<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission File No. 1-4850
COMPUTER SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 95-2043126
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2100 East Grand Avenue
El Segundo, California 90245
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (310) 615-0311
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
160,465,545 shares of Common Stock, $1.00 par value, were outstanding on
October 29, 1999.
<PAGE>
COMPUTER SCIENCES CORPORATION
Index to Form 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income, Second Quarter and
Six Months Ended October 1, 1999 and October 2, 1998 ........... 3
Consolidated Condensed Balance Sheets,
October 1, 1999 and April 2, 1999 .............................. 4
Consolidated Condensed Statements of Cash Flows,
Six Months Ended October 1, 1999 and October 2, 1998 ........... 5
Notes to Consolidated Condensed Financial Statements .............. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............ 10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk .............................................. 16
PART II. OTHER INFORMATION
Item 4. Submission of matters to a Vote of Security-Holders .......... 17
Item 6. Exhibits and Reports on Form 8-K ............................. 18
2
<PAGE>
<TABLE>
PART I, ITEM 1. FINANCIAL STATEMENTS
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited)
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------- ----------------------
(In thousands except Oct. 1, Oct. 2, Oct. 1, Oct. 2,
per-share amounts) 1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $2,126,100 $1,847,771 $4,189,480 $3,601,699
---------- ---------- ---------- ----------
Costs of services 1,676,501 1,451,204 3,312,138 2,833,254
Selling, general
and administrative 178,907 172,650 366,194 335,474
Depreciation and
amortization 125,999 105,337 240,628 209,439
Interest expense 13,956 11,575 27,239 23,476
Interest income (3,986) (2,542) (8,910) (5,926)
---------- ---------- ---------- ----------
Total costs and expenses 1,991,377 1,738,224 3,937,289 3,395,717
---------- ---------- ---------- ----------
Income before taxes 134,723 109,547 252,191 205,982
Taxes on income 45,100 36,500 84,300 68,600
---------- ---------- ---------- ----------
Net income $ 89,623 $ 73,047 $ 167,891 $ 137,382
========== ========== ========== ==========
Earnings per share
(note A):
Basic $ 0.56 $ 0.46 $ 1.05 $ 0.87
========== ========== ========== ==========
Diluted $ 0.55 $ 0.45 $ 1.03 $ 0.85
========== ========== ========== ==========
</TABLE>
[FN]
See accompanying notes.
3
<PAGE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Oct. 1, April 2,
(In thousands) 1999 1999
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 262,919 $ 602,593
Receivables 1,983,743 1,777,262
Prepaid expenses and other current assets 309,321 289,130
----------- -----------
Total current assets 2,555,983 2,668,985
----------- -----------
Goodwill 726,833 653,034
Software and other assets 685,476 598,815
Property and equipment, net of accumulated
depreciation and amortization of
$1,346,383 and $1,226,569 1,163,092 1,086,875
----------- -----------
Total assets $5,131,384 $5,007,709
=========== ===========
LIABILITIES
Short-term debt and current
maturities of long-term debt $ 243,642 $ 592,942
Accounts payable 316,259 374,978
Accrued payroll and related costs 435,795 386,788
Other accrued expenses 444,529 459,821
Deferred revenue 135,330 137,378
Income taxes payable 165,404 129,505
----------- -----------
Total current liabilities 1,740,959 2,081,412
----------- -----------
Long-term debt, net 667,413 397,860
----------- -----------
Other long-term liabilities 118,293 128,583
----------- -----------
STOCKHOLDERS' EQUITY (note B)
Common stock issued, par value $1.00 per share 160,571 159,510
Additional paid in capital 764,894 730,238
Earnings retained for use in business 1,746,016 1,578,125
Accumulated other comprehensive income (note D) (51,319) (53,235)
Less common stock in treasury (15,223) (14,413)
Unearned restricted stock and other (220) (371)
----------- -----------
Total stockholders' equity 2,604,719 2,399,854
----------- -----------
Total liabilities and stockholders' equity $5,131,384 $5,007,709
=========== ===========
</TABLE>
[FN]
See accompanying notes.
4
<PAGE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------
(In thousands, increase (decrease) Oct. 1, Oct. 2,
in cash and cash equivalents) 1999 1998
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 167,891 $ 137,382
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 240,628 209,439
Provision for losses on accounts receivable 2,949 4,955
Changes in assets and liabilities, net of
effects of acquisitions:
Increase in assets (154,048) (214,357)
(Decrease)increase in liabilities (59,422) 47,390
---------- ----------
Net cash provided by operating activities 197,998 184,809
---------- ----------
Investing activities:
Purchases of property and equipment (218,675) (192,552)
Acquisitions, net of cash acquired (94,152) (25,811)
Dispositions 37,947
Outsourcing contracts (106,826) (33,086)
Software (35,908) (35,201)
Other investing cash flows 11,210 649
---------- ----------
Net cash used in investing activities (444,351) (248,054)
---------- ----------
Financing activities:
Borrowings(repayments) under commercial paper, net 16,444 (887)
Borrowings under lines of credit, net 31,105 3,466
Principal payments on long-term debt (166,372) (9,481)
Proceeds from stock option transactions 22,890 31,492
Other financing cash flows 2,767 1,277
---------- ----------
Net cash (used in) provided by financing activities (93,166) 25,867
---------- ----------
Effect of exchange rate changes on cash
and cash equivalents (155) 4,750
---------- ----------
Net decrease in cash and cash equivalents (339,674) (32,628)
Cash and cash equivalents at beginning of year 602,593 274,688
---------- ----------
Cash and cash equivalents at end of period $ 262,919 $ 242,060
========== ==========
</TABLE>
[FN]
See accompanying notes.
5
<PAGE>
COMPUTER SCIENCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited)
(A) Basic and diluted earnings per share are calculated as follows (in
thousands except per share amounts):
<TABLE>
<CAPTION>
Second Quarter Ended
--------------------------------
Oct. 1, 1999 Oct. 2, 1998
------------ ------------
<S> <C> <C>
Net income for basic and diluted EPS $ 89,623 $ 73,047
======== ========
Common share information:
Average common shares outstanding
for basic EPS 160,019 158,031
Dilutive effect of stock options 3,293 3,987
-------- --------
163,312 162,018
======== ========
Basic EPS $ 0.56 $ 0.46
Diluted EPS 0.55 0.45
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
Oct. 1, 1999 Oct. 2, 1998
------------ ------------
<S> <C> <C>
Net income for basic and diluted EPS $167,891 $137,382
======== ========
Common share information:
Average common shares outstanding
for basic EPS 159,704 157,679
Dilutive effect of stock options 3,291 3,933
-------- --------
162,995 161,612
======== ========
Basic EPS $ 1.05 $ 0.87
Diluted EPS 1.03 0.85
</TABLE>
In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 128, the computation of diluted EPS did not include stock options
which were antidilutive, as their exercise price was greater than the
average market price of the common stock of Computer Sciences Corporation
("CSC" or the "Company") during the year. The number of such options was
202,857 and 47,918 at October 1, 1999 and October 2, 1998, respectively.
(B) No dividends were paid during the periods presented. At October 1, 1999
and April 2, 1999, there were 160,571,439 and 159,510,065 shares,
respectively, of $1.00 par value common stock issued, and 382,442 and
369,607 shares, respectively, of treasury stock.
6
<PAGE>
(C) Cash payments for interest on indebtedness were $30.8 million and $22.3
million for the six months ended October 1, 1999 and October 2, 1998,
respectively. Cash payments (refunds) for taxes on income were $28.6
million and $(54.7) million for the six months ended October 1, 1999
and October 2, 1998, respectively.
(D) The components of comprehensive income, net of tax, are as follows
(in thousands):
<TABLE>
<CAPTION>
Second Quarter Ended
--------------------------------
Oct. 1, 1999 Oct. 2, 1998
------------ ------------
<S> <C> <C>
Net income $ 89,623 $ 73,047
Foreign currency translation
adjustment 11,419 29,697
--------- ---------
Comprehensive income $101,042 $102,744
========= =========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
Oct. 1, 1999 Oct. 2, 1998
------------ ------------
<S> <C> <C>
Net income $167,891 $137,382
Foreign currency translation
adjustment 1,916 20,595
--------- ---------
Comprehensive income $169,807 $157,977
========= =========
</TABLE>
Accumulated other comprehensive income presented on the accompanying
consolidated condensed balance sheets consists of the accumulated
foreign currency translation adjustment and the minimum pension liability
adjustment.
(E) CSC's business involves operations which provide management and
information technology consulting, systems integration and outsourcing.
Based on the criteria of SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information," CSC has two reportable segments: the
U.S. Federal Sector and the Global Commercial Sector. The U.S. Federal
Sector operates principally within a regulatory environment subject to
governmental contracting and accounting requirements, including Federal
Acquisition Regulations, Cost Accounting Standards and audits by various
U.S. Federal agencies. The U.S. Federal Sector revenues reported below
will vary from U.S. Federal government revenue presented elsewhere in
this report due to overlapping activities between segments. Information
on reportable segments is as follows (in thousands):
7
<PAGE>
<TABLE>
<CAPTION>
Global U.S.
Commercial Federal
Sector Sector Corporate Total
---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Second Quarter Ended
October 1,1999
Revenues $1,650,203 $475,160 $ 737 $2,126,100
Earnings (loss) before
interest and taxes 118,756 27,068 (1,131) 144,693
Second Quarter Ended
October 2,1998
Revenues $1,391,290 $456,437 $ 44 $1,847,771
Earnings (loss) before
interest and taxes 96,568 25,922 (3,910) 118,580
</TABLE>
<TABLE>
<CAPTION>
Global U.S.
Commercial Federal
Sector Sector Corporate Total
---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Six Months Ended
October 1,1999
Revenues $3,237,015 $951,646 $ 819 $4,189,480
Earnings (loss) before
interest and taxes 220,244 55,325 (5,049) 270,520
Six Months Ended
October 2,1998
Revenues $2,685,495 $916,118 $ 86 $3,601,699
Earnings (loss) before
interest and taxes 176,160 52,316 (4,944) 223,532
</TABLE>
8
<PAGE>
(F) CSC adopted the American Institute of Certified Public Accountants
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" as of the first quarter
of fiscal 2000. This statement requires the capitalization of internal
use computer software costs provided that certain criteria are met. These
capitalized software costs are amortized on a straight-line basis over
the useful life of the software. The adoption of SOP 98-1 had no material
impact on the Company's consolidated financial position, results of
operations or cash flows.
(G) In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This statement requires all derivatives to be recorded on
the balance sheet at fair value and establishes accounting standards for
hedging activities. In June 1999, the FASB issued SFAS No. 137, which
amends SFAS No. 133 by deferring its effective date one year to fiscal
years beginning after June 15, 2000. The Company is currently assessing
the impact this statement will have and, based on preliminary estimates,
does not expect the adoption to have a material impact on its consolidated
financial position or results of operations.
(H) The financial information reported, which is not necessarily indicative
of the results for a full year, is unaudited but includes all adjustments
which the Company considers necessary for a fair presentation. All such
adjustments are normal recurring adjustments.
(I) On September 19, 1999, the Company and its wholly owned subsidiary, Nevada
Acquisition Corporation, entered into an Agreement and Plan of Merger with
Nichols Research Corporation ("Nichols"). The Agreement provides for the
acquisition of Nichols by the Company through the merger of Nevada
Acquisition Corporation with and into Nichols. Nichols is a leading
information technology services company primarily focusing on the U.S.
federal market, with services also provided to the healthcare and
consulting and systems integration markets. The merger will be accounted
for as a pooling of interests. Completion of the merger is subject to
approval by the shareholders of Nichols. A special meeting of Nichols'
shareholders will be held on November 16, 1999 to vote on the merger.
9
<PAGE>
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Second Quarter and First Six Months of Fiscal 2000 versus
Second Quarter and First Six Months of Fiscal 1999
Revenues
During the second quarter ended October 1, 1999, the Company's total revenue
increased 15.1%, or $278.3 million, over the same period last year.
Global commercial sector revenues grew 18.6%, or $258.9 million over the same
quarter of last year.
U.S. Commercial revenue grew 14.9% or $109.2 million during the second quarter
of fiscal 2000 over the same period last year. Over two-thirds of the growth
was generated from information technology outsourcing contracts. The balance
was due to demand for services related to enterprise-wide solutions,
e-business, supply chain and systems integration, and growth within the
Company's healthcare vertical markets.
European revenues grew $78.9 million or 14.5% during the second quarter.
The growth was provided principally from increases in outsourcing activities,
additional demand for consulting and systems integration activities and
revenue generated by acquisitions made last year in France, Italy and the
Netherlands. Revenue growth was negatively impacted by nearly 3% due to the
effect of European currency fluctuations.
Other international revenue for the second quarter grew 60.4% to $187.7
million. The increase was the result of last year's fourth quarter
acquisition of Singapore-based CSA Holdings, Ltd. and further expansion of
CSC's Australia operations.
U.S. Federal sector revenue increased 4.1% or $18.8 million during the second
quarter. Revenue gains generated from civil agencies were partially offset by
reductions in services performed on several NASA and Department of Defense
contracts.
For the first half of fiscal 2000, the Company's total revenue increased 16.3%
or $587.8 million and the Company announced a total of $5.3 billion in new
Global Commercial and Federal business awards. The Company's continued growth
has created a broad global revenue base across numerous customers, industries,
geographic regions and service regions.
10
<PAGE>
Costs and Expenses
The Company's costs and expenses as a percentage of revenue are as follows
(dollars in millions):
<TABLE>
<CAPTION>
Dollar Amount Percentage of Revenue
-------------- --------------------------------
Second Quarter Second Quarter First Six Months
-------------- -------------- ----------------
Fiscal Fiscal Fiscal
-------------- -------------- ----------------
2000 1999 2000 1999 2000 1999
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Costs of services $1,676 $1,451 78.9% 78.5% 79.1% 78.7%
Selling, general & admin. 179 173 8.4 9.4 8.7 9.3
Depreciation and amort. 126 105 5.9 5.7 5.7 5.8
Interest expense, net 10 9 0.5 0.5 0.5 0.5
------ ------ ------ ------ ------ ------
Total $1,991 $1,738 93.7% 94.1% 94.0% 94.3%
====== ====== ====== ====== ====== ======
</TABLE>
Comparing both the second quarter and first six months of fiscal 2000 and
fiscal 1999, total costs and expenses improved as a percentage of revenue.
Lower costs in selling, general and administrative expenses were partially
offset by increases in cost of services.
Lower selling, general and administrative expenses as a percentage of revenue
were substantially related to lower costs recorded in the Company's Federal
Sector as well as a lower percentage of costs in European operations and
vertical markets. The lower costs in the Federal Sector are attributable to
efficiencies realized as a result of last year's reorganization within the
Federal Sector and significant bid and proposal expenses incurred during last
year's second quarter. The increase in costs of services as a percentage of
revenue was primarily due to the operations of Singapore-based CSA Holdings,
Ltd which typically has a higher rate of costs of services in comparison with
the rest of the Company's operations.
Income Before Taxes
Due to the Company's revenue growth and improvements in operating performance,
income before taxes increased $25.2 million to $134.7 million, up 23% over the
same quarter last year. The resulting margin was 6.3% compared to 5.9% for
last year's second quarter and was 6.0% versus 5.7% for the six months of
fiscal 2000 and fiscal 1999, respectively.
11
<PAGE>
Net Income
Net income was up $16.6 million to $89.6 million for the second quarter of
fiscal 2000, up 22.7% over last year's second quarter. This year's second
quarter diluted earnings per share of 55 cents increased 22.2% over last
year's second quarter diluted earnings per share of 45 cents. On a year to
date basis, diluted earnings per share were $1.03, up 18 cents, or 21.2% over
the same period last year.
Cash Flows
Cash provided by operating activities was $198 million for the six months
ended October 1, 1999, compared with $184.8 million during the same period
last year. The increase of $13.2 million resulted from an increase in
earnings and non-cash depreciation and amortization expenses partially offset
by changes in working capital.
The Company's cash expenditures for investing activities totaled $444.4
million for the most recent six months versus $248.1 million during the same
period of last year. The increase principally relates to purchases of
outsourcing assets, property and equipment and acquisitions made in Italy,
Austria and the United States.
Cash used for financing activities was $93.2 million for the most recent six
months versus cash provided by financing activities of $25.9 million for the
same period last year. The change is due to repayment of the Company's $150
million 6.80% notes due April 1999 offset in part by other financing
activities.
Financial Condition
During the first six months of fiscal 2000, the Company's capital outlays
included $419.7 million of business investments in the form of fixed asset
purchases, acquisitions and outsourcing contracts. These investments as well
as the repayment of the Company's $150 million 6.80% notes due April 1999 were
funded from operating cash flows, additional borrowings and existing cash
balances, which decreased from $602.6 million to $262.9 million. The
Company's debt-to-total capitalization ratio improved to 25.9% at October 1,
1999 from 29.2% at fiscal 1999 year end, principally due to the previously
mentioned debt repayment.
During the second quarter of fiscal 2000, the Company entered into a $500
million credit facility that replaced the previous $490 million credit
facility that was scheduled to expire September 15, 1999. The Company's
commercial paper is backed by the credit facility. The credit facility is
comprised of both a $250 million short-term and a $250 million long-term
component. At October 1, 1999, commercial paper consisted of $141.3 million
classified as short-term debt and $250 million classified as long-term debt.
The Company has an option to require a subsidiary of Equifax Inc. to purchase
the Company's credit reporting business as further described in Note 11 of the
Company's Annual Report on Form 10-K for fiscal 1999. The exercise price of
this put option is equal to the appraised value of the business.
12
<PAGE>
It is management's opinion that the Company will be able to meet its liquidity
and cash needs for the foreseeable future through a combination of cash flows
from operating activities, cash balances, unused borrowing capacity and other
financing activities, including the issuance of debt and/or equity securities,
and/or the exercise of the put option described above.
New Accounting Pronouncements
The Company has adopted the American Institute of Certified Public Accountants
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" as of the first quarter of
fiscal 2000. This statement requires the capitalization of internal use
computer software costs provided that certain criteria are met. These
capitalized software costs are amortized on a straight-line basis over the
useful life of the software. The adoption of SOP 98-1 had no material impact
on the Company's consolidated financial position, results of operations or
cash flows.
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement requires all
derivatives to be recorded on the balance sheet at fair value and establishes
accounting standards for hedging activities. In June 1999, the FASB issued
SFAS No. 137, which amends SFAS No. 133 by deferring its effective date one
year to fiscal years beginning after June 15, 2000. The Company is currently
assessing the impact this statement will have and, based on preliminary
estimates, does not expect the adoption to have a material impact on its
consolidated financial position or results of operations.
Year 2000 Readiness Disclosure
Since its inception, CSC has dealt with significant changes in the information
technology industry. As a result, resources are constantly being employed to
modify, upgrade and enhance systems and infrastructure on behalf of clients
and for internal needs. The Year 2000 issue represents another one of these
changes. It is the result of computer systems that represent years as a two-
digit rather than a four-digit field. Any of such systems that utilize date
sensitive data may not properly recognize a date field of 00 as the year 2000,
but as some other date, typically the year 1900. This could result in
possible system failure, miscalculations, or data corruption, thereby
affecting normal business activity.
The Company has established a two-phase Year 2000 program to ensure that its
proprietary products, computer systems and facilities are Year 2000 ready.
The initial phase, which included planning, inventory and assessment, has been
completed with respect to CSC and all subsidiaries existing as of August 31,
1999. The final phase, which consists of correction, testing, deployment and
acceptance, was substantially completed by October 1, 1999. The very small
percentage of final phase activities not completed by October 1, 1999, is
primarily related to certain clients which have not yet upgraded applications
for which they are responsible, thereby delaying their migration to a Year
2000 ready system, and client approvals of joint Year 2000 contingency plans.
13
<PAGE>
Since September 1, 1999, CSC has acquired several information technology
companies. The existing Year 2000 readiness programs of the acquired
companies have been integrated into CSC's program and subjected to the same
progress monitoring and control procedures. All critical Year 2000
remediation tasks for these newly-acquired business operations are expected to
be substantially completed by December 15, 1999.
CSC's Year 2000 program is directed by its Year 2000 Assurance Office, which
monitors progress and coordinates the Company's Year 2000 activities. The
Year 2000 Assurance Office reports directly to the Chairman, President, and
Chief Executive Officer.
The Company expects that its Year 2000 preparation efforts will not have a
material effect on its overall financial position or results of operations.
The Company currently estimates that the total fiscal 1999 and 2000 operating
costs associated with making its proprietary products, systems and
infrastructure Year 2000 ready, as well as estimates for contingency planning
and monitoring, including the cost of Company personnel diverted to internal
Year 2000 assignments, will total approximately $49 million, of which $39
million had been incurred as of the end of the second quarter of fiscal 2000.
In addition, the Company currently estimates that related capital expenditures
for fiscal 1999 and 2000 will be approximately $13 million, of which $10
million had been incurred as of the end of the second quarter of fiscal 2000.
Some of these capital expenditures represent equipment replacements that have
been or will be accelerated due to Year 2000 issues. The operating costs
described above are generally not incremental, but reflect the reallocation of
existing resources. The Company has not deferred any significant information
technology projects as a result of the Year 2000 efforts.
As of the end of the second quarter of fiscal 2000, (a) the Company had
completed approximately 92% of all items it has identified as necessary to be
Year 2000 ready, including activities to correct Year 2000 issues, contingency
planning and ancillary efforts, and (b) the Company had completed remediation
and testing of approximately 99.8% of all items it has identified as necessary
to correct critical Year 2000 items.
The Company has completed an assessment of its obligations and
responsibilities to its customers in respect of Year 2000 issues arising from
contractual engagements for computer goods and services, including obligations
arising from the licensing of the Company's proprietary software products. As
a result of this assessment, it is management's opinion that these obligations
will not have a material effect on the Company.
The Company has initiated formal communications with all of its crucial
suppliers to determine whether they are or will be Year 2000 ready. The
Company has identified and replaced any such suppliers that are not or will
not be Year 2000 ready with the exception of minor activities in the Asia
operations and a newly acquired operation in South Africa, both of which will
be completed in December. The Company is also contacting property owners to
determine the readiness of its leased facilities with respect to facility
infrastructure systems. As of the end of the second quarter of fiscal 2000,
over 97% of the company's crucial suppliers, property owners, and landlords
have been determined to have adequate programs in place to be Year 2000 ready
before the end of 1999. Evaluation and, as appropriate, replacement of the
remaining 3% should be completed by December 1, 1999.
14
<PAGE>
In the opinion of the Company's management, the most reasonably likely worst
case scenario includes the possibility that the Company's crucial suppliers
are unable to complete their Year 2000 readiness efforts prior to the onset of
failures, the effects of which could have a material adverse impact on the
Company's operations. The Company could also be impacted materially by any
significant economic, financial market or infrastructure disruption
attributable to the Year 2000 issue.
The Company has developed Year 2000 transition, contingency and crisis
management plans. These plans include the use of exercises and drills with
various relevant scenarios. The plans will be updated in December of 1999
following the conclusion of the second round of exercises and drills in each
business unit to reflect lessons learned. The Company has also established
the infrastructure for a Year 2000 corporate command center and business unit
Year 2000 crisis management centers that will be fully operable beginning
December 1, 1999. The corporate command center will be linked to each
business unit's Year 2000 crisis management center, which in turn will be
connected to internal and client-support help desks.
The discussion above contains forward-looking statements which should be read
in conjunction with the following section.
Forward-Looking Statements
All statements contained in this quarterly report, or in any document filed by
the Company with the Securities and Exchange Commission, or in any press
release or other written or oral communication by or on behalf of the Company,
that do not directly and exclusively relate to historical facts constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements represent the Company's
expectations and beliefs, and no assurance can be given that the results
described in such statements will be achieved.
These statements are subject to risks, uncertainties and other factors, many
of which are outside of the Company's control, that could cause actual results
to differ materially from the results described in such statements. These
factors include, without limitation, the following: (i) competitive pressures;
(ii) the Company's ability to attract and retain key personnel; (iii) changes
in the demand for information technology outsourcing and business process
outsourcing; (iv) changes in the financial condition of the Company's major
commercial customers; (v) changes in U.S. federal government spending levels
for information technology services; (vi) the Company's ability to consummate
strategic acquisitions and alliances; (vii) the future profitability of the
Company's customer contracts; (viii) the Company's ability to continue to
develop and expand its service offerings to address emerging business demand
and technological trends; (ix) general economic conditions in countries in
which the Company does business; and (x) the ability of the Company, its
customers and suppliers to become Year 2000 ready.
15
<PAGE>
PART I, ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
For a discussion of the Company's market-risk associated with interest rates
and foreign currencies as of April 2, 1999, see "Quantitative and Qualitative
Disclosures about Market Risk" in the Part II, Item 7A, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," of
the Company's Annual Report on Form 10-K for the fiscal year then ended. For
the six months ended October 1, 1999, there has been no significant change in
related market risk factors.
16
<PAGE>
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security-Holders.
a. The Company held its Annual Meeting of Stockholders on August 9, 1999.
b. Proxies for the Annual Meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934; there were no solicitation in
opposition to management's nominees for director as listed in the Proxy
Statement; and all such nominees were elected.
The directors elected were Irving W. Bailey, II, Stephen L. Baum, Van B.
Honeycutt, William R. Hoover, Leon J. Level, Thomas A. McDonnell, F. Warren
McFarlan, James R. Mellor and William P. Rutledge.
With respect to each nominee, the results of the vote were as follows:
Name Votes For Withheld
---- ------------- ------------
Irving W. Bailey, II 136,649,393 638,089
Stephen L. Baum 136,605,272 682,210
Van B. Honeycutt 136,645,317 642,165
William R. Hoover 136,644,424 643,058
Leon J. Level 136,646,531 640,951
Thomas A. McDonnell 136,610,590 676,892
F. Warren McFarlan 136,650,253 637,229
James R. Mellor 136,454,814 832,668
William P. Rutledge 136,642,702 644,780
17
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
a. Exhibits
<S> <C> <C>
3.1 Restated Articles of Incorporation, effective
October 31, 1988 (c)
3.2 Amendment to Restated Articles of Incorporation,
effective August 10, 1992 (i)
3.3 Amendment to Restated Articles of Incorporation,
effective July 31, 1996 (k)
3.4 Certificate of Amendment of Certificate of Designations
of Series A Junior Participating Preferred Stock,
effective August 1, 1996 (m)
3.5 Bylaws, amended and restated effective May 4, 1998 (f)
10.1 1978 Stock Option Plan, amended and restated
effective March 31, 1988* (l)
10.2 1980 Stock Option Plan, amended and restated
effective March 31, 1988* (l)
10.3 1984 Stock Option Plan, amended and restated
effective March 31, 1988* (l)
10.4 1987 Stock Incentive Plan* (b)
10.5 Schedule to the 1987 Stock Incentive Plan for
United Kingdom personnel* (b)
10.6 1990 Stock Incentive Plan* (h)
10.7 1992 Stock Incentive Plan, amended and restated
effective August 9, 1993* (o)
10.8 Schedule to the 1992 Stock Incentive Plan for
United Kingdom personnel* (n)
10.9 1995 Stock Incentive Plan* (j)
10.10 1998 Stock Incentive Plan* (s)
10.11 Form of Stock Option Agreement* (r)
10.12 Form of Restricted Stock Agreement* (r)
10.13 Annual Management Incentive Plan, effective April 2, 1983* (a)
10.14 Supplemental Executive Retirement Plan, amended and
restated effective February 27, 1998* (r)
10.15 Deferred Compensation Plan, amended and restated
effective February 2, 1998* (p)
10.16 Severance Plan for Senior Management and Key Employees,
amended and restated effective February 18, 1998 (q)
10.17 Severance Agreement with Van B. Honeycutt, effective
February 2, 1998* (p)
10.18 Employment Agreement with Van B. Honeycutt, effective
May 1, 1999* (g)
10.19 Form of Indemnification Agreement for Officers (e)
10.20 Form of Indemnification Agreement for Directors (d)
10.21 1997 Nonemployee Director Stock Incentive Plan (o)
10.22 Form of Restricted Stock Unit Agreement (f)
10.23 1990 Nonemployee Director Retirement Plan, amended
and restated effective February 2, 1998 (p)
18
<PAGE>
10.24 Rights Agreement dated February 18, 1998 (q)
10.25 $250 million Credit Agreement (Long Term Facility) dated
as of August 20, 1999
10.26 $250 million Credit Agreement (Short Term Facility) dated
as of August 20, 1999
27 Financial Data Schedule
28 Revenues by Market Sector
99.1 Annual Report on Form 11-K for the Matched Asset Plan of the
Registrant for the fiscal year ended December 31, 1998 (g)
99.2 Annual Report on Form 11-K for the Hourly Savings Plan of
CSC Outsourcing, Inc. for the fiscal year ended
December 31, 1998 (g)
99.3 Annual Report on Form 11-K for the CUTW Hourly Savings
Plan of CSC Outsourcing, Inc. for the fiscal year
ended December 31, 1998 (g)
</TABLE>
19
<PAGE>
Notes to Exhibit Index:
*Management contract or compensatory plan or agreement
(a)-(g) These exhibits are incorporated herein by reference to the
Company's Annual Report on Form 10-K for the fiscal years ended
on the respective dates indicated below:
(a) March 30, 1984 (e) March 31, 1995
(b) April 1, 1988 (f) April 3, 1998
(c) March 31, 1989 (g) April 2, 1999
(d) April 3, 1992
(h) Incorporated herein by reference to the Registrant's Registration
Statement on Form S-8 filed on August 15, 1990.
(i) Incorporated herein by reference to the Registrant's Proxy
Statement for its August 10, 1992 Annual Meeting of Stockholders.
(j) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on November 13, 1995.
(k) Incorporated herein by reference to the Registrant's Proxy
Statement for its July 31, 1996 Annual Meeting of Stockholders.
(l) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on August 12, 1996.
(m) Incorporated herein by reference to the Registrant's Current
Report of Form 8-K dated August 1, 1996.
(n) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on February 10, 1997.
(o) Incorporated herein by reference to the Registrant's Proxy
Statement for its August 11, 1997 Annual Meeting of Stockholders.
(p) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on February 9, 1998.
(q) Incorporated herein by reference to the Registrant's
Registration Statement on Form 8-A filed on February 25, 1998
(r) Incorporated herein by reference to Amendment No. 2 to the
Registrant's Solicitation/Recommendation Statement on Schedule
14D-9 filed on March 2, 1998.
(s) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on August 14, 1998
b. Reports on Form 8-K:
There was one report on Form 8-K filed during the second quarter of fiscal
2000. On September 20, 1999, the Registrant filed a Current Report on
Form 8-K reporting that it had entered into an Agreement and Plan of Merger
with its wholly owned subsidiary, Nevada Acquisition Corporation, and Nichols
Research Corporation.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPUTER SCIENCES CORPORATION
Date: November 15, 1999 By: /s/ Scott M. Delanty
-----------------------------
Scott M. Delanty
Vice President and Controller
Chief Accounting Officer
21
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C>
10.25 $250 million Credit Agreement (Long Term Facility) dated as of
August 20, 1999
10.26 $250 million Credit Agreement (Short Term Facility) dated as of
August 20, 1999
27 Financial Data Schedule
28 Revenues by Market Sector
</TABLE>
22
EXHIBIT 10.25
U.S. $250,000,000
CREDIT AGREEMENT
(Long Term Facility)
Dated as of August 20, 1999
Among
CSC ENTERPRISES
as Borrower
-----------
and
COMPUTER SCIENCES CORPORATION
as Borrower and Guarantor
-------------------------
and
THE BANKS NAMED HEREIN
as Lenders
----------
and
CITICORP USA, INC.
as Administrative Agent
-----------------------
and
SALOMON SMITH BARNEY INC.
as Arranger
-----------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.................... 1
Section 1.01 Certain Defined Terms............................... 1
Section 1.02 Computation of Time Periods.........................11
Section 1.03 Accounting Terms....................................11
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES...................11
Section 2.01 The A Advances......................................11
Section 2.02 Making the A Advances...............................12
Section 2.03 The B Advances......................................14
Section 2.04 Fees................................................17
Section 2.05 Termination and Reduction of the Commitments........18
Section 2.06 Repayment and Prepayment of A Advances..............18
Section 2.07 Interest on A Advances..............................19
Section 2.08 Interest Rate Determination.........................20
Section 2.09 Voluntary Conversion or Continuation of A Advances..20
Section 2.10 Increased Costs.....................................21
Section 2.11 Payments and Computations...........................22
Section 2.12 Taxes...............................................23
Section 2.13 Sharing of Payments, Etc............................24
Section 2.14 Evidence of Debt....................................25
Section 2.15 Use of Proceeds.....................................25
Section 2.16 Extension of the Commitment Termination Date........26
Section 2.17 Substitution of Lenders.............................26
Section 2.18 Increased Commitments; Additional Lenders...........27
Section 2.19 Special Purpose Funding Vehicles....................28
ARTICLE III CONDITIONS OF LENDING...............................28
Section 3.01 Condition Precedent to Effective Date...............28
Section 3.02 Conditions Precedent to Each A Borrowing............29
Section 3.03 Conditions Precedent to Each B Borrowing............30
ARTICLE IV REPRESENTATIONS AND WARRANTIES......................30
Section 4.01 Representations and Warranties of the Partnership...30
Section 4.02 Representations and Warranties of the Corporation...33
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE V COVENANTS...........................................36
Section 5.01 Affirmative Covenants of the Partnership............36
Section 5.03 Affirmative Covenants of the Corporation............40
Section 5.04 Negative Covenants of the Corporation...............44
ARTICLE VI EVENTS OF DEFAULT...................................46
Section 6.01 Events of Default...................................46
ARTICLE VII THE AGENT...........................................49
Section 7.01 Authorization and Action............................49
Section 7.02 Agent's Reliance, Etc...............................49
Section 7.03 CUSA and Affiliates.................................50
Section 7.04 Lender Credit Decision..............................50
Section 7.05 Indemnification.....................................50
Section 7.06 Successor Agent.....................................50
ARTICLE VIII THE GUARANTY........................................51
Section 8.01 Guaranty of the Guarantied Obligations..............51
Section 8.02 Liability of the Guarantor..........................51
Section 8.03 Waivers by the Guarantor............................53
Section 8.04 Payment by the Guarantor............................54
Section 8.05 Subrogation.........................................54
Section 8.06 Subordination of Other Obligations..................54
Section 8.07 Expenses............................................55
Section 8.08 Continuing Guaranty; Termination of Guaranty........55
Section 8.09....Authority of the Guarantor or the Partnership.......55
Section 8.10 Financial Condition of the Partnership..............55
Section 8.11 Rights Cumulative...................................55
Section 8.12 Bankruptcy; Post-Petition Interest;
Reinstatement of the Guaranty.......................55
Section 8.13 Notice of Events....................................56
Section 8.14 Set Off.............................................56
Section 8.15 Determination of the Guarantied Obligations.........57
Section 8.16 Successors and Assigns..............................57
Section 8.17 Further Assurances..................................57
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX MISCELLANEOUS.......................................57
Section 9.01 Amendments, Etc.....................................57
Section 9.02 Notices, Etc........................................58
Section 9.03 No Waiver; Remedies.................................58
Section 9.04 Costs, Expenses and Indemnification.................59
Section 9.05 Right of Set-off....................................59
Section 9.06 Binding Effect......................................60
Section 9.07 Assignments and Participations......................60
Section 9.08 Governing Law.......................................62
Section 9.09 Execution in Counterparts...........................62
Section 9.10 Consent to Jurisdiction; Waiver of Immunities.......62
Section 9.11 Waiver of Trial by Jury.............................62
Section 9.12 Limited Liability of Merel Corporation..............63
Section 9.13 Survival of Warranties..............................63
Section 9.14 Severability........................................63
Section 9.15 Headings............................................63
SCHEDULES
Schedule I List of Applicable Lending Offices
- ----------
Schedule II Property of Partnership
- -----------
Schedule III Property of Corporation
- ------------
EXHIBITS
Exhibit A-1 Form of Notice of A Borrowing
- -----------
Exhibit A-2 Form of Notice of B Borrowing
- -----------
Exhibit B Form of Assignment and Acceptance
- ---------
Exhibit C-1 Form of Opinion of Gibson, Dunn & Crutcher, Counsel for the
- ----------- Borrower
Exhibit C-2 Form of Opinion of Howard D. Fisk, Esq., Counsel for the
- ----------- Borrower
Exhibit D Form of Extension Request
- ---------
-iii-
<PAGE>
CREDIT AGREEMENT
(Long Term Facility)
Dated as of August 20, 1999
CSC Enterprises, a Delaware general partnership (the "Partnership"), as a
Borrower, Computer Sciences Corporation, a Nevada corporation (the
"Corporation"), as a Borrower and as the Guarantor, the financial institutions
(the "Banks") listed on the signature pages hereof, and Citicorp USA, Inc.
