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EXECUTION COPY
August 11, 2000
Synavant Inc.
3445 Peachtree Road, NE
Suite 1400
Atlanta, GA 30326
Attention: Mr. Matthew Friedman
Gentlemen:
SunTrust Bank (the "BANK") is pleased to advise Synavant Inc. (the
"COMPANY") that the Bank has approved, subject to the conditions outlined in
this letter (the "AGREEMENT"), a committed revolving credit facility (the
"FACILITY"). The amount borrowed or utilized under the Facility shall not exceed
$20,000,000 at any one time outstanding. The Facility shall terminate on the
earlier of (i) December 31, 2000 and (ii) 90 days after the Effective Date (the
"TERMINATION DATE"); PROVIDED, that if the Effective Date has not occurred on or
before October 2, 2000, the parties hereto agree that this Agreement shall be
cancelled on such date, and the Bank shall have no obligation hereunder.
1. THE FACILITY
The Company may from time to time before the Termination Date borrow
Base Rate Loans and Eurodollar Loans (each, "LOAN" and collectively, the
"LOANS") and enter into foreign exchange contracts on a spot and forward basis
(each, a "FX CONTRACT" and collectively, the "FX CONTRACTS"). The aggregate
outstanding amount of the Loans shall not at any time exceed $20,000,000, LESS
the Total FX Risk Exposure, as determined in accordance with Section 1.8 hereof.
The Company may borrow, repay and reborrow Loans in accordance with the terms
hereof.
1.1 BORROWING PROCEDURES
(A) BASE RATE LOANS. Each Base Rate Loan shall be made upon
prior written notice from any Authorized Officer received by the Bank not later
than 11:00 a.m. (New York City time) on the proposed borrowing date. Each such
notice shall specify (i) the borrowing date, which shall be a Banking Day, and
(ii) the amount of such Loan. Each Base Rate Loan shall be in a minimum amount
of $1,000,000 and in an integral multiple of $250,000.
(B) EURODOLLAR LOANS. Each Eurodollar Loan shall be made upon
prior written or telephonic notice from any Authorized Officer received by the
Bank (which notice
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shall be irrevocable once given and, if given by telephone, shall be promptly
confirmed in writing) not later than 1:00 p.m. (New York City time) on the third
Banking Day preceding the commencement of an Interest Period for a Eurodollar
Loan or the end of an Interest Period applicable to a Eurodollar Loan. Each such
notice shall specify (i) the borrowing date, which shall be a Banking Day, (ii)
the amount of such Eurodollar Loan, and (iii) the Interest Period for such
Eurodollar Loan. If such Eurodollar Loan is to continue as a Eurodollar Loan,
the Company shall notify the Bank of the new Interest Period selected therefor,
and in the event the Company shall fail to so notify the Bank, such Eurodollar
Loan shall automatically be converted into and added to the Base Rate Loan as of
and on the last day of such Interest Period; PROVIDED, HOWEVER, that anything
contained herein to the contrary notwithstanding, the obligation of the Bank to
create or continue any Eurodollar Loan or to convert any part of the Base Rate
Loan into a Eurodollar Loan shall be conditioned upon the fact that at the time
no Unmatured Event of Default or Event of Default shall have occurred and be
continuing, except that during the existence of an Unmatured Event of Default
(but not an Event of Default) the Company may request the continuation of any
Eurodollar Loan into another Eurodollar Loan with an Interest Period not in
excess of one (1) month. Each Eurodollar Loan shall be in a minimum amount of
$1,000,000 and in an integral multiple of $500,000.
1.2 INTEREST
(A) BASE RATE LOANS. The unpaid principal of each Base Rate
Loan shall bear interest prior to maturity at a rate per annum, equal to the
Base Rate as in effect from time to time. Accrued interest on each Base Rate
Loan shall be payable monthly in arrears on the last Banking Day of each
calendar month, and on the Termination Date.
(B) EURODOLLAR LOANS. The unpaid principal amount of each
Eurodollar Loan shall bear interest prior to maturity at a rate per annum equal
to LIBOR as in effect for the Interest Period with respect to such Eurodollar
Loan PLUS 75 basis points. Accrued interest on each Eurodollar Loan shall be
payable on the last Banking Day of the Interest Period applicable to such Loan,
and on the Termination Date.
(C) INTEREST AFTER MATURITY. Any principal of any Loan which
is not paid at maturity, whether at the stated maturity, upon acceleration or
otherwise, shall bear interest from and including the date such principal shall
have become due to (but not including) the date of payment thereof in full at a
rate per annum equal to the greater of (i) the Base Rate from time to time in
effect plus 4% per annum, or (ii) 4% per annum in excess of the rate applicable
to such Loan immediately prior to its maturity. After maturity, accrued interest
shall be payable ON DEMAND.
(D) MAXIMUM RATE. In no event shall the interest rate
applicable to any amount outstanding hereunder exceed the maximum rate of
interest allowed by applicable law, as amended from time to time. Any payment of
interest or in the nature of interest in excess of such limitation shall be
credited as a payment of principal unless the Company shall request the return
of such amount.
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(E) METHOD OF CALCULATING INTEREST AND FEES. Interest on each
Loan and all fees shall be computed on the basis of a year consisting of 360
days and paid for actual days elapsed, except that interest on Base Rate Loans
will be computed on the basis of a year of 365 or 366 days (as the case may be)
for the actual number of days elapsed.
1.3 DISBURSEMENTS AND PAYMENTS
The Bank shall transfer the proceeds of each Loan as directed
by an Authorized Officer. Each Base Rate Loan shall be payable on the
Termination Date. Each Eurodollar Loan shall be payable on the earlier of the
last Banking Day of the Interest Period applicable thereto or the Termination
Date. All payments to the Bank shall be made at the office of the Bank located
at 25 Park Place, 21st Floor, Atlanta, GA 30303, or at such other address as
the Bank shall specify to the Company in writing. Any payment that shall be
due on a day, which is not a Banking Day, shall be payable on the next
succeeding Banking Day, subject to the definition of "Interest Period".
Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Indebtedness evidenced by the Note, in
each instance, by the Bank after the occurrence of an Event of Default shall
be distributed as follows: (i) first, to the payment of any outstanding costs
and expenses incurred by the Bank in preserving or enforcing fights under the
Loan Documents and in any event including all costs and expenses of a
character which the Company has agreed to pay under Section 11.3 hereof; (ii)
second, to the payment of any outstanding interest or other fees or amounts
due under the Loan Documents other than for principal; and (iii) third, to the
payment of the principal of the Note.
1.4 PREPAYMENT
(A) Subject to Section 3.7, the Company may, at any time or
from time to time prepay Base Rate Loans in whole or in part in minimum amounts
of $1,000,000 or any multiple of $250,000 in excess thereof and Eurodollar Rate
Loans in whole or in part in minimum amounts of $5,000,000 or any multiple of
$500,000 in excess thereof. Each prepayment shall be made upon not less than one
Banking Day's irrevocable written notice to the Bank with respect to Base Rate
Loans and not less than three Banking Days' irrevocable written notice to the
Bank with respect to Eurodollar Rate Loans. Such notice of prepayment shall
specify the date and amount of such prepayment and the type(s) of Loans to be
prepaid.
(B) The Company shall be required to prepay Loans to the
extent that the outstanding principal amount of all Loans and the Total FX Risk
Exposure exceeds at any time the then outstanding amount of the Facility.
1.5 NOTE
The Company's obligations with respect to the Loans shall be
evidenced by a note in the form attached as EXHIBIT A (the "NOTE"). The
amount, the rate of interest for each Loan and the Interest Period (if
applicable) shall be endorsed by the Bank on the schedule attached to the
Note, or at the Bank's option, in its records, which schedule or records shall
be conclusive, absent manifest error.
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1.6 REDUCTION OF FACILITY
The Facility amount is subject to reduction from time to time
pursuant to this Section 1.6.
(A) OPTIONAL. The Company may, from time to time on any
Banking Day, voluntarily cancel or reduce any unused amount of the Facility;
PROVIDED, HOWEVER, that all such reductions shall require at least five (5)
Banking Days' prior notice to the Bank and be permanent, and any partial
reduction of the Facility shall be in an integral multiple of $5,000,000.
(B) MANDATORY. On the Termination Date, the amount
of the Facility shall be reduced to zero.
1.7 INTENTIONALLY OMITTED
1.8 FOREIGN EXCHANGE CONTRACTS
The Company may use the Facility for FX Contracts on a spot
and/or forward basis upon terms and conditions negotiated separately with the
Bank and pursuant to customary documentation acceptable to the Bank; PROVIDED,
that at no time may the Total FX Risk Exposure exceed the lesser of (i)
$4,000,000 and (ii) the then outstanding amount of the Facility LESS the
principal amount of all outstanding Loans. No FX Contract may have a maturity
date that extends beyond the Termination Date.
