevocably guarantees the full and
prompt payment when due, whether upon maturity, acceleration or otherwise, of
any and all of the Guaranteed Obligations. This Guaranty is a primary obligation
of WLI and not merely a contract of surety. If any of the Guaranteed Obligations
becomes due and payable hereunder, WLI unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, together with any
and all expenses which may be incurred by the Guaranteed Creditors in collecting
any of the Guaranteed Obligations. If claim is ever made upon any Guaranteed
Creditor for repayment or recovery of any amount or amounts received in payment
or on account of any of the Guaranteed Obligations and any of the aforesaid
payees repays all or part of said amount by reason of (i) any judgment, decree
or order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including any specified
Borrower), then and in such event WLI agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon WLI, notwithstanding any
revocation of this Guaranty or any other instrument evidencing any liability of
the Foreign Borrowers, and WLI shall be and remain liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by any such payee.
13.02 BANKRUPTCY. Additionally, WLI unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Guaranteed Creditors whether or not due or payable by any Foreign
Borrowers upon the occurrence in respect of such Foreign Borrower of any of the
events specified in Section 9.05, and unconditionally promises to pay such
indebtedness on demand, in lawful money of the United States.
13.03 NATURE OF LIABILITY. The liability of WLI hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations whether executed by WLI, any other guarantor or by any
other party, and the liability of WLI hereunder is not affected or impaired by
(a) any direction as to application of payment by any Foreign Borrower or by any
other party, or (b) any other continuing or other guaranty or undertaking as to
the Guaranteed Obligations, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by any Foreign Borrower, or (e) any payment made
to the Guaranteed Creditors on the Guaranteed Obligations which any such
Guaranteed Creditor repays to any Foreign Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and WLI waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
13.04 INDEPENDENT OBLIGATION. The obligations of WLI hereunder
are independent of the obligations of any other guarantor, any other party or
any Foreign Borrower, and a separate action or actions may be brought and
prosecuted against WLI whether or not
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action is brought against any other guarantor, any other party or any Foreign
Borrower and whether or not any other guarantor, any other party or any Foreign
Borrower be joined in any such action or actions. WLI waives, to the full extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof. Any payment by any Foreign
Borrower or other circumstance which operates to toll any statute of limitations
as to such Foreign Borrower shall operate to toll the statute of limitations as
to WLI with respect to the Guaranteed Obligations owing by such Foreign
Borrower.
13.05 AUTHORIZATION. WLI authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
(b) take and hold security for the payment of any the
Guaranteed Obligations and sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
any Foreign Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, any Foreign Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may substitute the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Foreign
Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of any Foreign Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of such Borrower
remain unpaid;
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(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of WLI from its liabilities under this Guaranty.
13.06 RELIANCE. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of any Foreign Borrower or the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
13.07 SUBORDINATION. Any of the indebtedness of each Foreign
Borrower now or hereafter owing to WLI is hereby subordinated to the Guaranteed
Obligations of such Foreign Borrower; and if the Administrative Agent so
requests at a time when an Event of Default exists, all such indebtedness of
each Foreign Borrower to WLI shall be collected, enforced and received by WLI
for the benefit of the Guaranteed Creditors and be paid over to the
Administrative Agent on behalf of the Guaranteed Creditors on account of the
Guaranteed Obligations, but without affecting or impairing in any manner the
liability of WLI under the other provisions of this Guaranty. Prior to the
transfer by WLI of any note or negotiable instrument evidencing any of the
indebtedness of any Foreign Borrower to WLI, shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, WLI hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
13.08 WAIVER. (a) WLI waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor (i) proceed against any Foreign Borrower, any other guarantor or any
other party, (ii) proceed against or exhaust any security held by any Foreign
Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in any Guaranteed Creditor's power whatsoever. WLI waives any defense
based on or arising out of any defense of any Foreign Borrower, any other
guarantor or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out the disability of any Foreign Borrower, any
other guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Foreign Borrower than payment in full of the Guaranteed
Obligations. The Guaranteed Creditors may, at their election, foreclose on any
security held by the Collateral Agent or any other Guaranteed Creditor by one or
more judicial
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or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Guaranteed Creditors may have
against any Foreign Borrower or any other party, or any security, without
affecting or impairing in any way the liability of WLI hereunder except to the
extent the Guaranteed Obligations have been paid.
(b) WLI waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. WLI assumes all responsibility for being and keeping
itself informed of each Foreign Borrower's financial condition and assets, and
of all other circumstances, bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which WLI
assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall
have no duty to advise WLI of information known to them regarding such
circumstances or risks.
13.09 ENFORCEMENT. The Guaranteed Creditors agree that this
Guaranty may be enforced only by the action of the Administrative Agent acting
upon the instructions of the Required Lenders and no Guaranteed Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty, it
being understood and agreed that such rights and remedies may be exercised by
the Administrative Agent for the benefit of the Guaranteed Creditors upon the
terms of this Guaranty and the Security Documents.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Wang Laboratories, Inc.