("CUSA"), as administrative agent (the "Agent") for the Lenders hereunder,
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms.
---------------------
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"A Advance" means an advance by a Lender to a Borrower as part of an A
---------
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance, each
of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of A Advances of the same
-----------
Type made on the same day to the same Borrower pursuant to the same Notice of
A Borrowing by each of the Lenders pursuant to Section 2.01.
"Adjusted Eurodollar Rate" means, for any Interest Period for each
------------------------
Eurodollar Rate Advance comprising part of the same A Borrowing, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum,
if such average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the respective
Reference Bank's (or, in the case of Citibank, CUSA's) Eurodollar Rate Advance
comprising part of such A Borrowing and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage. The Adjusted Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same A Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.08. ------- -------
"Advance" means an A Advance or a B Advance.
-------
"Affiliate" means, as to any Person, any other Person that, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person or is a director or
1
<PAGE>
executive officer (as such term is used in Regulation S-K promulgated under
the Securities Act of 1933, as amended) of such Person.
"Agreement" means this Credit Agreement, as this Credit Agreement may be
---------
amended, supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Advance, and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
and, in the case of a B Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office with respect to such B
Advance.
"Applicable Margin" means, for any period for which any interest payment
-----------------
is to be made with respect to any Eurodollar Rate Advance, the interest rate
per annum derived by dividing (i) the sum of the Daily Margins for each of the
days included in such period by (ii) the number of days included in such
period.
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit B hereto.
"B Advance" means an advance by a Lender to a Borrower as part of a B
---------
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of B Advances made on the
-----------
same day to the same Borrower pursuant to the same Notice of B Borrowing by
each of the Lenders whose offer to make one or more B Advances as part of such
borrowing has been accepted by a Borrower under the auction bidding procedure
described in Section 2.03.
"B Reduction" has the meaning specified in Section 2.01.
-----------
"Base Rate" means, for any period, a fluctuating interest rate per annum
---------
as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum of (A) 1/2 of one percent per annum plus (B) the rate
obtained by dividing (x) the latest three-week moving average of
secondary market morning offering rates in the United States for three-
month certificates of deposit of major United States money market banks
(such three-week moving average being determined weekly by Citibank on
the basis of such rates reported by certificate of deposit dealers to
and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of one
percent, to the next higher 1/4 of one percent), by (y) a percentage
equal to 100% minus the average
2
<PAGE>
of the daily percentages specified during such three-week period by the
Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, but not limited to, any marginal
reserve requirements for Citibank in respect of liabilities consisting
of or including (among other liabilities) three-month nonpersonal time
deposits of at least $100,000), plus (C) the average during such three-
week period of the daily net annual assessment rates estimated by
Citibank for determining the current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation for insuring
three-month deposits in the United States; or
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance which bears interest as provided
-----------------
in Section 2.07(a).
"Borrower" means (i) the Partnership, or (ii) the Corporation, in the
---------------
Corporation's capacity as a borrower hereunder, and "Borrowers" means both of
them, together.
"Borrowing" means an A Borrowing or a B Borrowing.
---------
"Business Day" means a day of the year on which banks are not required
------------
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in
the London interbank market.
"Capital Expenditures" means, for any period, the expenditures (whether
--------------------
paid in cash or accrued as a liability) that are or are required to be
included in "capital expenditures", "additions to property, plant or
equipment" or comparable items in the consolidated statement of cash flows of
the Corporation and its Subsidiaries.
"Capital Lease" means, with respect to any Person, any lease of any
-------------
property by that Person as lessee which would, in conformity with GAAP, be
required to be accounted for as a capital lease on the balance sheet of that
Person.
"CBI" has the meaning specified in Section 4.01(n).
---
"Citibank" means Citibank, N.A.
--------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commercial Paper" means commercial paper issued by the Partnership or
----------------
the Corporation from time to time.
"Commitment" has the meaning specified in Section 2.01.
----------
"Commitment Termination Date" means, with respect to any Lender, five
---------------------------
years from the date of this Agreement, or such later date to which the
Commitment
3
<PAGE>
Termination Date of such Lender may be extended from time to time pursuant to
Section 2.16 (or if any such date is not a Business Day, the next preceding
Business Day).
"Consolidated Gross Cash Flow" means, for any period, (i) the sum of (A)
----------------------------
net income, plus (B) taxes on income, plus (C) net interest expense, plus (D)
---- ---- ----
depreciation expense, plus (E) amortization expense of goodwill, financing
----
costs and other intangibles, plus (F) extraordinary losses, plus (G) other
---- ----
non-cash charges to the extent deducted from net income, minus (ii) the sum
-----
of (A) extraordinary gains and (B) the aggregate amount of Capital
Expenditures, all of the foregoing shall be on a consolidated basis for the
Corporation and its Subsidiaries.
"Consolidated Interest Expense" means, for any period, consolidated
-----------------------------
total net interest expense in respect of Debt of the Corporation and its
Subsidiaries.
"Consolidated Total Capitalization" means, as of any date of
---------------------------------
determination, the sum of (a) consolidated stockholders' equity of the
Corporation and its Subsidiaries determined in accordance with GAAP and (b)
Consolidated Total Debt.
"Consolidated Total Debt" means, as of any date of determination, all
-----------------------
Debt of the Corporation and its Subsidiaries on a consolidated basis.
"Convert," "Conversion" and "Converted" each refers to a conversion of
------- ---------- ---------
A Advances of one Type into A Advances of another Type pursuant to Section
2.09.
"Corporation" means Computer Sciences Corporation, a Nevada corporation,
-----------
in its capacity as a Borrower hereunder, in its capacity as the Guarantor
hereunder or both, as the context may require.
"CSC Partners" means those partners of the Partnership which are wholly-
------------
owned direct or indirect Subsidiaries of the Corporation.
"Daily Margin" means, for any date of determination, the interest rate
------------
per annum set forth in the table below that corresponds to (i) the Level
applicable to such date of determination and (ii) the Utilization Ratio
applicable to such date of determination:
4
<PAGE>
<TABLE>
<CAPTION>
Daily Margin when
Utilization Ratio
Daily Margin when is greater than Daily Margin when
Utilization Ratio 0.35:1.00 but less Utilization Ratio
is equal to or than or equal to is greater than
less than 0.35:1.00 0.65:1.00 0.65:1.00
------------------- ------------------ -----------------
<S> <C> <C> <C>
Level 1 0.125% 0.175% 0.30%
Level 2 0.15% 0.20% 0.325%
Level 3 0.225% 0.325% 0.575%
Level 4 0.30% 0.40% 0.65%
</TABLE>
For purposes of this definition, (a) "Utilization Ratio" means, as of
-----------------
any date of determination, the ratio of (1) the aggregate outstanding
principal amount of all Advances as of such date to (2) the aggregate amount
of all Commitments in effect as of such date (whether used or unused and
without giving effect to any B Reduction), (b) if any change in the Rating
established by S&P or Moody's shall result in a change in the Level, the
change in the Daily Margin shall be effective as of the date on which such
rating change is publicly announced (in the case of a public rating) or is
disclosed to the Corporation (in the case of a private rating), (c) if Ratings
are unavailable from both S&P and Moody's for any reason for any day, then the
applicable Level for such day shall be deemed to be Level 4 (or, if the
Majority Lenders consent in writing, such other Level as may be reasonably
determined by the Majority Lenders from a rating with respect to Long-Term
Debt of the Corporation for such day established by another rating agency
reasonably acceptable to the Majority Lenders) and (d) if a Rating is not
available from S&P or Moody's (but not both) for any reason for any day, then
the applicable Level shall be set by reference to the Rating of S&P or Moody's
that is available for such day.
"Debt" means, with respect to any Person, (i) indebtedness of such
----
Person for borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services, excluding
trade payables or accrued expenses arising in the ordinary course of business,
(iv) obligations of such Person as lessee under Capital Leases, and (v)
obligations of such Person under direct or indirect guaranties in respect of,
and obligations of such Person (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through (iv) above, provided that "Debt" shall not include
--------
borrowings against the cash surrender value of life insurance policies
covering employees of Borrowers or their Affiliates and owned by the
Corporation or the Partnership so long as (x) recourse for such borrowings is
limited to such policies and the proceeds thereof and (y) any value assigned
to such policies on the consolidated financial statements of the Corporation
and its Subsidiaries is net of the amount of such borrowings.
"Domestic Lending Office" means, with respect to any Lender, the office
-----------------------
of such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto
5
<PAGE>
or in the Assignment and Acceptance pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from time to time specify
to the Borrowers and the Agent.
"Effective Date" means August 20, 1999, so long as the conditions
--------------
precedent set forth in Section 3.01 have been satisfied.
"Eligible Assignee" means any financial institution or entity engaged in
-----------------
the business of extending revolving credit approved in writing by the
Borrowers and the Agent as an Eligible Assignee for purposes of this
Agreement, provided that the Borrowers' and the Agent's approval shall not be
unreasonably withheld, and provided further that no such approval shall be
required in the case of an assignment by a Bank to an Affiliate of such Bank.
"Environmental Law" means any and all statutes, laws, regulations,
-----------------
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions of any
federal, state or local governmental authority within the United States or any
State or territory thereof and which relate to the environment or the release
of any materials into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA
---------------
is a member of either Borrower's controlled group, or under common control
with such Borrower, within the meaning of Section 414 of the Code and the
regulations promulgated and rulings issued thereunder.
"ERISA Event" means (i) the occurrence of a reportable event, within
-----------
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement
with respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Pension Plan of a notice of intent to terminate such
Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (iii) the cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (iv) the withdrawal by either Borrower
or an ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by either Borrower or any ERISA Affiliate to make a
payment to a Pension Plan required under Section 302(f)(1) of ERISA, which
Section imposes a lien for failure to make required payments; (vi) the
adoption of an amendment to a Pension Plan requiring the provision of security
to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the
institution by the PBGC of proceedings to terminate a Pension Plan, pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition which,
in the reasonable judgment of either Borrower, might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, a Pension Plan.
6
<PAGE>
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Borrowers and the Agent.
"Eurodollar Rate Advance" means an A Advance which bears interest as
-----------------------
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
----------------------------------
Period for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirements (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Existing Credit Agreement" means the Credit Agreement dated as of
-------------------------
September 15, 1995, among the Partnership, the Corporation, the lenders party
thereto and CUSA, as agent for such lenders, as amended.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
------------------
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such
day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Guarantied Obligations" has the meaning assigned to that term in
----------------------
Section 8.01.
"Guarantor" means the Corporation, in its capacity as the guarantor
---------
hereunder.
7
<PAGE>
"Guaranty" shall have the meaning set forth in Section 8.01.
--------
"Insufficiency" means, with respect to any Pension Plan, the amount,
-------------
if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18)
of ERISA.
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same A Borrowing, the period commencing on the date of such
Eurodollar Rate Advance, or on the date of continuation of such Advance as a
Eurodollar Rate Advance upon expiration of successive Interest Periods
applicable thereto, or on the date of Conversion of a Base Rate Advance into a
Eurodollar Rate Advance, and ending on the last day of the period selected by
the applicable Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three or six months, as the
applicable Borrower may select in the Notice of Borrowing or the Notice of
Conversion/Continuation for such Advance; provided, however, that:
(i) a Borrower may not select any Interest Period which ends
after the earliest Commitment Termination Date of any Lender then in
effect;
(ii) Interest Periods commencing on the same date for A Advances
comprising part of the same A Borrowing shall be of the same duration;
and
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business
Day.
"Lenders" means the Banks listed on the signature pages hereof and each
-------
Eligible Assignee that shall become a party hereto pursuant to Section 9.07.
"Level" means Level 1, Level 2, Level 3 or Level 4, as the case may be.
-----
"Level 1" means that, as of any date of determination, the higher of the
-------
Ratings is equal to or better than A+ or A1, as applicable, as of such date of
determination.
"Level 2" means that, as of any date of determination, the higher of the
-------
Ratings is equal to A or A2, as applicable, as of such date of determination.
"Level 3" means that, as of any date of determination, the higher of the
-------
Ratings is equal to A- or A3, as applicable, as of such date of determination.
"Level 4" means that, as of any date of determination, the higher of the
-------
Ratings is equal to or lower than BBB+ or Baa1, as applicable, as of such date
of determination, or the only Rating is a private rating and the Corporation
will not authorize the applicable rating agency to make such Rating available
to the Agent and the Lenders.
8
<PAGE>
"Lien" means any lien, mortgage, pledge, security interest, charge or
----
encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Long-Term Debt" means senior, unsecured, long term debt securities of
--------------
the Corporation.
"Majority Lenders" means at any time Lenders holding greater than 50% of
----------------
the then aggregate unpaid principal amount of the A Advances held by Lenders,
or, if no such principal amount is then outstanding, Lenders having greater
than 50% of the Commitments (provided that, for purposes hereof, neither a
Borrower, nor any of its Affiliates, if a Lender, shall be included in (i) the
Lenders holding such amount of the A Advances or having such amount of the
Commitments or (ii) determining the aggregate unpaid principal amount of the A
Advances or the total Commitments).
"Managing Partner" means CSC Enterprises, Inc., a Nevada corporation and
----------------
an indirect wholly-owned Subsidiary of the Corporation.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA to which either Borrower or any ERISA Affiliate of such
Borrower is making, or is obligated to make, contributions or has within any
of the preceding six plan years been obligated to make or accrue
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
----------------------
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of either
Borrower or an ERISA Affiliate and at least one Person other than such
Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of
which either Borrower or an ERISA Affiliate could have liability under Section
4063, 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Non-Hostile Acquisition" means an acquisition (whether by purchase of
-----------------------
capital stock or assets, merger or otherwise) which has been approved by
resolutions of the Board of Directors of the Person being acquired or by
similar action if the Person is not a corporation and as to which such
approval has not been withdrawn.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
---------------------
"Notice of a B Borrowing" has the meaning specified in Section 2.03(a).
-----------------------
"Notice of Borrowing" means the Notice of A Borrowing or the Notice of B
-------------------
Borrowing or both, as the context may require.
"Notice of Conversion/Continuation" has the meaning specified in
---------------------------------
Section 2.09.
"Partnership" means CSC Enterprises, a Delaware general partnership, in
-----------
its capacity as a Borrower hereunder.
9
<PAGE>
"Payment in full", "paid in full" or any similar term, as used in
--------------- ------------
Article VIII hereof, means payment in full of the Guarantied Obligations
including, without limitation, all principal, interest, costs, fees and
expenses (including, without limitation, legal fees and expenses) of Lenders
and Agent as required hereunder.
"PBGC" means the U.S. Pension Benefit Guaranty Corporation.
----
"Pension Plan" means a Single Employer Plan or a Multiple Employer Plan
------------
or both.
"Person" means an individual, partnership, corporation, business trust,
------
joint stock company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"Potential Event of Default" means a condition or event which, after
--------------------------
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or
cure period.
"Rating" means a public or private rating established by S&P or Moody's
------
with respect to the Long-Term Debt or, if there is no Long-Term Debt
outstanding, a private rating established by S&P or Moody's with respect to
the Corporation.
"Reference Banks" means Citibank, Morgan Guaranty Trust Company of New
---------------
York and The First National Bank of Chicago.
"Register" has the meaning specified in Section 9.07(c).
--------
"S&P" means Standard & Poor's Ratings Group.
---
"SEC" means the Securities and Exchange Commission and any successor
---
agency.
"Significant Subsidiary" means, at any time, any Subsidiary of the
----------------------
Partnership or of the Corporation which accounts for more than 5% of
consolidated total assets or 5% of consolidated revenue of the Corporation and
its Subsidiaries determined in accordance with GAAP.
"Single Employer Plan" means a single employer plan, as defined in
--------------------
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of either
Borrower or any ERISA Affiliate and no Person other than such Borrower and its
ERISA Affiliates or (ii) was so maintained and in respect of which either
Borrower or an ERISA Affiliate could have liability under Section 4062 or 4069
of ERISA in the event such plan has been or were to be terminated.
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity of which at least 50% of the total voting
power of shares of stock or other securities entitled to vote in the election
of directors, managers or trustees thereof is
10
<PAGE>
at the time owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination thereof.
"Termination Date" means, with respect to any Lender, the earlier of (i)
----------------
the Commitment Termination Date of such Lender and (ii) the date of
termination in whole of the Commitments of all Lenders pursuant to Section
2.05 or 6.01.
"Type" means, with reference to an A Advance, a Base Rate Advance or a
----
Eurodollar Rate Advance.
"Withdrawal Liability" has the meaning given such term under Part I of
--------------------
Subtitle E of Title IV of ERISA.
Section 1.02 Computation of Time Periods.
---------------------------
In this Agreement in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
Section 1.03 Accounting Terms.
----------------
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e) or Section 4.02(e), as the
case may be. All computations determining compliance with financial covenants
or terms, including definitions used therein, shall be prepared in accordance
with generally accepted accounting principles in effect at the time of the
preparation of, and in conformity with those used to prepare, the historical
financial statements delivered to the Lenders pursuant to Section 4.01(e) or
Section 4.02(e), as the case may be. If at any time the computations for
determining compliance with financial covenants or provisions relating thereto
utilize generally accepted accounting principles different than those then
being utilized in the financial statements being delivered to the Lenders,
such financial statements shall be accompanied by a reconciliation statement.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 The A Advances.
--------------
Each Lender severally agrees, on the terms and conditions hereinafter set
forth, to make A Advances to either Borrower from time to time on any Business
Day during the period from the Effective Date until the Termination Date of
such Lender in an aggregate amount (together with the aggregate amount of A
Advances made to the other Borrower that is outstanding at such time) not to
exceed at any time outstanding the amount set opposite such Lender's name on
the signature pages hereof or, if such Lender has entered into any Assignment
and Acceptance, set forth for such Lender in the Register maintained by the
Agent pursuant to Section 9.07(c), as such amount may be reduced pursuant to
Section 2.05 (such Lender's "Commitment"), provided that
--------
the aggregate amount of the Commitments of the Lenders shall be deemed used
from time to time to the extent of the aggregate amount of the B Advances then
outstanding and at any time of determination, such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably according to
their respective Commitments in effect at such time of determination (such
deemed use of the aggregate amount of the Commitments being a "B Reduction").
Each A Borrowing shall be in an aggregate amount not less than $5,000,000 or
an integral multiple of $1,000,000 in
11
<PAGE>
excess thereof and shall consist of A Advances of the same Type made on the
same day to the same Borrower by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, each
Borrower may from time to time borrow, prepay pursuant to Section 2.06(d) and
reborrow under this Section 2.01.
Section 2.02 Making the A Advances.
---------------------
(a) Each A Borrowing shall be made on notice, given not later than
(x) 10:00 A.M. (New York City time) on the date of a proposed A Borrowing
consisting of Base Rate Advances and (y) 12:00 noon (New York City time) on
the third Business Day prior to the date of a proposed A Borrowing consisting
of Eurodollar Rate Advances, by the Borrower requesting the proposed A
Borrowing to the Agent, which shall give to each Lender prompt notice thereof
by telecopier, telex or cable. Each such notice of an A Borrowing (a "Notice
of A Borrowing") shall be by telecopier, telex or cable, confirmed immediately
in writing, in substantially the form of Exhibit A-1 hereto, specifying
therein the requested (i) date of such A Borrowing, (ii) Type of A Advances
comprising such A Borrowing, (iii) aggregate amount of such A Borrowing, and
(iv) in the case of an A Borrowing comprised of Eurodollar Rate Advances, the
initial Interest Period for each such A Advance. A Borrower may, subject to
the conditions herein provided, borrow more than one A Borrowing on any
Business Day. Each Lender shall, before 1:00 P.M. (New York City time) in the
case of a Borrowing consisting of Base Rate Advances and before 11:00 A.M.
(New York City time) in the case of a Borrowing consisting of Eurodollar Rate
Advances, in each case on the date of such A Borrowing, make available for the
account of its Applicable Lending Office to the Agent at its address referred
to in Section 9.02, in same day funds, such Lender's ratable portion of such A
Borrowing. After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent will make such
funds available to the Borrower requesting the proposed A Borrowing at the
Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) a Borrower may not select Eurodollar Rate Advances for
any A Borrowing or with respect to the Conversion or continuance of any
A Borrowing if the aggregate amount of such A Borrowing or such
Conversion or continuance is less than $5,000,000;
(ii) there shall be no more than five Interest Periods
relating to Eurodollar Rate Advances outstanding at any time;
(iii) if any Lender shall, at least one Business Day before
the date of any requested A Borrowing, notify the Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Lender or
its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances hereunder, the Commitment of such Lender to make Eurodollar
Rate Advances or to Convert all or any portion of Base Rate Advances
shall forthwith be suspended until the Agent shall notify the Borrowers
that such Lender has determined that the circumstances causing such
suspension no longer exist and such Lender's then outstanding Eurodollar
Rate Advances, if any, shall be Base Rate Advances; to the extent that
such affected Eurodollar Rate
12
<PAGE>
Advances become Base Rate Advances, all payments of principal that would
have been otherwise applied to such Eurodollar Rate Advances shall be
applied instead to such Lender's Base Rate Advances; provided that if
Majority Lenders are subject to the same illegality or assertion of
illegality, then the right of a Borrower to select Eurodollar Rate
Advances for such A Borrowing or any subsequent A Borrowing or to
Convert all or any portion of Base Rate Advances shall forthwith be
suspended until the Agent shall notify the Borrowers that the
circumstances causing such suspension no longer exist, and each A
Advance comprising such A Borrowing shall be a Base Rate Advance;
(iv) if fewer than two Reference Banks furnish timely
information to the Agent for determining the Adjusted Eurodollar Rate
for any Eurodollar Rate Advances comprising any requested A Borrowing,
the right of a Borrower to select Eurodollar Rate Advances for such A
Borrowing or any subsequent A Borrowing shall be suspended until the
Agent shall notify the Borrowers and the Lenders that the circumstances
causing such suspension no longer exist, and each A Advance comprising
such A Borrowing shall be made as a Base Rate Advance; and
(v) if the Majority Lenders shall, at least one Business Day
before the date of any requested A Borrowing, notify the Agent that the
Adjusted Eurodollar Rate for Eurodollar Rate Advances comprising such A
Borrowing will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate
Advances for such A Borrowing, the right of a Borrower to select
Eurodollar Rate Advances for such A Borrowing or any subsequent A
Borrowing shall be suspended until the Agent shall notify the Borrowers
and the Lenders that the circumstances causing such suspension no longer
exist, and each A Advance comprising such A Borrowing shall be made as a
Base Rate Advance.
(c) Each Notice of A Borrowing shall be irrevocable and binding on
the Borrower requesting the proposed A Borrowing. In the case of any A
Borrowing which the related Notice of A Borrowing specifies is to be comprised
of Eurodollar Rate Advances, the Borrower requesting the proposed A Borrowing
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the A Advance to be made by such Lender as
part of such A Borrowing or by reason of the termination of hedging or other
similar arrangements, in each case when such A Advance is not made on such
date, including without limitation, as a result of any failure to fulfill on
or before the date specified in such Notice of A Borrowing for such A
Borrowing the applicable conditions set forth in Article III.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any A Borrowing that such Lender will not make available to the
Agent such Lender's ratable portion of such A Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such A Borrowing in accordance with subsection (a) of this Section 2.02 and
the Agent may, in reliance upon such assumption, make available to the
Borrower requesting the proposed A Borrowing on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Agent, such Lender and such Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to such Borrower until the date such amount is repaid to the
Agent, at (i) in the
13
<PAGE>
case of such Borrower, the interest rate applicable at the time to A Advances
comprising such A Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's A Advance as part
of such A Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made by it
as part of any A Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its A Advance on the date of such A
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the A Advance to be made by such other Lender on the date of
any A Borrowing.
Section 2.03 The B Advances.
--------------
(a) Each Lender severally agrees that either Borrower may make B
Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 30 days prior
to the latest Commitment Termination Date of any Lender then in effect in the
manner set forth below; provided that, (i) following the making of each B
Borrowing, (1) the aggregate amount of the Advances then outstanding to both
Borrowers shall not exceed the aggregate amount of the Commitments of the
Lenders then in effect (computed without regard to any B Reduction), and (2)
the aggregate amount of the B Advances scheduled to be outstanding to both
Borrowers at any time through the maturity of such B Advances shall not exceed
the aggregate amount of the Commitments of the Lenders scheduled to be in
effect at such time (computed without regard to any B Reduction), and (ii) no
Lender may make a B Advance if the maturity date of such B Advance occurs
after the Commitment Termination Date of such Lender.
(i) Either Borrower may request a B Borrowing under this
Section 2.03 by delivering to the Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a B Borrowing (a "Notice
of B Borrowing"), in substantially the form of Exhibit A-2 hereto,
specifying the date and aggregate amount of the proposed B Borrowing,
the maturity date for repayment of each B Advance to be made as part of
such B Borrowing (which maturity date (x) in the case of a fixed rate B
Borrowing may not be earlier than the date occurring 14 days after the
date of such B Borrowing or later than the date occurring 180 days after
the date of such B Borrowing, and (y) in the case of any other B
Borrowing may not be earlier than the date occurring 30 days after the
date of such B Borrowing or later than the date occurring 180 days after
the date of such B Borrowing), the interest payment date or dates
relating thereto, and any other terms to be applicable to such B
Borrowing, not later than 11:00 A.M. (New York City time) (A) at least
one Business Day prior to the date of the proposed B Borrowing, if such
Borrower shall specify in the Notice of B Borrowing that the rates of
interest to be offered by the Lenders shall be fixed rates per annum and
(B) at least four Business Days prior to the date of the proposed B
Borrowing, if such Borrower shall instead specify in the Notice of B
Borrowing the basis to be used by the Lenders in determining the rates
of interest to be offered by them. A Borrower may not select a maturity
date for any B Borrowing which ends after the latest Commitment
Termination Date of any Lender then in effect. The Agent shall in turn
promptly notify each Lender of each request for a B Borrowing received
by it from a Borrower by sending such Lender a copy of the related
Notice of B Borrowing.
14
<PAGE>
(ii) Each Lender may, if, in its sole discretion, it elects
to do so, irrevocably offer to make one or more B Advances to such
Borrower as part of such proposed B Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by notifying
the Agent (which shall give prompt notice thereof to such Borrower),
before 11:00 A.M. (New York City time) (A) on the date of such proposed
B Borrowing, in the case of a Notice of B Borrowing delivered pursuant
to clause (A) of paragraph (i) above and (B) three Business Days before
the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (B) of paragraph (i) above, of
the minimum amount and maximum amount of each B Advance which such
Lender would be willing to make as part of such proposed B Borrowing
(which amounts may, subject to the proviso to the first sentence of this
Section 2.03(a), exceed such Lender's Commitment), the rate or rates of
interest therefor and such Lender's Applicable Lending Office with
respect to such B Advance; provided that if the Agent in its capacity as
a Lender shall, in its sole discretion, elect to make any such offer, it
shall notify such Borrower of such offer before 10:00 A.M. (New York
City time) on the date on which notice of such election is to be given
to the Agent by the other Lenders. If any Lender shall elect not to
make such an offer, such Lender shall so notify the Agent, before 10:00
A.M. (New York City time) on the date on which notice of such election
is to be given to the Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any B Advance as part of such B
Borrowing; provided that the failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any B Advance as
part of such proposed B Borrowing.
(iii) Such Borrower shall, in turn, (A) before 12:00 noon (New
York City time) on the date of such proposed B Borrowing, in the case of
a Notice of B Borrowing delivered pursuant to clause (A) of paragraph
(i) above and (B) before 1:00 P.M. (New York City time) three Business
Days before the date of such proposed B Borrowing, in the case of a
Notice of B Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either
(x) cancel such B Borrowing by giving the Agent notice to that
effect, or
(y) accept one or more of the offers made by any Lender or Lenders
pursuant to paragraph (ii) above (which acceptance shall be
irrevocable) in its sole discretion, by giving notice to the Agent
of the amount of each B Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the
maximum amount, notified to such Borrower by the Agent on behalf of
such Lender for such B Advance pursuant to paragraph (ii) above) to
be made by each Lender as part of such B Borrowing (provided that
the aggregate amount of such B Borrowing shall not exceed the
amount specified on the Notice of B Borrowing delivered by such
Borrower pursuant to paragraph (i) above), and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above by giving
the Agent notice to that effect; provided that acceptance of offers
--------
may only be made on the basis of ascending rates for B Borrowings
of the same type and duration for up to the maximum amounts offered
by Lenders; and provided further that if offers are made by two or
-------- ------
more Lenders for the same type of B Borrowing for the same duration
and with the same rate of interest, in an aggregate amount which is
greater than the amount requested, such offers shall be accepted on
a pro rata basis based on the maximum amounts offered by such
Lenders at such rate of
15
<PAGE>
interest.
(iv) If such Borrower notifies the Agent that such B
Borrowing is cancelled pursuant to paragraph (iii)(x) above or if such
Borrower rejects any offers made by Lenders pursuant to paragraph
(iii)(y) above, the Agent shall give prompt notice thereof to the
Lenders or affected Lenders, as the case may be, and in the case of a
cancellation, such B Borrowing shall not be made.
(v) If such Borrower accepts one or more of the offers made
by any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent
shall in turn promptly notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and aggregate amount of
such B Borrowing and whether or not any offer or offers made by such
Lender pursuant to paragraph (ii) above have been accepted by such
Borrower, (B) each Lender that is to make a B Advance as part of such B
Borrowing, of the amount of each B Advance to be made by such Lender as
part of such B Borrowing, and (C) each Lender that is to make a B
Advance as part of such B Borrowing, upon receipt, that the Agent has
received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a B
Advance as part of such B Borrowing shall, before 1:00 P.M. (New York
City time) on the date of such B Borrowing specified in the notice
received from the Agent pursuant to clause (A) of the preceding sentence
or any later time when such Lender shall have received notice from the
Agent pursuant to clause (C) of the preceding sentence, make available
for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 9.02 such Lender's portion of such B
Borrowing, in same day funds. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the Agent of
such funds, the Agent will make such funds available to such Borrower at
the Agent's aforesaid address. Promptly after each B Borrowing, the
Agent will notify each Lender of the amount of the B Borrowing, the
consequent B Reduction and the dates upon which such B Reduction
commenced and will terminate.
(vi) Each Borrower agrees to pay to the Agent for the Agent's
account an auction fee in an amount agreed to in a separate letter agreement
between the Borrowers and the Agent for each Notice of B Borrowing delivered
by such Borrower to the Agent pursuant to this Section 2.03(a), whether or not
a B Borrowing is made pursuant thereto.