2. FEES
The Company agrees to pay to the Bank (a) a facility fee of $150,000
payable (i) $75,000 on the Agreement Date, which payment shall be nonrefundable,
and (ii) $75,000 on the Effective Date and (b) a commitment fee on the actual
daily unused amount of the Facility at the rate per annum equal to 50 basis
points (as determined by the Bank and notified to the Company) that begins to
accrue on the Effective Date and is payable on the last Business Day of each
calendar month and on the Termination Date.
3. ADDITIONAL PROVISIONS RELATING TO LOANS.
3.1 INCREASED COSTS
The Company agrees to reimburse the Bank for any increase in the cost
to the Bank of, or any reduction in the amount of any sum receivable by the Bank
in respect of, making or maintaining any Eurodollar Loans relating to the
adoption of any law, rule or regulation or any change therein or any change in
the interpretation of administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof. The additional amount required to compensate the Bank
for such increased cost or
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reduced amount shall be payable by the Company to the Bank within five days of
the Company's receipt of written notice from the Bank specifying such increased
cost or reduced amount and the amount required to compensate the Bank therefor,
which notice shall, in the absence of manifest error, be conclusive and binding
on the Company. In determining such additional amount, the Bank may use
reasonable averaging, attribution and allocation methods.
3.2 DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE;
IMPRACTICABILITY
If the Company has notified the Bank of its intention to borrow a
Eurodollar Loan for an Interest Period and the Bank determines (which
determination shall be conclusive and binding on the Company) that:
(A) deposits of the necessary amount for such Interest Period
are not available to the Bank in the London interbank market or, by reason of
circumstances affecting such market, adequate and reasonable means do not exist
for ascertaining LIBOR for such Interest Period; or
(B) LIBOR will not adequately and fairly reflect the cost to
the Bank of making or funding a Eurodollar Loan for such Interest Period, or
(C) the making or funding of Eurodollar Loans has become
impracticable as a result of any event occurring after the date of this
Agreement which, in the opinion of the Bank, materially and adversely affects
such Loans or the interbank Eurodollar market;
then any notice of a Eurodollar Loan previously given by the Company and not yet
borrowed shall be deemed to be a notice to make a Base Rate Loan.
3.3 CHANGES IN LAW RENDERING EURODOLLAR LOANS UNLAWFUL
If at any time due to the adoption of, or change in, any law, rule,
regulation, treaty or directive or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or for any other reason arising subsequent to the date
hereof, it shall become (or, in the good faith judgment of the Bank, raise a
substantial question as to whether it is) unlawful for the Bank to make or fund
any Eurodollar Loan, Eurodollar Loans shall not be made hereunder for the
duration of such illegality. If any such event shall make it unlawful for the
Bank to continue any Eurodollar Loans previously made by it hereunder, the
Company shall, after being notified by the Bank of the occurrence of such event,
on such date as shall be specified in such notice, either convert such
Eurodollar Loan to a Base Rate Loan or prepay in full such Eurodollar Loan,
together with accrued interest thereon, without any premium or penalty (except
as provided in Section 3.7).
3.4 DISCRETION OF THE BANK AS TO MANNER OF FUNDING
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The Bank shall be entitled to fund and maintain its funding of all or
any part of the Loans in any manner it sees fit; it being understood, however,
that for purposes of this Agreement and the Note, all determinations hereunder
and thereunder (including, but not limited to, any determination pursuant to
Section 3.3) shall be made as if the Bank had actually funded and maintained
each Eurodollar Loan during the Interest Period for such Eurodollar Loan through
the purchase of deposits having a term corresponding to such Interest Period and
bearing an interest rate equal to LIBOR for such Interest Period.
3.5 INTENTIONALLY OMITTED
3.6 INCREASED CAPITAL COSTS
If any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other Governmental Authority
affects or would affect the amount of capital required or expected to be
maintained by the Bank or any entity controlling the Bank, and the Bank
determines (in its sole and absolute discretion) that the rate of return an its
or such controlling entity's capital as a consequence of the Loans made by the
Bank or the commitment hereunder is reduced to a level below that which the Bank
or such controlling entity could have achieved but for the occurrence of any
such circumstance, then, in any such case, upon notice from time to time by the
Bank to the Company, the Company shall immediately pay directly to the Bank
additional amounts sufficient to compensate the Bank or such controlling entity
for such reduction in rate of return. A statement of the Bank as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Company. In determining such amount, the Bank may use reasonable averaging,
attribution and allocation methods.
3.7 FUNDING LOSSES
The Company will indemnify the Bank upon demand against any loss or
expense which the Bank may sustain or incur (including, without limitation, any
loss or expense sustained or incurred in obtaining, liquidating or employing
deposits or other funds acquired to effect, fund or maintain any Loan) as a
consequence of (i) any failure of the Company to make any payment when due of
any amount due hereunder, (ii) any failure of the Company to borrow a Loan on a
date specified therefor in a notice thereof, or (iii) any payment (including any
payment upon the Bank's acceleration of the Loans) or prepayment of any
Eurodollar Loan on a date other than the last day of the Interest Period for
such Loan.
4. CONDITIONS PRECEDENT
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4.1 INITIAL LOAN OR FX CONTRACT
The obligation of the Bank to make the initial Loan to, or to enter
into the initial FX Contract with, the Company shall be subject to the prior or
concurrent satisfaction of each of the following conditions precedent:
(A) PROMISSORY NOTE. The Bank shall have received the Note duty executed
and delivered by the Company.
(B) GUARANTEE. The Bank shall have received the Guarantee duly executed and
delivered by the Guarantor.
(C) SECRETARY'S CERTIFICATES. (1) The Company shall have delivered to
the Bank a certificate dated the Effective Date of its Secretary or Assistant
Secretary as to (i) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this Agreement,
the Note, and each of the other Loan Documents to which the Company is a party,
(ii) the Company's certificate of incorporation and by-laws, and (iii) the
incumbency and signatures of those of its officers authorized to act with
respect to this Agreement, the Note and each of the Loan Documents executed by
it, upon which certificate the Bank may conclusively rely until it shall have
received a further certificate of the Secretary or Assistant Secretary of the
Company canceling or amending such prior certificate.
(2) The Guarantor shall have delivered to the Bank a
certificate dated the Effective Date of its Secretary or Assistant Secretary as
to (i) resolutions of its Board of Directors then in full force and effect
authorizing the execution, delivery and performance of the Guarantee, (ii) the
Guarantor's certificate of incorporation and by-laws that were delivered to the
Bank pursuant to the Existing Loan Agreement are still in full force and effect
and have not been amended or otherwise modified since such date, and (iii) the
incumbency and signatures of those of its officers authorized to act with
respect to the Guarantee, upon which certificate the Bank may conclusively rely
until it shall have received a further certificate of the Secretary or Assistant
Secretary of the Guarantor canceling or amending such prior certificate.
(D) GOOD STANDING CERTIFICATES. The Bank shall have received good
standing certificates (or their equivalent) issued by the Secretary of State of
(1) with respect to the Company, each of the State of Delaware and the State of
Georgia and (ii) with respect to the Guarantor, each of the State of Delaware
and the State of Connecticut, each dated within 7 days of the Effective Date.
(E) OPINIONS OF COUNSEL. The Bank shall have received an opinion or
opinions from counsel to each of the Company and the Guarantor, dated the
Effective Date and addressed to the Bank, in form and content acceptable to the
Bank.
(F) FEES. The Borrower shall have paid all fees to, and
other costs and expenses of, the Bank then due under Section 2 and Section 11.3
respectively.
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4.2 EACH LOAN AND FX CONTRACT
The obligation of the Bank to make any Loan (including the initial
Loan) and to enter into any FX Contract (including the initial FX Contract)
shall be subject to the following statements being true and correct before and
after giving effect to such Loan or FX Contract: (i) the representations and
warranties of the Borrower set forth in SECTION 5 (except those representations
and warranties set forth in SECTION 5.4 but only if such Loan or FX Contract is
made or entered into prior to the time that such financial information is
required to be delivered pursuant to Section 6.1) and of the Guarantor set forth
in Section 8 of the Guarantee shall be true and correct with the same effect as
if then made (unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct as of such earlier
date), (ii) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing and (iii) there shall have occurred no material
adverse effect on the condition, operation, assets, business, properties or
prospects of either the Company or on the Guarantor and its Subsidiaries since
June 30, 2000.
Each request for a Loan or a FX Contract shall be deemed a
representation by the Company as to the matters set forth in this Section.
5. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Bank (which representations
and warranties shall survive the execution and delivery hereof and of the Note)
that:
5.1 EXISTENCE
The Company is a corporation duly formed, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has all requisite
power and authority, and the legal right, to own, operate and lease its
properties and to carry on the business in which it is engaged or presently
proposes to engage, and is duly qualified or licensed under the laws of the
State of Georgia and each other jurisdiction where it is required to be so
qualified or licensed except where the failure to be so qualified would not
cause a material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company, and is in compliance with all
Requirements of Law except to the extent that failure to comply therewith would
not reasonably be expected, in the aggregate, to cause a material adverse change
in the financial condition, operations, assets, business, properties or
prospects of the Company.
5.2 POWER AND AUTHORIZATION; ENFORCEABLE OBLIGATIONS
The Company has all requisite power and authority to execute, deliver
and perform this Agreement and the Note and to borrow hereunder and thereunder.
The Company has taken all necessary corporate and legal action to authorize the
Loans and FX Contracts hereunder and under the Note on the terms and conditions
of this Agreement and the Note and to authorize the execution, delivery and
performance of this Agreement and the Note. This Agreement the Note have been
duly executed and delivered by a duly authorized representative of the Company,
and
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this Agreement and the Note constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors' rights generally and except as enforceability may be limited by
general principles of equity and an implied covenant of good faith.
5.3 NO LEGAL BAR
The execution, delivery and performance of this Agreement and the Note
by the Company will not violate any provision of any existing law, treaty or
regulation or of any order, judgment, award or decree of any court, arbitrator
or Governmental Authority or of any Requirement of Law or Contractual Obligation
applicable to the Company and will not result in the creation or imposition of
any Lien on any of the material properties or assets of the Company pursuant to
the provisions of any such Requirement of Law or Contractual Obligation.
5.4 FINANCIAL INFORMATION; DISCLOSURE, ETC.
(A) The unaudited balance sheet of the Company dated as of the
Effective Date delivered pursuant to Section 6.1 hereof presents fairly in all
material respects the financial condition of the Company as at such date and has
been prepared in accordance with GAAP.
(B) The projections of the Company's balance sheet and statements of
income and cash flows for the fiscal years 2000, 2001 and 2002 delivered
pursuant to Section 6.1 hereof have been based upon good faith estimates and
assumptions, have been prepared on the basis of such estimates and assumptions
and reflect the reasonable estimates of the Company of its results of operations
and other information projected therein.
5.5 LICENSES; PERMITS, ETC.
No material authorizations, licenses and permits of any Governmental
Authority are required or necessary for the conduct of the business of the
Company as now conducted or proposed to be conducted by it (such authorizations,
licenses and permits, together with any extensions or renewals thereof, being
herein sometimes referred to collectively as the "LICENSES") except for such
Licenses (i) as have been obtained and are in full force and effect, or (ii) the
failure to have obtained which could not reasonably be expected to result,
either in any case or in the aggregate, in a material adverse change in the
financial condition, operations, assets, business, properties or prospects of
the Company.
5.6 TAX RETURNS AND PAYMENTS
The Company has filed all tax returns and information statements
required by law to be filed and has paid all taxes, assessments and other
governmental charges levied upon or in respect of any of its properties, assets,
income, Licenses or franchises, other than those not yet delinquent, those, not
substantial in aggregate amount, being or about to be contested and those the
failure of which to pay could not cause a material adverse change in the
financial condition, operations, assets, business, properties or prospects of
the Company. The charges, accruals and reserves on the books of the Company in
respect of its taxes are adequate in the opinion of the Company, and the
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Company knows of no unpaid assessment for additional taxes material in amount or
of any reasonable basis therefor. No tax liens have been filed, and, to the
knowledge of the Company, no claims are being asserted with respect to any such
taxes, fees or other charges.
5.7 TITLE TO PROPERTIES; LIENS
The Company and its Subsidiaries have sufficient title to all of their
material properties and assets for the conduct of their respective business as
presently conducted and proposed to be conducted by them. The Company and its
Subsidiaries enjoy quiet possession under all material real property leases to
which it is a party as lessee, and all of its material leases are valid,
subsisting and in full force and effect.
5.8 LITIGATION, ETC.
There is no action, proceeding or investigation pending or to the
knowledge of the Company threatened (or any basis therefor known to the Company)
which questions the validity of this Agreement and the Note or any other Loan
Documents executed in connection herewith, or any action taken or to be taken
pursuant hereto or thereto, or which could reasonably be expected to result,
either in any case or in the aggregate, in a material adverse change in the
financial condition, operations, assets, business, properties or prospects of
the Company.
5.9 NO DEFAULT
No Event of Default or Unmatured Event of Default has occurred and is
continuing. Neither the Company nor any of its Subsidiaries is in violation of
any Requirement of Law or any term of any Contractual Obligation applicable to
the Company or such Subsidiary, the violation of which would be likely to cause
a material adverse change in the financial condition, operations, assets,
business, properties of prospects of the Company. Without limiting the scope of
the foregoing, the Company and each Subsidiary is in compliance in all material
respects with a Environmental Laws, the violation of which could be reasonably
expected to cause a material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Company.
5.10 GOVERNMENTAL AND OTHER CONSENTS
The Company is not required to obtain any order, consent, approval or
authorization of, or to make any declaration or filing with, any Governmental
Authority or any other Person in connection with the execution and delivery of
any performance under this Agreement and the issuance and delivery of such
Company's Note pursuant hereto, unless the failure to do so would not result in
a material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company.
5.11 REGULATION U, ETC.
None of the proceeds of the Loans will be used, directly or indirectly,
by the Company for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
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purchase or carry, any margin stock or for any other purpose which might
constitute the transactions contemplated hereby a "purpose credit" within the
meaning of said Regulation U, or cause this Agreement to violate Regulation T,
Regulation U, Regulation X, or any other regulation of the Board of Governors of
The Federal Reserve System or the Securities Exchange Act of 1934.
5.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS
The Company is not an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. The Company is not subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness.
5.13 COMPLIANCE WITH ERISA
Each Plan is in substantial compliance with ERISA and the Code; no
Reportable Event has occurred with respect to a Plan; no Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability, no Plan has an
accumulated or waived funding deficiency, has permitted decreases in its funding
standard account or has applied for a waiver of the minimum funding standard or
an extension of any amortization period within the meaning of Section 412 of the
Code; all contributions required to be made with respect to a Plan have been
timely made, neither the Company nor any ERISA Affiliate has incurred any
material liability to or on account of a 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, 4975 or 4980 of the Code or reasonably expects to incur any
material liability (including any indirect, contingent or secondary liability)
under any of the foregoing Sections with respect to any Plan (other than
liabilities of any ERISA Affiliate which could not, by operation of law or
otherwise, become a liability of the Company); no proceedings have been
instituted to terminate, or to appoint a trustee to administer, any Plan; no
condition exists which presents a material risk to the Company or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code, using actuarial assumptions and
computation methods consistent with Part I of Subtitle E of Title IV or ERISA,
the aggregate liabilities of the Company and its ERISA Affiliates to all Plans
which are multi-employer plans (as defined in Section 400 1 (a)(3) of ERISA) 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 Effective Date would not result
in a Material Adverse Effect; and no lien imposed under the Code or ERISA on the
assets of the Company or any ERISA Affiliate exists or is likely to arise on
account of any Plan.
5.14 ENVIRONMENTAL MATTERS
To the best knowledge of the Company, each of the representations and
warranties set for the in paragraphs (A) through (E) of this subsection is true
and correct with respect to each parcel of real property owned or operated
(within the meaning of any Environmental Law) by the Company or any Subsidiary
(the "PROPERTIES"), except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct could not reasonably be
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expected to cause a material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Company:
(A) The Properties do not contain, and have not previously contained,
in, on, or under, including, without limitation, the soil and groundwater
thereunder, any Hazardous Materials in violation of any Environmental Laws.
(B) The Properties and all operations and facilities at the Properties
are in compliance with all Environmental Laws, and there is no Hazardous
Materials contamination or violation of any Environmental Law which could
interfere with the continued operation of any of the Properties or impair the
fair salable value of any thereof.
(C) Neither the Company nor any Subsidiary has received any complaint,
notice of violation, alleged violation, investigation or advisory action or of
potential liability or of potential responsibility regarding environmental
protection matters or permit compliance with regard to the Properties, nor is
the Company aware that any Governmental Authority is contemplating delivering to
the Company any such notice.
(D) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the Properties, nor have any Hazardous
Materials been transferred from the Properties to any other location in
violation of any Environmental Laws.