WANG LABORATORIES, INC.,
600 Technology Park Dr.
as Borrower
Billerica, MA 01821-4130
Tel: (978) 957-5000
Fax: (978) 957-3930
By
----------------------------------------------------------
Attention: General Counsel
Name:
cc: Treasurer
Title:
Wang Nederland B.V.
WANG NEDERLAND B.V.,
c/o Wang Laboratories, Inc.
as Borrower
600 Technology Park Dr.
Tel: (978) 957-5000
Fax: (978) 957-3930
By
----------------------------------------------------------
Attention: General Counsel
Name:
cc: Treasurer Title:
<PAGE> 120
Olivetti Solutions SPA,
OLIVETTI SOLUTIONS SPA,
c/o Wang Laboratories, Inc.
as Borrower
600 Technology Park Dr.
Tel: (978) 957-5000
Fax: (978) 957-3930
By
----------------------------------------------------------
Attention: General Counsel
Name:
cc: Treasurer Title:
<PAGE> 121
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By
-------------------------------------
Name:
Title:
<PAGE> 122
NATIONAL WESTMINSTER BANK PLC,
Individually and as Syndication Agent
By
-------------------------------------
Name:
Title:
<PAGE> 123
LEHMAN COMMERCIAL PAPER INC.,
Individually and as Documentation Agent
By
-------------------------------------
Name:
Title:
<PAGE> 124
BANKERS TRUST INTERNATIONAL
PLC
As Lira Lender
By
-------------------------------------
Name:
Title:
<PAGE> 125
ANNEX I
COMMITMENTS
<TABLE>
<CAPTION>
USF MCF
Lender Commitment Commitment
------ ---------- ----------
<S> <C> <C>
Bankers Trust Company $ 82,500,000 $192,500,000
National Westminster Bank Plc 45,000,000 105,000,000
Lehman Commercial Paper Inc. 22,500,000 52,500,000
Total: $150,000,000 $350,000,000
============ ============
</TABLE>
<PAGE> 126
ANNEX II
LENDER ADDRESSES
Bankers Trust Company 130 Liberty Street
New York, New York 10006
Attention: Andrew Keith
Tel. No.: 212-250-8617
Fax No.: 212-250-7218
National Westminster Bank Plc P.O. Box 122684
Sixth Floor
One Princess Street
London EC2R 8PB
Attention: John Roche
Tel. No.: 011-44-171-390-1250
Fax No.: 011-44-171-390-1775
Lehman Commercial Paper Inc. Three World Financial Center
10th Floor
New York, New York 10285
Attention: Michele Swanson
Tel. No.: 212-526-0330
Fax No.: 212-528-0819
<PAGE> 127
ANNEX IV
Part I: MATERIAL SUBSIDIARIES
Australia: Wang Australia Pty Ltd
Olivetti Australia Pty Ltd
(collectively, "Australian Subsidiaries")
Belgium: Wang Europe S.A. N.V.
Olsy Belgium S.A. N.V.
(collectively, "Belgian Subsidiaries")
Canada: Wang Canada Limited
Olsy Canada Ltd.
Denmark: Olsy S.A. (Denmark)
("Danish Subsidiary")
France: Wang France S.A.
Olsy France S.A.
(collectively, "French Subsidiaries")
Germany: Wang Germany GmbH
Olivetti GmbH
(collectively, "German Subsidiaries")
Italy: Olivetti Solutions SpA
("Italian Borrower")
Japan: Olivetti Corp. Japan
Netherlands: Wang Nederland B.V. ("EU Holdco")
Olsy Nederland B.V.
(collectively, "Dutch Subsidiaries")
Spain: Olivetti Espana S.A.
("Spanish Subsidiary")
<PAGE> 128
ANNEX IV
Page 2
United Kingdom: Wang I-NET Ltd.
Olsy UK Ltd.
(collectively, "UK Subsidiaries")
United States: Olsy North America Inc.
[I-NET]
[WGSI]
[Bannex]
[All other U.S. subsidiaries that are
not Immaterial Subsidiaries]
Part II: MATERIAL SUBSIDIARIES PARTY TO FOREIGN GUARANTIES
Australian Subsidiaries (unless waived by Agents)
Belgian Subsidiaries
Italian Borrower
Dutch Subsidiaries
Spanish Subsidiary
UK Subsidiaries
Part III: MATERIAL SUBSIDIARIES PARTY TO FOREIGN
SECURITY DOCUMENTS
(in support of its Guaranty
and EU Intercompany Note unless
otherwise indicated)
Australian Subsidiaries (in support of Guaranty only) unless waived by
Agents
Belgian Subsidiaries
Danish Subsidiary (in support of EU Intercompany Note only)
<PAGE> 129
ANNEX IV
Page 2
Italian Borrower (in support of Lira Note and subject to review of any
additional cost, its Guaranty)
EU Holdco (in support of its MCF Loans and its Guaranty)
Olsy Nederland B.V.
Spanish Subsidiary
UK Subsidiaries