(b) Each B Borrowing shall be in an aggregate amount not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrowers and each Lender shall
be in compliance with the limitations set forth in the proviso to the first
sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, either Borrower may from time to time borrow under this Section
2.03, repay or prepay pursuant to subsection (d) below, and reborrow under
this Section 2.03, and more than one B Borrowing may be made on a Business
Day; provided that, except for B Borrowings made on the same Business Day, a B
Borrowing shall not be made within three Business Days of the date of any
other B Borrowing.
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(d) Each Borrower shall repay to the Agent for the account of each
Lender which has made a B Advance to such Borrower, on the maturity date of
each B Advance made to such Borrower (such maturity date being that specified
by such Borrower for repayment of such B Advance in the related Notice of B
Borrowing delivered pursuant to subsection (a)(i) above), the then unpaid
principal amount of such B Advance. Neither Borrower shall have any right to
prepay any principal amount of any B Advance unless, and then only on the
terms, specified by such Borrower for such B Advance in the related Notice of
B Borrowing delivered pursuant to subsection (a)(i) above.
(e) Each Borrower shall pay interest on the unpaid principal amount
of each B Advance made to such Borrower from the date of such B Advance to the
date the principal amount of such B Advance is repaid in full, at the rate of
interest for such B Advance specified by the Lender making such B Advance in
its notice with respect thereto delivered pursuant to subsection (a)(ii)
above, payable on the interest payment date or dates specified by such
Borrower for such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above; provided that any principal amount of any
B Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) until the stated maturity date of such B
Advance, the greater of (x) 2% per annum above the Base Rate in effect from
time to time and (y) 2% above the stated rate per annum of such B Advance, and
(B) after the stated maturity of such B Advance, 2% per annum above the Base
Rate in effect from time to time.
(f) Subject to the obligations of the Guarantor under the Guaranty,
neither Borrower shall have any obligation to repay to any Lender any B
Advance made by such Lender to the other Borrower or to pay any interest on
any B Advance made by such Lender to the other Borrower.
Section 2.04 Fees.
----
(a) Facility Fees.
-------------
The Borrowers jointly and severally agree to pay to the Agent
for the account of each Lender a facility fee on the amount of such Lender's
Commitment (or if no Commitment is in effect, Advances), whether used or
unused and without giving effect to any B Reduction, from the date hereof in
the case of each Bank and from the effective date specified in the Assignment
and Acceptance pursuant to which it became a Lender in the case of each other
Lender until the Termination Date of such Lender, payable in arrears on the
last day of each March, June, September and December during the term of such
Lender's Commitment, commencing September 30, 1999, and on the Termination
Date of such Lender, in an amount equal to the product of (i) the average
daily amount of such Lender's Commitment (whether used or unused and without
giving effect to any B Reduction) in effect during the period for which such
payment that is to be made times (ii) the weighted average rate per annum that
is derived from the following rates: (a) a rate of 0.07% per annum with
respect to each day during such period that the higher of the Ratings was
Level 1, (b) a rate of 0.10% per annum with respect to each day during such
period that the higher of such Ratings was Level 2, (c) a rate of 0.125% per
annum with respect to each day during such period that the higher of such
Ratings was Level 3 and (d) a rate of 0.15% per annum with respect to each day
during such period that the higher of such Ratings was Level 4. If any change
in the Rating shall result in a change in the Level, the change in the
facility fee shall be effective as of the date on which such rating change is
publicly
17
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announced (in the case of a public rating) or is disclosed to the Corporation
(in the case of a private rating). If Ratings are unavailable from both S&P
or Moody's for any reason for any day, then the applicable Level for purposes
of calculating the facility fee for such day shall be deemed to be Level 4
(or, if the Majority Lenders consent in writing, such other Level as may be
reasonably determined by the Majority Lenders from a rating with respect to
Long-Term Debt or the Corporation for such day established by another rating
agency reasonably acceptable to the Majority Lenders). If no Rating is
available from S&P or Moody's (but not both) for any reason for any day, then
the applicable Level shall be set by reference to the Rating of S&P or Moody's
that is available for such day.
(b) Agents' Fees.
------------
The Borrowers agree to pay to the Agent the fees payable
pursuant to the fee letter dated as of August 16, 1999 between the Borrowers
and CUSA, in the amounts and at the times specified in such letter.
Section 2.05 Termination and Reduction of the Commitments.
--------------------------------------------
(a) Mandatory Termination.
---------------------
In the event that a mandatory prepayment in full of the A
Advances is required by Section 2.06(b), the Commitments of the Lenders shall
immediately terminate.
(b) Optional Reductions.
-------------------
The Borrowers shall have the right, upon at least four Business
Days' notice to the Agent by both Borrowers, to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the
Lenders, provided that the aggregate amount of the Commitments of the Lenders
shall not be reduced to an amount which is less than the aggregate principal
amount of the Advances then outstanding, and provided, further, that each
partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
Section 2.06 Repayment and Prepayment of A Advances.
--------------------------------------
(a) Mandatory Repayment on Termination Date.
---------------------------------------
Each Borrower shall repay the outstanding principal amount of
each A Advance made by each Lender to such Borrower on the Termination Date of
such Lender.
(b) Mandatory Prepayment in Certain Events.
--------------------------------------
If any one of the following events shall occur:
(i) Representatives of CSC Partners shall cease to
constitute a majority of the Partnership's Partnership Committee (or
similar body which may replace such Partnership Committee) or the rights
and powers of such Partnership Committee shall be materially diminished
in a manner such that the Partnership's Partnership Committee (or
similar body which may replace such Partnership Committee) shall cease
to have substantially the same ability to control the operations or
policies of the Partnership as it has on the date hereof; or
(ii) CSC Enterprises, Inc. shall cease to be the Managing
Partner (unless the successor Managing Partner is a Subsidiary of the
Corporation of which the Corporation owns at least 80% of the voting
stock) or, if CSC Enterprises, Inc. is the Managing Partner of the
Partnership, the Corporation shall cease to own, directly or
18
<PAGE>
indirectly, at least 80% of the voting stock of CSC Enterprises, Inc.,
or the rights and powers of the Managing Partner shall be materially
diminished in a manner such that the Managing Partner shall cease to
have substantially the same ability to control the operations or
policies of the Partnership as it has on the date hereof; or
(iii) The Partnership shall transfer a majority of its assets
to any Person other than the Corporation or one or more Subsidiaries of
the Corporation of which the Corporation owns at least 80% of the voting
stock; or
(iv) The Corporation shall cease to directly or indirectly
(through its Subsidiaries of which it owns at least 80% of the voting
stock) own more than 50% of the outstanding partnership interest of the
Partnership;
then, and in any such event, the Partnership shall immediately prepay in full
the A Advances made to the Partnership, and shall immediately make an offer to
all Lenders which have made B Advances to the Partnership to prepay such B
Advances, and shall immediately prepay in full the B Advances of all Lenders
accepting such offer, and in the case of all Advances so prepaid the
Partnership will pay interest accrued to the date of prepayment and will
reimburse the Lenders in respect thereof pursuant to Section 9.04(b).
(c) Mandatory Prepayment Due to Reductions of Commitments.
-----------------------------------------------------
Each Borrower shall from time to time prepay the A Advances made
to such Borrower to the extent necessary so that the aggregate principal
amount of the Advances does not exceed the aggregate amount of the Commitments
of the Lenders then in effect (computed without regard to any B Reduction).
(d) Voluntary Prepayments of A Borrowings.
-------------------------------------
Neither Borrower shall have any right to prepay any principal
amount of any A Advances other than as provided in this subsection (d). Each
Borrower may, upon at least one Business Day's notice to the Agent in the case
of Base Rate Advances and at least three Business Days' notice to the Agent in
the case of Eurodollar Rate Advances stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given such Borrower
shall, prepay the outstanding principal amounts of the Advances made to such
Borrower comprising part of the same A Borrowing in whole or ratably in part;
provided, however, that (x) each partial prepayment shall be
-------- -------
in an aggregate principal amount not less than $5,000,000 and integral
multiples of $1,000,000 in excess thereof and (y) in the case of any such
prepayment of any Eurodollar Rate Advance, such Borrower shall pay all accrued
interest to the date of such prepayment on the portion of such Eurodollar Rate
Advance being prepaid and shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 9.04(b).
(e) Certain Obligations Several.
---------------------------
Subject to the obligations of the Guarantor under the Guaranty,
neither Borrower shall have any obligation to repay to any Lender any A
Advance made by such Lender to the other Borrower or to pay any interest on
any A Advance made by such Lender to the other Borrower.
Section 2.07 Interest on A Advances.
----------------------
Each Borrower shall pay interest accrued on the principal amount of each A
Advance that was made to such Borrower outstanding from time to time from the
date of such A Advance until such principal amount shall be paid in full, at
the following rates per annum:
19
<PAGE>
(a) Base Rate Advances.
------------------
If such A Advance is a Base Rate Advance, a rate per annum equal
at all times to the Base Rate in effect from time to time, payable in arrears
on the last day of each March, June, September and December during the term of
this Agreement, commencing September 30, 1999, and on the Termination Date of
the applicable Lender; provided that any amount of principal, interest, fees
and other amounts payable under this Agreement (including, without limitation,
the principal amount of Base Rate Advances, but excluding the principal amount
of Eurodollar Rate Advances and B Advances) which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear interest
from the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to 2% per annum
above the Base Rate in effect from time to time.
(b) Eurodollar Rate Advances.
------------------------
If such A Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during the Interest Period for such A Advance to the sum of
the Adjusted Eurodollar Rate for such Interest Period plus the Applicable
Margin, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on the day
which occurs during such Interest Period three months from the first day of
such Interest Period; provided that any principal amount of any Eurodollar
Rate Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) during the Interest Period applicable to
such Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base
Rate in effect from time to time and (y) 2% per annum above the rate per annum
required to be paid on such amount immediately prior to the date on which such
amount became due and (B) after the expiration of such Interest Period, 2% per
annum above the Base Rate in effect from time to time.
Section 2.08 Interest Rate Determination.
---------------------------
(a) Each Reference Bank agrees to furnish to the Agent timely
information for the purpose of determining each Adjusted Eurodollar Rate. If
any one or more of the Reference Banks shall not furnish such timely
information to the Agent for the purpose of determining any such interest
rate, the Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks, subject to Section
2.02(b)(iv).
(b) The Agent shall give prompt notice to the Borrowers and the
Lenders of the applicable interest rate determined by the Agent for purposes
of Section 2.07(a) or 2.07(b), and the applicable rate, if any, furnished by
each Reference Bank for the purpose of determining the applicable interest
rate under Section 2.07(b).
Section 2.09 Voluntary Conversion or Continuation of A Advances.
--------------------------------------------------
(a) Each Borrower may on any Business Day, upon notice given to the
Agent not later than 12:00 noon (New York City time) on the third Business Day
prior to the date of the proposed Conversion or continuance (a "Notice of
Conversion/Continuation") and subject to the provisions of Section 2.02(b),
(1) Convert all Advances of one Type comprising the same A Borrowing made to
such Borrower into A Advances of another Type and (2) upon the expiration of
any Interest Period applicable to A Advances which are Eurodollar Rate
Advances made to such Borrower, continue all (or, subject to Section 2.02(b),
any portion of) such A Advances as Eurodollar Rate Advances and the succeeding
Interest Period(s) of such continued A Advances
20
<PAGE>
shall commence on the last day of the Interest Period of the A Advances to be
continued; provided, however, that any Conversion of any Eurodollar Rate
-------- -------
Advances into A Advances of another Type shall be made on, and only on, the
last day of an Interest Period for such Eurodollar Rate Advances. Each such
Notice of Conversion/Continuation shall, within the restrictions specified
above, specify (i) the date of such continuation or Conversion, (ii) the A
Advances (or, subject to Section 2.02(b), any portion thereof) to be continued
or Converted, (iii) if such continuation is of, or such Conversion is into,
Eurodollar Rate Advances, the duration of the Interest Period for each such A
Advance and (iv) that no Potential Event of Default or Event of Default has
occurred and is continuing.
(b) If upon the expiration of the then existing Interest Period
applicable to any A Advance which is a Eurodollar Rate Advance made to either
Borrower, such Borrower shall not have delivered a Notice of
Conversion/Continuation in accordance with this Section 2.09, then such
Advance shall upon such expiration automatically be Converted to a Base Rate
Advance.
(c) After the occurrence of and during the continuance of a
Potential Event of Default or an Event of Default, a Borrower may not elect to
have an A Advance be made or continued as, or Converted into, a Eurodollar
Rate Advance after the expiration of any Interest Rate then in effect for that
A Advance.
Section 2.10 Increased Costs.
---------------
(a) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements in
the case of Eurodollar Rate Advances included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall
be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances made to either Borrower, then
such Borrower shall from time to time, upon demand by such Lender (with a copy
of such demand to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost. A reasonably detailed certificate as to the amount and manner of
calculation of such increased cost, submitted to such Borrower and the Agent
by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the amount of
such capital is increased by or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of this type, then, upon
demand by such Lender (with a copy of such demand to the Agent), the Borrowers
shall immediately pay, jointly and severally, to the Agent for the account of
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
commitment to lend hereunder. A reasonably detailed certificate as to such
amounts and the manner of calculation thereof submitted to the Borrowers
21
<PAGE>
and the Agent by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If a Lender shall change its Applicable Lending Office, such
Lender shall not be entitled to receive any greater payment under Sections
2.10 and 2.12 than the amount such Lender would have been entitled to receive
if it had not changed its Applicable Lending Office, unless such change was
made at the request of a Borrower or at a time when the circumstances giving
rise to such greater payment did not exist.
Section 2.11 Payments and Computations.
-------------------------
(a) Each Borrower shall make each payment hereunder not later than
1:00 P.M. (New York City time) on the day when due in U.S. dollars to the
Agent at its address referred to in Section 9.02 in same day funds. Subject
to the immediately succeeding sentence, the Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or facility fees ratably (other than amounts payable pursuant to
Section 2.03, 2.10 or 2.12 or, to the extent the Termination Date is not the
same for all Lenders, pursuant to Section 2.06(a)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon receipt of
principal or interest paid after an Event of Default and an acceleration or a
deemed acceleration of amounts due hereunder, the Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest ratably in accordance with each Lender's outstanding A
Advances and B Advances (other than amounts payable pursuant to Section 2.10
or 2.12) to the Lenders for the account of their respective Applicable Lending
Offices. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Adjusted Eurodollar Rate or
the Federal Funds Rate and of facility fees shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or such fees are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the
case may be; provided, however, if such extension would cause payment of
-------- -------
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
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<PAGE>
(d) Unless the Agent shall have received notice from a Borrower
prior to the date on which any payment is due to the Lenders hereunder that
such Borrower will not make such payment in full, the Agent may assume that
such Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent that such Borrower shall not have so made such payment in
full to the Agent, each Lender shall repay to the Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate.
Section 2.12 Taxes.
-----
(a) Any and all payments by a Borrower hereunder shall be made, in
accordance with Section 2.11, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, (i) taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Lender
or the Agent (as the case may be) is organized or any political subdivision
thereof or in which its principal office is located, (ii) taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof, (iii)
taxes imposed upon or measured by the overall net income of such Lender by the
United States of America or any political subdivision or taxing authority
thereof or therein, and (iv) United States income taxes (including withholding
taxes with respect to payments hereunder) payable with respect to payments
hereunder under laws (including without limitation any statute, treaty,
ruling, determination or regulation) in effect on the date hereof in the case
of each Bank and on the effective date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other Lender (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If a Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender or the Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrowers jointly and severally agree to pay
any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (to the extent specifically attributable
to Borrowings made by such Borrower) (including, without limitation, any Taxes
or Other Taxes (to the extent specifically attributable to Borrowings made by
such Borrower) imposed by any jurisdiction on amounts payable under this
Section 2.12) and the Borrowers jointly and severally will indemnify each
Lender and the Agent for the full amount of Taxes or Other Taxes (to the
extent not
23
<PAGE>
specifically attributable to Borrowings made by a particular Borrower)
(including, without limitation, any Taxes or Other Taxes (to the extent not
specifically attributable to Borrowings made by a particular Borrower) imposed
by any jurisdiction on amounts payable under this Section 2.12), in each case
paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date
such Lender or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrowers, or either of them, will furnish to the Agent, at its address
referred to in Section 9.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by either
Borrower (but only so long as such Lender remains lawfully able to do so),
shall provide such Borrower with Internal Revenue Service form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the form provided by
a Lender at the time such Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from "Taxes" as
defined in Section 2.12(a).
(f) For any period with respect to which a Lender has failed to
provide a Borrower with the appropriate form described in Section 2.12(e)
(other than if such failure is due to a change in law occurring subsequent
to the date on which a form originally was required to be provided, or if such
form otherwise is not required under the first sentence of subsection (e)
above), such Lender shall not be entitled to indemnification under Section
2.12(a) with respect to Taxes imposed by the United States;
provided, however, that should a Lender become subject to Taxes because of
- -------- -------
its failure to deliver a form required hereunder, such Borrower shall, at the
expense of such Lender, take such steps as the Lender shall reasonably request
to assist the Lender to recover such Taxes.
(g) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.12 shall survive the payment in full of principal and
interest hereunder.
Section 2.13 Sharing of Payments, Etc.
------------------------
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the A Advances made by it (other than pursuant to Section 2.10 or
2.12 or, to the extent the Termination Date is not the same for all Lenders,
pursuant to Section 2.06(a)) in excess of its ratable share of payments on
account of the A Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the A
Advances made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them, provided, however,
-------- -------
that if all or any portion of such
24
<PAGE>
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the applicable Borrower in the amount of
such participation.
Section 2.14 Evidence of Debt.
----------------
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder. Each Borrower agrees that upon notice by
any Lender to such Borrower (with a copy of such notice to the Agent) to the
effect that a promissory note or other evidence of indebtedness is required or
appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the A Advances or the B Advances owing to,
or to be made by, such Lender, such Borrower shall promptly execute and
deliver to such Lender promissory notes or other evidence of such
indebtedness, in form and substance reasonably satisfactory to such Borrower
and such Lender, payable to the order of such Lender in a principal amount
equal, in the case of the A Advances, to the aggregate principal amount of the
Commitment of such Lender and, in the case of the B Advances, to the
outstanding principal amount of B Advances of such Lender; provided, however,
that the execution and delivery of such promissory note or other evidence of
indebtedness shall not be a condition precedent to the making of any Advance
under this Agreement.
(b) The Register maintained by the Agent pursuant to Section 9.07(c)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date, amount and
tenor, as applicable, of each Borrowing, the Borrower that received the
proceeds of such Borrowing, the Type of Advances comprising such Borrowing and
the Interest Period applicable thereto, (ii) the terms of each Assignment and
Acceptance delivered to and accepted by it, (iii) the amount of any principal
or interest due and payable or to become due and payable from each Borrower to
each Lender hereunder, and (iv) the amount of any sum received by the Agent
from each Borrower hereunder and each Lender's share thereof.
(c) The entries made in the Register shall be conclusive and binding
for all purposes, absent manifest error.
Section 2.15 Use of Proceeds.
---------------
(a) Advances shall be used by the Borrowers for Commercial Paper
backup, for Non-Hostile Acquisitions and for general corporate purposes.
25
<PAGE>
(b) No portion of the proceeds of any Advances under this Agreement
shall be used by either Borrower or any of its Subsidiaries in any manner
which might cause the Advances or the application of such proceeds to violate,
or require any Lender to make any filing or take any other action under,
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Securities Exchange Act of 1934, in each case as in effect on the date or
dates of such Advances and such use of proceeds.
Section 2.16 Extension of the Commitment Termination Date.
--------------------------------------------
The Borrowers may, not later than 30 days prior to each anniversary
of the Effective Date (the "Current Anniversary Date"), and not more than once
in any calendar year, commencing not later than 30 days prior to the first
anniversary of the Effective Date, from time to time jointly request that the
Commitment Termination Date for all Eligible Lenders (as defined below) be
extended by delivering to the Agent a copy of an extension request signed by
both Borrowers (an "Extension Request") in substantially the form of Exhibit D
hereto. The Agent shall promptly notify each Lender of its receipt of such
Extension Request. On or prior to the fifteenth day (the "Determination
Date") prior to the Current Anniversary Date, each Eligible Lender shall
notify the Agent and the Borrowers of its willingness or unwillingness to
extend its Commitment Termination Date hereunder. Any Eligible Lender that
shall fail to so notify the Agent and the Borrowers on or prior to the
Determination Date shall be deemed to have declined to so extend. In the
event that, on or prior to the Determination Date, Eligible Lenders
representing more than 50% of the aggregate amount of the Commitments of all
Eligible Lenders then in effect shall consent to such extension, the Agent
shall so advise the Lenders and the Borrowers, and, subject to execution of
documentation evidencing such extension and consents, the Commitment
Termination Date of each Eligible Lender (each a "Consenting Lender") that has
consented on or prior to the Determination Date to so extend shall be extended
to the date indicated in the Extension Request. Thereafter, (i) for each
Consenting Lender, the term "Commitment Termination Date" as used herein and
in any promissory note executed and delivered by the Borrowers pursuant to
Section 2.14 hereof, shall at all times refer to such date, unless it is later
extended pursuant to this Section 2.16, and (ii) for each Lender that is not
an Eligible Lender and for each Eligible Lender that either has declined on or
prior to the Determination Date to so extend or is deemed to have so declined,
the term "Commitment Termination Date" shall at all times refer to the date
which was the Commitment Termination Date of such Lender immediately prior to
the delivery to the Agent of such Extension Request. In the event that, as of
the Determination Date, the Consenting Lenders represent 50% or less of the
aggregate amount of the Commitments of all Eligible Lenders then in effect,
the Agent shall so advise the Lenders and the Borrowers, and none of the
Lenders' Commitment Termination Dates shall be extended to the date indicated
in the Extension Request and each Lender's Commitment Termination Date shall
continue to be the date which was the Commitment Termination Date of such
Lender immediately prior to the delivery to the Agent of such Extension
Request. For purposes of this Section 2.16, the term "Eligible Lenders"
means, with respect to any Extension Request, (i) all Lenders if no Lender's
Commitment Termination Date had been extended pursuant to this Section 2.16
prior to the delivery to the Agent of such Extension Request, and (ii) in all
other cases, those Lenders which had extended their Commitment Termination
Date in the most recent extension of any Commitment Termination Date effected
pursuant to this Section 2.16.
Section 2.17 Substitution of Lenders.
-----------------------
If any Lender requests compensation from a Borrower under Section
2.10(a) or (b) or if any Lender declines to extend
26
<PAGE>
its Commitment Termination Date pursuant to Section 2.16, the Borrowers shall
have the right, with the assistance of the Agent, to seek one or more
substitute banks or financial institutions (which may be one or more of the
Lenders) reasonably satisfactory to the Agent and the Borrowers to purchase
the Advances and assume the Commitments of such Lender, and the Borrowers, the
Agent, such Lender, and such substitute banks or financial institutions shall
execute and deliver an appropriately completed Assignment and Acceptance
pursuant to Section 9.07(a) hereof to effect the assignment of rights to and
the assumption of obligations by such substitute banks or financial
institutions; provided that such requesting Lender shall be entitled to (i)
compensation under Section 2.10 for any costs incurred by it prior to its
replacement, (ii) payment of all A Advances of such Lender then outstanding
and all interest and fees accrued to the date of such payment, and (iii) if
any Eurodollar Rate Advances of such Lender are then outstanding, any
reimbursement which would be payable under Section 9.04(b) in connection with
a prepayment of such Eurodollar Rate Advances on such date.
Section 2.18 Increased Commitments; Additional Lenders.
-----------------------------------------
(a) No more than once per year from the Effective Date, the
Borrowers may, upon at least thirty (30) days notice to the Agent (which shall
promptly provide a copy of such notice to the Lenders), propose to increase
the aggregate amount of the Commitments in increments of $50,000,000, the
total amount of all such increases not to exceed $250,000,000 (the amount of
any such increase, the "Increased Commitments"); provided that at the time of
and after giving effect to any increase in the Commitments (and the delivery
of the applicable commitment increase notice shall constitute a representation
and warranty by the Partnership and the Corporation that on the effective date
of such increase such statements are true) (i) the Corporation's Long-Term
Debt ratings from Moody's and S&P are better than or equal to Baa2 or BBB,
respectively ; (ii) the representations and warranties of the Partnership and
the Corporation contained in Article IV are correct on and as of the date of
such increase, before and after giving effect to such increase, as though made
on and as of such date, except to the extent that any such representation or
warranty expressly relates only to an earlier date, in which case they were
correct as of such earlier date; (iii) no Event of Default or Potential Event
of Default exists and is continuing ; (iv) on the date of such increase, (x)
there shall be no A Advances outstanding or all Interest Periods shall have
ended and (y) and all accrued and unpaid interest on the A Advances and all
accrued and unpaid Facility Fees shall have been paid in full and (v) after
any such increase, no Lender's Commitment shall exceed 50% of the aggregate
amount of the Commitments]. Each Lender party to this Agreement at such time
shall have the right (but no obligation), for a period of fifteen (15) days
following receipt of such notice, to elect by notice to the Borrower and the
Administrative Agent to increase its Commitment by a principal amount which
bears the same ratio to the Increased Commitments as its then Commitment bears
to the aggregate Commitments then existing.
(b) If any Lender party to this Agreement shall not elect to
increase its Commitment pursuant to subsection (a) of this Section, the
Borrowers may designate another lender or other lenders (which may be, but
need not be, one or more of the existing Lenders) which at the time agree to
(i) in the case of any such lender that is an existing Lender, increase its
Commitment and (ii) in the case of any other such lender (an "Additional
Lender"), become a party to this Agreement. The sum of the increases in the
Commitments of the existing Lenders pursuant to this subsection (b) plus the
Commitments of the Additional Lenders shall not in the aggregate exceed the
unsubscribed amount of the Increased Commitments.
27
<PAGE>
(c) An increase in the aggregate amount of the Commitments pursuant
to this Section 2.18 shall become effective upon the receipt by the Agent of
an agreement in form and substance satisfactory to the Agent signed by the
Borrowers, by each Additional Lender and by each other Lender whose Commitment
is to be increased, setting forth the new Commitments of such Lenders and
setting forth the agreement of each Additional Lender to become a party to
this Agreement and to be bound by all the terms and provisions hereof,
together with such evidence of appropriate corporate authorization on the part
of the Borrowers with respect to the Increased Commitments and such opinions
of counsel for the Borrowers with respect to the Increased Commitments as the
Agent may reasonably request.
Section 2.19 Special Purpose Funding Vehicles.
--------------------------------
Notwithstanding anything to the contrary contained herein, any Lender, (a
"Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
the option to fund all or any part of any Loan that such Granting Lender would
otherwise be obligated to fund pursuant to this Agreement; provided the (i)
nothing herein shall constitute a commitment by an SPC to fund any Loan, and
(ii) if an SPC elects not to exercise such option or otherwise fails to fund
all or any part of such Loan, the Granting Lender shall be obligated to fund
such Loan pursuant to the terms hereof. The funding of a Loan by an SPC
hereunder shall utilize the Revolving Credit Commitment of the Granting Lender
to the same extent, and as if, such Loan were funded by such Granting Lender.
Each party hereto hereby agrees that no SPC shall be liable for any indemnity
or payment under this Agreement for which a Lender would otherwise be liable
for so long as, and to the extent, the Granting Lender provides such indemnity
or makes such payment. Notwithstanding anything to the contrary contained in
this Agreement, any SPC may disclose on a confidential basis any non-public
information relating to tits funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or guarantee to such SPC. This Section
may not be amended without the prior written consent of each Granting Lender,
all or any part of whose outstanding Loans is being funded by an SPC at the
time of such amendment.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Condition Precedent to Effective Date.
-------------------------------------
The effectiveness of this Agreement and the obligation of each
Lender to make its initial Advance hereunder are subject to the condition
precedent that the Agent shall have received on or before the Effective Date
the following, each (other than items (f) and (i)) dated the Effective Date,
and each in form and substance satisfactory to the Agent and in sufficient
copies for each Lender:
(a) A certificate of an authorized officer of the Managing Partner
to the effect that the copy of the Partnership's Partnership Agreement
delivered to the Agent (and available for inspection by the Lenders) is a
complete and correct copy of the Partnership's Partnership Agreement, as
amended to date.
(b) Certified copies of resolutions of the Board of Directors of the
Managing Partner of the Partnership approving this Agreement, and of all
documents evidencing other necessary partnership action and governmental
approvals, if any, with respect to this Agreement.
28
<PAGE>
(c) A certificate of the Secretary or an Assistant Secretary of the
Managing Partner of the Partnership certifying the names and true signatures
of the officers of the Managing Partner authorized to sign this Agreement and
the other documents to be delivered by the Partnership hereunder.
(d) Certified copies of the resolutions of the Board of Directors of
the Corporation approving this Agreement, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement;
(e) A certificate of the Secretary or an Assistant Secretary of the
Corporation certifying the names and true signatures of the officers of the
Corporation authorized to sign this Agreement and the other documents to be
delivered by the Corporation hereunder;
(f) Certified copies of Corporation's and the Managing Partner's
Certificate of Incorporation, together with good standing certificates from
the states of their respective incorporation and their respective principal
places of business, each to be dated a recent date prior to the Effective
Date;
(g) Copies of the Corporation's and the Managing Partner's Bylaws,
certified as of the Effective Date by their respective Secretary or an
Assistant Secretary;
(h) A favorable opinion of Gibson, Dunn & Crutcher, special counsel
for the Partnership and the Corporation, substantially in the form of Exhibit
C-1 hereto, and a favorable opinion of Hayward D. Fisk, Esq., General Counsel
of the Corporation, substantially in the form of Exhibit C-2 hereto;
(i) Financial statements of the Corporation and its Subsidiaries
specified in Section 4.02(e);
(j) Evidence satisfactory to the Agent of (i) the absence of any
indebtedness of the Partnership or the Corporation under the Existing Credit
Agreement (including borrowings and accrued interest), (ii) the payment of
fees payable, if any, by the Partnership or the Corporation under the Existing
Credit Agreement and (iii) consent to the termination of the Existing Credit
Agreement on the Effective Date by any party thereto which is not a party
hereto.
Section 3.02 Conditions Precedent to Each A Borrowing.
----------------------------------------
The obligation of each Lender to make an A Advance on the occasion
of each A Borrowing (including the initial A Borrowing) shall be subject to
the further conditions precedent that (i) Agent shall have received a Notice
of A Borrowing with respect thereto in accordance with Section 2.02 and (ii)
on the date of such A Borrowing the following statements shall be true (and
each of the giving of the applicable Notice of A Borrowing and the acceptance
by the applicable Borrower of the proceeds of such A Borrowing shall
constitute a representation and warranty by the Partnership and the
Corporation that on the date of such A Borrowing such statements are true):
(a) The representations and warranties of the Partnership and the
Corporation contained in Article IV are correct on and as of the date of such
A Borrowing, before and after giving effect to such A Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation or warranty
29
<PAGE>
expressly relates only to an earlier date, in which case they were correct as
of such earlier date; and
(b) No event has occurred and is continuing, or would result from
such A Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or a Potential Event of Default.
Section 3.03 Conditions Precedent to Each B Borrowing.
----------------------------------------
The obligation of each Lender which is to make a B Advance on the
occasion of a B Borrowing (including the initial B Borrowing) to make such B
Advance as part of such B Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of B
Borrowing with respect thereto in accordance with Section 2.03 and (ii) on the
date of such B Borrowing the following statements shall be true (and each of
the giving of the applicable Notice of B Borrowing and the acceptance by the
applicable Borrower of the proceeds of such B Borrowing shall constitute a
representation and warranty by the Partnership and the Corporation that on the
date of such B Borrowing such statements are true):
(a) The representations and warranties of the Partnership and the
Corporation contained in Article IV are correct on and as of the date of such
B Borrowing, before and after giving effect to such B Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were correct as of such
earlier date, and
(b) No event has occurred and is continuing, or would result from
such B Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or a Potential Event of Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Partnership.
-------------------------------------------------
The Partnership represents and warrants as follows:
(a) Due Organization, etc.
---------------------
The Partnership is a general partnership duly organized and
validly existing under the laws of the jurisdiction indicated at the beginning
of this Agreement.
(b) Due Authorization, etc.
----------------------
The execution, delivery and performance by the Partnership of
this Agreement are within the Partnership's partnership powers, have been duly
authorized by all necessary partnership action, and do not contravene (i) the
Partnership's Partnership Agreement or (ii) applicable law or any material
contractual restriction binding on or affecting the Partnership.
(c) Governmental Consent.
--------------------
No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Partnership of this
Agreement.
30
<PAGE>
(d) Validity.
--------
This Agreement is the legal, valid and binding obligation of the
Partnership enforceable against the Partnership in accordance with its terms
subject to the effect of applicable bankruptcy, insolvency, arrangement,
moratorium and other similar laws affecting creditors' rights generally and to
the application of general principles of equity.
(e) Condition of the Partnership.
----------------------------
The balance sheet of the Partnership and its Subsidiaries as at
April 2, 1999, and the related statements of income and retained earnings of
the Partnership and its Subsidiaries for the fiscal year then ended, copies of
which have been furnished to each Bank, fairly present the financial condition
of the Partnership and its Subsidiaries as at such date and the results of the
operations of the Partnership and its Subsidiaries for the period ended on
such date, all in accordance with GAAP consistently applied, and as of the
Effective Date, there has been no material adverse change in the business,
condition (financial or otherwise), operations or properties of the
Partnership and its Subsidiaries, taken as a whole, since April 2, 1999,
except for any transfer of assets of the Partnership to Subsidiaries of the
Corporation of which the Corporation owns 80% or more of the voting stock.
(f) Litigation.