(E) There are no governmental, administrative actions or judicial
proceedings pending or contemplated under any Environmental Laws to which the
Company is or will be named as a party with respect to the Properties, nor arc
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to any of the Properties.
5.15 DISTRIBUTION AGREEMENT
The Distribution Agreement and all other agreements entered into by the
Company in connection therewith have been duly executed and delivered by all
parties thereto and are in full force and effect and no "default" or "event of
default" (or any other terms with similar meanings) thereunder has occurred and
is continuing, and the "Distribution" (as defined in the Distribution Agreement)
has occurred in accordance with the terms thereof.
5.16 SOLVENCY
On the Effective Date, both before and after giving effect to the
transactions contemplated by the Distribution Agreement and this Agreement, the
Company (i) is and will be Solvent (as defined in the following sentence), (ii)
is and will continue to be able to pay its debts as they mature, and (iii) has
and will continue to have capital sufficient (and will not be left with
unreasonably small capital) to conduct its business and all businesses in which
it is engaged. "SOLVENT" means that (x) the Company will have assets with a
present fair saleable value greater than the amount of its total liabilities
(including contingent liabilities), (y) the sum of the
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Company's assets at book value exceeds the sum of its debts, and (z) on the
Company's most recent balance sheet, the sum of its assets exceeds the sum of
its liabilities.
6. AFFIRMATIVE COVENANTS
From the Agreement Date until the termination of the Facility and until
the Obligations are paid in full, the Company agrees that it will:
6.1 FINANCIAL INFORMATION
Furnish to the Bank:
(A) The balance sheet and projections referenced in
Section 5.4 not later than two weeks after the Effective Date;
(B) an unaudited income statement of the Company within 20
days after each month end, certified by the Treasurer or higher ranking
financial officer of the Company;
(C) as soon as available and in any event within 45 days after
the end of the fiscal quarter of the Company ending September 30, 2000, the
Company's Form 10-Q containing the balance sheet of the Company as at the end of
such quarterly fiscal period and statements of earnings and cash flows of the
Company for such period, certified by the Treasurer or higher ranking financial
officer of the Company;
(D) CONCURRENTLY WITH THE DELIVERY OF THE FINANCIAL STATEMENT DELIVERED
IN SUBSECTION (C), A CERTIFICATE OF THE CHIEF FINANCIAL OFFICER OF THE COMPANY
SETTING FORTH THE NET WORTH OF THE COMPANY AS OF THE END OF THE PERIOD COVERED
BY SUCH FINANCIAL STATEMENT AND CERTIFYING THAT THE COMPANY HAS NO INDEBTEDNESS
OTHER THAN THE INDEBTEDNESS HEREUNDER AND UNDER THE NOTE; AND
(E) such other information with respect to the condition or
operations, financial or otherwise, of the Company as the Bank may from time to
time reasonably request.
6.2 USE OF PROCEEDS
Use the proceeds of Loans for the general corporate purposes of the
Company.
6.3 PAYMENT OF OBLIGATIONS
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If and to the extent the failure to do so would result in a material
adverse change in the financial condition, operations, assets, business,
properties or prospects of the Company, pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company; and cause each of its Subsidiaries so to
do.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
Licenses, privileges and franchises necessary or desirable in the normal conduct
of its business; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, have a material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Company.
6.5 INSURANCE
Maintain, in the name of the Company or each relevant Subsidiary, with
financially sound and reputable insurance companies, insurance with adequate
coverage on all of its properties.
6.6 BOOKS AND RECORDS
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities.
6.7 NOTICES
Promptly, upon gaining actual knowledge thereof, give notice to the
Bank of
(A) the occurrence of any Unmatured Event of Default or Event of
Default, and
(B) any material adverse change in the financial condition, operations,
assets, business, properties or prospects of the Company.
Each notice pursuant to this subsection shall be accompanied by a statement of
an Authorized Officer setting forth details of the occurrence referred to
therein and stating what action (if any) the Company proposes to take with
respect thereto.
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6.8 PAYMENT OF TAXES
If and to the extent the failure to do any of the following would
result in a material adverse change in the financial condition, operations,
assets, business, properties or prospects of the Company, pay and discharge, and
cause each Subsidiary to pay and discharge, prior to their becoming delinquent
all taxes, assessments and other governmental charges or levies imposed upon it
or its income or upon any of its property or assets, or upon any part thereof,
as well as all lawful claims of any kind (including claims for labor, materials
and supplies) which, if unpaid, might by law become a Lien upon its property;
PROVIDED that neither the Company nor any Subsidiary will be required to pay any
such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall be contested in good faith by appropriate proceedings or
other appropriate actions diligently conducted and if the Company or such
Subsidiary shall have set aside on its books such reserves, if any, with respect
thereto as are required by GAAP and deemed appropriate by the Company and its
independent public accountants.
6.9 FURTHER ASSURANCES
From time to time hereafter, execute and deliver, or cause to be
executed and delivered, such additional instruments, certificates or documents,
and will take all such actions, as the Bank may reasonably request, for the
purposes of implementing or effectuating the provisions of the Loan Documents.
Upon the exercise by the Bank of any power, right, privileges or remedy pursuant
to the Loan Documents, which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Company will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Bank may be required to obtain from the Company for such governmental
consent, approval, recording, qualification or authorization.
6.10 NO DIVIDEND RESTRICTIONS
The Company is not a party to any agreement prohibiting or restricting
the payment of dividends.
7. NEGATIVE COVENANTS
7.1 NEGATIVE PLEDGE
The Company will not, and will not permit any Subsidiary to, create,
assume, incur or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except for the following (the "PERMITTED LIENS"):
(A) Liens existing on the Agreement Date which are set forth on
Schedule 7.1 hereof, and renewals, extensions and continuations thereof,
provided that such renewals, extensions, continuations shall not (i) increase
the Indebtedness secured thereby or (ii) extend the coverage thereof beyond the
original coverage of such Liens;
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(B) Liens for taxes, assessments or other governmental charges not yet
delinquent or being contested in good faith and by appropriate proceedings;
Liens in connection with workers' compensation, unemployment insurance or other
social security obligations; Liens securing the performance of bids, tenders,
contracts, surety and appeal bonds, Liens to secure progress or partial payments
and other Liens of like nature arising in the ordinary course of business;
mechanics', workmen's, materialmen's or other like Liens arising in the ordinary
course of business in respect of obligations which are not yet due or which are
being contested in good faith; and other Liens arising in the ordinary course of
business and incidental to the conduct of the business of the Company or such
Subsidiary or to the ownership of its properties or assets, which were not
incurred in connection with the borrowing of money and which do not materially
detract from the value of the properties or assets of the Company or materially
affect the use thereof in the operation of its business;
(C) Liens in respect of judgments and awards to the extent that such
judgments or awards are being contested in good faith and adequate insurance or
appropriate reserves are maintained with respect thereto on the books of the
Company to the extent required by GAAP and so long as execution is not levied
thereunder;
(D) Liens on an property acquired after the date hereof which Liens
existed when such property was acquired, and extensions and renewals of such
Liens; provided that no such extension or renewal shall increase the aggregate
amount of Indebtedness secured thereby, nor add to the property subject to such
Lien;
(E) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use of property or minor
irregularities of title which do not in the aggregate materially detract from
the value of its property or assets or materially impair the use thereof in the
operations, business or prospects of the Company or its Subsidiaries, and
(F) Liens on the property or assets of any Subsidiary in favor of
the Company or any Subsidiary;
PROVIDED THAT NO SUCH LIENS IN SECTION 7.1(B) THROUGH (F) SHALL SECURE ANY
INDEBTEDNESS.
7.2 DISSOLUTIONS AND MERGERS
The Company shall not merge into or consolidate with or into any
corporation or entity without the Bank's prior written consent.
7.3 DISPOSITION OF ASSETS
The Company shall not, and shall not permit any of its Subsidiaries to,
convey, sell, assign, lease, transfer or dispose all or any portion of its
assets (including accounts receivable and capital stock of Subsidiaries) to any
Person, except (a) sales of inventory in the ordinary course of business and (b)
the sale or other disposition of (i) the common stock of the Gartner Group
(NYSE:IT) and (ii) the Wilton Note.
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7.4 CONDUCT OF BUSINESS
The Company shall not make or permit to be made any material change in
the character of its business as carried on at the Agreement Date.
7.5 COMPLIANCE WITH FEDERAL RESERVE REGULATIONS
The Company shall not use any part of the proceeds of any credit
extended under this Agreement or the Note to purchase or carry, or to reduce or
retire any indebtedness incurred to purchase or carry, any margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
or to extend credit to any Person for the purpose of purchasing or carrying any
margin stock.