----------
(i) There is no pending action or proceeding against the
Partnership or any of its Subsidiaries before any court, governmental agency
or arbitrator, and (ii) to the knowledge of the Managing Partner of the
Partnership, there is no pending or threatened action or proceeding affecting
the Partnership or any of its Subsidiaries before any court, governmental
agency or arbitrator, which in either case would reasonably be expected to
materially adversely affect the financial condition or operations of the
Partnership and its Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this Agreement.
(g) Margin Regulations.
------------------
The Partnership is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock in any manner that violates, or would
cause a violation of, Regulation T, Regulation U or Regulation X.
(h) Payment of Taxes.
----------------
The Partnership and each of its Subsidiaries have filed or
caused to be filed all material tax returns (federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect
to which appropriate reserves are being maintained by the Partnership or any
such Subsidiary, as the case may be.
(i) Governmental Regulation.
-----------------------
The Partnership is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940, each as amended, or to any
Federal or state statute or regulation limiting its ability to incur
indebtedness for money borrowed. No Subsidiary of the Partnership is subject
to any regulation that would limit the ability of the Partnership to enter
into or perform its obligations under this Agreement.
(j) ERISA.
31
<PAGE>
(i) No ERISA Event which might result in liability (other
than for premiums payable under Title IV of ERISA) has occurred or is
reasonably expected to occur with respect to any Pension Plan.
(ii) Schedule B (Actuarial Information) to the most recently
completed annual report (Form 5500 Series) for each Pension Plan, copies
of which have been filed with the Internal Revenue Service and furnished
to the Agent, is complete and, to the best knowledge of the Partnership,
accurate, and since the date of such Schedule B there has been no
material adverse change in the funding status of any such Pension Plan.
(iii) Neither the Partnership nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Partnership, is reasonably
expected to incur, any Withdrawal Liability to any Multiemployer Plan.
(iv) Neither the Partnership nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and, to the best knowledge of the
Partnership, no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated within the meaning of Title IV of
ERISA.
(k) Disclosure.
----------
No representation or warranty of the Partnership contained in
this Agreement (including any Schedule furnished in connection herewith)
contains any untrue statement of a material fact. No other document,
certificate or written statement furnished to the Agent or any Lender by or on
behalf of the Partnership for use in connection with the transactions
contemplated by this Agreement, taken as a whole with other documents,
certificates or written statements furnished contemporaneously therewith,
contains any untrue statement of fact or omits to state a material fact (known
to the Partnership in the case of any documents not furnished by it) necessary
in order to make the statements contained therein not misleading in light of
the circumstances under which the same were made.
(l) Insurance.
---------
The Partnership and its Subsidiaries (i) have in full force
insurance coverage of their respective properties, assets and business
(including casualty, general liability, products liability and business
interruption insurance) that is (A) no less protective in any material respect
than the insurance the Partnership and its Subsidiaries have carried in
accordance with their past practices or (B) prudent given the nature of the
business of the Partnership and its Subsidiaries and the prevailing practice
among companies similarly situated or (ii) maintain a plan or plans of self-
insurance to such extent and covering such risks as is usual for companies of
comparable size engaged in the same or similar business which plan or plans
provide for, among other things, adequate reserves for the risks being self-
insured.
(m) Environmental Matters.
---------------------
(i) The Partnership and each of its Subsidiaries is in
compliance in all material respects with all Environmental Laws the non-
compliance with which could reasonably be expected to have a material adverse
effect on the financial condition or operations of the Partnership and its
Subsidiaries, taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.) or any other release, emission or discharge
-- ---
into the environment of any hazardous or toxic substance, pollutant or other
materials from the Partnership's or its Subsidiaries' property other than as
permitted under applicable Environmental Law and other than those which would
32
<PAGE>
not have a material adverse effect on the financial condition or operations of
the Partnership and its Subsidiaries, taken as a whole. Other than disposals
for which the Partnership has been indemnified in full, all "hazardous waste"
(as defined by the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (1976) and the regulations thereunder, 40 CFR
-- ---
Part 261 ("RCRA")) generated at the Partnership's or any Subsidiaries'
properties have in the past been and shall continue to be disposed of at sites
which maintain valid permits under RCRA and any applicable state or local
Environmental Law.
(n) Year 2000 Compliance.
--------------------
The Partnership has developed and budgeted for a comprehensive
program to address the "year 2000 problem" (that is, the inability of
computers and computer software, as well as embedded microchips in non-
computing devices, to properly perform date-sensitive functions with respect
to certain dates prior to and after December 31, 1999). The Partnership has,
to date, implemented that program substantially in accordance with its
timetable and budget. The Partnership reasonably believes that the year 2000
problem will not result in a material adverse change in the business,
condition (financial or otherwise), operations or properties of the
Partnership and its Subsidiaries, taken as a whole. The Partnership has
developed adequate contingency plans to ensure uninterrupted and unimpaired
business operation in the event of a failure of its own or a third party's
systems or equipment due to the year 2000 problem.
Section 4.02 Representations and Warranties of the Corporation.
-------------------------------------------------
The Corporation, in its capacity as a Borrower, represents and
warrants as follows, and the Corporation, in its capacity as the Guarantor, in
order to induce Lenders and Agent to accept the Guaranty and to enter into
this Agreement and to make the Advances hereunder, represents and warrants as
follows:
(a) Due Organization, etc.
---------------------
The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. The
Corporation is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions which require such qualification except to
the extent that failure to so qualify would not have a material adverse effect
on the Corporation. Each Subsidiary of the Corporation is duly organized and
validly existing under the laws of the jurisdiction of its incorporation or
formation. Each such Subsidiary is duly qualified to do business in all other
jurisdictions which require such qualification except to the extent that
failure to so qualify would not have a material adverse effect on such
Subsidiary.
(b) Due Authorization, etc.
----------------------
The execution, delivery and performance by the Corporation of
this Agreement are within the Corporation's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) the
Corporation's certificate of incorporation or bylaws or (ii) law or any
material contractual restriction binding on or affecting the Corporation.
(c) Governmental Consent.
--------------------
No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Corporation of this
Agreement.
(d) Validity.
--------
This Agreement is the legal, valid and binding obligation of the
Corporation enforceable against the Corporation in accordance with its terms,
subject to the
33
<PAGE>
effect of applicable bankruptcy, insolvency, arrangement, moratorium and other
similar laws affecting creditors' rights generally and to the application of
general principles of equity.
(e) Condition of the Corporation.
----------------------------
The balance sheet of the Corporation and its Subsidiaries as at
April 2, 1999, and the related statements of income and retained earnings of
the Corporation and its Subsidiaries for the fiscal year then ended, copies of
which have been furnished to each Bank, fairly present the financial condition
of the Corporation and its Subsidiaries as at such date and the results of the
operations of the Corporation and its Subsidiaries for the fiscal year ended
on such date, all in accordance with GAAP consistently applied, and as of the
Effective Date, there has been no material adverse change in the business,
condition (financial or otherwise), operations or properties of the
Corporation and its Subsidiaries, taken as a whole, since April 2, 1999.
(f) Litigation.
----------
(i) There is no pending action or proceeding against the
Corporation or any of its Subsidiaries before any court, governmental agency
or arbitrator, and (ii) to the knowledge of the Corporation, there is no
pending or threatened action or proceeding affecting the Corporation or any of
its Subsidiaries before any court, governmental agency or arbitrator, which in
either case would reasonably be expected to materially adversely affect the
financial condition or operations of the Corporation and its Subsidiaries,
taken as a whole, or which purports to affect the legality, validity or
enforceability of this Agreement.
(g) Margin Regulations.
------------------
The Corporation is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock in any manner that violates or would
cause a violation of Regulation T, Regulation U or Regulation X.
(h) Payment of Taxes.
----------------
The Corporation and each of its Subsidiaries have filed or
caused to be filed all material tax returns (federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect
to which appropriate reserves are being maintained by the Corporation or any
such Subsidiary, as the case may be.
(i) Governmental Regulation.
-----------------------
The Corporation is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940, each as amended, or to any
Federal or state statute or regulation limiting its ability to incur
indebtedness for money borrowed. No Subsidiary of the Corporation is subject
to any regulation that would limit the ability of the Partnership or the
Corporation to enter into or perform their respective obligations under this
Agreement.
(j) ERISA.
(i) No ERISA Event which might result in liability (other
than for premiums payable under Title IV of ERISA) has occurred or is
reasonably expected to occur with respect to any Pension Plan.
34
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(ii) Schedule B (Actuarial Information) to the most recently
completed annual report (Form 5500 Series) for each Pension Plan, copies
of which have been filed with the Internal Revenue Service and furnished
to the Agent, is complete and, to the best knowledge of the Corporation,
accurate, and since the date of such Schedule B there has been no
material adverse change in the funding status of any such Pension Plan.
(iii) Neither the Corporation nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Corporation, is reasonably
expected to incur, any Withdrawal Liability to any Multiemployer Plan.
(iv) Neither the Corporation nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and, to the best knowledge of the
Corporation, no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated within the meaning of Title IV of
ERISA.
(k) Disclosure.
----------
No representation or warranty of the Corporation contained in
this Agreement (including any Schedule furnished in connection herewith)
contains any untrue statement of a material fact. No other document,
certificate or written statement furnished to the Agent or any Lender by or on
behalf of the Corporation for use in connection with the transactions
contemplated in this Agreement, taken as a whole with other documents,
certificates or written statements furnished contemporaneously therewith,
contains any untrue statement of fact or omits to state a material fact (known
to the Corporation in the case of any documents not furnished by it) necessary
in order to make the statements contained therein not misleading in light of
the circumstances under which the same were made.
(l) Insurance.
---------
The Corporation and its Subsidiaries (i) have in full force
insurance coverage of their respective properties, assets and business
(including casualty, general liability, products liability and business
interruption insurance) that is (A) no less protective in any material respect
than the insurance the Corporation and its Subsidiaries have carried in
accordance with their past practices or (B) prudent given the nature of the
business of the Corporation and its Subsidiaries and the prevailing practice
among companies similarly situated or (ii) maintain a plan or plans of self-
insurance to such extent and covering such risks as is usual for companies of
comparable size engaged in the same or similar business which plan or plans
provide for, among other things, adequate reserves for the risks being self-
insured.
(m) Environmental Matters.
---------------------
(i) The Corporation and each of its Subsidiaries is in
compliance in all material respects with all Environmental Laws the non-
compliance with which could reasonably be expected to have a material adverse
effect on the financial condition or operations of the Corporation and its
Subsidiaries, taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.) or any other release, emission or discharge
-- ---
into the environment of any hazardous or toxic substance, pollutant or other
materials from the Corporation's or its Subsidiaries' property other than as
permitted under applicable Environmental Law and other than those which would
not have a material adverse effect on the financial condition or operations of
the Corporation and its Subsidiaries, taken as a whole. Other than disposals
for which the Corporation has been indemnified in full, all "hazardous waste"
(as defined by the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (1976) and the regulations thereunder,
-- ---
35
<PAGE>
40 CFR Part 261 ("RCRA")) generated at the Corporation's or any Subsidiaries'
properties have in the past been and shall continue to be disposed of at sites
which maintain valid permits under RCRA and any applicable state or local
Environmental Law.
(n) Relationship between Corporation and Partnership; Approval of
-------------------------------------------------------------
Terms.
-----
(i) The Corporation is the owner, directly or indirectly
(through its Subsidiaries of which it owns at least 80% of the voting stock),
of more than 50% of the partnership interest of the Partnership; (ii) Lenders'
agreement to make the Advances to the Partnership is of substantial and
material benefit to the Corporation; and (iii) the Corporation has reviewed
and approved copies of this Agreement and is fully informed of the remedies
Lenders may pursue upon the occurrence of an Event of Default.
(o) Year 2000 Compliance.
--------------------
The Corporation has developed and budgeted for a comprehensive
program to address the "year 2000 problem" (that is, the inability of
computers and computer software, as well as embedded microchips in non-
computing devices, to properly perform date-sensitive functions with respect
to certain dates prior to and after December 31, 1999). The Corporation has,
to date, implemented that program substantially in accordance with its
timetable and budget. The Corporation reasonably believes that the year 2000
problem will not result in a material adverse change in the business,
condition (financial or otherwise), operations or properties of the
Corporation and its Subsidiaries, taken as a whole. The Corporation has
developed contingency plans to address a failure of its own or a third party's
systems or equipment due to the year 2000 problem.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Partnership.
----------------------------------------
The Partnership covenants and agrees that the Partnership will, so
long as any Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, unless the Majority Lenders shall otherwise consent in
writing:
(a) Compliance with Laws, Etc.
-------------------------
Comply, and cause each of its Subsidiaries to comply, with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, (i) complying with all Environmental Laws and (ii) paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith, except where failure to so comply would not have a material
adverse effect on the business, condition (financial or otherwise), operations
or properties of the Partnership and its Subsidiaries, taken as a whole.
(b) Reporting Requirements. Furnish to the Lenders:
----------------------
(i) as soon as available and in any event within 110 days
after the end of each fiscal year of the Partnership, a copy of the
annual audit report for such year for the Partnership and its
Subsidiaries, containing financial statements (including a consolidated
balance sheet, consolidated statements of income and partners' equity
and cash flows of the Partnership and its Subsidiaries) for such year,
accompanied by an opinion of Deloitte & Touche or other nationally
recognized independent public accountants. The opinion shall be
unqualified (as to going concern, scope of audit and disagreements over
the accounting or other treatment of offsets) and shall state that such
consolidated financial statements present fairly the financial position
of the Partnership and its Subsidiaries as at the dates indicated and
the results of their operations and cash flow for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as stated therein) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
36
<PAGE>
(ii) together with each delivery of the report of the
Partnership and its Subsidiaries pursuant to subsection (i) above, a
compliance certificate for the year executed by an authorized financial
officer of the Partnership stating that the signer has reviewed the
terms of this Agreement and has made, or caused to be made under his or
her supervision, a review in reasonable detail of the transactions and
condition of the Partnership and its Subsidiaries during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signer does not have knowledge of the existence as at the
date of the compliance certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Partnership has taken,
is taking and proposes to take with respect thereto;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each Potential Event
of Default, continuing on the date of such statement, a statement of an
authorized financial officer of the Partnership setting forth details of
such Event of Default or Potential Event of Default and the action which
the Partnership has taken and proposes to take with respect thereto;
(iv) promptly after any significant change in accounting
policies or reporting practices, notice and a description in reasonable
detail of such change;
(v) promptly and in any event within 30 days after the
Partnership or any ERISA Affiliate knows or has reason to know that any
ERISA Event referred to in clause (i) of the definition of ERISA Event
with respect to any Pension Plan has occurred which might result in
liability to the PBGC a statement of the chief accounting officer of the
Partnership describing such ERISA Event and the action, if any, that the
Partnership or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(vi) promptly and in any event within 10 days after the
Partnership or any ERISA Affiliate knows or has reason to know that any
ERISA Event (other than an ERISA Event referred to in (v) above) with
respect to any Pension Plan has occurred which might result in liability
to the PBGC, a statement of the chief accounting officer of the
Partnership describing such ERISA Event and the action, if any, that the
Partnership or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(vii) promptly and in any event within five Business Days
after receipt thereof by the Partnership or any ERISA Affiliate from the
PBGC, copies of each notice from the PBGC of its intention to terminate
any Pension Plan or to have a trustee appointed to administer any
Pension Plan;
37
<PAGE>
(viii) promptly and in any event within seven Business Days
after receipt thereof by the Partnership or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice received by the
Partnership or any ERISA Affiliate concerning (w) the imposition of
Withdrawal Liability by a Multiemployer Plan, (x) the determination that
a Multiemployer Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA, (y) the termination of a Multiemployer
Plan within the meaning of Title IV of ERISA or (z) the amount of
liability incurred, or expected to be incurred, by the Partnership or
any ERISA Affiliate in connection with any event described in clause
(w), (x) or (y) above;
(ix) promptly after the commencement thereof, notice of all
material actions, suits and proceedings before any court or government
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Partnership or any of its
Subsidiaries, of the type described in Section 4.01(f);
(x) promptly after the occurrence thereof, notice of (A)
any event which makes any of the representations contained in Section
4.01(m) inaccurate in any material respect or (B) the receipt by the
Partnership of any notice, order, directive or other communication from
a governmental authority alleging violations of or noncompliance with
any Environmental Law which could reasonably be expected to have a
material adverse effect on the financial condition of the Partnership
and its Subsidiaries, taken as a whole;
(xi) promptly after any change in any Rating, a notice of
such change, which notice shall specify the new Rating, the date on
which such change was publicly announced (in the case of a public
rating) or disclosed to the Corporation (in the case of a private
rating), and such other information with respect to such change as any
Lender through the Agent may reasonably request; and
(xii) such other information respecting the condition or
operations, financial or otherwise, of the Partnership or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(c) Partnership Existence, Etc.
--------------------------
The Partnership will, and will cause each of its
Subsidiaries to, at all times maintain its fundamental business and preserve
and keep in full force and effect its partnership existence (except as
permitted under Section 5.02(b) hereof) and all rights, franchises and
licenses necessary or desirable in the normal conduct of its business.
(d) Maintenance of Insurance.
------------------------
The Partnership will and will cause each of its
Subsidiaries to maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks (i) as are
usually insured by companies engaged in similar businesses and (ii) with
responsible and reputable insurance companies. Notwithstanding the foregoing,
the Partnership and its Subsidiaries may maintain a plan or plans of self-
insurance to such extent and covering such risks as is usual for companies of
comparable size engaged in the same or similar business, which plans shall
include, among other things, adequate reserves for the risks that are self-
insured. On request the Partnership will advise the Agent and the Lenders
concerning any such plan or plans for self-insurance.
38
<PAGE>
Section 5.02 Negative Covenants of the Partnership.
-------------------------------------
The Partnership covenants and agrees that, so long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, without
the written consent of the Majority Lenders:
(a) Liens, Etc.
----------
The Partnership will not create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any Lien, upon or with
respect to any of its properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to receive
income, in each case to secure or provide for the payment of any Debt of any
Person, unless the Partnership's obligations hereunder shall be secured
equally and ratably with, or prior to, any such Debt; provided however that
the foregoing restriction shall not apply to the following Liens which are
permitted:
(i) set-off rights, arising by operation of law or under
any contract entered into in the ordinary course of business, and
bankers' Liens, Liens of carriers, warehousemen, mechanics, workmen,
employees, materialmen and other Liens imposed by law;
(ii) Liens in favor of the United States of America to
secure amounts paid to the Partnership or any of its Subsidiaries as
advance or progress payments under government contracts entered into by
it so long as such Liens cover only (x) special bank accounts into which
only such advance or progress payments are deposited and (y) supplies
covered by such government contracts and material and other property
acquired for or allocated to the performance of such government
contracts;
(iii) attachment, judgment and other similar Liens arising in
connection with legal proceedings, provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings,
and provided that any such judgment does not constitute an Event of
Default;
(iv) Liens on accounts receivable resulting from the sale of
such accounts receivable;
(v) Liens on assets of any Subsidiary of the Partnership
existing at the time such Person becomes a Subsidiary (other than any
such Lien created in contemplation of becoming a Subsidiary);
(vi) purchase money Liens upon or in any property acquired
or held by the Partnership or any Subsidiary in the ordinary course of
business to secure the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the acquisition of such
property (provided that the amount of Debt secured by such Lien does not
exceed 100% of the purchase price of such property and transaction costs
relating to such acquisition) and Liens existing on such property at the
time of its acquisition (other than any such Lien created in
contemplation of such acquisition); and the interest of the lessor
thereof in any property that is subject to a Capital Lease;
(vii) Liens, other than Liens described in clauses (i)
through (vi) and in clause (ix), to secure Debt not in excess of
$75,000,000 principal amount at any time outstanding;
39
<PAGE>
(viii) Liens resulting from any extension, renewal or
replacement (or successive extensions, renewals or replacements), in
whole or in part, of any Debt secured by any Lien referred to in clauses
(iv), (v) and (vi) so long as (x) the aggregate principal amount of any
such Debt shall not increase as a result of any such extension, renewal
or replacement and (y) Liens resulting from any such extension, renewal
or replacement shall cover only such property which secured the Debt
that is being extended, renewed or replaced; and
(ix) Liens on any of the properties described in Schedule II
hereto to secure Debt, provided that the amount of such Debt does not
exceed 100% of the fair market value of the property encumbered by such
Lien at the time such Debt is incurred.
(b) Restrictions on Fundamental Changes. The Partnership will not,
and will not permit any of its Subsidiaries to, merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or a substantial portion of
its assets (whether now owned or hereafter acquired) to any Person (other than
the Corporation or any Subsidiary of the Corporation, so long as the
Corporation, directly or indirectly, owns 80% or more of the voting stock
thereof), or enter into any partnership, joint venture, syndicate, pool or
other combination, unless (a) no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom and (b) any
prepayment required under Section 2.06(b) has been made.
(c) Plan Terminations. The Partnership will not, and will not
permit any ERISA Affiliate to, terminate any Pension Plan so as to result in
liability of the Partnership or any ERISA Affiliate to the PBGC in excess of
$15,000,000, or permit to exist any occurrence of an event or condition which
reasonably presents a material risk of a termination by the PBGC of any
Pension Plan with respect to which the Partnership or any ERISA Affiliate
would, in the event of such termination, incur liability to the PBGC in excess
of $15,000,000.
(d) Employee Benefit Costs and Liabilities. The Partnership will
not, and will not permit any ERISA Affiliate to, create or suffer to exist,
(i) any Insufficiency with respect to a Pension Plan or any Withdrawal
Liability with respect to a Multiemployer Plan if, immediately after giving
effect thereto, such Insufficiencies and Withdrawal Liabilities of all Pension
Plans and Multiemployer Plans, respectively, of the Partnership and its ERISA
Affiliates exceeds $25,000,000 or (ii) except as provided in Section 4980B of
the Code and except as provided under the terms of any employee welfare
benefit plans provided pursuant to the terms of collective bargaining
agreements, any employee benefit plan to provide health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of the Partnership or any of its ERISA Affiliate unless the
Partnership and/or any of its ERISA Affiliates are permitted to terminate such
benefits pursuant to the terms of such employee benefit plan.
Section 5.03 Affirmative Covenants of the Corporation.
----------------------------------------
The Corporation covenants and agrees that the Corporation will,
unless and until all of the Advances shall have been indefeasibly paid in
full, the Commitments of the Lenders shall have terminated and all of the
Guarantied Obligations shall have been indefeasibly paid in full, unless
Majority Lenders shall otherwise consent in writing:
40
<PAGE>
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, (i) complying with all
Environmental Laws and (ii) paying before the same become delinquent all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent contested in good faith, except where failure to
so comply would not have a material adverse effect on the business, condition
(financial or otherwise), operations or properties of the Corporation and its
Subsidiaries, taken as a whole.
(b) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days of
the end of each of the first three fiscal quarters of each fiscal year
of the Corporation, a copy of the quarterly report for such quarter for
the Corporation and its Subsidiaries, containing financial statements
(including a consolidated balance sheet, consolidated statements of
income and stockholders' equity and cash flows of the Corporation and
its Subsidiaries) for such quarter;
(ii) as soon as available and in any event within 110 days
after the end of each fiscal year of the Corporation, a copy of the
annual audit report for such year for the Corporation and its
Subsidiaries, containing financial statements (including a consolidated
balance sheet, consolidated statements of income and stockholders'
equity and cash flows of the Corporation and its Subsidiaries) for such
year, accompanied by an opinion of Deloitte & Touche or other nationally
recognized independent public accountants. The opinion shall be
unqualified (as to going concern, scope of audit and disagreements over
the accounting or other treatment of offsets) and shall state that such
consolidated financial statements present fairly the financial position
of the Corporation and its Subsidiaries as at the dates indicated and
the results of their operations and cash flow for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as stated therein) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iii) together with each delivery of the report of the
Corporation and its Subsidiaries pursuant to subsection (i) or
subsection (ii) above, a compliance certificate for the quarter or year,
as applicable, executed by an authorized financial officer of the
Corporation (A) stating, in the case of the financial statements
delivered under Section 5.03(b)(i) for such quarter, that such financial
statements fairly present the financial condition of the Corporation and
its Subsidiaries as at the dates indicated and the results of operations
of the Corporation and its Subsidiaries and cash flow for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise stated therein), subject to changes
resulting from audit and normal year-end adjustment, (B) stating that
the signer has reviewed the terms of this Agreement and has made, or
caused to be made under his or her supervision, a review in reasonable
detail of the transactions and condition of the Corporation and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signer does not
have knowledge of the existence as at the date of the compliance
certificate, of any condition or event that constitutes an Event of
Default or a Potential Event of Default
41
<PAGE>
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Corporation
has taken, is taking and proposes to take with respect thereto and (C)
demonstrating in reasonable detail compliance during (as required
thereunder) and at the end of such accounting periods with the
restrictions contained in Section 5.04(c).
(iv) together with each delivery of the Corporation's annual
report pursuant to subsection (ii) above, a written statement by the
independent public accountants giving the report thereon (so long as
delivery of such statement is not prohibited by AICPA rules) (A) stating
that their audit examination has included a review of the terms of this
Agreement as they relate to accounting matters and (B) stating whether,
in connection with their audit examination, any condition or event that
constitutes an Event of Default or a Potential Event of Default has come
to their attention, and if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided, that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of a
reasonable audit examination;
(v) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each Potential Event
of Default, continuing on the date of such statement, a statement of an
authorized financial officer of the Corporation setting forth details of
such Event of Default or Potential Event of Default and the action which
the Corporation has taken and proposes to take with respect thereto;
(vi) promptly after any significant change in accounting
policies or reporting practices, notice and a description in reasonable
detail of such change;
(vii) promptly and in any event within 30 days after the
Corporation or any ERISA Affiliate knows or has reason to know that any
ERISA Event referred to in clause (i) of the definition of ERISA Event
with respect to any Pension Plan has occurred which might result in
liability to the PBGC a statement of the chief accounting officer of the
Corporation describing such ERISA Event and the action, if any, that the
Corporation or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(viii) promptly and in any event within 10 days after the
Corporation or any ERISA Affiliate knows or has reason to know that any
ERISA Event (other than an ERISA Event referred to in (v) above) with
respect to any Pension Plan has occurred which might result in liability
to the PBGC, a statement of the chief accounting officer of the
Corporation describing such ERISA Event and the action, if any, that the
Corporation or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(ix) promptly and in any event within five Business Days
after receipt thereof by the Corporation or any ERISA Affiliate from the
PBGC, copies of each notice from the PBGC of its intention to terminate
any Pension Plan or to have a trustee appointed to administer any
Pension Plan;
(x) promptly and in any event within seven Business Days
after receipt thereof by the Corporation or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice received by the
Corporation or any ERISA Affiliate
42
<PAGE>
concerning (w) the imposition of Withdrawal Liability by a Multiemployer
Plan, (x) the determination that a Multiemployer Plan is, or is expected
to be, in reorganization within the meaning of Title IV of ERISA, (y)
the termination of a Multiemployer Plan within the meaning of Title IV
of ERISA or (z) the amount of liability incurred, or expected to be
incurred, by the Corporation or any ERISA Affiliate in connection with
any event described in clause (w), (x) or (y) above;
(xi) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports that the
Corporation or any of its Subsidiaries sends to its stockholders
generally, and copies of all regular, periodic and special reports, and
all registration statements, that the Corporation or any of its
Subsidiaries files with the SEC or any governmental authority that may
be substituted therefor, or with any national securities exchange;
(xii) promptly after the furnishing thereof, copies of any
statement or report furnished to any other holder of the securities of
the Corporation or any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lenders pursuant to any other clause of
this Section 5.03.
(xiii) promptly after the commencement thereof, notice of all
material actions, suits and proceedings before any court or government
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Corporation or any of its
Subsidiaries, of the type described in Section 4.02(f).
(xiv) promptly after the occurrence thereof, notice of (A)
any event which makes any of the representations contained in Section
4.02(l) inaccurate in any material respect or (B) the receipt by the
Corporation of any notice, order, directive or other communication from
a governmental authority alleging violations of or noncompliance with
any Environmental Law which could reasonably be expected to have a
material adverse effect on the financial condition of the Corporation
and its Subsidiaries, taken as a whole;
(xv) promptly after any change in any Rating, a notice of
such change, which notice shall specify the new Rating, the date on
which such change was publicly announced (in the case of a public
rating) or was disclosed to the Corporation (in the case of a private
rating), and such other information with respect to such change as any
Lender through Agent may reasonably request; and
(xvi) such other information respecting the condition or
operations, financial or otherwise, of the Corporation or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(c) Corporate Existence, Etc.
------------------------
The Corporation will, and will cause each of its material
Subsidiaries to, at all times maintain its fundamental business and preserve
and keep in full force and effect its corporate existence (except as permitted
under Section 5.04(b)) and all rights, franchises and licenses necessary or
desirable in the normal conduct of its business.
43
<PAGE>
(d) Maintenance of Insurance.
------------------------
The Corporation will and will cause each of its Subsidiaries to
maintain insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks (i) as are usually
insured by companies engaged in similar businesses and (ii) with responsible
and reputable insurance companies or associations. Notwithstanding the
foregoing, the Corporation and its Subsidiaries may maintain a plan or plans
of self-insurance to such extent and covering such risks as is usual for
companies of comparable size engaged in the same or similar business, which
plans shall include, among other things, adequate reserves for the risks that
are self-insured. On request the Corporation will advise the Agent and the
Lenders concerning any such plan or plans for self-insurance.
(e) Relationship to the Partnership.
-------------------------------
The Corporation shall keep itself informed as to the status of
the transactions contemplated or referred to herein, the Partnership's
financial status and its ability to perform its obligations under this
Agreement.
Section 5.04 Negative Covenants of the Corporation.
-------------------------------------
The Corporation covenants and agrees that, unless and until all of
the Advances shall have been indefeasibly paid in full, the Commitments of the
Lenders shall have terminated and all of the Guarantied Obligations shall have
been indefeasibly paid in full, unless Majority Lenders shall otherwise
consent in writing:
(a) Liens, Etc.
----------
The Corporation will not create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any Lien, upon or with
respect to any of its properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to receive
income, in each case to secure or provide for the payment of any Debt of any
Person, unless the Corporation's obligations hereunder shall be secured
equally and ratably with, or prior to, any such Debt; provided however that
the foregoing restriction shall not apply to the following Liens which are
permitted:
(i) set-off rights, arising by operation of law or under
any contract entered into in the ordinary course of business, and
bankers' Liens, Liens of carriers, warehousemen, mechanics, workmen,
employees, materialmen and other Liens imposed by law;
(ii) Liens in favor of the United States of America to
secure amounts paid to the Corporation or any of its Subsidiaries as
advance or progress payments under government contracts entered into by
it so long as such Liens cover only (x) special bank accounts into which
only such advance or progress payments are deposited and (y) supplies
covered by such government contracts and material and other property
acquired for or allocated to the performance of such government
contracts;
(iii) attachment, judgment and other similar Liens arising in
connection with legal proceedings, provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings,
and provided that any such judgment does not constitute an Event of
Default;
(iv) Liens on accounts receivable resulting from the sale of
such accounts receivable;
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(v) Liens on assets of any Subsidiary of the Corporation
existing at the time such Person becomes a Subsidiary (other than any
such Lien created in contemplation of becoming a Subsidiary);
(vi) purchase money Liens upon or in any property acquired
or held by the Corporation or any Subsidiary in the ordinary course of
business to secure the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the acquisition of such
property (provided that the amount of Debt secured by such Lien does not
exceed 100% of the purchase price of such property and transaction costs
relating to such acquisition) and Liens existing on such property at the
time of its acquisition (other than any such Lien created in
contemplation of such acquisition); and the interest of the lessor
thereof in any property that is subject to a Capital Lease;
(vii) Liens, other than Liens described in clauses (i)
through (vi) and in clause (ix), to secure Debt not in excess of an
aggregate of $75,000,000 principal amount at any time outstanding;
(viii) Liens resulting from any extension, renewal or
replacement (or successive extensions, renewals or replacements), in
whole or in part, of any Debt secured by any Lien referred to in clauses
(iv), (v) and (vi) so long as (x) the aggregate principal amount of any
such Debt shall not increase as a result of any such extension, renewal
or replacement and (y) Liens resulting from any such extension, renewal
or replacement shall cover only such property which secured the Debt
that is being extended, renewed or replaced; and
(ix) Liens on any of the properties described in Schedule
III hereto to secure Debt, provided that the amount of such Debt does
not exceed 100% of the fair market value of the property encumbered by
such Lien at the time such Debt is incurred.
(b) Restrictions on Fundamental Changes. The Corporation will not,
and will not permit any of its Subsidiaries to, merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or a substantial portion of
its assets (whether now owned or hereafter acquired) to any Person (other than
the Corporation or any Subsidiary of the Corporation, so long as the
Corporation, directly or indirectly, owns 80% or more of the voting stock
thereof), or enter into any partnership, joint venture, syndicate, pool or
other combination, unless (a) no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom and (b) in
the case of any consolidation or merger involving the Corporation either (i)
the Corporation is the surviving entity or (ii) the Person surviving or
resulting from such consolidation or merger shall have assumed the obligations
of the Corporation hereunder in an agreement or instrument reasonably
satisfactory in form and substance to the Agent.
(c) Financial Covenants.
-------------------
(i) Leverage Ratio.
--------------
The Corporation will not permit at any time the ratio
of Consolidated Total Debt to Consolidated Total Capitalization to
exceed 0.45 to 1.00.
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(ii) Minimum Interest Coverage Ratio.
-------------------------------
The Corporation will not permit the ratio of
Consolidated Gross Cash Flow for the four consecutive fiscal quarters
ending on the last day of each fiscal quarter to Consolidated Interest
Expense for such four consecutive fiscal quarters ending on the last day
of each fiscal quarter to be less than 3.50 to 1.00.
(d) Plan Terminations.
-----------------
The Corporation will not, and will not permit any ERISA
Affiliate to, terminate any Pension Plan so as to result in liability of the
Corporation or any ERISA Affiliate to the PBGC in excess of $15,000,000, or
permit to exist any occurrence of an event or condition which reasonably
presents a material risk of a termination by the PBGC of any Pension Plan with
respect to which the Corporation or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of $15,000,000.
(e) Employee Benefit Costs and Liabilities.
--------------------------------------
The Corporation will not, and will not permit any ERISA
Affiliate to, create or suffer to exist, (i) any Insufficiency with respect to
a Pension Plan or any Withdrawal Liability with respect to a Multiemployer
Plan if, immediately after giving effect thereto, such Insufficiencies and
Withdrawal Liabilities of all Pension Plans and Multiemployer Plans,
respectively, of the Corporation and its ERISA Affiliates exceeds $25,000,000
or (ii) except as provided in Section 4980B of the Code and except as provided
under the terms of any employee welfare benefit plans provided pursuant to the
terms of collective bargaining agreements, any employee benefit plan to
provide health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Corporation or any of its
ERISA Affiliate unless the Corporation and/or any of its ERISA Affiliates are
permitted to terminate such benefits pursuant to the terms of such employee
benefit plan.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.
-----------------
If any of the following events ("Events of Default") shall occur and
be continuing:
(a) Either Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable or either Borrower shall fail to pay any
interest on any Advance or any fees or other amounts payable hereunder within
five days of the date due; or
(b) The Guarantor shall fail to pay any Guarantied Obligations when
the same becomes due and payable; or
(c) Any representation or warranty made by the Partnership or the
Corporation herein or by the Partnership (or any of its or the Managing
Partner's officers) or the Corporation in connection with this Agreement shall
prove to have been incorrect in any material respect when made; or
(d) The Partnership shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.01(c) or 5.02, or (ii) any other
term, covenant or agreement contained in this Agreement on its part to be
performed or observed if the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after the
Partnership obtains knowledge of such breach; or
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(e) The Corporation shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.03(c) or 5.04, or (ii) any other
term, covenant or agreement contained in this Agreement on its part to be
performed or observed if the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after the
Corporation obtains knowledge of such breach; or
(f) The Corporation, the Partnership or any of their respective
Subsidiaries shall fail to pay any principal of or premium or interest on any
Debt which is outstanding in a principal amount of at least $35,000,000 in the
aggregate (but excluding Debt arising under this Agreement) of the
Corporation, the Partnership or such Subsidiary (as the case may be), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Debt and shall continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the maturity of such Debt; or
any such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment or by a
required prepayment of insurance proceeds or by a required prepayment as a
result of formulas based on asset sales or excess cash flow), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity
thereof; or
(g) The Corporation, the Partnership or any of their respective
Significant Subsidiaries shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Corporation, the
Partnership or any of their respective Significant Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Corporation, the
Partnership or any of their respective Significant Subsidiaries shall take any
corporate or partnership action to authorize any of the actions set forth
above in this subsection (g); or
(h) Any judgment or order for the payment of money in excess of
$35,000,000 shall be rendered against the Corporation, the Partnership or any
of their respective Significant Subsidiaries and is not promptly paid by the
Corporation, the Partnership or any of their respective Significant
Subsidiaries 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;
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(i) Any provision of the Guaranty shall for any reason cease to be
valid and binding on the Guarantor or the Guarantor shall so state in writing;
or
(j)
(i) Any ERISA Event with respect to a Pension Plan shall
have occurred and, 30 days after notice thereof shall have been given to
the Borrowers by the Agent, (x) such ERISA Event shall still exist and
(y) the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Pension Plan and the Insufficiency
of any and all other Pension Plans with respect to which an ERISA Event
shall have occurred and then exist (or in the case of a Pension Plan
with respect to which an ERISA Event described in clause (iii) through
(vi) of the definition of ERISA Event shall have occurred and then
exist, the liability related thereto) is equal to or greater than
$15,000,000; or
(ii) Either Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred an
aggregate Withdrawal Liability for all years to such Multiemployer Plan
in an amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by such Borrower and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds $15,000,000; or
(iii) Either Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV or ERISA, if as a result of such reorganization or termination
the aggregate annual contributions of such Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan year of such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $15,000,000;
or
(k) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities and Exchange Act of
1934, as amended), directly or indirectly, of securities of the Corporation
(or other securities convertible into such securities) representing 35% or
more of the combined voting power of all securities of the Corporation
entitled to vote in the election of directors, other than securities having
such power only by reason of the happening of a contingency; or
(l) The Corporation or any of its Subsidiaries shall be suspended or
debarred by any governmental entity from entering into any government contract
or government subcontract from otherwise engaging in any business relating to
government contracts or from participation in government non-procurement
programs, and such suspension or debarment could reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise), operations or properties of the Corporation and its Subsidiaries,
taken as a whole; then, and in any such event, the Agent (i) shall at the
request, or may with the consent, of the Majority Lenders, by notice to the
Borrowers, declare the obligation of each Lender to make
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Advances to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Majority Lenders,
by notice to the Borrowers, declare the Advances, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are here expressly waived by the
Borrowers; provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to the Corporation, the Partnership or any
of their respective Subsidiaries under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated
and (B) the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrowers.
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action.
------------------------
Each Lender hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including, without limitation, enforcement or
collection of the Advances and other amounts owing hereunder), the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders; provided,
however, that the Agent shall not be required to take any
-------- -------
action which exposes the Agent to personal liability or which is contrary to
this Agreement or applicable law. The Agent agrees to give to each Lender
prompt notice of each notice given to it by either Borrower pursuant to the
terms of this Agreement.
Section 7.02 Agent's Reliance, Etc.
---------------------
Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Agent: (i) may treat the payee of any Advance as the
holder thereof until the Agent receives and accepts an Assignment and
Acceptance entered into by the Lender which is the payee of such Advance, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(ii) may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement on the part of
the Partnership or the Corporation or to inspect the property (including the
books and records) of the Partnership or the Corporation; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate
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or other instrument or writing (which may be by telecopier, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties.
Section 7.03 CUSA and Affiliates.
-------------------
With respect to its Commitment, the Advances made by it, CUSA shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include CUSA in its
individual capacity. CUSA and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrowers, any of their respective subsidiaries and any
Person who may do business with or own securities of either Borrower or any
such subsidiary, all as if CUSA were not the Agent and without any duty to
account therefor to the Lenders.
Section 7.04 Lender Credit Decision.
----------------------
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 7.05 Indemnification.
---------------
The Lenders agree to indemnify the Agent (to the extent not
reimbursed by the Borrowers), ratably according to the respective principal
amounts of the A Advances then held by each of them (or if no A Advances are
at the time outstanding or if any A Advances are held by Persons which are not
Lenders, ratably according to the respective amounts of their Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Agent under this Agreement, provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, syndication,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrowers.
Section 7.06 Successor Agent.
---------------
The Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrowers and may be removed at any time with or without
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Majority Lenders' removal of
the retiring Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent
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which shall be a commercial bank organized under the laws of the United States
of America or of any State thereof or any Bank and, in each case having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
THE GUARANTY
Section 8.01 Guaranty of the Guarantied Obligations.
--------------------------------------
The Guarantor hereby irrevocably and unconditionally guaranties, as
primary obligor and not merely as surety, the due and punctual payment in full
of all Guarantied Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment or declaration of (or in certain
circumstances automatic) acceleration (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "Guarantied Obligations"
is used herein in its most comprehensive sense and includes:
(a) any and all obligations of the Partnership in respect of notes,
advances, borrowings, loans, debts, interest, fees, costs, expenses
(including, without limitation, legal fees and expenses of counsel),
indemnities and liabilities of whatsoever nature now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, arising under or in connection with this
Agreement, including those arising under successive borrowing transactions
under this Agreement which shall either continue such obligations of the
Partnership or from time to time renew them after they have been satisfied;
and
(b) those expenses set forth in Section 8.07 hereof.
This Article VIII, as it may be amended, amended and restated, supplemented or
otherwise modified from time to time, is sometimes referred to herein as the
"Guaranty" or this "Guaranty".
Section 8.02 Liability of the Guarantor.
--------------------------
The Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor
or surety other than indefeasible payment in full of the Guarantied
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, the Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) The obligations of the Guarantor hereunder are independent of
the obligations of the Partnership hereunder and the obligations of any other
guarantor of the obligations of the Partnership hereunder, and a separate
action or actions may be brought and prosecuted against the Guarantor whether
or not any action is brought against the Partnership or any of such other
guarantors and whether or not the Partnership is joined in any such action or
actions.
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(c) The Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guarantied Obligations which has
not been paid. Without limiting the generality of the foregoing, if Agent is
awarded a judgment in any suit brought to enforce the Guarantor's covenant to
pay a portion of the Guarantied Obligations, such judgment shall not be deemed
to release the Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit.
(d) The Agent or any Lender, upon such terms as it deems
appropriate, without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction, limitation,
impairment, discharge or termination of the Guarantor's liability hereunder,
from time to time may (i) renew, extend (whether pursuant to Section 2.16 or
otherwise), accelerate (in accordance with the terms of this Agreement),
increase the rate of interest on, or otherwise change the time, place, manner
or terms of payment of the Guarantied Obligations, (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guarantied Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guarantied
Obligations, any other guaranties of the Guarantied Obligations, or any other
obligation of any Person with respect to the Guarantied Obligations; (v)
enforce and apply any security now or hereafter held by or for the benefit of
Agent or any Lender in respect of this Guaranty or the Guarantied Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that Agent or Lenders, or any of them, may have against any such
security, as Agent in its discretion may determine consistent with this
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or non-judicial sales, whether
or not every aspect of any such sale is commercially reasonable, and even
though such action operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of the Guarantor against the
Partnership or any security for the Guarantied Obligations; and (vi) exercise
any other rights available to it hereunder.
(e) This Guaranty and the obligations of the Guarantor hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
indefeasible payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not the
Guarantor shall have had notice or knowledge of any of them: (i) any failure
or omission to assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising hereunder, at law, in equity or
otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guarantied Obligations; (ii) any rescission, waiver, amendment
or modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events of
default) of this Agreement, or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied Obligations,
in each case whether or not in accordance with the terms of this Agreement or
any agreement relating to such other guaranty or security; (iii) the
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Guarantied Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
from the proceeds of any security for the Guarantied Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though Agent or Lenders, or any of them, might
have elected to apply such payment to any part or all of the Guarantied
Obligations; (v) any Lender's or Agent's consent to the change, reorganization
or termination of the corporate or partnership structure or existence of the
Partnership or any of its Subsidiaries and to any corresponding restructuring
of the Guarantied Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guarantied Obligations; (vii) any defenses which the Partnership may allege or
assert against Agent or any Lender in respect of the Guarantied Obligations,
including but not limited to statute of frauds, statute of limitations, and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk
of the Guarantor as an obligor in respect of the Guarantied Obligations.
Section 8.03 Waivers by the Guarantor.
------------------------
The Guarantor hereby waives, for the benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition of payment
or performance by the Guarantor, to (i) proceed against the Partnership, any
other guarantor of the Guarantied Obligations or any other Person, (ii)
proceed against or exhaust any security held from the Partnership, any other
guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of Agent or any Lender in favor of the Partnership or any other Person,
or (iv) pursue any other remedy in the power of Agent or any Lender
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Partnership including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Partnership from any cause other than indefeasible payment in
full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(d) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any
legal or equitable discharge of the Guarantor's obligations hereunder, (ii)
the benefit of any statute of limitations affecting the Guarantor's liability
hereunder or the enforcement hereof, and (iii) promptness, diligence and any
requirement that Agent or any Lender protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(e) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default hereunder or any agreement or
instrument related thereto, notices of any renewal,
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extension or modification of the Guarantied Obligations or any agreement
related thereto, notices of any extension of credit to the Partnership and
notices of any of the matters referred to in Section 8.02 and any right to
consent to any thereof; and
(f) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or which
may conflict with the terms of this Guaranty.
Section 8.04 Payment by the Guarantor.
------------------------
The Guarantor hereby agrees, in furtherance of the foregoing and not
in limitation of any other right which Agent or any other Person may have at
law or in equity against the Guarantor by virtue hereof, upon the failure of
the Partnership to pay any of the Guarantied Obligations when and as the same
shall become due, whether at stated maturity, by required prepayment or
declaration of (or, in certain circumstances, automatic) acceleration,
(including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), the Guarantor will forthwith pay, or cause to be paid, in cash, to
Agent for the benefit of Lenders, an amount equal to the sum of the unpaid
principal amount of all Guarantied Obligations then due as aforesaid, accrued
and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy
with respect to the Partnership, would have accrued on such Guarantied
Obligations, whether or not a claim is allowed against the Partnership for
such interest in any such bankruptcy proceeding) and all other Guarantied
Obligations then owed to Agent and/or Lenders as aforesaid.
Section 8.05 Subrogation.
-----------
Until the Guarantied Obligations shall have been indefeasibly paid
in full, the Guarantor shall withhold exercise of (a) any right of
subrogation, (b) any right of contribution the Guarantor may have against any
other guarantor of the Guarantied Obligations, (c) any right to enforce any
remedy which Agent or any Lender now has or may hereafter have against the
Partnership or (d) any benefit of, and any right to participate in, any
security now or hereafter held by Agent or any Lender. The Guarantor further
agrees that, to the extent that its agreement to defer exercising any of its
rights of subrogation and contribution as set forth herein is found by a court
of competent jurisdiction to be void or voidable for any reason, any rights of
subrogation the Guarantor may have against the Partnership or against any
collateral or security, and any rights of contribution the Guarantor may have
against any other guarantor, shall be junior and subordinate to any rights
Agent or Lenders may have against the Partnership, to all right, title and
interest Agent or Lenders may have in any such collateral or security, and to
any right Agent or Lenders may have against such other guarantor. Agent, on
behalf of Lenders, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights the Guarantor
may have, and upon any such disposition or sale any rights of subrogation the
Guarantor may have shall terminate. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all
Guarantied Obligations shall not have been paid in full, such amount shall be
held in trust for Agent on behalf of Lenders and shall forthwith be paid over
to Agent for the benefit of Lenders to be credited and applied against the
Guarantied Obligations in accordance with the terms of this Agreement or any
applicable security agreement.
Section 8.06 Subordination of Other Obligations.
----------------------------------
Any indebtedness of the Partnership or any Subsidiary of the
Partnership now or hereafter held by the Guarantor is hereby subordinated in
right of payment to the Guarantied Obligations, and any such
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indebtedness of the Partnership or any Subsidiary of the Partnership to the
Guarantor collected or received by the Guarantor after an Event of Default
resulting from a payment default has occurred and is continuing or after an
acceleration of the Guarantied Obligations shall be held in trust for Agent on
behalf of Lenders and shall forthwith be paid over to Agent for the benefit of
Lenders to be credited and applied against the Guarantied Obligations but
without affecting, impairing or limiting in any manner the liability of the
Guarantor under any other provision of this Guaranty.
Section 8.07 Expenses.
--------
The Guarantor agrees to pay, or cause to be paid, and to save Agent
and Lenders harmless against liability for, any and all reasonable costs and
out-of-pocket expenses (including fees and disbursements of counsel) incurred
or expended by Agent or any Lender in connection with the enforcement of or
preservation of any rights under this Guaranty.
Section 8.08 Continuing Guaranty; Termination of Guaranty.
--------------------------------------------
This Guaranty is a continuing guaranty and shall remain in effect
until all of the Guarantied Obligations shall have been indefeasibly paid in
full and the Commitments of all Lenders shall have terminated.
Section 8.09 Authority of the Guarantor or the Partnership.
---------------------------------------------
It is not necessary for Lenders or Agent to inquire into the
capacity or powers of the Guarantor or the Partnership or the officers,
directors or any agents acting or purporting to act on behalf of any of them.
Section 8.10 Financial Condition of the Partnership.
--------------------------------------
Any Advances may be granted to the Partnership or continued from
time to time without notice to or authorization from Guarantor regardless of
the financial or other condition of the Partnership at the time of any such
grant or continuation. Lenders and Agent shall have no obligation to disclose
or discuss with the Guarantor their assessment, or the Guarantor's assessment,
of the financial condition of the Partnership. The Guarantor has adequate
means to obtain information from the Partnership on a continuing basis
concerning the financial condition of the Partnership and its ability to
perform its obligations hereunder, and the Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
the Partnership and of all circumstances bearing upon the risk of nonpayment
of the Guarantied Obligations. The Guarantor hereby waives and relinquishes
any duty on the part of Agent or any Lender to disclose any matter, fact or
thing relating to the business, operations or conditions of the Partnership
now known or hereafter known by Agent or any Lender.
Section 8.11 Rights Cumulative.
-----------------
The rights, powers and remedies given to Lenders and Agent by this
Guaranty are cumulative and shall be in addition to and independent of all
rights, powers and remedies given to Lenders and Agent by virtue of any
statute or rule of law or under this Agreement or any agreement between the
Corporation and Lenders and/or Agent or between the Partnership and Lenders
and/or Agent. Any forbearance or failure to exercise, and any delay by any
Lender or Agent in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.
Section 8.12 Bankruptcy; Post-Petition Interest; Reinstatement
-------------------------------------------------
of the Guaranty.
---------------
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(a) So long as any Guarantied Obligations remain outstanding, the
Guarantor shall not, without the prior written consent of Agent in accordance
with the terms of this Agreement, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency proceedings of or
against the Partnership. The obligations of the Guarantor under this Guaranty
shall not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of the Partnership or by any defense which the Partnership may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.
(b) The Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement of
any proceeding referred to in clause (a) above (or, if interest on any portion
of the Guarantied Obligations ceases to accrue by operation of law by reason
of the commencement of said proceeding, such interest as would have accrued on
such portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of the Guarantor and Agent that the Guarantied Obligations which are
guarantied by the Guarantor pursuant to this Guaranty should be determined
without regard to any rule of bankruptcy or other similar laws or which may
relieve the Partnership of any portion of such Guarantied Obligations. The
Guarantor will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Agent, or allow the claim of Agent in respect of, any such interest accruing
after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by the Partnership, the obligations of the Guarantor
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Agent or any Lender as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guarantied Obligations for all
purposes under this Guaranty.
Section 8.13 Notice of Events.
----------------
As soon as the Guarantor obtains knowledge thereof, the Guarantor
shall give Agent written notice of any condition or event which has resulted
or might reasonably be expected to result in (a) a material adverse change in
the financial condition of the Guarantor or the Partnership, or (b) a breach
of or noncompliance with any term, condition or covenant contained in this
Agreement or in any document delivered pursuant hereto, or (c) a material
breach of, or material noncompliance with, any material term, condition or
covenant of any material contract to which the Guarantor or the Partnership is
a party or by which the Guarantor or the Partnership or the Guarantor's or the
Partnership's property may be bound, or (d) the Guarantor or any of its
Subsidiaries being suspended or debarred by any governmental entity from
entering into any government contract or government subcontract, from
otherwise engaging in any business relating to government contracts or from
participation in government non-procurement programs, if such suspension or
debarment may have a material adverse effect on the business, condition
(financial or otherwise), operations or properties of the Guarantor and its
Subsidiaries, taken as a whole.
Section 8.14 Set Off.
-------
In addition to any other rights any Lender may have under law or in
equity, if any amount shall at any time be due and owing by the Guarantor to
any Lender under this Guaranty, such Lender is authorized at any time or from
time to time, without
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notice (any such notice being hereby expressly waived), to set off and to
appropriate and to apply any and all deposits (including but not limited to
indebtedness evidenced by certificates of deposit, whether matured or
unmatured, time or demand deposits, provisional or final deposits, or general
deposits but not special deposits) and any other indebtedness of such Lender
or any Affiliate thereof owing to the Guarantor and any other property of the
Guarantor held by such Lender to or for the credit or the account of the
Guarantor against and on account of the Guarantied Obligations and liabilities
of Guarantor to such Lender under this Guaranty, and each such Affiliate is
hereby irrevocably authorized to permit such setoff and application.
Section 8.15 Determination of the Guarantied Obligations.
-------------------------------------------
Notwithstanding anything to the contrary contained in this Guaranty,
the determination of the amount and terms of repayment of the Guarantied
Obligations under this Guaranty shall be consistent with such determination
pursuant to this Agreement (without giving effect to the effect upon such
determination of the Bankruptcy Code) with the result that the liability of
the Guarantor under this Guaranty will not exceed the liability which the
Guarantor would have had if it had been the Partnership under this Agreement
(plus any amounts payable pursuant to Section 8.07 hereof); provided however
that the Guarantor's agreements and waivers set forth herein with respect to
suretyship defenses (including, without limitation, defenses based on lack of
authority of the Partnership or persons signing on behalf of the Partnership
or the illegality, invalidity or unenforceability of this Agreement against
the Partnership) shall be fully effective, it being understood that the
limitation on the Guarantor's liability set forth above relates only to the
determination of the amount and payment terms of the Guarantied Obligations
and does not otherwise limit the Guarantor's obligations under this Guaranty.
Section 8.16 Successors and Assigns.
----------------------
This Guaranty is a continuing guaranty and shall be binding upon the
Guarantor and its successors and assigns. This Guaranty shall inure to the
benefit of Lenders, Agent and their respective successors and assigns. The
Guarantor shall not assign this Guaranty or any of the rights or obligations
of the Guarantor hereunder without the prior written consent of all Lenders.
Any Lender may, without notice or consent, assign its interest in this
Guaranty in whole or in part. The terms and provisions of this Guaranty shall
inure to the benefit of any assignee or transferee of any rights and
obligations under this Agreement, and in the event of such transfer or
assignment the rights and privileges herein conferred upon Lenders and Agent
shall automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions hereof.
Section 8.17 Further Assurances.
------------------
At any time or from time to time, upon the request of Agent or
Majority Lenders, the Guarantor shall execute and deliver such further
documents and do such other acts and things as Agent or Majority Lenders may
reasonably request in order to effect fully the purposes of this Guaranty.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement, nor
consent to any departure by the Partnership or the Corporation therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall,
-------- -------
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of
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the conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders (except pursuant to Section 2.18) or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the A
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the A Advances or any
fees or other amounts payable hereunder (except pursuant to Section 2.16), (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the A Advances, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action hereunder, (f) limit or
release the liability of the Guarantor under the Guaranty, (g) postpone any
date fixed for payment under the Guaranty or (h) amend Section 2.16, Section
2.18 or this Section 9.01; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement; and provided further, that any amendment,
modification, termination or waiver of the principal amount of any B Advance
or payments or prepayments by either Borrower in respect thereof, the
scheduled maturity dates of any B Advance, the dates on which interest is
payable and decreases in interest rates borne by B Advances shall not be
effective without the written concurrence of the Lender which has funded such
B Advance.
Section 9.02 Notices, Etc.
------------
All notices and other communications provided for hereunder shall be
in writing (including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or delivered, if to the
Corporation, at its address at Computer Sciences Corporation, 2100 East Grand
Avenue, El Segundo, California, 90245, Attention: Leon J. Level; if to the
Partnership, at its address at CSC Enterprises, 2100 E. Grand Avenue, El
Segundo, California 90245, Attention: Leon J. Level; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if
to any other Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Agent, (A) for all notices and communications relating to borrowings or
repayments, including, without limitation, any Notice of Borrowing, Notice of
Conversion/Continuation or notice of repayment or prepayment, at its address
at Citicorp USA, Inc., c/o Citibank Agency Services, 2 Penns Way, Suite 200,
New Castle, Delaware 19720, Attention: Janet Wallace, and (B) for all other
notices and communications at its address at Citicorp USA, Inc., 787 West 5th
Street, 27th Floor, Los Angeles, California 90071, Attention: Walter Larsen;
or, as to the Corporation, the Partnership or the Agent, at such other address
as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Corporation, the Partnership and the
Agent. All such notices and communications shall, when personally delivered,
mailed, telecopied, telegraphed, telexed or cabled, be effective when
personally delivered, after five (5) days after being deposited in the mails,
when delivered to the telegraph company, when confirmed by telex answerback or
when delivered to the cable company, respectively, except that notices and
communications to the Agent pursuant to Article II or VII shall not be
effective until received by the Agent.
Section 9.03 No Waiver; Remedies.
-------------------
No failure on the part of any Lender or the Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
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Section 9.04 Costs, Expenses and Indemnification.
-----------------------------------
(a) The Partnership and the Corporation jointly and severally agree
to pay promptly on demand all reasonable costs and out-of-pocket expenses of
Agent in connection with the preparation, execution, delivery, administration,
syndication, modification and amendment of this Agreement, and the other
documents to be delivered hereunder or thereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities hereunder. The Partnership and the Corporation
further jointly and severally agree to pay promptly on demand all costs and
expenses of the Agent and of each Lender, if any (including, without
limitation, reasonable counsel fees and out-of-pocket expenses), in connection
with the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other documents to be delivered
hereunder, including, without limitation, reasonable counsel fees and out-of-
pocket expenses in connection with the enforcement of rights under this
Section 9.04(a).
(b) If any payment of principal of any Eurodollar Rate Advance or B
Advance extended to either Borrower is made other than on the last day of the
interest period for such Advance, as a result of a payment pursuant to Section
2.06 or acceleration of the maturity of the Advances pursuant to Section 6.01
or for any other reason, such Borrower shall, upon demand by any Lender (with
a copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain such Advance.
(c) The Partnership and the Corporation jointly and severally agree
to indemnify and hold harmless the Agent, each Lender and each director,
officer, employee, agent, attorney and affiliate of the Agent and each Lender
(each an "indemnified person") in connection with any expenses, losses,
claims, damages or liabilities to which the Agent, a Lender or such
indemnified persons may become subject, insofar as such expenses, losses,
claims, damages or liabilities (or actions or other proceedings commenced or
threatened in respect thereof) arise out of the transactions referred to in
this Agreement or arise from any use or intended use of the proceeds of the
Advances, or in any way arise out of activities of the Borrowers or the
Guarantor that violate Environmental Laws, and to reimburse the Agent, each
Lender and each indemnified person, upon their demand, for any reasonable
legal or other out-of-pocket expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability, or action or other proceeding, whether commenced or threatened
(whether or not the Agent, such Lender or any such person is a party to any
action or proceeding out of which any such expense arises). Notwithstanding
the foregoing, the Corporation and the Partnership shall have no obligation
hereunder to an indemnified person with respect to indemnified liabilities
which have resulted from the gross negligence, bad faith or willful misconduct
of such indemnified person.
Section 9.05 Right of Set-off.
----------------
Upon (i) the occurrence and during the continuance of any Event of
Default and (ii) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Agent to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time
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and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (time or demand, provisional or final, or general,
but not special) at any time held and other indebtedness at any time owing by
such Lender or any Affiliate thereof to or for the credit or the account of
either Borrower against any and all of the obligations of such Borrower now or
hereafter existing under this Agreement that are then due and payable, whether
or not such Lender shall have made any demand under this Agreement, and each
such Affiliate is hereby irrevocably authorized to permit such setoff and
application. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of set-
off) which such Lender may have.
Section 9.06 Binding Effect.
--------------
This Agreement shall be deemed to have been executed and delivered
when it shall have been executed by the Partnership, the Corporation and the
Agent and when the Agent shall have been notified by each Bank that such Bank
has executed it and thereafter shall be binding upon and inure to the benefit
of the Partnership, the Corporation, the Agent and each Lender and their
respective successors and permitted assigns, except that the Partnership and
the Corporation shall not have the right to assign their rights hereunder or
any interest herein without the prior written consent of all Lenders. At the
time of the effectiveness of this Agreement, (i) this Agreement shall
supersede the Existing Credit Agreement and (ii) the Existing Credit Agreement
shall automatically terminate and be of no further force and effect.
Section 9.07 Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the A Advances
owing to it); provided, however, that (i) each such assignment shall be of a
-------- -------
constant, and not a varying, percentage of all rights and obligations under
this Agreement (other than any B Advances), (ii) after giving effect to any
such assignment, (1) the assigning Lender shall no longer have any Commitment
or (2) the amount of the Commitment of each of the assigning Lender and the
Eligible Assignee party to such assignment (in each case determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall
not be less than $10,000,000, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, and a processing and recordation fee of $3,500.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto). Any Lender may
at any time pledge or assign all or any portion of its rights hereunder to any
Affiliate of such Lender or any Federal Reserve Bank; provided, that no such
pledge or assignment shall release such Lender
--------
from any of its obligations hereunder.
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(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Partnership or the Corporation or the performance or
observance by the Partnership or the Corporation of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.01 and Section 4.02, and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Agent, such assigning Lender or any other Lender
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and the Commitment of, the Commitment Termination Date of, and, with respect
to each Borrower, principal amount of the Advances owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Within five days of its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee (together with a processing and recordation fee of $3,500
with respect thereto) and upon consent of the Borrowers thereto, which consent
shall not be unreasonably withheld, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit B
hereto, (1) accept such Assignment and Acceptance and (2) record the
information contained therein in the Register. All communications with the
Borrowers with respect to such consent of the Borrowers shall be either sent
pursuant to Section 9.02 or sent to the following: CSC Enterprises, 2100 E.
Grand Avenue, El Segundo, California 90245, Attention: Leon J. Level,
Telephone No.: (310) 615-1728, Facsimile No.: (310) 322-9767.
(e) Each Lender may assign to one or more banks or other entities
any B Advance or B Advances made by it.
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(f) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Advances owing to it; provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrowers hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Advance for all purposes of this Agreement, (iv) the Borrowers, the
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement, and (v) no Lender shall grant any participation under which the
participant shall have rights to require such Lender to take or omit to take
any action hereunder or approve any amendment to or waiver of this Agreement,
except to the extent such amendment or waiver would: (A) extend the
Termination Date of such Lender; or (B) reduce the interest rate or the amount
of principal or fees applicable to Advances or the Commitment in which such
participant is participating.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Partnership or the Corporation
furnished to such Lender by or on behalf of the Partnership or the
Corporation; provided that, prior to any such disclosure, the assignee or
Participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Partnership or
the Corporation received by it from such Lender.
Section 9.08 Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
Section 9.09 Execution in Counterparts.
-------------------------
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
Section 9.10 Consent to Jurisdiction; Waiver of Immunities.
---------------------------------------------
The Partnership and the Corporation hereby irrevocably submit to the
jurisdiction of any New York state or Federal court sitting in New York, New
York in any action or proceeding arising out of or relating to this Agreement,
and the Partnership and the Corporation hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such New York state or Federal court. The Partnership and the Corporation
hereby irrevocably waive, to the fullest extent they may effectively do so,
the defense of an inconvenient forum to the maintenance of such action or
proceeding. The Partnership and the Corporation agree 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 Section 9.10 shall affect the right of any Lender or
Agent to serve legal process in any other manner permitted by law or affect
the right of any Lender or Agent to bring any action or proceeding against the
Partnership and the Corporation or their respective property in the courts of
any other jurisdiction.
Section 9.11 Waiver of Trial by Jury.
-----------------------
THE PARTNERSHIP, THE CORPORATION, THE BANKS, THE AGENT AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, OTHER LENDERS EACH HEREBY AGREES TO WAIVE
ITS
62
<PAGE>
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. The Partnership, the Corporation, the Banks,
the Agent and, by its acceptance of the benefits hereof, other Lenders each
(i) acknowledges that this waiver is a material inducement for the
Partnership, the Corporation, the Lenders and the Agent to enter into a
business relationship, that the Partnership, the Corporation, the Lenders and
the Agent have already relied on this waiver in entering into this Agreement
or accepting the benefits thereof, as the case may be, and that each will
continue to rely on this waiver in their related future dealings and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
Section 9.12 Limited Liability of Merel Corporation.
--------------------------------------
The Agent and each Lender agree for themselves and their successors
and assigns that any claim against Merel Corporation or its successors (the
"Limited Liability Partner") which may arise hereunder shall be made only
against and shall be limited to the partnership interest in the Partnership
owned by such Limited Liability Partner, any right to proceed against the
Limited Liability Partner individually or any of its respective assets, other
than with respect to its respective partnership interests in the Partnership,
being hereby expressly waived and renounced by the Agent and each Lender.
Nothing in this Section 9.12 shall be construed so as to prevent the Agent or
any Lender from commencing any legal action, suit or proceeding with respect
to, or causing legal papers to be served upon, the Limited Liability Partner
for the purpose of obtaining jurisdiction over the Partnership or the Limited
Liability Partner.
Section 9.13 Survival of Warranties.
----------------------
All agreements, representations and warranties made in this
Agreement shall survive the execution and delivery of this Agreement and any
increase in the Commitments under this Agreement.