7.6 INDEBTEDNESS
The Company will not at any time incur any Indebtedness, except
Indebtedness owed to the Bank and Indebtedness that is used concurrently with
the incurrence thereof to repay all outstanding Loans and FX Contracts under the
Facility.
7.7 NET WORTH
The Company will maintain at all times Net Worth of not less than
$175,000,000.
8. EVENTS OF DEFAULT
8.1 EVENTS
Each of the following shall constitute an Event of Default:
(A) PAYMENTS. The Company fails to pay when due any principal
of any Loan; or the Company fails to pay when due any interest or any other
amount payable hereunder (except under FX Contracts) or under the Note (and such
payment is not made within two (2) days thereafter);or the Company fails to pay
when due any amount payable under a FX Contract (and such payment is not made
within two (2) days thereafter in the case of Dollar-denominated payments or
within three (3) days thereafter in the case of any foreign currency-denominated
payments);
(B) MISREPRESENTATION. Any representation or
warranty of the Company or of the Guarantor made or deemed made under any
Loan Document or under any other writing or certificate furnished by or
on behalf of the Company or the Guarantor to the Bank for the purposes
of or in connection with any Loan Document is incorrect in any material
respect;
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(C) COVENANTS WITHOUT NOTICE. The Company defaults in the due
performance or observance of Section 6.2, 6.7 or 7 (other than Section 7.1); or
the Company defaults in the due performance or observance of any other covenant
or agreement contained herein or in any other Loan Document and such default
shall continue for 10 days after written notice thereof shall have been given to
the Company by the Bank;
(D) OTHER OBLIGATIONS. The Company or any Subsidiary defaults
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other indebtedness of the Company or any
Subsidiary having a principal amount, individually or in the aggregate, in
excess of $1,000,000; or a default shall occur in the performance or observance
of any obligation or condition with respect to such other indebtedness if the
effect of such default in performance or observance is to accelerate the
maturity of any such indebtedness or to permit the holder or holders of such
indebtedness, or any trustee or agent for such holders, to cause such
indebtedness to become due and payable prior to its expressed maturity;
(E) JUDGMENTS UNPAID AND UNSTAYED. Any judgment or order for the
payment of money in excess of $ 1,000,000 shall be rendered against the Company
or any Subsidiary (to the extent such liability is not fully covered by
insurance), shall not be paid or otherwise satisfied, and either
(i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or
(ii) there shall be any period of 10 consecutive days during
which a stay of enforcement of such Judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(F) BANKRUPTCY AND INSOLVENCY. The Company or the Guarantor shall
(i) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become due;
(ii) apply for, consent to or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for the Company or the
Guarantor, as the case may be, or any substantial part of the property thereof,
or make a general assignment for the benefit of creditors;
(iii) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or the Guarantor, as the case
may be, or for a substantial part of the property thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged within 60
days;
(iv) permit to suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Company or the Guarantor, as the case may be, and,
if any such case or proceeding is not commenced by the
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Company or the Guarantor, as the case may be, or any such case or proceeding
shall be consented to or acquiesced in by the Company or the Guarantor, as the
case may be, shall result in the entry of an order for relief or shall remain
for 60 days undismissed; or
(v) take any action authorizing, or in furtherance of, any of the
foregoing.
(G) ERISA. (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan is, shall have been or is likely to
be terminated or the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made to
a Plan or a Foreign Pension Plan has not been timely made or the Company, any
Subsidiary or any ERISA Affiliate has incurred or is likely to incur a liability
to or on account of a Plan under Section 409, 502(i), 502(1), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401 (a)(29), 4971, 4975 or
4980 of the Code (ii) 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 (iii) which lien, security interest
or liability, individually and/or in the aggregate, in the opinion of the Bank,
will have a material adverse effect upon the operations, business, properties or
condition (financial or otherwise) of the Company; or
(H) CONTROL OF THE COMPANY. Any Change in Control shall
occur.
(I) IMS LOAN AGREEMENT. The occurrence of any "Event of
Default" under the IMS Loan Agreement which has not been cured within any
applicable grace period or waived by the Bank.
(J) GUARANTEE AGREEMENT. Any provision of the Guarantee shall
for any reason cease to be in full force and effect and to be valid and binding
on, or enforceable against, the Guarantor, or the Guarantor shall so state in
writing, or the Guarantor shall seek to terminate the Guarantee.
8.2 REMEDIES
Upon the occurrence of an Event of Default under Section 8.l(F), the
commitment of the Bank to make Loans and/or enter into any FX Contracts shall be
terminated and all Loans, all FX Contracts and all other obligations hereunder
shall become immediately due and payable in full; and upon the occurrence of any
other Event of Default, the commitment of the Bank to make Loans may be
terminated by the Bank and the Bank may declare the Note and the principal of
and accrued interest on each Loan, and all other amounts payable hereunder
(including all amounts due under outstanding FX Contracts), to be forthwith due
and payable in full.
9. IMS HEALTH GUARANTEE
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IMS Health Incorporated shall provide the Guarantee substantially in
the form of EXHIBIT B.
10. DEFINITIONS
As used in this Agreement:
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan), A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power:
(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"AGREEMENT" means, on any date, this Agreement as originally in effect
on the Agreement Date and as thereafter from time to time amended, supplemented,
amended and restated or otherwise modified and in effect an such date.
"AGREEMENT DATE" means the date that the Company agrees to the terms
and conditions set forth in this Agreement as it appears on the signature page
hereof.
"AUTHORIZED OFFICER" means each officer or employee of the Company who
is authorized to request Loans and/or FX Contracts on behalf of the Company, to
confirm in writing any such request and to agree to rates of interest or
exchange ratio, as the case may be, as set forth on the schedule of Authorized
Officers for the Company most recently delivered by the Company to the Bank.
"BANKING DAY" means any day other than Saturday, Sunday or other day on
which the Bank is required or permitted to close in New York and, with respect
to Eurodollar Loans on which dealings in Dollars are carried on in the London
interbank market.
"BASE RATE" means a floating rate of interest equal to the higher
(redetermined daily) of (i) the per annum rate of interest as publicly announced
by the Bank from time to time as its prime commercial rate for Dollar Loans made
in the United States (it being understood that such rate may not be the Bank's
best or lowest rate) with any change in the Base Rate resulting from a change in
said prime commercial rate to be effective as of the date of change in said
prime commercial rate, or (ii) the Federal Funds Rate plus 0.5%.
"BASE RATE LOAN" means any Loan which bears interest at the Base Rate.
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"CHANGE IN CONTROL" the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
l3d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 35% or more of the outstanding shares of voting stock of the
Company.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DISTRIBUTION AGREEMENT" means that certain distribution agreement to
be entered into between the Company and the Guarantor in connection with the
distribution of the Company's common stock to the shareholders of the Guarantor,
as it may thereafter be amended, supplemented or otherwise modified.
"DOLLARS" means lawful money of the United States of America.
"EFFECTIVE DATE" means the date that the conditions precedent set forth
in SECTIONS 4.1 and 4.2 have been satisfied or the satisfaction of which has
been waived by the Bank.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority regulating, relating to or
imposing liability or standard of conduct concerning environmental protection
matters, including without limitation, Hazardous Materials, as now or may at any
time hereafter be in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and the regulations promulgated and the rulings issued
thereunder. Section references to ERISA are to ERISA as in effect at the date of
this Agreement and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shaft mean each person (as defined in Section 3(9) of
ERISA) which together with the Company would be deemed to be a "single employee"
(i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as
a result of the Company being or having been a general partner of such person.
"EURODOLLAR LOAN" means any Loan which bears interest based on LIBOR.
"EVENT OF DEFAULT" means an event described in Section 8.1.
"FACILITY" has the meaning set forth in the initial paragraph of this
Agreement.
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"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which are applicable from time to time.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEE" means the Guarantee Agreement dated August 11, 2000 between
the Guarantor and the Bank, as it may thereafter be amended, extended,
supplemented or otherwise modified.
"HAZARDOUS MATERIALS" means any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any faction thereof), defined or regulated as such in or
under any Environmental Law.
"IMS LOAN AGREEMENT" means the letter agreement dated March 2, 2000
between the Guarantor and the Bank pursuant to which the Bank has established a
$75,000,000 revolving credit facility to the Guarantor, as such Agreement may
hereafter be amended, extended, supplemented or otherwise modified.