Section 9.14 Severability.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 9.15 Headings
--------
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
63
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CSC ENTERPRISES, a Delaware partnership
By: CSC Enterprises, Inc., its Managing Partner
By /s/ Hayward D. Fisk
------------------------------------
Name: Hayward D. Fisk
Title: Vice President
COMPUTER SCIENCES CORPORATION,
a Nevada corporation
By /s/ Leon J. Level
------------------------------------
Name: Leon J. Level
Title: Vice President
CITICORP USA, INC., as Agent and a Lender
By /s/ J. Gregory Davis
------------------------------------
Name: J. Gregory Davis
Title: Vice President
Commitment: $23,750,000
S-1
<PAGE>
Commitment Banks
- ---------- -----
$21,250,000 MORGAN GUARANTY TRUST CO. OF
NEW YORK AS ATTORNEY-IN FACT
FOR REVOLVING COMMITMENT
VEHICLE CORPORATION (As a lender
And as a Senior Managing Agent)
By /s/ Eric Wise
-------------------------------
Name: Eric Wise
Title: Vice President
$21,250,000 THE BANK OF NEW YORK (As a
Lender and as a Senior Managing Agent)
By /s/ Jonathan Rollins
-------------------------------
Name: Jonathan Rollins
Title: Vice President
$21,250,000 THE FIRST NATIONAL BANK OF CHICAGO
(As a Lender and as a
Senior Managing Agent)
By /s/ Mark A. Isley
-------------------------------
Name: Mark A. Isley
Title: FVP/Credit Officer II
$21,250,000 FIRST UNION NATIONAL BANK
(As a Lender and as a Senior Managing Agent)
By /s/ Peter D. Steffen
-------------------------------
Name: Peter D. Steffen
Title: Senior Vice President
$21,250,000 MELLON BANK N.A. (As a Lender and
as a Senior Managing Agent)
By /s/ Lawrence C. Ivey
-------------------------------
Name: Lawrence C. Ivey
Title: Vice President
S-2
<PAGE>
$16,500,000 BANCA DI ROMA (As a Lender and as
a Co-Agent)
By /s/ Augusto Bianchi
-------------------------------
Name: Augusto Bianchi
Title: First Vice President 97911
By /s/ Richard Dietz
-------------------------------
Name: Richard Dietz
Title: Vice President 97271
$16,500,000 BANCA COMMERCIALE ITALIANA
Los Angeles Foreign Branch
(As a Lender and as a Co-Agent)
By /s/ E. Bermant
-------------------------------
Name: E. Bermant
Title: First Vice President/
Deputy Manager
By /s/ J. Carlani
-------------------------------
Name: J. Carlani
Title: Vice President
$16,500,000 WELLS FARGO BANK (As a Lender
and as a Co-Agent)
By /s/ Donald A. Hartmann
-------------------------------
Name: Donald A. Hartmann
Title: Senior Vice President
By /s/ Frieda Youlios
-------------------------------
Name: Frieda Youlios
Title: Vice President
S-3
<PAGE>
$11,750,000 BANCA NAZIONALE DEL LAVORO S.p.A.
(As a Lender)
By /s/ Francesco Ingargiola
-------------------------------
Name: Francesco Ingargiola
Title: Assistant Vice President
By /s/ Leonardo Valentini
-------------------------------
Name: Leonardo Valentini
Title: First Vice President
$11,750,000 BBL INTERNATIONAL (U.K.) LTD.
(As a Lender)
By /s/ C. F. Wright
-------------------------------
Name: C. F. Wright
Title: Authorised Signatory
By /s/ M-C Swinnen
-------------------------------
Name: M-C Swinnen
Title: Authorised Signatory
$11,750,000 THE BANK OF NOVA SCOTIA
(As a Lender)
By /s/ Edward Kofman
-------------------------------
Name: Edward Kofman
Title: Relationship Manager
$11,750,000 NATIONAL WESTMINSTER BANK, Plc
(As a Lender)
By /s/ Simon Millsop
-------------------------------
Name: Simon Millsop
Title: Vice President
S-4
<PAGE>
$11,750,000 STANDARD CHARTERED BANK
(As a Lender)
By /s/ John Biscette
-------------------------------
Name: John Biscette
Title: Vice President
By /s/ Sylvia Rivera
-------------------------------
Name: Sylvia Rivera
Title: Vice President
$11,750,000 DRESDNER BANK AG,
New York and Grand Cayman Branches
(As a Lender)
By /s/ A. Richard Morris
-------------------------------
Name: A. Richard Morris
Title: First Vice President
By /s/ Vincent Carotenuto
-------------------------------
Name: Vincent Carotenuto
Title: Assistant Treasurer
S-5
<PAGE>
SCHEDULE I
APPLICABLE LENDING OFFICES
Bank Domestic Lending Office Eurodollar Lending Office
- ---- ----------------------- -------------------------
Banca Commerciale Banca Commerciale Banca Commerciale
Italiana Italiana Italiana
(Los Angeles (N.Y. Branch) (N.Y. Branch)
Foreign Branch) One South William Street One South William Street
New York, NY 10004 New York, NY 10004
Attention: Brigitte Sacin Attention: Brigitte Sacin
Tel. No. 212-607-3899 Tel. No. 212-607-3899
Fax No. 212-809-2124 Fax No. 212-809-2124
Banca di Roma Banca di Roma Banca di Roma
One Market Street, One Market Street,
Stuart Tower Stuart Tower
Suite 1000 Suite 1000
San Francisco, CA 94105 San Francisco, CA 94105
Attention: Tom Woodruff Attention: Tom Woodruff
Tel. No. 415-977-7308 Tel. No. 415-977-7308
Fax No. 415-357-9869 Fax No. 415-357-9869
Banca Nazionale del Banca Nazionale del Banca Nazionale del
Lavoro Lavoro S.p.A. Lavoro S.p.A.
New York Branch New York Branch
25 W. 51st St. 25 W. 51st St.
New York, NY 10019 New York, NY 10019
Attention: Giulio Giovine Attention: Giulio Giovine
Tel. No. 212-341-0239 Tel. No. 212-314-0239
Fax No. 212-765-2978 Fax No. 212-765-2978
BBL International BBL International BBL International
(U.K.) Limited (U.K.) Limited (U.K.) Limited
6 Broadgate 6 Broadgate
London EC2M2AJ London EC2M2AJ
Attention: Chris Wright Attention: Chris Wright
Tel. No. 44-171-392-5533 Tel. No. 44-171-392-5533
Fax No. 44-171-562-0208 Fax No. 44-171-562-0208
The Bank of New York The Bank of New York The Bank of New York
One Wall Street, One Wall Street,
2nd Floor 2nd Floor
New York, NY 10005 New York, NY 1005
Attention: Dawn Hertling Attention: Dawn Hertling
Tel. No. 212-635-6742 Tel. No. 212-635-6742
Fax No. 212-635-6933 Fax No. 212-635-6933
Schedule I-1
<PAGE>
The Bank of Nova Scotia The Bank of Nova Scotia The Bank of Nova Scotia
580 California Street 580 California Street
San Francisco, CA 94104 San Francisco, CA 94104
Attention: John Quick Attention: John Quick
Tel. No. 415-986-1100 Tel. No. 415-986-1100
Fax No. 415-397-0791 Fax No. 415-397-0791
Citicorp USA, Inc. Citicorp USA, Inc. Citicorp USA, Inc.
Citibank Agency Services Citibank Agency Services
2 Penns Way, Suite 200 2 Penns Way, Suite 200
New Castle, DE 19720 New Castle, DE 19720
Attention: Janet Wallace Attention: Janet Wallace
Tel. No.: 302-894-6029 Tel. No.: 302-894-6029
Fax No.: 302-894-6120 Fax No.: 302-894-6120
Dresdner Bank AG Dresdner Bank AG, Dresdner Bank AG,
New York Branch New York Branch
Grand Cayman Branch Grand Cayman Branch
75 Wall Street 75 Wall Street
New York, NY 10005 New York, NY 10005
Attention: Thomas A. Lowe Attention: Thomas A. Lowe
Tel. No. 212-429-3037 Tel. No. 212-429-3037
Fax No. 212-429-2780 Fax No. 212-429-2780
The First National The First National The First National
Bank of Chicago Bank of Chicago Bank of Chicago
One First National Plaza One First National Plaza
Chicago, IL 60670 Chicago, IL 60670
Attention: Sharon Bosh Attention: Sharon Bosh
Tel. No. 312-732-5694 Tel. No. 312-732-5694
Fax No. 312-732-4840 Fax No. 312-732-4840
First Union National First Union National Bank First Union National Bank
Bank 301 S. College St. 301 S. College St.
Mail Code: NC1183 Mail Code: NC1183
Charlotte, NC 28288 Charlotte, NC 28288
Attention: Todd Tucker Attention: Todd Tucker
Tel. No. 704-383-0905 Tel. No. 704-383-0905
Fax No. 704-383-7999 Fax No. 704-383-7999
Mellon Bank, N.A. Mellon Bank, N.A. Mellon Bank, N.A.
Three Mellon Center, Three Mellon Center,
Room 1203 Room 1203
Pittsburgh, PA 15259 Pittsburgh, PA 15259
Attn: Loan Administration Attn: Loan Administration
Tel. No. 412-234-7365 Tel. No. 412-234-7365
Fax No. 412-209-6122 Fax No. 412-209-6122
Schedule I-2
<PAGE>
Morgan Guaranty Trust Morgan Guaranty Trust Morgan Guaranty Trust
Company of New York Company of New York Company of New York
60 Wall Street Nassau Bahamas Office
New York, NY 10260 c/o J.P. Morgan
Attention: Dennis Wilczek Services Inc
Tel. No. 212-648-5018 Euro-Loan Servicing Unit
Fax No. 212-648-1265 500 Stanton Christiana
Road
Newark, DE 19713
Attention: Andrew Lipsett
Telex 177425MBDELUT
Fax No. 302-634-1094
National Westminster National Westminister National Westminster
Bank, Plc Bank, Plc Bank, Plc
New York Branch Nassau Branch
65 East 55th Street, c/o East 55th Street,
24th Floor 24th Floor
New York, NY 10022 New York, NY 10022
Attention: Sheila Shaw, Attention: Sheila Shaw,
Commercial Loans Commercial Loans
Tel. No. 212-401-1406/1424 Tel.No. 212-401-1406/1424
Fax No. 212-401-1494 Fax No. 212-401-1494
Standard Chartered Bank Standard Chartered Bank Standard Chartered Bank
7 World Trade Center 7 World Trade Center
New York, NY 10048 New York, NY 10048
Attn: Larry Fitzgerald Attn: Larry Fitzgerald
Tel. No. 212-667-0107 Tel. No. 212-667-0107
Fax No. 212-667-0568 Fax No. 212-667-0568
Wells Fargo Bank Wells Fargo Bank Wells Fargo Bank
707 Wilshire Boulevard, 707 Wilshire Boulevard,
16th Floor 16th Floor
MAC 2818-165 MAC 2818-165
Los Angeles, CA 90017 Los Angeles, CA 90017
Attn: Catherine Wallace Attn: Catherine Wallace
Tel. No. 213-614-4763 Tel. No. 213-614-4763
Fax No. 213-614-2569 Fax No. 213-614-2569
Schedule I-3
<PAGE>
SCHEDULE II
PROPERTY OF PARTNERSHIP
Approximate
Square
Address Footage Acreage
------- ------- -------
1. 100 Winnenden Road 147,000 51.0
Norwich, CT
2. 5021 Kearney Villa Road 161,000 9.5
San Diego, CA
3. 1500 S. Edgewood Street 20,000 3.9
Baltimore, MD
4. 45154 Underwood Lane 45,000 5.4
Sterling, VA
5. 71 Deerfield Lane 119,000 18.0
Meriden, CT
Schedule II-1
<PAGE>
SCHEDULE III
PROPERTY OF CORPORATION
Approximate
Square
Address Footage Acreage
------- ------- -------
1. 301 Harper Drive 41,000 4.2
Moorestown, NJ
2. 3001 Centreville Road 87,000 16.5
Herndon, VA
3. 2100 E. Grand Avenue 206,000 5.9
El Segundo, CA
4. 304 W. Route 38 58,000 5.5
Moorestown, NJ
5. 300 Fellowship Road 12,000 8.3
Mt. Laurel, NJ
6. 3170 Fairview Park Drive 290,000 11.1
Falls Church, VA
7. 100 Winnenden Road 149,000 51.0 *
Norwich, CT
8. 5021 Kearney Villa Road 161,000 9.5 *
San Diego, CA
9. 460 Pacific Highway 60,000 1.0
St. Leonards, Australia
10. 2 Crawford Drive 2,000 0.2
Nowra, Australia
11. 1500 S. Edgewood Street 20,000 3.9 *
Baltimore, MD
12. 45154 Underwood Lane 45,000 5.4 *
Sterling, VA
13. 71 Deerfield Lane 119,000 18.0 *
Meriden, CT
14. 9500 Arboretum Boulevard 187,000 5.4
Austin, TX
15. Retortevj 8 293,000 11.8
Copenhagen, Denmark
16. Oldenborg Alle 1 130,000 3.4
Copenhagen, Denmark
17. 21-25 Church Street West 10,000 0.3
Woking, Surrey, United Kingdom
18. 645 Paper Mill Road 183,000
Newark, DE
19. Lodgehouse, Vinters Park 79,000 11.3
Maidstone, United Kingdom
20. 221 Henderson Road 61,000 1.0
Singapore
Schedule III-1
<PAGE>
Approximate
Square
Address Footage Acreage
------- ------- -------
21. Topsail Plaza 73,000
11 Sum Street
Shatin NT, Hong Kong
22. 19 Chaoyanmen Wai Avenue 5,000
Beijing, China
23. #2 Consolate Avenue 2,000
Chendu, China
24. 836 Dong Feng Road East 6,000
Guangzhou, China
25. Parlevinkerweg 1 20,000
Venlo, Netherlands
26. Aldershot, United Kingdom 35.0
* Owned by the Partnership and also listed on Schedule II.
Schedule III-2
<PAGE>
EXHIBIT A-1
-----------
NOTICE OF A BORROWING
Citicorp USA, Inc., as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
c/o Citibank Agency Services
2 Penns Way, Suite 200
New Castle, Delaware 19720 [Date]
Attention: Janet Wallace
Ladies and Gentlemen:
Each of the undersigned, CSC Enterprises (the "Partnership") and
Computer Sciences Corporation (the "Corporation"), refers to the Credit
Agreement (Long Term Facility) dated as of August 20, 1999 (as amended from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the Partnership, the Corporation, certain
Lenders party thereto and Citicorp USA, Inc., as Administrative Agent for said
Lenders (the "Agent"). The [Partnership] [Corporation] hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
[Partnership] [Corporation] hereby requests an A Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such A Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a)
of the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is [Date].
(ii) The Type of A Advances comprising the Proposed A Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$______________.
(iv) If the Type of A Advances comprising the Proposed A
Borrowing is Eurodollar Rate Advances, the Interest Period
for each A Advance made as part of the Proposed A Borrowing
is __ month[s].
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
Proposed A Borrowing:
<PAGE>
(A) the representations and warranties contained in Article IV of
the Credit Agreement are correct, before and after giving
effect to the Proposed A Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation and warranty
expressly relates only to an earlier date, in which case they
were correct as of such earlier date;
(B) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the
proceeds therefrom, which constitutes an Event of Default or a
Potential Event of Default; and
(C) the amount of the Proposed A Borrowing does not exceed the
aggregate amount of the unused Commitments of the Lenders
(after giving effect to any B Reductions).
The Corporation hereby further certifies that after giving effect to
the Proposed A Borrowing, the aggregate amount of the Guarantied Obligations
(as defined in the Credit Agreement), together with all other Debt (including
any Advances under the Credit Agreement) incurred by the Corporation pursuant
to the resolutions of the Board of Directors of the Corporation authorizing
the Credit Agreement, does not exceed the aggregate amount of Debt authorized
by such resolutions.
Very truly yours,
CSC ENTERPRISES, a Delaware general partnership
By CSC Enterprises, Inc.,
Its Managing Partner
By: ______________________
Title:
COMPUTER SCIENCES CORPORATION
By: ___________________________
Title:
<PAGE>
EXHIBIT A-2
-----------
NOTICE OF B BORROWING
Citicorp USA, Inc., as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
c/o Citibank Agency Services
2 Penns Way, Suite 200
New Castle, Delaware 19720 [Date]
Attention: Janet Wallace
Ladies and Gentlemen:
Each of the undersigned, CSC Enterprises (the "Partnership") and
Computer Sciences Corporation (the "Corporation"), refers to the Credit
Agreement (Long Term Facility) dated as of August 20, 1999 (as amended from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the Partnership, the Corporation, certain
Lenders party thereto and Citicorp USA, Inc., as Administrative Agent for said
Lenders (the "Agent"). The [Partnership] [Corporation] hereby gives you
notice pursuant to Section 2.03 of the Credit Agreement that the [Partnership]
[Corporation] hereby requests a B Borrowing under the Credit Agreement, and in
that connection sets forth the terms on which such B Borrowing (the "Proposed
B Borrowing") is requested to be made:
(A) Date of B Borrowing ____________________
(B) Amount of B Borrowing ____________________
(C) Maturity Date ____________________
(D) Interest Rate Basis ____________________
(E) Interest Payment Date(s) ____________________
(F) [Additional Terms] ____________________
(G) [Additional Terms] ____________________
(H) [Additional Terms] ____________________
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
Proposed B Borrowing:
(a) the representations and warranties contained in Article IV of
the Credit Agreement are correct, before and after giving
effect to the Proposed B Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation and warranty
expressly relates only to an earlier date, in which case they
were correct as of such earlier date;
<PAGE>
(b) no event has occurred and is continuing, or would result from
the Proposed B Borrowing or from the application of the
proceeds therefrom, which constitutes an Event of Default or a
Potential Event of Default;
(c) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Credit
Agreement is within the aggregate amount of the unused
Commitments of the Lenders.
The [Partnership] [Corporation] hereby confirms that the Proposed B
Borrowing is to be made available to it in accordance with Section 2.03(a)(v)
of the Credit Agreement.
The Corporation hereby further certifies that after giving effect to
the Proposed B Borrowing, the aggregate amount of the Guarantied Obligations
(as defined in the Credit Agreement), together with all other Debt (including
any Advances under the Credit Agreement) incurred by the Corporation pursuant
to the resolutions of the Board of Directors of the Corporation authorizing
the Credit Agreement, does not exceed the aggregate amount of Debt authorized
by such resolutions.
Very truly yours,
CSC ENTERPRISES, a Delaware general partnership
CSC ENTERPRISES, INC.,
Its Managing Partner
By: _______________________
Title:
COMPUTER SCIENCES CORPORATION
By: ___________________________
Title:
<PAGE>
EXHIBIT B
---------
ASSIGNMENT AND ACCEPTANCE
Dated ________, _____
Reference is made to the Credit Agreement (Long Term Facility) dated
as of August 20, 1999 (as amended from time to time, the "Credit Agreement")
among Computer Sciences Corporation, a Nevada corporation (the "Corporation"),
CSC Enterprises, a Delaware general partnership (the "Partnership"), the
Lenders (as defined in the Credit Agreement) and Citicorp, USA, Inc., as
Administrative Agent for the Lenders (the "Agent"). Terms defined in the
Credit Agreement and not defined herein are used herein with the same meaning.
_________________ (the "Assignor") and ___________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns without recourse to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
that interest in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the Effective Date (other than in respect of B
Advances) which represents the percentage interest specified on Schedule 1
attached hereto of all outstanding rights and obligations under the Credit
Agreement (other than in respect of B Advances), including, without
limitation, such interest in the Assignor's Commitment and the A Advances
owing to the Assignor. After giving effect to such sale and assignment, the
Assignee's Commitment, the amount of the A Advances owing to the Assignee, and
the Commitment Termination Date of the Assignee will be as set forth in
Section 2 of Schedule 1 attached hereto. In consideration of Assignor's
assignment, Assignee hereby agrees to pay to Assignor, on the Effective Date,
the amount of $__________ in immediately available funds by wire transfer to
Assignor's office at ________________________________________.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Partnership or the Corporation or the performance
or observance by the Partnership or the Corporation of any of its obligations
under the Credit Agreement or any other instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 and Section 4.02 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem
<PAGE>
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vii) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty].<F1>
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance
and recording by the Agent. The effective date of this Assignment and
Acceptance shall be the date of acceptance thereof by the Agent, unless
otherwise specified on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
[FN]
<FN1> If the Assignee is organized under the laws of a jurisdiction outside of
the United States.
</FN>
<PAGE>
Schedule 1
to
ASSIGNMENT AND ACCEPTANCE
Dated __________, _____
Section 1.
- ---------
Percentage Interest: ______%
Section 2.
- ---------
Assignee's Commitment: $______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignee: $______
A Advances payable to the Assignee
Principal amount: _______
A Advances payable to the Assignor
Principal amount: _______
Assignee's Commitment Termination Date: _________, ____
Section 3.
- ---------
Effective Date<F2>: __________, _____
[NAME OF ASSIGNOR]
By: ____________________________
Title:
[NAME OF ASSIGNEE]
By:____________________________
Title:
[FN]
<FN2> This date should be no earlier thatn the date of acceptance by the
Agent.
</FN>
<PAGE>
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ____ day
of _____________, ______
CITICORP USA, INC., as Agent
By: ______________________
Title:
COMPUTER SCIENCES CORPORATION,
a Nevada corporation
By: ______________________
Title:
CSC ENTERPRISES, a Delaware
general partnership
By CSC ENTERPRISES, INC.,
Its Managing Partner
By: ____________________________
Title:
<PAGE>
EXHIBIT C-1
-----------
[FORM OF OPINION OF ________________________________ ]
[EFFECTIVE DATE]
Citicorp USA, Inc., as Administrative Agent
under the Credit Agreement
(as hereinafter defined), and each
of the lending institutions party
to the Credit Agreement and listed
on Schedule I attached hereto
(collectively, the "Banks")
787 West 5th Street
27th Floor
Los Angeles, California 90071
Re: Credit Agreement (Long Term Facility) dated as of August 20, 1999, among
CSC Enterprises, Computer Sciences Corporation, the Banks and Citicorp
USA, Inc., as Administrative Agent for the Banks
------------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to CSC Enterprises, a Delaware
general partnership (the "Partnership"), and Computer Sciences Corporation, a
Nevada corporation (the "Corporation"), in connection with the Credit
Agreement (Long Term Facility) dated as of August 20, 1999 (the "Credit
Agreement") among the Partnership, the Corporation, the Banks and Citicorp
USA, Inc., as Administrative Agent for the Banks (in such capacity, the
"Agent"). Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as therein defined. This opinion is rendered to you
pursuant to Section 3.01(h) of the Credit Agreement.
In rendering this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction as being true copies, of
the following documents and instruments:
(a) the Credit Agreement;
(b) a certificate of even date herewith of the corporate secretary
of the Managing Partner attaching thereto and certifying (i) a copy of the
certificate of incorporation and by-laws of the Managing Partner in effect on
the date hereof, (ii) a copy of the corporate resolutions of the Managing
Partner in respect of the Credit Agreement and the transactions contemplated
thereby, (iii) incumbencies of certain officers of the Managing Partner, and
(iv) a copy of the partnership agreement of the Partnership (the "Partnership
Agreement") in effect on the date hereof; and
<PAGE>
(c) certificates of even date herewith of officers of the Managing
Partner and the Corporation setting forth or certifying certain factual
matters, a copy of such certificates having been delivered to the Agent.
The Partnership and the Corporation are sometimes referred to herein
collectively as the "Obligors".
We have also reviewed such other documents, certificates or
statements of public officials and such other persons, and have considered
such matters of law, as we deem necessary for purposes of this opinion.
We have, with your permission, assumed, without investigation or
inquiry with respect to any such matter, that:
(a) The Corporation is a validly existing corporation in good
standing under the laws of the State of Nevada and has all requisite corporate
power and authority to execute, deliver and perform its obligations under the
Credit Agreement. The Credit Agreement has been duly authorized by all
necessary corporate action on the part of the Corporation and has been duly
executed and delivered by the Corporation. The Managing Partner is a
corporation validly existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power and authority to execute and
deliver the Credit Agreement on behalf of the Partnership. The execution and
delivery of the Credit Agreement by the Managing Partner, acting in its
capacity as the managing general partner on behalf of the Partnership, has
been duly authorized by all necessary corporate action on behalf of the
Managing Partner, and the Credit Agreement has been duly executed and
delivered by the Managing Partner. We understand that there has been
delivered to you an opinion of Hayward D. Fisk, Vice President and General
Counsel of the Corporation, dated the Effective Date to such effect.
(b) To the extent that the obligations of the Obligors may be
dependent upon such matters, each of the Banks and the Agent has all requisite
power and authority to execute, deliver and perform its obligations under the
Credit Agreement; the execution and delivery of the Credit Agreement and
performance of such obligations have been duly authorized by all necessary
action on the part of such Bank and the Agent; the Credit Agreement has been
duly executed and delivered by such Bank or the Agent; and the Credit
Agreement is the legal, valid and binding obligation of such Bank or the
Agent, enforceable against it in accordance with its terms.
(c) The signatures on all documents examined by us are genuine,
and, except as to the Partnership (with respect to which the following
assumption in this clause (c) does not apply), all individuals executing such
documents were thereunto duly authorized.
(d) The documents submitted to us as originals are authentic and
the documents submitted to us as certified or reproduction copies conform to
the originals.
With respect to questions of fact material to the opinions
<PAGE>
expressed below, we have, with your consent, relied upon certificates of
public officials and officers of the Managing Partner and the Corporation, in
each case without having independently verified the accuracy or completeness
thereof.
With respect to any opinion herein in regard to the existence or
absence of facts that is stated to be to our actual knowledge, such statement
means that, during the course of our representation of the Obligors, no
information has come to the attention of the lawyers in our Firm participating
in such representation that has given them actual knowledge of facts contrary
to the existence or absence of the facts indicated. No inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of the Obligors.
Based upon the foregoing, and subject to the qualifications,
exceptions, limitations and assumptions hereinafter set forth, we are of the
opinion that:
1. The Partnership is a general partnership validly existing and in
good standing under the laws of the State of Delaware and has all requisite
partnership power and authority to own and operate its properties, to conduct
its business as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all necessary
partnership action on the part of the Partnership and has been duly executed
and delivered by the Partnership. The Credit Agreement constitutes the legal,
valid and binding obligation of the Partnership, enforceable against the
Partnership in accordance with its terms. The Credit Agreement constitutes
the legal, valid and binding obligation of the Corporation, enforceable
against the Corporation in accordance with its terms.
3. Neither the execution and delivery by the Partnership of the
Credit Agreement, nor consummation of the transactions contemplated thereby,
nor compliance on or prior to the date hereof with the terms and conditions
thereof by the Partnership conflicts with or is a violation of, the
Partnership Agreement, as in effect on the date hereof. Neither the execution
and delivery by each Obligor of the Credit Agreement, nor the consummation of
the transactions contemplated thereby, nor compliance on or prior to the date
hereof with the terms and conditions thereof by each Obligor will result in a
violation of any applicable federal or New York law, governmental rule or
regulation or of the General Corporation Law of the State of Delaware.
4. Neither the making of the Advances on the Effective Date
pursuant to, nor application of the proceeds thereof in accordance with, the
Credit Agreement, will violate Regulations T, U or X promulgated by the Board
of Governors of the Federal Reserve System.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority of the United States of America or the State of New York or under
the General Corporation Law of the State of Delaware is required by law to be
obtained or made by either Obligor for the execution, delivery and performance
by such Obligor of the Credit Agreement, except such filings as
<PAGE>
may be required in the ordinary course to keep in full force and effect rights
and franchises material to the business of the Obligors and in connection with
the payment of taxes.
6. Neither Obligor is an "investment company" or a Person directly
or indirectly "controlled" by or "acting on behalf of" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Each of the opinions set forth, above are subject to the following
qualifications, exceptions, limitations and assumptions:
(a) Our opinions are subject to (i) the effect of bankruptcy,
insolvency, reorganization, moratorium, arrangement or other similar laws
affecting enforcement of creditors' rights generally, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or laws affecting
distributions by corporations to stockholders and (ii) general principles of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or other equitable relief (whether sought in a proceeding
at law or in equity).
(b) We have assumed that no agreement exists that would expand,
modify or otherwise affect the respective rights or obligations of the parties
to the Credit Agreement. We have no actual knowledge of any such agreement.
(c) We express no opinion with respect to the legality, validity,
binding effect or enforceability of (i) any provision of the Credit Agreement
regarding the remedies available to any party which permit any party to take
discretionary action which is arbitrary, unreasonable or capricious, or is not
taken in good faith or in a commercially reasonable manner, whether or not
such action is permitted under the Credit Agreement; (ii) any provision of the
Credit Agreement to the effect that rights or remedies are not exclusive or
may be exercised without notice, that every right or remedy is cumulative and
may be exercised in addition to any other right or remedy, that the election
of some particular remedy does not preclude recourse to one or more others or
that failure to exercise or delay in exercising rights or remedies will not
operate as a waiver of any such right or remedy; (iii) any waiver or any
consents (whether or not characterized as a waiver or consent in the Credit
Agreement) relating to the rights of the Obligors or duties owing to the
obligations existing as a matter of law to the extent such waivers or consents
are found by a court to be against public policy or are ineffective pursuant
to New York statutes or judicial decisions; (iv) provisions construed as
imposing penalties or forfeitures; (v) waivers of broadly or vaguely stated
rights or unknown future rights; (vi) any provisions waiving the applicable
statute of limitations; (vii) any rights of setoff, other than as provided by
Section 151 of the Debtor and Creditor Law of the State of New York, as
interpreted by applicable judicial decisions; (viii) any provision relating to
indemnification or contribution to the extent such indemnification or
contribution relates to any claims made under the Federal securities laws or
state securities or Blue Sky laws or is otherwise limited by public policy; or
(ix) any provisions requiring written amendments, waivers or other
modifications of the Credit Agreement insofar as they suggest that the
doctrine of promissory estoppel might not apply.
<PAGE>
We render no opinion herein as to matters involving the laws of any
jurisdiction other than the United States of America and the State of New
York; however, we are generally familiar with the General Corporation Law of
the State of Delaware and the Uniform Partnership Law as in effect in the
State of Delaware and have made such inquiries as we consider necessary to
render our opinions expressed in Paragraphs 1, 2, 3 and 5 hereof. This
opinion is limited to the effect of the present state of the laws of the
United States of America and the State of New York and, to the extent set
forth in the preceding sentence, the State of Delaware. In rendering this
opinion, we assume no obligation to revise or supplement this opinion should
the present laws, or the interpretation thereof, be changed.
This opinion is rendered to the Agent and the Banks as of the date
hereof in connection with the Credit Agreement, and may not be relied upon by
any person other than the Agent and the Banks and their permitted assignees,
or by them in any other context, and may not be furnished to any other person
or entity without our prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their
normal examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action to which the Bank is a party
arising out of the transactions contemplated by the Credit Agreement, or (v)
in connection with the assignment of or sale of participations in the
Advances.
Very truly yours,
[FIRM NAME]
<PAGE>
Schedule I
to
[FORM OF OPINION OF _____________________________________________ ]
[List lending institutions party to Credit Agreement]
<PAGE>
EXHIBIT C-2
-----------
[FORM OF OPINION OF GENERAL COUNSEL OF
COMPUTER SCIENCES CORPORATION]
[EFFECTIVE DATE]
Citicorp USA, Inc., as Administrative Agent
under the Credit Agreement
(as hereinafter defined), and each
of the lending institutions party
to the Credit Agreement and listed
on Schedule I attached hereto
(collectively, the "Banks")
787 West 5th Street
27th Floor
Los Angeles, California 90071
RE: Credit Agreement (Long Term Facility) dated as of August 20, 1999,
among Computer Sciences Corporation, CSC Enterprises, the Banks and
Citicorp USA, Inc., as Administrative Agent for the Banks
-------------------------------------------------------------------
Ladies and Gentlemen:
I am the General Counsel of Computer Sciences Corporation, a Nevada
corporation (the "Corporation"). This opinion is being rendered to you in
connection with the Credit Agreement (Long Term Facility) dated as of August
20, 1999 (the "Credit Agreement") among the Corporation, CSC Enterprises, a
Delaware general partnership (the "Partnership"), the Banks and Citicorp USA,
Inc., as Administrative Agent for the Banks (in such capacity, the "Agent").
Terms defined in the Credit Agreement and not otherwise defined herein are
used herein as therein defined.
In rendering this opinion, I have examined originals or copies, certified
or otherwise identified to my satisfaction as being true copies, of the
following documents and instruments:
(a) the Credit Agreement;
(b) a certificate of even date herewith of the corporate secretary
of the Corporation as to corporate resolutions in respect of the Credit
Agreement and the transactions contemplated thereby, incumbencies of certain
officers and a copy of the certificate of incorporation and by-laws of the
Corporation in effect on the date hereof;
(c) a certificate of even date herewith of the corporate secretary
<PAGE>
of the Managing Partner as to corporate resolutions in respect of the Credit
Agreement and the transactions contemplated thereby, incumbencies of certain
officers and a copy of the certificate of incorporation and by-laws of the
Managing Partner in effect on the date hereof; and
(d) certificates of recent date of the Secretary of State of the
State of Nevada as to the legal existence of each of the Corporation and the
Managing Partner in good standing under the laws of the State of Nevada.
I have also reviewed such other documents, certificates or statements of
public officials and such other persons, and have made such other
investigation of fact and law, as I deem necessary for purposes of this
opinion.
With respect to questions of fact material to the opinions expressed
below, I have, with your consent, relied upon certificates of public officials
and officers of the Corporation and the Managing Partner, in each case without
having independently verified the accuracy or completeness thereof.
Based upon the foregoing, I am of the opinion that:
1. The Corporation is a validly existing corporation in good
standing under the laws of the State of Nevada, and is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions
which require such qualification, except to the extent that failure to so
qualify would not have a material adverse effect on the Corporation. The
Corporation has all requisite corporate power and authority to own and operate
its properties, to conduct its business as presently conducted, and to
execute, deliver and perform its obligations under the Credit Agreement. The
Managing Partner is a corporation validly existing and in good standing under
the laws of the State of Nevada and has all requisite corporate power and
authority to own and operate its properties, to conduct its business as
presently conducted and to execute and deliver the Credit Agreement on behalf
of the Partnership.
2. The Credit Agreement has been duly authorized by all necessary
corporate action on the part of the Corporation, and has been duly executed
and delivered by the Corporation. The execution and delivery of the Credit
Agreement by the Managing Partner, acting in its capacity as the managing
general partner of the Partnership, has been duly authorized by all necessary
corporate action on behalf of the Managing Partner, and the Credit Agreement
has been duly executed and delivered by the Managing Partner.
3. Neither the execution and delivery of the Credit Agreement by
the Corporation, nor the consummation of the transactions contemplated
thereby, nor compliance on or prior to the date hereof with the terms and
conditions thereof, conflicts with or results in a breach of the certificate
of incorporation or bylaws of the Corporation, each as in effect on the date
hereof.
4. Neither the execution and delivery by the Corporation of the
Credit Agreement, performance of its respective obligations thereunder, nor
<PAGE>
the consummation of the transactions contemplated thereby, constitutes a
violation of the General Corporation Law of the State of Nevada.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority is required to be obtained or made by the Corporation under the
General Corporation Law of the State of Nevada for the execution, delivery and
performance by the Corporation of the Credit Agreement, except such filings as
may be required in the ordinary course to keep in full force and effect rights
and franchises material to the business of the Corporation and in connection
with the payment of taxes.
I am admitted to the practice of law before the United States Supreme
Court and several lower federal courts as well as the state courts of Kansas,
Pennsylvania and the District of Columbia. My opinion with respect to foreign
qualification contained in numbered paragraph 1 is based solely upon a review
of unofficial compilations of the provisions of the statutory laws of the
relevant jurisdictions. I expressly disclaim any obligation or undertaking to
update or modify this opinion as a consequence of any future changes in the
applicable laws or in the facts bearing upon this opinion.
I call to your attention that I am not admitted to the practice of law in
the State of Nevada; however I am familiar with the General Corporation Law of
the State of Nevada and have made such inquiries as I consider necessary to
render the opinions expressed herein with respect to the General Corporation
Law of the State of Nevada.
This opinion is limited to the effect of the present state of the General
Corporation Law of the State of Nevada and the laws of the relevant
jurisdictions, to the extent set forth in the preceding two paragraphs. In
rendering this opinion, I assume no obligation to revise or supplement this
opinion should the present laws, or the interpretation thereof, be changed.
This opinion is rendered to the Agent and the Banks as of the date hereof
in connection with the Credit Agreement, and may not be relied upon by any
person other than the Agent and the Banks and their permitted assignees, or by
them in any other context, and may not be furnished to any other person or
entity without my prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their
normal examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action to which the Bank is a party
arising out of the transactions contemplated by the Credit Agreement, or (v)
in connection with the assignment of or sale of participations in the
Advances.
Very truly yours,
Hayward D. Fisk, Esq.
<PAGE>
Schedule I
to
[FORM OF OPINION OF GENERAL COUNSEL OF
COMPUTER SCIENCES CORPORATION]
[List lending institutions party to Credit Agreement]
<PAGE>
EXHIBIT D
[FORM OF EXTENSION REQUEST]
CSC ENTERPRISES,
A DELAWARE GENERAL PARTNERSHIP
COMPUTER SCIENCES CORPORATION
REQUEST FOR EXTENSION OF COMMITMENT
TERMINATION DATE
[Date]
[Name and Address of Eligible Lender]
Pursuant to that certain Credit Agreement (Long Term Facility) dated
as of August 20, 1999 (as amended from time to time, the "Credit Agreement",
the terms defined therein being used herein as therein defined) among Computer
Sciences Corporation (the "Corporation"), CSC Enterprises (the "Partnership"),
certain Lenders party thereto and Citicorp USA, Inc., as Administrative Agent
for said Lenders (the "Agent"), this represents the Partnership's and the
Corporation's joint request to extend the Commitment Termination Date of each
Eligible Lender to __________, ______ <FN1> pursuant to Section 2.16 of the
Credit Agreement.
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
effectiveness of the extension requested hereby ("Proposed Extension"):
(a) the representations and warranties contained in Article IV of
the Credit Agreement are correct, before and after giving
effect to the Proposed Extension, except to the extent that
any such representation and warranty expressly relates only to
an earlier date, in which case they were correct as of such
earlier date;
(b) no event has occurred and is continuing, or would result from
the Proposed Extension, which constitutes an Event of Default
or a Potential Event of Default; and
(c) the balance sheet of the Corporation and its Subsidiaries as
at ___________, ______ <FN2>, and the related statements of
[FN]
<FN1> Insert date which is one year after the latest Commitment Termination
Date in effect.
<FN2> Insert date of the most recent audited balance sheet of the Corporation
and its Subsidiaries.
</FN>
<PAGE>
income and retained earnings of the Corporation and its
Subsidiaries for the fiscal year then ended, and the balance
sheet of the Partnership and its Subsidiaries as at
_________, ______ <FN3>, and the related statements of income
and retained earnings of the Partnership for the fiscal year
then ended, copies of each of which have been furnished to
each Lender, fairly present the financial condition of the
Corporation and its Subsidiaries or the Partnership and its
Subsidiaries, as the case may be, as at such applicable date
and the results of the operations of Corporation and its
Subsidiaries or the Partnership and its Subsidiaries, as the
case may be, for the fiscal year ended on such applicable
date, all in accordance with GAAP consistently applied, and
since __________, ____ <FN2>, and ___________, ____<FN3>,
respectively, there has been no material adverse change in the
business, condition (financial or otherwise), operations or
properties of the Corporation and its Subsidiaries, taken as a
whole, or of the Partnership and its Subsidiaries, taken as a
whole.
The Corporation hereby further certifies that after giving effect to
the Proposed Extension, the aggregate amount of the Guarantied Obligations (as
defined in the Credit Agreement), together with all other Debt (including any
Advances under the Credit Agreement) incurred by Corporation pursuant to the
resolutions of the Board of Directors of the Corporation authorizing the
Credit Agreement, does not exceed the aggregate amount of Debt authorized by
such resolutions.
Please indicate your consent to such extension of the Commitment
Termination Date by signing the attached copy of this request in the space
provided below and returning the same to the undersigned by _______________,
_____ <FN4>.
Very truly yours,
CSC ENTERPRISES, a Delaware general
partnership
By CSC ENTERPRISES, INC.,
Its Managing Partner
By: _____________________
Title:
[FN]
<FN3> Insert date of the most recent audited balance sheet of the Partnership
and its Subsidiaries.
<FN4> Insert fifteenth day prior to the Current Anniversary Date (as defined
in Section 2.16 of Credit Agreement).
</FN>
<PAGE>
COMPUTER SCIENCES CORPORATION
By: __________________________
Title:
The undersigned Eligible Lender
hereby consents to the extension
of its Commitment Termination
Date as requested above. This
consent is subject to the terms
of Section 2.16 of the Credit
Agreement.
DATED: ___________________
[ELIGIBLE LENDER]
By: _____________________
Title:
</PAGE>
EXHIBIT 10.26
U.S. $250,000,000
CREDIT AGREEMENT
(Short Term Facility)
Dated as of August 20, 1999
Among
CSC ENTERPRISES
as Borrower
-----------
and
COMPUTER SCIENCES CORPORATION
as Borrower and Guarantor
-------------------------
and
THE BANKS NAMED HEREIN
as Lenders
----------
and
CITICORP USA, INC.
as Administrative Agent
-----------------------
and
SALOMON SMITH BARNEY INC.
as Arranger
-----------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................... 1
Section 1.01 Certain Defined Terms.................................. 1
Section 1.02 Computation of Time Periods............................11
Section 1.03 Accounting Terms.......................................11
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES......................11
Section 2.01 The A Advances.........................................11
Section 2.02 Making the A Advances..................................12
Section 2.03 The B Advances.........................................14
Section 2.04 Fees...................................................17
Section 2.05 Termination and Reduction of the Commitments...........18
Section 2.06 Repayment and Prepayment of A Advances.................18
Section 2.07 Interest on A Advances.................................20
Section 2.08 Interest Rate Determination............................20
Section 2.09 Voluntary Conversion or Continuation of A Advances.....21
Section 2.10 Increased Costs........................................21
Section 2.11 Payments and Computations..............................22
Section 2.12 Taxes..................................................23
Section 2.13 Sharing of Payments, Etc...............................25
Section 2.14 Evidence of Debt.......................................25
Section 2.15 Use of Proceeds........................................26
Section 2.16 Extension of the Commitment Termination Date...........26
Section 2.17 Substitution of Lenders................................27
Section 2.18 Increased Commitments; Additional Lenders..............27
Section 2.19 Term Loan..............................................28
Section 2.20 Special Purpose Funding Vehicles.......................29
ARTICLE III CONDITIONS OF LENDING..................................29
Section 3.01 Condition Precedent to Effective Date..................29
Section 3.02 Conditions Precedent to Each A Borrowing...............30
Section 3.03 Conditions Precedent to Each B Borrowing...............30
ARTICLE IV REPRESENTATIONS AND WARRANTIES.........................31
Section 4.01 Representations and Warranties of the Partnership......31
Section 4.02 Representations and Warranties of the Corporation......34
ARTICLE V COVENANTS..............................................37
Section 5.01 Affirmative Covenants of the Partnership...............37
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 5.03 Affirmative Covenants of the Corporation...............41
Section 5.04 Negative Covenants of the Corporation..................45
ARTICLE VI EVENTS OF DEFAULT......................................47
Section 6.01 Events of Default......................................47
ARTICLE VII THE AGENT..............................................50
Section 7.01 Authorization and Action...............................50
Section 7.02 Agent's Reliance, Etc..................................50
Section 7.03 CUSA and Affiliates....................................50
Section 7.04 Lender Credit Decision.................................51
Section 7.05 Indemnification........................................51
Section 7.06 Successor Agent........................................51
ARTICLE VIII THE GUARANTY...........................................51
Section 8.01 Guaranty of the Guarantied Obligations.................52
Section 8.02 Liability of the Guarantor.............................52
Section 8.03 Waivers by the Guarantor...............................54
Section 8.04 Payment by the Guarantor...............................54
Section 8.05 Subrogation............................................55
Section 8.06 Subordination of Other Obligations.....................55
Section 8.07 Expenses...............................................55
Section 8.08 Continuing Guaranty; Termination of Guaranty...........56
Section 8.09 Authority of the Guarantor or the Partnership..........56
Section 8.10 Financial Condition of the Partnership.................56
Section 8.11 Rights Cumulative......................................56
Section 8.12 Bankruptcy; Post-Petition Interest; Reinstatement
of the Guaranty.......................................56
Section 8.13 Notice of Events.......................................57
Section 8.14 Set Off................................................57
Section 8.15 Determination of the Guarantied Obligations............58
Section 8.16 Successors and Assigns.................................58
Section 8.17 Further Assurances.....................................58
ARTICLE IX MISCELLANEOUS..........................................58
Section 9.01 Amendments, Etc........................................58
Section 9.02 Notices, Etc...........................................59
Section 9.03 No Waiver; Remedies....................................59
Section 9.04 Costs, Expenses and Indemnification....................59
Section 9.05 Right of Set-off ......................................60
Section 9.06 Binding Effect.........................................61
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 9.07 Assignments and Participations.........................61
Section 9.08 Governing Law..........................................63
Section 9.09 Execution in Counterparts..............................63
Section 9.10 Consent to Jurisdiction; Waiver of Immunities..........63
Section 9.11 Waiver of Trial by Jury................................63
Section 9.12 Limited Liability of Merel Corporation.................64
Section 9.13 Survival of Warranties.................................64
Section 9.14 Severability...........................................64
Section 9.15 Headings...............................................64
SCHEDULES
Schedule I List of Applicable Lending Offices
- ----------
Schedule II Property of Partnership
- -----------
Schedule III Property of Corporation
- ------------
EXHIBITS
Exhibit A-1 Form of Notice of A Borrowing
- -----------
Exhibit A-2 Form of Notice of B Borrowing
- -----------
Exhibit B Form of Assignment and Acceptance
- ---------
Exhibit C-1 Form of Opinion of Gibson, Dunn & Crutcher, Counsel for the
- ----------- Borrower
Exhibit C-2 Form of Opinion of Hayward D. Fisk, Esq., Counsel for the
- ----------- Borrower
Exhibit D Form of Extension Request
- ---------
-iii-
<PAGE>
CREDIT AGREEMENT
(Short Term Facility)
Dated as of August 20, 1999
CSC Enterprises, a Delaware general partnership (the "Partnership"),
as a Borrower, Computer Sciences Corporation, a Nevada corporation (the
"Corporation"), as a Borrower and as the Guarantor, the financial institutions
(the "Banks") listed on the signature pages hereof, and Citicorp USA, Inc.
("CUSA"), as administrative agent (the "Agent") for the Lenders hereunder,
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms.
---------------------
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to a Borrower as part of an
---------
A Borrowing (and after the making of the Term Loans, the Term Loans), and
refers to a Base Rate Advance or a Eurodollar Rate Advance, each of which
shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of A Advances of the same
-----------
Type made on the same day to the same Borrower pursuant to the same Notice of
A Borrowing by each of the Lenders pursuant to Section 2.01.
"Adjusted Eurodollar Rate" means, for any Interest Period for each
------------------------
Eurodollar Rate Advance comprising part of the same A Borrowing, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum,
if such average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the respective
Reference Bank's (or, in the case of Citibank, CUSA's) Eurodollar Rate Advance
comprising part of such A Borrowing and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage. The Adjusted Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same A Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
------- -------
Section 2.08.
"Advance" means an A Advance or a B Advance.
-------
"Affiliate" means, as to any Person, any other Person that, directly
---------
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or
1
<PAGE>
executive officer (as such term is used in Regulation S-K promulgated under
the Securities Act of 1933, as amended) of such Person.
"Agreement" means this Credit Agreement, as this Credit Agreement
---------
may be amended, supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Advance, and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
and, in the case of a B Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office with respect to such B
Advance.
"Applicable Margin" means, for any period for which any interest
-----------------
payment is to be made with respect to any Eurodollar Rate Advance, the
interest rate per annum derived by dividing (i) the sum of the Daily Margins
for each of the days included in such period by (ii) the number of days
included in such period.
"Assignment and Acceptance" means an assignment and acceptance
-------------------------
entered into by a Lender and an Eligible Assignee, and accepted by the Agent,
in substantially the form of Exhibit B hereto.
"B Advance" means an advance by a Lender to a Borrower as part of a
---------
B Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of B Advances made on the
-----------
same day to the same Borrower pursuant to the same Notice of B Borrowing by
each of the Lenders whose offer to make one or more B Advances as part of such
borrowing has been accepted by a Borrower under the auction bidding procedure
described in Section 2.03.
"B Reduction" has the meaning specified in Section 2.01.
-----------
"Base Rate" means, for any period, a fluctuating interest rate per
---------
annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in
New York, New York, from time to time, as Citibank's base rate;
(b) the sum of (A) 1/2 of one percent per annum plus (B) the
rate obtained by dividing (x) the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks (such three-
week moving average being determined weekly by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank, in
either case adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one percent), by (y) a
percentage equal to 100% minus the average
2
<PAGE>
of the daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve requirements
for Citibank in respect of liabilities consisting of or including (among other
liabilities) three-month nonpersonal time deposits of at least $100,000), plus
(C) the average during such three-week period of the daily net annual
assessment rates estimated by Citibank for determining the current annual
assessment payable by Citibank to the Federal Deposit Insurance Corporation
for insuring three-month deposits in the United States; or
(c) 1/2 of one percent per annum above the Federal Funds
Rate.
"Base Rate Advance" means an A Advance which bears interest as
-----------------
provided in Section 2.07(a).
"Borrower" means (i) the Partnership, or (ii) the Corporation, in
--------
the Corporation's capacity as a borrower hereunder, and "Borrowers" means both
of them, together.
"Borrowing" means an A Borrowing or a B Borrowing.
---------
"Business Day" means a day of the year on which banks are not
------------
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" means, for any period, the expenditures
--------------------
(whether paid in cash or accrued as a liability) that are or are required to
be included in "capital expenditures", "additions to property, plant or
equipment" or comparable items in the consolidated statement of cash flows of
the Corporation and its Subsidiaries.
"Capital Lease" means, with respect to any Person, any lease of any
-------------
property by that Person as lessee which would, in conformity with GAAP, be
required to be accounted for as a capital lease on the balance sheet of that
Person.
"CBI" has the meaning specified in Section 4.01(n).
---
"Citibank" means Citibank, N.A.
--------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commercial Paper" means commercial paper issued by the Partnership
----------------
or the Corporation from time to time.
"Commitment" has the meaning specified in Section 2.01.
----------
"Commitment Termination Date" means, with respect to any Lender,
---------------------------
the date that occurs 364 days from the Effective Date; provided, however,
--------
that, subject to the
3
<PAGE>
provisions of Section 2.16, if any Lender has consented to an Extension
Request with regard to the then existing Commitment Termination Date, the then
existing Commitment Termination Date as to such Lender shall be automatically
extended for 364 days from the then existing Termination Date.
"Consolidated Gross Cash Flow" means, for any period, (i) the sum of
----------------------------
(A) net income, plus (B) taxes on income, plus (C) net interest expense, plus
(D) depreciation expense, plus (E) amortization expense of goodwill, financing
costs and other intangibles, plus (F) extraordinary losses, plus (G) other
non-cash charges to the extent deducted from net income, minus (ii) the sum of
(A) extraordinary gains and (B) the aggregate amount of Capital Expenditures,
all of the foregoing shall be on a consolidated basis for the Corporation and
its Subsidiaries.
"Consolidated Interest Expense" means, for any period, consolidated
-----------------------------
total net interest expense in respect of Debt of the Corporation and its
Subsidiaries.
"Consolidated Total Capitalization" means, as of any date of
---------------------------------
determination, the sum of (a) consolidated stockholders' equity of the
Corporation and its Subsidiaries determined in accordance with GAAP and (b)
Consolidated Total Debt.
"Consolidated Total Debt" means, as of any date of determination,
-----------------------
all Debt of the Corporation and its Subsidiaries on a consolidated basis.
"Convert," "Conversion" and "Converted" each refers to a conversion
------- ---------- ---------
of A Advances of one Type into A Advances of another Type pursuant to Section
2.09.
"Corporation" means Computer Sciences Corporation, a Nevada
-----------
corporation, in its capacity as a Borrower hereunder, in its capacity as the
Guarantor hereunder or both, as the context may require.
"CSC Partners" means those partners of the Partnership which are
------------
wholly-owned direct or indirect Subsidiaries of the Corporation.
"Daily Margin" means, for any date of determination, the interest
------------
rate per annum set forth in the table below that corresponds to (i) the Level
applicable to such date of determination and (ii) the Utilization Ratio
applicable to such date of determination:
4
<PAGE>
Daily Margin when Daily Margin when Daily Margin when
Utilization Ratio Utilization Ratio is greater Utilization Ratio
is equal to or than 0.35:1.00 but less is greater than
less than 0.35:1.00 than or equal to 0.65:1.00 0.65:1.00
------------------- ---------------------------- -----------------
Level 1 0.145% 0.195% 0.32%
Level 2 0.17% 0.22% 0.345%
Level 3 0.25% 0.35% 0.60%
Level 4 0.325% 0.425% 0.675%
For purposes of this definition, (a) "Utilization Ratio" means, as
-----------------
of any date of determination, the ratio of (1) the aggregate outstanding
principal amount of all Advances as of such date to (2) the aggregate amount
of all Commitments in effect as of such date (whether used or unused and
without giving effect to any B Reduction), (b) if any change in the Rating
established by S&P or Moody's shall result in a change in the Level, the
change in the Daily Margin shall be effective as of the date on which such
rating change is publicly announced (in the case of a public rating) or is
disclosed to the Corporation (in the case of a private rating), (c) if Ratings
are unavailable from both S&P and Moody's for any reason for any day, then the
applicable Level for such day shall be deemed to be Level 4 (or, if the
Majority Lenders consent in writing, such other Level as may be reasonably
determined by the Majority Lenders from a rating with respect to Long-Term
Debt of the Corporation for such day established by another rating agency
reasonably acceptable to the Majority Lenders) and (d) if a Rating is not
available from S&P or Moody's (but not both) for any reason for any day, then
the applicable Level shall be set by reference to the Rating of S&P or Moody's
that is available for such day.
"Debt" means, with respect to any Person, (i) indebtedness of such
----
Person for borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services, excluding
trade payables or accrued expenses arising in the ordinary course of business,
(iv) obligations of such Person as lessee under Capital Leases, and (v)
obligations of such Person under direct or indirect guaranties in respect of,
and obligations of such Person (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through (iv) above, provided that "Debt" shall not include borrowings
against the cash surrender value of life insurance policies covering employees
of Borrowers or their Affiliates and owned by the Corporation or the
Partnership so long as (x) recourse for such borrowings is limited to such
policies and the proceeds thereof and (y) any value assigned to such policies
on the consolidated financial statements of the Corporation and its
Subsidiaries is net of the amount of such borrowings.
"Domestic Lending Office" means, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto
5
<PAGE>
or in the Assignment and Acceptance pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from time to time specify
to the Borrowers and the Agent.
"Effective Date" means August 20, 1999, so long as the conditions
--------------
precedent set forth in Section 3.01 have been satisfied.
"Eligible Assignee" means any financial institution or entity
-----------------
engaged in the business of extending revolving credit approved in writing by
the Borrowers and the Agent as an Eligible Assignee for purposes of this
Agreement, provided that the Borrowers' and the Agent's approval shall not be
unreasonably withheld, and provided further that no such approval shall be
required in the case of an assignment by a Bank to an Affiliate of such Bank.
"Environmental Law" means any and all statutes, laws, regulations,
-----------------
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions of any
federal, state or local governmental authority within the United States or any
State or territory thereof and which relate to the environment or the release
of any materials into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
-----
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of
---------------
ERISA is a member of either Borrower's controlled group, or under common
control with such Borrower, within the meaning of Section 414 of the Code and
the regulations promulgated and rulings issued thereunder.
"ERISA Event" means (i) the occurrence of a reportable event, within
-----------
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement
with respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Pension Plan of a notice of intent to terminate such
Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (iii) the cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (iv) the withdrawal by either Borrower
or an ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by either Borrower or any ERISA Affiliate to make a
payment to a Pension Plan required under Section 302(f)(1) of ERISA, which
Section imposes a lien for failure to make required payments; (vi) the
adoption of an amendment to a Pension Plan requiring the provision of security
to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the
institution by the PBGC of proceedings to terminate a Pension Plan, pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition which,
in the reasonable judgment of either Borrower, might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, a Pension Plan.
6
<PAGE>
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Borrowers and the Agent.
"Eurodollar Rate Advance" means an A Advance which bears interest as
-----------------------
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
----------------------------------
Period for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirements (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Existing Credit Agreement" means the Credit Agreement dated as of
-------------------------
September 15, 1995, among the Partnership, the Corporation, the lenders party
thereto and CUSA, as agent for such lenders, as amended.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"GAAP" means generally accepted accounting principles set forth in
----
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantied Obligations" has the meaning assigned to that term in
----------------------
Section 8.01.
"Guarantor" means the Corporation, in its capacity as the guarantor
---------
hereunder.
7
<PAGE>
"Guaranty" shall have the meaning set forth in Section 8.01.
--------
"Insufficiency" means, with respect to any Pension Plan, the amount,
-------------
if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18)
of ERISA.
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same A Borrowing, the period commencing on the date of such
Eurodollar Rate Advance, or on the date of continuation of such Advance as a
Eurodollar Rate Advance upon expiration of successive Interest Periods
applicable thereto, or on the date of Conversion of a Base Rate Advance into a
Eurodollar Rate Advance, and ending on the last day of the period selected by
the applicable Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three or six months, as the
applicable Borrower may select in the Notice of Borrowing or the Notice of
Conversion/Continuation for such Advance; provided, however, that:
-------- -------
(i) a Borrower may not select any Interest Period which
ends after the earliest Commitment Termination Date of any Lender then in
effect (or after the Term Loan Maturity Date if such Advances comprise all or
a part of the Term Loan);
(ii) Interest Periods commencing on the same date for A
Advances comprising part of the same A Borrowing shall be of the same
duration; and
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business
Day, provided, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day.
"Lenders" means the Banks listed on the signature pages hereof and
-------
each Eligible Assignee that shall become a party hereto pursuant to Section
9.07.
"Level" means Level 1, Level 2, Level 3 or Level 4, as the case
-----
may be.
"Level 1" means that, as of any date of determination, the higher of
-------
the Ratings is equal to or better than A+ or A1, as applicable, as of such
date of determination.
"Level 2" means that, as of any date of determination, the higher of
-------
the Ratings is equal to A or A2, as applicable, as of such date of
determination.
"Level 3" means that, as of any date of determination, the higher of
-------
the Ratings is equal to A- or A3, as applicable, as of such date of
determination.
"Level 4" means that, as of any date of determination, the higher of
-------
the Ratings is equal to or lower than BBB+ or Baa1, as applicable, as of such
date of determination, or
8
<PAGE>
the only Rating is a private rating and the Corporation will not authorize the
applicable rating agency to make such Rating available to the Agent and the
Lenders.
"Lien" means any lien, mortgage, pledge, security interest, charge
----
or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Long-Term Debt" means senior, unsecured, long term debt securities
--------------
of the Corporation.
"Majority Lenders" means at any time Lenders holding greater than
----------------
50% of the then aggregate unpaid principal amount of the A Advances held by
Lenders, or, if no such principal amount is then outstanding, Lenders having
greater than 50% of the Commitments (provided that, for purposes hereof,
neither a Borrower, nor any of its Affiliates, if a Lender, shall be included
in (i) the Lenders holding such amount of the A Advances or having such amount
of the Commitments or (ii) determining the aggregate unpaid principal amount
of the A Advances or the total Commitments).
"Managing Partner" means CSC Enterprises, Inc., a Nevada corporation
----------------
and an indirect wholly-owned Subsidiary of the Corporation.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA to which either Borrower or any ERISA Affiliate of
such Borrower is making, or is obligated to make, contributions or has within
any of the preceding six plan years been obligated to make or accrue
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
----------------------
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of either
Borrower or an ERISA Affiliate and at least one Person other than such
Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of
which either Borrower or an ERISA Affiliate could have liability under Section
4063, 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Non-Hostile Acquisition" means an acquisition (whether by purchase
-----------------------
of capital stock or assets, merger or otherwise) which has been approved by
resolutions of the Board of Directors of the Person being acquired or by
similar action if the Person is not a corporation and as to which such
approval has not been withdrawn.
"Notice of A Borrowing" has the meaning specified in Section
---------------------
2.02(a).
"Notice of a B Borrowing" has the meaning specified in Section
-----------------------
2.03(a).
"Notice of Borrowing" means the Notice of A Borrowing or the Notice
-------------------
of B Borrowing or both, as the context may require.
"Notice of Conversion/Continuation" has the meaning specified in
---------------------------------
Section 2.09.
9
<PAGE>
"Partnership" means CSC Enterprises, a Delaware general partnership,
-----------
in its capacity as a Borrower hereunder.
"Payment in full", "paid in full" or any similar term, as used in
---------------
Article VIII hereof, means payment in full of the Guarantied Obligations
including, without limitation, all principal, interest, costs, fees and
expenses (including, without limitation, legal fees and expenses) of Lenders
and Agent as required hereunder.
"PBGC" means the U.S. Pension Benefit Guaranty Corporation.
----
"Pension Plan" means a Single Employer Plan or a Multiple Employer
------------
Plan or both.
"Person" means an individual, partnership, corporation, business
------
trust, joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency
thereof.
"Potential Event of Default" means a condition or event which, after
--------------------------
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or
cure period.
"Rating" means a public or private rating established by S&P or
------
Moody's with respect to the Long-Term Debt or, if there is no Long-Term Debt
outstanding, a private rating established by S&P or Moody's with respect to
the Corporation.
"Reference Banks" means Citibank, Morgan Guaranty Trust Company of
---------------
New York and The First National Bank of Chicago.
"Register" has the meaning specified in Section 9.07(c).
--------
"S&P" means Standard & Poor's Ratings Group.
---
"SEC" means the Securities and Exchange Commission and any successor
---
agency.
"Significant Subsidiary" means, at any time, any Subsidiary of the
----------------------
Partnership or of the Corporation which accounts for more than 5% of
consolidated total assets or 5% of consolidated revenue of the Corporation and
its Subsidiaries determined in accordance with GAAP.
"Single Employer Plan" means a single employer plan, as defined in
--------------------
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of either
Borrower or any ERISA Affiliate and no Person other than such Borrower and its
ERISA Affiliates or (ii) was so maintained and in respect of which either
Borrower or an ERISA Affiliate could have liability under Section 4062 or 4069
of ERISA in the event such plan has been or were to be terminated.
10
<PAGE>
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity of which at least 50% of the total voting
power of shares of stock or other securities entitled to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Termination Date" means, with respect to any Lender, the earlier
----------------
of (i) the Commitment Termination Date of such Lender and (ii) the date of
termination in whole of the Commitments of all Lenders pursuant to Section
2.05 or 6.01.
"Term Loans" shall have the meaning assigned to that term in
----------
Section 2.19.
"Term Loan Maturity Date" shall be the date occurring one year
-----------------------
after the date on which the Term Loan is made.
"Type" means, with reference to an A Advance, a Base Rate Advance
----
or a Eurodollar Rate Advance.
"Withdrawal Liability" has the meaning given such term under Part I
--------------------
of Subtitle E of Title IV of ERISA.
Section 1.02 Computation of Time Periods.
---------------------------
In this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
Section 1.03 Accounting Terms.
----------------
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(e) or
Section 4.02(e), as the case may be. All computations determining compliance
with financial covenants or terms, including definitions used therein, shall
be prepared in accordance with generally accepted accounting principles in
effect at the time of the preparation of, and in conformity with those used to
prepare, the historical financial statements delivered to the Lenders pursuant
to Section 4.01(e) or Section 4.02(e), as the case may be. If at any time the
computations for determining compliance with financial covenants or provisions
relating thereto utilize generally accepted accounting principles different
than those then being utilized in the financial statements being delivered to
the Lenders, such financial statements shall be accompanied by a
reconciliation statement.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 The A Advances.
--------------
Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make A Advances to either Borrower from time to time
on any Business Day during the period from the Effective Date until the
Termination Date of such Lender in an aggregate amount (together with the
aggregate amount of A Advances made to the other Borrower that is outstanding
at such time) not to exceed at any time outstanding the amount set opposite
such Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender in the
Register
11
<PAGE>
maintained by the Agent pursuant to Section 9.07(c), as such amount may be
reduced pursuant to Section 2.05 (such Lender's "Commitment"); provided that
the aggregate amount of the Commitments of the Lenders shall be deemed used
from time to time to the extent of the aggregate amount of the B Advances then
outstanding and at any time of determination, such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably according to
their respective Commitments in effect at such time of determination (such
deemed use of the aggregate amount of the Commitments being a "B Reduction").
Each A Borrowing shall be in an aggregate amount not less than $5,000,000 or
an integral multiple of $1,000,000 in excess thereof and shall consist of A
Advances of the same Type made on the same day to the same Borrower by the
Lenders ratably according to their respective Commitments. Within the limits
of each Lender's Commitment, each Borrower may from time to time borrow,
prepay pursuant to Section 2.06(d) and reborrow under this Section 2.01.
Section 2.02 Making the A Advances.
---------------------
(a) Each A Borrowing shall be made on notice, given not
later than (x) 10:00 A.M. (New York City time) on the date of a proposed A
Borrowing consisting of Base Rate Advances and (y) 12:00 noon (New York City
time) on the third Business Day prior to the date of a proposed A Borrowing
consisting of Eurodollar Rate Advances, by the Borrower requesting the
proposed A Borrowing to the Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Each such notice of an A
Borrowing (a "Notice of A Borrowing") shall be by telecopier, telex or cable,
confirmed immediately in writing, in substantially the form of Exhibit A-1
hereto, specifying therein the requested (i) date of such A Borrowing, (ii)
Type of A Advances comprising such A Borrowing, (iii) aggregate amount of such
A Borrowing, and (iv) in the case of an A Borrowing comprised of Eurodollar
Rate Advances, the initial Interest Period for each such A Advance. A
Borrower may, subject to the conditions herein provided, borrow more than one
A Borrowing on any Business Day. Each Lender shall, before 1:00 P.M. (New
York City time) in the case of a Borrowing consisting of Base Rate Advances
and before 11:00 A.M. (New York City time) in the case of a Borrowing
consisting of Eurodollar Rate Advances, in each case on the date of such A
Borrowing, make available for the account of its Applicable Lending Office to
the Agent at its address referred to in Section 9.02, in same day funds, such
Lender's ratable portion of such A Borrowing. After the Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Agent will make such funds available to the Borrower
requesting the proposed A Borrowing at the Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) a Borrower may not select Eurodollar Rate Advances
for any A Borrowing or with respect to the Conversion or continuance of any A
Borrowing if the aggregate amount of such A Borrowing or such Conversion or
continuance is less than $5,000,000;
(ii) there shall be no more than five Interest Periods
relating to Eurodollar Rate Advances outstanding at any time;
(iii) if any Lender shall, at least one Business Day
before the date of any requested A Borrowing, notify the Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank
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<PAGE>
or other governmental authority asserts that it is unlawful, for such Lender
or its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, the Commitment of such Lender to make Eurodollar Rate Advances or
to Convert all or any portion of Base Rate Advances shall forthwith be
suspended until the Agent shall notify the Borrowers that such Lender has
determined that the circumstances causing such suspension no longer exist and
such Lender's then outstanding Eurodollar Rate Advances, if any, shall be Base
Rate Advances; to the extent that such affected Eurodollar Rate Advances
become Base Rate Advances, all payments of principal that would have been
otherwise applied to such Eurodollar Rate Advances shall be applied instead to
such Lender's Base Rate Advances; provided that if Majority Lenders are
subject to the same illegality or assertion of illegality, then the right of a
Borrower to select Eurodollar Rate Advances for such A Borrowing or any
subsequent A Borrowing or to Convert all or any portion of Base Rate Advances
shall forthwith be suspended until the Agent shall notify the Borrowers that
the circumstances causing such suspension no longer exist, and each A Advance
comprising such A Borrowing shall be a Base Rate Advance;
(iv) if fewer than two Reference Banks furnish timely
information to the Agent for determining the Adjusted Eurodollar Rate for any
Eurodollar Rate Advances comprising any requested A Borrowing, the right of a
Borrower to select Eurodollar Rate Advances for such A Borrowing or any
subsequent A Borrowing shall be suspended until the Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist, and each A Advance comprising such A Borrowing shall be made as
a Base Rate Advance; and
(v) if the Majority Lenders shall, at least one
Business Day before the date of any requested A Borrowing, notify the Agent
that the Adjusted Eurodollar Rate for Eurodollar Rate Advances comprising such
A Borrowing will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such A Borrowing, the right of a Borrower to select Eurodollar Rate Advances
for such A Borrowing or any subsequent A Borrowing shall be suspended until
the Agent shall notify the Borrowers and the Lenders that the circumstances
causing such suspension no longer exist, and each A Advance comprising such A
Borrowing shall be made as a Base Rate Advance.