"INDEBTEDNESS" means, as to any Person, at a particular time without
duplication, (a) all indebtedness of such Person for borrowed money or on
account of advances made to such person or for the deferred purchase price of
property (excluding accounts payable to trade creditors for goods and services
which are incurred in the ordinary course of business and on customary trade
terms), in respect of which such Person is liable or evidenced by any bond,
debenture, note or other instrument, (b) indebtedness arising under acceptance
facilities and the face amount of all letters of credit issued for the account
of such person and, without duplication, all drafts drawn thereunder, (c) all
liabilities secured by any lien on any property owned by such Person even though
it has not assumed or otherwise become liable for the payment thereof, (d)
obligations under leases which have been, or under GAAP are required to be,
capitalized (e) all indebtedness of others with respect to which such person has
provided a guarantee or otherwise has agreed to become directly or indirectly
liable, and (f) all obligations under any interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values.
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"INTEREST PERIOD" means, for any Eurodollar Loan, a time interval of
seven (7) days, one month or three months, as designated by the Company, in each
case commencing on the date of such Loan. Each Interest Period that would
otherwise end on a day which is not a Banking Day shall end on the next
succeeding Banking Day unless such next Banking Day would be the first Banking
Day in the next calendar month, in which case such Interest Period shall end on
the preceding Banking Day. Any Interest Period for a Eurodollar Loan which
begins on the last Banking Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Banking Day of the calendar month at the
end of such Interest Period. No Interest Period shall extend beyond the
Termination Date.
"LIBOR" means relative to any Interest Period for a Eurodollar Loan,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rate per annum at which Dollar deposits in
immediately available funds are offered in the London interbank market at or
about 11:00 a.m. (London time) two Banking Days prior to the beginning of such
Interest Period, which rate appears in the Dow Jones Market Service at Telerate
Page 3750.
"LICENSES" has the meaning set forth in Section 5.5.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financial lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing).
"LOAN" has the meaning set forth in Section 1.
"LOAN DOCUMENTS" means this Agreement, the Note, all FX Contracts, the
Guarantee, and each other agreement, document or instrument delivered in
connection with this Agreement.
"NET WORTH" means, as of any date, (i) the total assets of the Borrower
and its Subsidiaries that would be reflected on the Borrower's consolidated
balance sheet as of such date prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in
the stock and surplus of Subsidiaries, MINUS the sum of (i) the total
liabilities of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in accordance
with GAAP, (ii) the amount of any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the cost of
such assets acquired reflected on the consolidated balance sheet of the Borrower
as of such date prepared in accordance with GAAP.
"NOTE" has the meaning set forth in Section 1.5.
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"OBLIGATIONS" means an obligations (monetary or otherwise) of the
Company arising under or in connection with this Agreement, the Note and each of
the other Loan Documents.
"PERMITTED LIENS" has the meaning set forth in Section 7.1.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" means any multi-employer or single-employer plan as defined in
Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Company or a Subsidiary of the
Company or an ERISA Affiliate and each plan for the five-year period immediately
following the latest date, on which the Company or a Subsidiary of the Company
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"PROPERTIES" has the meaning set forth in Section 5.14.
"REPORTABLE EVENT" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection. .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"REQUIREMENT OF LAW" means, as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"SUBSIDIARY" means any corporation or other entity of which the Company
owns, directly or indirectly, such number of outstanding shares or other voting
interests as have more than 50% of the ordinary voting power for the election of
directors.
"TOTAL FX RISK EXPOSURE" shall mean, with respect to all outstanding FX
Contracts, an amount (calculated on the date that each FX Contract is entered
into) equal to 20% of the notional (or face) amount of such FX Contracts (on a
Dollar equivalent basis for any FX Contract that is denominated in a foreign
currency as determined by the Bank, which determination shall be conclusive
absent manifest error) For purposes of clarification only and subject to the
limitations set forth in Section 1.8, the aggregate notional amount of all FX
Contracts may equal up to $20,000,000 (i.e. $4,000,000 divided by 20%).
"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.
24
<PAGE>
"UNMATURED EVENT OF DEFAULT" means an event which with notice, the
lapse of time or both would constitute an Event of Default.
"WILTON NOTE" means that certain promissory note dated June 17, 1997 in
the original principal amount of $3,000,000 from DIV Wildev, LLC to Cognizant
Corporation assigned by allonge dated June 30, 1998 to the Guarantor and further
assigned by allonge dated not later than the Effective Date to the Borrower.
11. GENERAL
11.1 INSTRUCTIONS
The Company hereby authorizes the Bank to rely upon telephonic, written
or facsimile instructions of any person identifying himself or herself as an
Authorized Officer and upon any signature which the Bank believes to be genuine,
and the Company shall be bound thereby in the same manner as if such person were
authorized or such signature were genuine. The Company agrees to indemnify the
Bank from and against all losses and expenses arising out of the Bank's reliance
on said instructions or signatures.
11.2 PAYMENTS
Payments hereunder and under any other Loan Document shall be made in
immediately available funds in Dollars.
11.3 COSTS
The Company shall pay all reasonable, actual, out-of-pocket costs
(including all reasonable attorneys' fees) of the Bank with respect to the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents, any amendments, waivers, consents or modifications with respect
thereto and of enforcement or collection of every kind, including but not
limited to all reasonable attorneys' fees, court costs and expenses incurred by
the Bank in connection with collection or protection or enforcement of any
rights hereunder whether or not any lawsuit is ever filed.
11.4 INDEMNIFICATION
In consideration of the execution and delivery of this Agreement by the
Bank and the extension of credit hereunder, the Company hereby indemnifies,
exonerates and holds the Bank and each of its officers, directors, employees and
agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of,
25
<PAGE>
or relating to this Agreement or any other Loan Document or any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Loan or any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by the Company of any Hazardous
Material, except for any such Indemnified Liabilities arising from the account
of a particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment in satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
11.5 NOTICES
All notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by facsimile
and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature hereto or at such other address
or facsimile number as may be designated by such party in a notice to the other
parties, Any notice, if mailed and properly addressed with postage prepaid shall
be deemed given five days after mailed. Any notice sent by courier service shall
be deemed given when received. Any notice, if transmitted by facsimile, shall be
deemed given when transmitted.
11.6 SURVIVAL
The obligations of the Company under Sections 2, 3.1, 3.6, 3.7, 11.3
and 11.4 shall survive any payment of the principal of and interest on the Loans
and the termination of this Agreement.
11.7 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of separate counterparts,
each of which when so executed and delivered shall be an original, and all such
counterparts shall together constitute one and the same instrument.
11.8 WAIVER
No modification or waiver with respect to this Agreement or any other
Loan Document shall be effective unless in writing, and any waiver by the Bank
of any rights hereunder or under any other Loan Document shall not constitute a
waiver of any other rights of the Bank from time to time.
11.9 JURISDICTION
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE BANK OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF GEORGIA OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT
26
<PAGE>
OF GEORGIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE BANK'S OPTION, IN THE COURTS
OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF GEORGIAAND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF GEORGIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY CONSENTS TO PERSONAL SERVICE WITHIN OR WITHOUT THE STATE
OF GEORGIA. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID Of
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, THE NOTE AND EACH OTHER LOAN DOCUMENT.
11.10 WAIVER OF JURY TRIAL
THE COMPANY AND THE BANK WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE
NOTE OR ANY OTHER LOAN DOCUMENT, AND THE COMPANY AND THE BANK AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.
11.11 APPLICABLE LAW
This Agreement, the Note and each other Loan Document shall be governed
by the internal laws of the State of Georgia applicable to contracts made and to
be performed entirely within such State.
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<PAGE>
Please acknowledge your agreement to the foregoing by signing and
returning a copy of this letter.
Very truly yours
SUNTRUST BANK
By:
------------------------------------
Title:
ADDRESS: 717 FIFTH AVENUE, 16TH FLOOR
New York, New York 10022
Attn: Ms. Allison Vella
Telecopier Number: (212) 371-9386
Telephone Number: (212) 583-2606
Agreed to this day of
---
August, 2000
SYNAVANT INC.
By:
----------------------------------
Title:
By: [CORPORATE SEAL]
----------------------------------
Title:
Address: 3445 Peachtree Road, NE
Suite 1400
Atlanta, Georgia 30326
Attn: Craig Kussman
Chief Financial Officer
Telecopier Number: (404) 846-3950
Telephone Number: (404) 846-3680
28
<PAGE>
EXHIBIT "A"
NOTE
$20,000,000 [TO BE DATED THE EFFECTIVE DATE]
FOR VALUE RECEIVED, Synavant Inc., a Delaware corporation (the
"Borrower"), promises to pay to the order of SunTrust Bank (the "Bank") the
principal sum of Twenty Million Dollars ($20,000,000) or, if less, the aggregate
unpaid principal amount of all Loans made by the Bank pursuant to that certain
letter agreement, dated as August 11, 2000 (together with all amendments and
other modifications, if any, from time to time thereafter made thereto, the
"Credit Agreement"), between the Borrower and the Bank payable on the dates
specified in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money
of the United States of America in same day or immediately available funds.
This Note is the Note referred to in, and evidences indebtedness
incurred under, the Credit Agreement, to which reference is made for a statement
of the terms and conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the indebtedness evidenced by
this Note and on which such indebtedness may be declared to be immediately due
and payable. Unless otherwise defined, terms used herein have the meanings
provided in the Credit Agreement.
The amount, the rate of interest and the Interest Period, if
applicable, shall be endorsed by the Bank an the schedule attached to this Note,
or at the Bank's option, in the records of the Bank which schedule or records
shall be conclusive, absent manifest error.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
In addition, should legal action or an attorney-at-law be utilized to collect
any amount due hereunder, the Borrower further promises to pay all costs of
collection, including the reasonable attorneys' fees of the Lender.
SYNAVANT INC.
By:
----------------------------------------
Title:
By:
----------------------------------------
Title:
A-1
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LOANS AND PRINCIPAL PAYMENTS
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Date of Loan or Amount of Applicable Maturity Amount of Principal Unpaid Principal Initials of
Payment Loan Interest Rate Date Payment Balance Person
Making
Notation
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</TABLE>
A-2
<PAGE>
A-3
<PAGE>
EXHIBIT "B"
GUARANTEE AGREEMENT dated as of August 11, 2000 between IMS HEALTH
INCORPORATED, a Delaware corporation (the "GUARANTOR"), and SUNTRUST BANK, a
Georgia banking corporation (the "LENDER").
Reference is made to that certain letter agreement dated as of August
11, 2000 (as hereafter amended, extended, supplemented or otherwise modified,
the "LOAN AGREEMENT"; all defined terms used herein not otherwise defined herein
shall have the meanings ascribed to them therein) between the Bank and Synavant,
Inc., a Delaware corporation (the "BORROWER") and the Note to be dated as of the
Effective Date attached thereto (as amended, extended, supplemented or otherwise
modified from time to time, the "NOTE"), pursuant to which the Lender has
established a $20,000,000 revolving credit facility (the "FACILITY") to the
Borrower. The Borrower is a former subsidiary of the Guarantor and, as part of
the transactions contemplated under the Distribution Agreement, the Guarantor
has agreed to provide certain credit support to the Borrower in order to effect
the Distribution (as defined in the Distribution Agreement). The obligation of
the Lender to establish the Facility and to make any Loans and/or to enter into
any FX Contracts under the Facility is conditioned on, among other things, the
execution and delivery by the Guarantor of this Guarantee Agreement (as it may
hereafter be amended, extended, supplemented or otherwise modified, the
"GUARANTEE"). As consideration therefor and in order to induce the Lender to
establish the Facility and to make Loans and to enter into FX Contracts
thereunder, the Guarantor is willing to execute this Guarantee.
Accordingly, the parties hereto agree as follows:
SECTION 1. GUARANTEE. The Guarantor unconditionally guarantees, as a
primary obligor and not merely as a surety, (a) the due and punctual payment of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on all Loans made pursuant to the Loan Agreement, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, and (ii) all other monetary obligations, including all amounts due
under any FX Contract and all fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred pursuant to Section 6(b) hereof and/or during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Borrower
to the Lender under the Loan Agreement and/or any of the other Loan Documents to
which it is a party, and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to
Loan Agreement and/or any of the other Loan Documents to
B-1
<PAGE>
which it is a party (all the monetary and other obligations referred to in the
preceding clauses (a) and (b) being collectively called the "GUARANTEED
OBLIGATIONS").
SECTION 2. OBLIGATIONS NOT WAIVED. The Guarantor waives presentment to,
demand of payment from and protest to the Borrower of any of the Guaranteed
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. The obligations of the Guarantor hereunder shall not be
affected by (a) the failure of the Lender to assert any claim or demand or to
enforce or exercise any right or remedy against the Borrower or any other
guarantor under the provisions of the Loan Agreement or the Note or otherwise,
(b) any rescission, waiver, amendment or modification of, or any release from
any of the terms or provisions of, this Guarantee, the Loan Agreement or the
Note, or (c) the failure to perfect any security interest in, or the release of,
any of the security held by or on behalf of the Lender pursuant to the Loan
Agreement or the Note.
SECTION 3. GUARANTEE OF PAYMENT. Subject to Section 7(b) hereof, the
Guarantor agrees that its guarantee constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any resort be had by
the Lender to any security held for payment of the Guaranteed Obligations or to
any balance of any deposit account or credit on the books of the Lender in favor
of the Borrower or any other person.
SECTION 4. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The obligations
of the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Guaranteed
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise or the failure to
give any notice to the Guarantor as provided for in Sections 1 and 2 hereof.
Without limiting the generality of the foregoing, the obligations of the
Guarantor hereunder shall not be discharged or impaired or otherwise affected by
the failure of the Lender to assert any claim or demand or to enforce any remedy
under the Loan Agreement or the Note, by any waiver or modification of any
provision of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations, or by any other act
or omission that may or might in any manner or to the extent vary the risk of
the Guarantor or that would otherwise operate as a discharge of the Guarantor as
a matter of law or equity (other than the indefeasible payment in full in cash
of all the Guaranteed Obligations).
B-2
<PAGE>
SECTION 5. DEFENSES OF BORROWER WAIVED. The Guarantor waives any
defense based on or arising out of any defense of the Borrower or the
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower, other
than the final and indefeasible payment in full in cash of the Guaranteed
Obligations. The Lender may, at its election, foreclose on any security held by
it by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Guaranteed Obligations, make any other accommodation with the Borrower or any
other guarantor, without affecting or impairing in any way the liability of the
Guarantor hereunder, except to the extent the Guaranteed Obligations have been
fully, finally and indefeasibly paid in cash. The Guarantor waives any defense
arising out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantor against the Borrower or
any other guarantor, as the case may be, or any security.
SECTION 6. AGREEMENT TO PAY; SUBORDINATION. (a) In furtherance of the
foregoing and not in limitation of any other right that the Lender has at law or
in equity against the Guarantor by virtue hereof, upon the failure of the
Borrower to pay any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
the Guarantor hereby promises to and will forthwith pay, or cause to be paid, to
the Lender in cash the amount of such unpaid Guaranteed Obligation. Upon payment
by the Guarantor of any sums to the Lender, all rights of the Guarantor against
the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Guaranteed Obligations. In addition, any indebtedness of
the Borrower now or hereafter held by the Guarantor is hereby subordinated in
right of payment to the prior indefeasible payment in full in cash of the
Guaranteed Obligations. If any amount shall erroneously be paid to the Guarantor
on account of (i) such subrogation, contribution, reimbursement, indemnity or
similar right or (ii) any such indebtedness of the Borrower, such amount shall
be held in trust for the benefit of the Lender and shall forthwith be paid to
the Lender to be credited against the payment of the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Loan
Agreement.
(b) Notwithstanding the foregoing, if the Borrower shall fail
to pay any Guaranteed Obligation when due and payable, the Lender agrees that,
in lieu of the immediate payment by the Guarantor as contemplated in Section
6(a), the Guarantor shall pay to the Lender an amount equal to such unpaid
Guaranteed Obligations (including without limitation any estimated costs and
expenses (including estimated attorneys' fees) that the Lender may incur in the
enforcement of its rights and remedies under the Loan Agreement and/or any other
Loan Document, which the Guarantor agrees constitute for all purposes hereunder
"Guaranteed Obligations") . All amounts so received by the Lender (and all
investments of such amounts and earnings and proceeds of such investments) shall
be held by the Lender in a cash collateral account in the name of the Lender
entitled "IMS Health/Synavant Cash Collateral Account" (the
B-3
<PAGE>
"CASH COLLATERAL ACCOUNT") as collateral for the prompt payment of such
Guaranteed Obligations. At the Lender's request, the Guarantor hereby agrees to
enter into such agreement or agreements in connection with the establishment of
the Cash Collateral Account and the perfection of the Lender's security interest
therein. The Lender may, but shall be under no obligation to, pursue any rights
and remedies available to the Lender under the Loan Agreement and at law or in
equity against the Borrower as it deems necessary or desirable and only for such
period of time as it shall decide in its sole discretion. If the Borrower has
not paid the full amount of the Guaranteed Obligations to the Lender in cash
within a period of time deemed reasonable by the Lender after demand by the
Lender, the Guarantor hereby authorizes the Lender to apply the proceeds in the
Cash Collateral Account to the repayment of all Guaranteed Obligations. If the
proceeds in the Cash Collateral Account shall be insufficient to repay the
amount of the Guaranteed Obligations in full in cash, the Guarantor hereby
agrees to pay an amount equal to such shortfall to the Lender immediately upon
demand. The Guarantor waives any right or defense to this Guarantee that it may
have as a result of the type of action, if any, that the Lender takes to collect
the Guaranteed Obligations from the Borrower and the determination by the Lender
of how long to proceed against the Borrower before using the proceeds in the
Cash Collateral Account to repay the Guaranteed Obligations, and acknowledges
and agrees that it is estopped from objecting to any such action (or inaction,
as the case may be) on any grounds. The Guarantor further agrees that,
notwithstanding this Section 6(b), this Guarantee remains a guaranty of payment
and not of collection.
SECTION 7. INFORMATION. The Guarantor assumes all responsibility for
being and keeping itself informed of the 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 that
the Guarantor assumes and incurs hereunder, and agrees that the Lender will not
have any duty to advise it of information known to it regarding such
circumstances or risks.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants to the Lender that:
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has all requisite power and authority, and the legal right, to
own, operate and lease its properties and to carry on the business in which it
is engaged or presently proposes to engage, and is duly qualified where it is
required to be so qualified or licensed except where a failure to be so
qualified would not cause a material adverse change in financial condition,
operations, assets, business, properties or prospects of the Guarantor, and in
compliance with all Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, cause a material adverse change in
the financial condition, operations, assets, business, properties or prospects
of the Guarantor.
B-4
<PAGE>
(b) The Guarantor has all requisite power and authority to
execute, deliver and perform this Guarantee. The Guarantor has taken all
necessary corporate and legal action to authorize the execution and delivery and
performance of this Guarantee. This Guarantee has been executed and delivered by
a duly authorized representative of the Guarantor, and this Guarantee
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally and except as enforceability
may be limited by general principles of equity and an implied covenant of good
faith.
(c) The execution, delivery and performance of this Guarantee
by the Guarantor (i) do not require any consent or approval of, registration or
filing with, or any action by, any governmental authority, except those as have
been obtained or made and are in full force and effect or where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect upon its financial condition, business,
properties or prospects, (ii) will not violate any provision of any existing
law, treaty or regulation or of any order, judgment, award or decree of any
court, arbitrator, Governmental Authority or any Requirement of Law or
Contractual Obligation applicable to the Guarantor and will not result in the
creation or imposition of any Lien on any of the material properties or assets
of the Guarantor pursuant to the provisions of any such Requirement of Law or
Contractual Obligation.
(d) On and as of the Effective Date, both before and after
giving effect to the transactions contemplated by the Distribution Agreement and
this Guarantee, the Guarantor (i) is and will be Solvent (as defined in the
following sentence), (ii) is and will continue to be able to pay its debts as
they mature, and (iii) has and will continue to have capital sufficient (and
will not be left with unreasonably small capital) to conduct its business and
all businesses in which it is engaged. "SOLVENT" means that (x) the Guarantor
will have assets with a present fair saleable valuegreater than the amount of
its total liabilities (including contingent liabilities), (y) the sum of the
Guarantor's assets at book value exceeds the sum of its debts, and (z) on the
Guarantor's most recent balance sheet, the sum of its assets exceeds the sum of
its liabilities.
(e) ALL REPRESENTATIONS AND WARRANTIES IN THE CURRENT LETTER AGREEMENT
DATED MARCH 2, 2000 BETWEEN THE GUARANTOR AND THE LENDER IN CONNECTION WITH THE
$75,000,000 REVOLVING CREDIT FACILITY (THE "EXISTING LOAN AGREEMENT") ARE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE HEREOF (EXCEPT TO THE EXTENT
ANY SUCH REPRESENTATION OR WARRANTY IS EXPRESSLY MADE AS OF A PRIOR DATE).
(f) NO "EVENT OF DEFAULT" OR "UNMATURED EVENT OF DEFAULT" (EACH AS
DEFINED IN THE EXISTING LOAN AGREEMENT) EXISTS UNDER THE EXISTING LOAN
AGREEMENT.
SECTION 9. TERMINATION. The guarantees made hereunder (a) shall
terminate when all the Guaranteed Obligations have been paid in full in cash,
and the Lender has no further commitment to lend under the Loan Agreement and
(b) shall continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any Guaranteed
B-5
<PAGE>
Obligation is rescinded or must otherwise be restored by the Lender or the
Guarantor upon the bankruptcy or reorganization of the Borrower, the Guarantor
or otherwise. In connection with the foregoing, the Lender shall execute and
deliver to the Guarantor or the Guarantor's designee, at the Guarantor's
expense, any documents or instruments which the Guarantor shall reasonably
request from time to time to evidence such termination and release.
SECTION 10. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS. Whenever in
this Guarantee any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantor that are contained in
this Guarantee shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Guarantee shall become effective
as to the Guarantor when a counterpart hereof executed on behalf of the
Guarantor shall have been delivered to the Lender, and a counterpart hereof
shall have been executed on behalf of the Lender, and thereafter shall be
binding upon the Guarantor and the Lender and their respective successors and
assigns, and shall inure to the benefit of the Guarantor, the Lender, and their
respective successors and assigns, except that the Guarantor shall not have the
right to assign its rights or obligations hereunder or any interest herein (and
any such attempted assignment shall be void).
SECTION 11. WAIVERS; AMENDMENT.
(a) No failure or delay of the Lender of any in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder are cumulative and are not exclusive of any
rights or remedies that it would otherwise have. No waiver of any provision of
this Guarantee or consent to any departure by the Guarantor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver and consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the
Guarantor in any case shall entitle the Guarantor to any other or further notice
in similar or other circumstances.
(b) Neither this Guarantee nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantor and the Lender.
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SECTION 12. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE OF THE STATE OF GEORGIA (WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW).
SECTION 13. NOTICES. All communications and notices hereunder shall be
in writing (including telecopier or similar writing, but not e-mail) and shall
be given to such party at its address or telecopier number set forth on the
signature pages hereof or such other address or telecopier number as such party
may hereafter specify for the purpose of notice to such other party. Each such
notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section and the information is received, (ii) if given by mail, 3
Domestic Business Days after such communication is deposited in the mail with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section.
SECTION 14. SURVIVAL OF GUARANTEE; SEVERABILITY.
(a) All covenants, agreements, representations and warranties made by
the Guarantor herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Guarantee shall be considered
to have been relied upon by the Lender and shall survive the making by the
Lender of any Loans or FX Contracts pursuant to the Loan Agreement regardless of
any investigation made by the Lender or on its behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan, any amount due under any FX Contract or any other fee or amount payable
under this Guarantee is outstanding and unpaid and as long as the Facility has
not been terminated.
(b) In the event one or more of the provisions contained in this
Guarantee, in the Loan Agreement or in any other document related thereto should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
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SECTION 15. COUNTERPARTS. This Guarantee may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Guarantee by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Guarantee.
SECTION 16. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) The Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Georgia state
court or Federal court of the United States of America sitting in Atlanta,
Georgia, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guarantee or any other documents in
connection therewith, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such Georgia state court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guarantee shall affect any right that the Lender may otherwise
have to bring any action or proceeding relating to this Guarantee or the other
documents executed and delivered in connection therewith against the Guarantor
or its properties in the courts of any jurisdiction.
(b) The Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guarantee in any Georgia state or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(c) Each party to this Guarantee irrevocably consents to service of
process in the manner provided for notices in Section 13. Nothing in this
Guarantee will affect the right of any party to this Guarantee to serve process
in any other manner permitted by law.
SECTION 17. WAIVER OF JURY TRIAL. THE GUARANTOR HERBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS GUARANTEE.
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SECTION 18. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, the Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other Indebtedness at any time owing by the Lender to or for the credit
or the account of the Guarantor against any or all the obligations of the
Guarantor now or hereafter existing under this Guarantee held by the Lender,
irrespective of whether or not the Lender shall have made any demand under this
Guarantee or any other Loan Document and although such obligations may be
unmatured. The rights of the Lender under this Section 18 are in addition to
other rights and remedies (including other rights of setoff) which the Lender
may have.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON THE FOLLOWING PAGE].
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Guarantee as of the day and year first above written.
IMS HEALTH INCORPORATED
By:
-----------------------------------
Name:
Title:
200 Nyala Farms
Westport, Connecticut 06880
Attn: Mr. Matthew Friedman
Telecopier Number: (203) 222-4552
Telephone Number: (203) 222-4435
SUNTRUST BANK
By:
------------------------------------
Name:
Title:
717 Fifth Avenue, 16th Floor
New York, New York 10022
Attn: Ms. Allison Vella
Telecopier Number: (212) 371-9386
Telephone Number: (212) 583-2606
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