(c) Each Notice of A Borrowing shall be irrevocable and
binding on the Borrower requesting the proposed A Borrowing. In the case of
any A Borrowing which the related Notice of A Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower requesting the proposed A
Borrowing shall indemnify each Lender against any loss, cost or expense
incurred by such Lender by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the A Advance to be
made by such Lender as part of such A Borrowing or by reason of the
termination of hedging or other similar arrangements, in each case when such A
Advance is not made on such date, including without limitation, as a result of
any failure to fulfill on or before the date specified in such Notice of A
Borrowing for such A Borrowing the applicable conditions set forth in Article
III.
(d) Unless the Agent shall have received notice from a
Lender prior to the date of any A Borrowing that such Lender will not make
available to the Agent such Lender's
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<PAGE>
ratable portion of such A Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such A Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may, in
reliance upon such assumption, make available to the Borrower requesting the
proposed A Borrowing on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available
to the Agent, such Lender and such Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of such Borrower, the interest rate applicable at the time to A Advances
comprising such A Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's A Advance as part
of such A Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be
made by it as part of any A Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its A Advance on the date of such A
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the A Advance to be made by such other Lender on the date of
any A Borrowing.
Section 2.03 The B Advances.
--------------
(a) Each Lender severally agrees that either Borrower may make
B Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 30 days prior
to the latest Commitment Termination Date of any Lender then in effect in the
manner set forth below; provided that, (i) following the making of each B
Borrowing, (1) the aggregate amount of the Advances then outstanding to both
Borrowers shall not exceed the aggregate amount of the Commitments of the
Lenders then in effect (computed without regard to any B Reduction), and (2)
the aggregate amount of the B Advances scheduled to be outstanding to both
Borrowers at any time through the maturity of such B Advances shall not exceed
the aggregate amount of the Commitments of the Lenders scheduled to be in
effect at such time (computed without regard to any B Reduction), and (ii) no
Lender may make a B Advance if the maturity date of such B Advance occurs
after the Commitment Termination Date of such Lender.
(i) Either Borrower may request a B Borrowing under
this Section 2.03 by delivering to the Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a B Borrowing (a "Notice of B
Borrowing"), in substantially the form of Exhibit A-2 hereto, specifying the
date and aggregate amount of the proposed B Borrowing, the maturity date for
repayment of each B Advance to be made as part of such B Borrowing (which
maturity date (x) in the case of a fixed rate B Borrowing may not be earlier
than the date occurring 14 days after the date of such B Borrowing or later
than the date occurring 180 days after the date of such B Borrowing, and (y)
in the case of any other B Borrowing may not be earlier than the date
occurring 30 days after the date of such B Borrowing or later than the date
occurring 180 days after the date of such B Borrowing), the interest payment
date or dates relating thereto, and any other terms to be applicable to such B
Borrowing, not later than 11:00 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed B Borrowing, if such Borrower
shall specify in the Notice of B Borrowing that the rates of interest to be
offered by the Lenders shall be fixed rates per annum and (B) at least four
Business Days prior to the date of the proposed B Borrowing, if such Borrower
shall instead specify in the Notice of
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<PAGE>
B Borrowing the basis to be used by the Lenders in determining the rates of
interest to be offered by them. A Borrower may not select a maturity date for
any B Borrowing which ends after the latest Commitment Termination Date of any
Lender then in effect. The Agent shall in turn promptly notify each Lender of
each request for a B Borrowing received by it from a Borrower by sending such
Lender a copy of the related Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more B Advances to such
Borrower as part of such proposed B Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by notifying the Agent (which
shall give prompt notice thereof to such Borrower), before 11:00 A.M. (New
York City time) (A) on the date of such proposed B Borrowing, in the case of a
Notice of B Borrowing delivered pursuant to clause (A) of paragraph (i) above
and (B) three Business Days before the date of such proposed B Borrowing, in
the case of a Notice of B Borrowing delivered pursuant to clause (B) of
paragraph (i) above, of the minimum amount and maximum amount of each B
Advance which such Lender would be willing to make as part of such proposed B
Borrowing (which amounts may, subject to the proviso to the first sentence of
this Section 2.03(a), exceed such Lender's Commitment), the rate or rates of
interest therefor and such Lender's Applicable Lending Office with respect to
such B Advance; provided that if the Agent in its capacity as a Lender shall,
in its sole discretion, elect to make any such offer, it shall notify such
Borrower of such offer before 10:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Agent by the other
Lenders. If any Lender shall elect not to make such an offer, such Lender
shall so notify the Agent, before 10:00 A.M. (New York City time) on the date
on which notice of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and shall not, make any B
Advance as part of such B Borrowing; provided that the failure by any Lender
to give such notice shall not cause such Lender to be obligated to make any B
Advance as part of such proposed B Borrowing.
(iii) Such Borrower shall, in turn, (A) before 12:00 noon
(New York City time) on the date of such proposed B Borrowing, in the case of
a Notice of B Borrowing delivered pursuant to clause (A) of paragraph (i)
above and (B) before 1:00 P.M. (New York City time) three Business Days before
the date of such proposed B Borrowing, in the case of a Notice of B Borrowing
delivered pursuant to clause (B) of paragraph (i) above, either
(x) cancel such B Borrowing by giving the Agent notice to
that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above (which acceptance shall be
irrevocable) in its sole discretion, by giving notice to the Agent of the
amount of each B Advance (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum amount, notified to such
Borrower by the Agent on behalf of such Lender for such B Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of such B Borrowing
(provided that the aggregate amount of such B Borrowing shall not exceed the
amount specified on the Notice of B Borrowing delivered by such Borrower
pursuant to paragraph (i) above), and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by
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<PAGE>
giving the Agent notice to that effect; provided that acceptance of offers may
only be made on the basis of ascending rates for B Borrowings of the same type
and duration for up to the maximum amounts offered by Lenders; and provided
further that if offers are made by two or more Lenders for the same type of B
Borrowing for the same duration and with the same rate of interest, in an
aggregate amount which is greater than the amount requested, such offers shall
be accepted on a pro rata basis based on the maximum amounts offered by such
Lenders at such rate of interest.
(iv) If such Borrower notifies the Agent that such B
Borrowing is cancelled pursuant to paragraph (iii)(x) above or if such
Borrower rejects any offers made by Lenders pursuant to paragraph (iii)(y)
above, the Agent shall give prompt notice thereof to the Lenders or affected
Lenders, as the case may be, and in the case of a cancellation, such B
Borrowing shall not be made.
(v) If such Borrower accepts one or more of the offers
made by any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent
shall in turn promptly notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and aggregate amount of such B
Borrowing and whether or not any offer or offers made by such Lender pursuant
to paragraph (ii) above have been accepted by such Borrower, (B) each Lender
that is to make a B Advance as part of such B Borrowing, of the amount of each
B Advance to be made by such Lender as part of such B Borrowing, and (C) each
Lender that is to make a B Advance as part of such B Borrowing, upon receipt,
that the Agent has received forms of documents appearing to fulfill the
applicable conditions set forth in Article III. Each Lender that is to make a
B Advance as part of such B Borrowing shall, before 1:00 P.M. (New York City
time) on the date of such B Borrowing specified in the notice received from
the Agent pursuant to clause (A) of the preceding sentence or any later time
when such Lender shall have received notice from the Agent pursuant to clause
(C) of the preceding sentence, make available for the account of its
Applicable Lending Office to the Agent at its address referred to in Section
9.02 such Lender's portion of such B Borrowing, in same day funds. Upon
fulfillment of the applicable conditions set forth in Article III and after
receipt by the Agent of such funds, the Agent will make such funds available
to such Borrower at the Agent's aforesaid address. Promptly after each B
Borrowing, the Agent will notify each Lender of the amount of the B Borrowing,
the consequent B Reduction and the dates upon which such B Reduction commenced
and will terminate.
(vi) Each Borrower agrees to pay to the Agent for the
Agent's account an auction fee in an amount agreed to in a separate letter
agreement between the Borrowers and the Agent for each Notice of B Borrowing
delivered by such Borrower to the Agent pursuant to this Section 2.03(a),
whether or not a B Borrowing is made pursuant thereto.
(b) Each B Borrowing shall be in an aggregate amount not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each B Borrowing, the Borrowers and each Lender
shall be in compliance with the limitations set forth in the proviso to the
first sentence of subsection (a) above.
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<PAGE>
(c) Within the limits and on the conditions set forth in
this Section 2.03, either Borrower may from time to time borrow under this
Section 2.03, repay or prepay pursuant to subsection (d) below, and reborrow
under this Section 2.03, and more than one B Borrowing may be made on a
Business Day; provided that, except for B Borrowings made on the same Business
Day, a B Borrowing shall not be made within three Business Days of the date of
any other B Borrowing.
(d) Each Borrower shall repay to the Agent for the account
of each Lender which has made a B Advance to such Borrower, on the maturity
date of each B Advance made to such Borrower (such maturity date being that
specified by such Borrower for repayment of such B Advance in the related
Notice of B Borrowing delivered pursuant to subsection (a)(i) above), the then
unpaid principal amount of such B Advance. Neither Borrower shall have any
right to prepay any principal amount of any B Advance unless, and then only on
the terms, specified by such Borrower for such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above.
(e) Each Borrower shall pay interest on the unpaid principal
amount of each B Advance made to such Borrower from the date of such B Advance
to the date the principal amount of such B Advance is repaid in full, at the
rate of interest for such B Advance specified by the Lender making such B
Advance in its notice with respect thereto delivered pursuant to subsection
(a)(ii) above, payable on the interest payment date or dates specified by such
Borrower for such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above; provided that any principal amount of any
B Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) until the stated maturity date of such B
Advance, the greater of (x) 2% per annum above the Base Rate in effect from
time to time and (y) 2% above the stated rate per annum of such B Advance, and
(B) after the stated maturity of such B Advance, 2% per annum above the Base
Rate in effect from time to time.
(f) Subject to the obligations of the Guarantor under the
Guaranty, neither Borrower shall have any obligation to repay to any Lender
any B Advance made by such Lender to the other Borrower or to pay any interest
on any B Advance made by such Lender to the other Borrower.
Section 2.04 Fees.
----
(a) Facility Fees.
-------------
The Borrowers jointly and severally agree to pay to the
Agent for the account of each Lender a facility fee on the amount of such
Lender's Commitment (or if no Commitment is in effect, Advances), whether used
or unused and without giving effect to any B Reduction, from the date hereof
in the case of each Bank and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date of such Lender, payable in
arrears on the last day of each March, June, September and December during the
term of such Lender's Commitment, commencing September 30, 1999, and on the
Termination Date of such Lender, in an amount equal to the product of (i) the
average daily amount of such Lender's Commitment (whether used or unused and
without giving effect to any B Reduction) in effect during the period for
which such payment that is to be made times (ii) the weighted average rate per
annum that is derived from the following rates: (a) a rate of 0.05% per annum
with respect to each day during such
17
<PAGE>
period that the higher of the Ratings was Level 1, (b) a rate of 0.08% per
annum with respect to each day during such period that the higher of such
Ratings was Level 2, (c) a rate of 0.10% per annum with respect to each day
during such period that the higher of such Ratings was Level 3 and (d) a rate
of 0.125% per annum with respect to each day during such period that the
higher of such Ratings was Level 4. If any change in the Rating shall result
in a change in the Level, the change in the facility fee shall be effective as
of the date on which such rating change is publicly announced (in the case of
a public rating) or is disclosed to the Corporation (in the case of a private
rating). If Ratings are unavailable from both S&P or Moody's for any reason
for any day, then the applicable Level for purposes of calculating the
facility fee for such day shall be deemed to be Level 4 (or, if the Majority
Lenders consent in writing, such other Level as may be reasonably determined
by the Majority Lenders from a rating with respect to Long-Term Debt or the
Corporation for such day established by another rating agency reasonably
acceptable to the Majority Lenders). If no Rating is available from S&P or
Moody's (but not both) for any reason for any day, then the applicable Level
shall be set by reference to the Rating of S&P or Moody's that is available
for such day.
(b) Agents' Fees.
------------
The Borrowers agree to pay to the Agent the fees payable
pursuant to the fee letter dated as of August 16, 1999 between the Borrowers
and CUSA, in the amounts and at the times specified in such letter.
Section 2.05 Termination and Reduction of the Commitments.
--------------------------------------------
(a) Mandatory Termination.
---------------------
In the event that a mandatory prepayment in full of the
A Advances is required by Section 2.06(b), the Commitments of the Lenders
shall immediately terminate.
(b) Optional Reductions.
-------------------
The Borrowers shall have the right, upon at least four
Business Days' notice to the Agent by both Borrowers, to terminate in whole or
reduce ratably in part the unused portions of the respective Commitments of
the Lenders, provided that the aggregate amount of the Commitments of the
Lenders shall not be reduced to an amount which is less than the aggregate
principal amount of the Advances then outstanding, and provided, further, that
each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
Section 2.06 Repayment and Prepayment of A Advances.
--------------------------------------
(a) Mandatory Repayment on Termination Date.
---------------------------------------
Each Borrower shall repay the outstanding principal
amount of each A Advance made by each Lender (other than A Advances comprising
a Term Loan) to such Borrower on the Termination Date of such Lender.
(b) Mandatory Prepayment in Certain Events.
--------------------------------------
If any one of the following events shall occur:
(i) Representatives of CSC Partners shall cease to
constitute a majority of the Partnership's Partnership Committee (or similar
body which may replace such Partnership Committee) or the rights and powers of
such Partnership Committee shall be materially diminished in a manner such
that the Partnership's Partnership Committee (or similar body which may
replace such Partnership Committee) shall cease
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<PAGE>
to have substantially the same ability to control the operations or policies
of the Partnership as it has on the date hereof; or
(ii) CSC Enterprises, Inc. shall cease to be the
Managing Partner (unless the successor Managing Partner is a Subsidiary of the
Corporation of which the Corporation owns at least 80% of the voting stock)
or, if CSC Enterprises, Inc. is the Managing Partner of the Partnership, the
Corporation shall cease to own, directly or indirectly, at least 80% of the
voting stock of CSC Enterprises, Inc., or the rights and powers of the
Managing Partner shall be materially diminished in a manner such that the
Managing Partner shall cease to have substantially the same ability to control
the operations or policies of the Partnership as it has on the date hereof; or
(iii) The Partnership shall transfer a majority of its
assets to any Person other than the Corporation or one or more Subsidiaries of
the Corporation of which the Corporation owns at least 80% of the voting
stock; or
(iv) The Corporation shall cease to directly or
indirectly (through its Subsidiaries of which it owns at least 80% of the
voting stock) own more than 50% of the outstanding partnership interest of the
Partnership;
then, and in any such event, the Partnership shall immediately prepay in full
the A Advances made to the Partnership, and shall immediately make an offer to
all Lenders which have made B Advances to the Partnership to prepay such B
Advances, and shall immediately prepay in full the B Advances of all Lenders
accepting such offer, and in the case of all Advances so prepaid the
Partnership will pay interest accrued to the date of prepayment and will
reimburse the Lenders in respect thereof pursuant to Section 9.04(b).
(c) Mandatory Prepayment Due to Reductions of Commitments.
-----------------------------------------------------
Each Borrower shall from time to time prepay the A
Advances made to such Borrower to the extent necessary so that the sum of the
aggregate principal amount of the Advances then outstanding does not exceed
the aggregate amount of the Commitments of the Lenders then in effect
(computed without regard to any B Reduction).
(d) Voluntary Prepayments of A Borrowings.
-------------------------------------
Neither Borrower shall have any right to prepay any
principal amount of any A Advances other than as provided in this subsection
(d). Each Borrower may, upon at least one Business Day's notice to the Agent
in the case of Base Rate Advances and at least three Business Days' notice to
the Agent in the case of Eurodollar Rate Advances stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given
such Borrower shall, prepay the outstanding principal amounts of the Advances
made to such Borrower comprising part of the same A Borrowing in whole or
ratably in part; provided, however, that (x) each partial prepayment shall be
in an aggregate principal amount not less than $5,000,000 and integral
multiples of $1,000,000 in excess thereof and (y) in the case of any such
prepayment of any Eurodollar Rate Advance, such Borrower shall pay all accrued
interest to the date of such prepayment on the portion of such Eurodollar Rate
Advance being prepaid and shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 9.04(b).
(e) Certain Obligations Several.
---------------------------
Subject to the obligations of the Guarantor under the
Guaranty, neither Borrower shall have any obligation to repay to any Lender
any A
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Advance made by such Lender to the other Borrower or to pay any interest on
any A Advance made by such Lender to the other Borrower.
(f) Payment of Term Loan. The Borrowers shall repay the
Term Loans together with all accrued and unpaid interest thereon on the Term
Loan Maturity Date and may prepay the Term Loans in accordance with Section
2.06(d) above. Amounts paid in respect of the Term Loans may not be
reborrowed.
Section 2.07 Interest on A Advances.
----------------------
Each Borrower shall pay interest accrued on the principal amount of
each A Advance that was made to such Borrower outstanding from time to time
from the date of such A Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) Base Rate Advances.
------------------
If such A Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time to time, payable
in arrears on the last day of each March, June, September and December during
the term of this Agreement, commencing September 30, 1999, and on the
Termination Date of the applicable Lender; provided that any amount of
principal, interest, fees and other amounts payable under this Agreement
(including, without limitation, the principal amount of Base Rate Advances,
but excluding the principal amount of Eurodollar Rate Advances and B Advances)
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum equal at
all times to 2% per annum above the Base Rate in effect from time to time.
(b) Eurodollar Rate Advances.
------------------------
If such A Advance is a Eurodollar Rate Advance, a rate per
annum equal at all times during the Interest Period for such A Advance to the
sum of the Adjusted Eurodollar Rate for such Interest Period plus the
Applicable Margin, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months, on the
day which occurs during such Interest Period three months from the first day
of such Interest Period; provided that any principal amount of any Eurodollar
--------
Rate Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) during the Interest Period applicable to
such Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base
Rate in effect from time to time and (y) 2% per annum above the rate per annum
required to be paid on such amount immediately prior to the date on which such
amount became due and (B) after the expiration of such Interest Period, 2% per
annum above the Base Rate in effect from time to time.
Section 2.08 Interest Rate Determination.
---------------------------
(a) Each Reference Bank agrees to furnish to the Agent timely
information for the purpose of determining each Adjusted Eurodollar Rate. If
any one or more of the Reference Banks shall not furnish such timely
information to the Agent for the purpose of determining any such interest
rate, the Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks, subject to Section
2.02(b)(iv).
(b) The Agent shall give prompt notice to the Borrowers and the
Lenders of the applicable interest rate determined by the Agent for purposes
of Section 2.07(a) or 2.07(b),
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<PAGE>
and the applicable rate, if any, furnished by each Reference Bank for the
purpose of determining the applicable interest rate under Section 2.07(b).
Section 2.09 Voluntary Conversion or Continuation of A Advances.
--------------------------------------------------
(a) Each Borrower may on any Business Day, upon notice given
to the Agent not later than 12:00 noon (New York City time) on the third
Business Day prior to the date of the proposed Conversion or continuance (a
"Notice of Conversion/Continuation") and subject to the provisions of Section
2.02(b), (1) Convert all Advances of one Type comprising the same A Borrowing
made to such Borrower into A Advances of another Type and (2) upon the
expiration of any Interest Period applicable to A Advances which are
Eurodollar Rate Advances made to such Borrower, continue all (or, subject to
Section 2.02(b), any portion of) such A Advances as Eurodollar Rate Advances
and the succeeding Interest Period(s) of such continued A Advances shall
commence on the last day of the Interest Period of the A Advances to be
continued; provided, however, that any Conversion of any Eurodollar Rate
Advances into A Advances of another Type shall be made on, and only on, the
last day of an Interest Period for such Eurodollar Rate Advances. Each such
Notice of Conversion/Continuation shall, within the restrictions specified
above, specify (i) the date of such continuation or Conversion, (ii) the A
Advances (or, subject to Section 2.02(b), any portion thereof) to be continued
or Converted, (iii) if such continuation is of, or such Conversion is into,
Eurodollar Rate Advances, the duration of the Interest Period for each such A
Advance and (iv) that no Potential Event of Default or Event of Default has
occurred and is continuing.
(b) If upon the expiration of the then existing Interest Period
applicable to any A Advance which is a Eurodollar Rate Advance made to either
Borrower, such Borrower shall not have delivered a Notice of
Conversion/Continuation in accordance with this Section 2.09, then such
Advance shall upon such expiration automatically be Converted to a Base Rate
Advance.
(c) After the occurrence of and during the continuance of a
Potential Event of Default or an Event of Default, a Borrower may not elect to
have an A Advance be made or continued as, or Converted into, a Eurodollar
Rate Advance after the expiration of any Interest Rate then in effect for that
A Advance.
Section 2.10 Increased Costs.
---------------
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements in the case of Eurodollar Rate Advances included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Advances made to either
Borrower, then such Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A reasonably detailed certificate as to the amount
and manner of calculation of such increased cost, submitted to such Borrower
and the Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
21
<PAGE>
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the amount of
such capital is increased by or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of this type, then, upon
demand by such Lender (with a copy of such demand to the Agent), the Borrowers
shall immediately pay, jointly and severally, to the Agent for the account of
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
commitment to lend hereunder. A reasonably detailed certificate as to such
amounts and the manner of calculation thereof submitted to the Borrowers and
the Agent by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If a Lender shall change its Applicable Lending Office,
such Lender shall not be entitled to receive any greater payment under
Sections 2.10 and 2.12 than the amount such Lender would have been entitled to
receive if it had not changed its Applicable Lending Office, unless such
change was made at the request of a Borrower or at a time when the
circumstances giving rise to such greater payment did not exist.
Section 2.11 Payments and Computations.
-------------------------
(a) Each Borrower shall make each payment hereunder not
later than 1:00 P.M. (New York City time) on the day when due in U.S. dollars
to the Agent at its address referred to in Section 9.02 in same day funds.
Subject to the immediately succeeding sentence, the Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.03, 2.10 or 2.12 or, to the extent the Termination Date
is not the same for all Lenders, pursuant to Section 2.06(a)) to the Lenders
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon receipt of
principal or interest paid after an Event of Default and an acceleration or a
deemed acceleration of amounts due hereunder, the Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest ratably in accordance with each Lender's outstanding A
Advances and B Advances (other than amounts payable pursuant to Section 2.10
or 2.12) to the Lenders for the account of their respective Applicable Lending
Offices. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) All computations of interest based on the Base Rate
shall be made by the Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Adjusted Eurodollar
Rate or the Federal Funds Rate and of facility fees
22
<PAGE>
shall be made by the Agent on the basis of a year of 360 days, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or such fees are payable.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the
case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Lenders
hereunder that such Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent that such Borrower shall not have so
made such payment in full to the Agent, each Lender shall repay to the Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the Agent, at the
Federal Funds Rate.
Section 2.12 Taxes.
-----
(a) Any and all payments by a Borrower hereunder shall be
made, in accordance with Section 2.11, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in the
---------
case of each Lender and the Agent, (i) taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender or the Agent (as the case may be) is organized or any political
subdivision thereof or in which its principal office is located, (ii) taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision
thereof, (iii) taxes imposed upon or measured by the overall net income of
such Lender by the United States of America or any political subdivision or
taxing authority thereof or therein, and (iv) United States income taxes
(including withholding taxes with respect to payments hereunder) payable with
respect to payments hereunder under laws (including without limitation any
statute, treaty, ruling, determination or regulation) in effect on the date
hereof in the case of each Bank and on the effective date of the Assignment
and Acceptance pursuant to which it became a Lender in the case of each other
Lender (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If a
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
23
<PAGE>
(b) In addition, the Borrowers jointly and severally agree
to pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (to the extent specifically
attributable to Borrowings made by such Borrower) (including, without
limitation, any Taxes or Other Taxes (to the extent specifically attributable
to Borrowings made by such Borrower) imposed by any jurisdiction on amounts
payable under this Section 2.12) and the Borrowers jointly and severally will
indemnify each Lender and the Agent for the full amount of Taxes or Other
Taxes (to the extent not specifically attributable to Borrowings made by a
particular Borrower) (including, without limitation, any Taxes or Other Taxes
(to the extent not specifically attributable to Borrowings made by a
particular Borrower) imposed by any jurisdiction on amounts payable under this
Section 2.12), in each case paid by such Lender or the Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made within
30 days from the date such Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrowers, or either of them, will furnish to the Agent, at its address
referred to in Section 9.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested in writing by
either Borrower (but only so long as such Lender remains lawfully able to do
so), shall provide such Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the form provided by
a Lender at the time such Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from "Taxes" as
defined in Section 2.12(a).
(f) For any period with respect to which a Lender has failed
to provide a Borrower with the appropriate form described in Section 2.12(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such
form otherwise is not required under the first sentence of subsection (e)
above), such Lender shall not be entitled to indemnification under Section
2.12(a) with respect to Taxes imposed by the United States; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, such Borrower shall, at the expense of such Lender,
take such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.
24
<PAGE>
(g) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.12 shall survive the payment in full of principal
and interest hereunder.
Section 2.13 Sharing of Payments, Etc.
------------------------
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the A Advances made by it (other than pursuant to Section 2.10 or
2.12 or, to the extent the Termination Date is not the same for all Lenders,
pursuant to Section 2.06(a)) in excess of its ratable share of payments on
account of the A Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the A
Advances made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them, provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent
of such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrowers agree that any Lender
so purchasing a participation from another Lender pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the applicable Borrower in
the amount of such participation.
Section 2.14 Evidence of Debt.
----------------
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower
to such Lender resulting from each Advance owing to such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder. Each Borrower agrees that upon notice by
any Lender to such Borrower (with a copy of such notice to the Agent) to the
effect that a promissory note or other evidence of indebtedness is required or
appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the A Advances or the B Advances owing to,
or to be made by, such Lender, such Borrower shall promptly execute and
deliver to such Lender promissory notes or other evidence of such
indebtedness, in form and substance reasonably satisfactory to such Borrower
and such Lender, payable to the order of such Lender in a principal amount
equal, in the case of the A Advances, to the aggregate principal amount of the
Commitment of such Lender and, in the case of the B Advances, to the
outstanding principal amount of B Advances of such Lender; provided, however,
that the execution and delivery of such promissory note or other evidence of
indebtedness shall not be a condition precedent to the making of any Advance
under this Agreement.
(b) The Register maintained by the Agent pursuant to Section
9.07(c) shall include a control account, and a subsidiary account for each
Lender, in which accounts (taken together) shall be recorded (i) the date,
amount and tenor, as applicable, of each Borrowing, the Borrower that received
the proceeds of such Borrowing, the Type of Advances comprising such Borrowing
and the Interest Period applicable thereto, (ii) the terms of each Assignment
and Acceptance delivered to and accepted by it, (iii) the amount of any
principal or interest due and
25
<PAGE>
payable or to become due and payable from each Borrower to each Lender
hereunder, and (iv) the amount of any sum received by the Agent from each
Borrower hereunder and each Lender's share thereof.
(c) The entries made in the Register shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.15 Use of Proceeds.
---------------
(a) Advances shall be used by the Borrowers for Commercial
Paper backup, for Non-Hostile Acquisitions and for general corporate purposes.
(b) No portion of the proceeds of any Advances under this
Agreement shall be used by either Borrower or any of its Subsidiaries in any
manner which might cause the Advances or the application of such proceeds to
violate, or require any Lender to make any filing or take any other action
under, Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Securities Exchange Act of 1934, in each case as in effect on the date or
dates of such Advances and such use of proceeds.
Section 2.16 Extension of the Commitment Termination Date.
--------------------------------------------
The Borrowers may, not earlier than 45 days but not later than 30
days prior to the then current Commitment Termination Date (the "Current
Termination Date"), propose to extend the Commitment Termination Date for all
Lenders for an additional 364 days by delivering to the Agent a copy of an
extension request signed by both Borrowers (an "Extension Request") in
substantially the form of Exhibit D hereto. The Agent shall promptly notify
each Lender of its receipt of such Extension Request. Not earlier than 30
days but not later than 15 days (the "Determination Date") prior to the
Current Termination Date, each Lender shall notify the Agent and the Borrowers
of its willingness or unwillingness to extend its Commitment Termination Date
hereunder. Any Lender that shall fail to so notify the Agent and the
Borrowers on or prior to the Determination Date shall be deemed to have
declined to so extend. In the event that, on or prior to the Determination
Date, Lenders representing more than 50% of the aggregate amount of the
Commitments of all Lenders then in effect shall consent to such extension, the
Agent shall so advise the Lenders and the Borrowers, and, subject to execution
of documentation evidencing such extension and consents, the Commitment
Termination Date of each Lender (each a "Consenting Lender") that has
consented on or prior to the Determination Date to so extend shall be extended
by 364 days. Thereafter, (i) for each Consenting Lender, the term "Commitment
Termination Date" as used herein and in any promissory note executed and
delivered by the Borrowers pursuant to Section 2.14 hereof, shall at all times
refer to such date, unless it is later extended pursuant to this Section 2.16,
and (ii) for each Lender that either has declined on or prior to the
Determination Date to so extend or is deemed to have so declined, the term
"Commitment Termination Date" shall at all times refer to the date which was
the Commitment Termination Date of such Lender immediately prior to the
delivery to the Agent of such Extension Request. In the event that, as of the
Determination Date, the Consenting Lenders represent 50% or less of the
aggregate amount of the Commitments of all Lenders then in effect, the Agent
shall so advise the Lenders and the Borrowers, and none of the Lenders'
Commitment Termination Dates shall be extended and each Lender's Commitment
Termination Date shall continue to be the date which was the Commitment
Termination Date of such Lender immediately prior to the delivery to the Agent
of such Extension Request.
26
<PAGE>
Section 2.17 Substitution of Lenders.
-----------------------
If any Lender requests compensation from a Borrower under Section
2.10(a) or (b) or if any Lender declines to extend its Commitment Termination
Date pursuant to Section 2.16, the Borrowers shall have the right, with the
assistance of the Agent, to seek one or more substitute banks or financial
institutions (which may be one or more of the Lenders) reasonably satisfactory
to the Agent and the Borrowers to purchase the Advances and assume the
Commitments of such Lender, and the Borrowers, the Agent, such Lender, and
such substitute banks or financial institutions shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.07(a)
hereof to effect the assignment of rights to and the assumption of obligations
by such substitute banks or financial institutions; provided that such
requesting Lender shall be entitled to (i) compensation under Section 2.10 for
any costs incurred by it prior to its replacement, (ii) payment of all A
Advances of such Lender then outstanding and all interest and fees accrued to
the date of such payment, and (iii) if any Eurodollar Rate Advances of such
Lender are then outstanding, any reimbursement which would be payable under
Section 9.04(b) in connection with a prepayment of such Eurodollar Rate
Advances on such date.
Section 2.18 Increased Commitments; Additional Lenders.
-----------------------------------------
(a) No more than once per 364 day period from the Effective
Date, the Borrowers may, upon at least thirty (30) days notice to the Agent
(which shall promptly provide a copy of such notice to the Lenders), propose
to increase the aggregate amount of the Commitments in increments of
$50,000,000, the total amount of all such increases not to exceed
$250,000,000 (the amount of any such increase, the "Increased Commitments");
provided that at the time of and after giving effect to any increase in the
Commitments (and the delivery of the applicable commitment increase notice
shall constitute a representation and warranty by the Partnership and the
Corporation that on the effective date of such increase such statements are
true) (i) the Corporation's Long-Term Debt ratings from Moody's and S&P are
better than or equal to Baa2 or BBB, respectively; (ii) the representations
and warranties of the Partnership and the Corporation contained in Article IV
are correct on and as of the date of such increase, before and after giving
effect to such increase, as though made on and as of such date, except to the
extent that any such representation or warranty expressly relates only to an
earlier date, in which case they were correct as of such earlier date; (iii)
no Event of Default or Potential Event of Default exists and is continuing ;
(iv) on the date of such increase, (x) there shall be no A Advances
outstanding or all Interest Periods shall have ended and (y) all accrued and
unpaid interest on the A Advances and all accrued and unpaid Facility Fees
shall have been paid in full and (v) after any such increase, no Lender's
Commitment shall exceed 50% of the aggregate amount of the Commitments. Each
Lender party to this Agreement at such time shall have the right (but no
obligation), for a period of fifteen (15) days following receipt of such
notice, to elect by notice to the Borrower and the Administrative Agent to
increase its Commitment by a principal amount which bears the same ratio to
the Increased Commitments as its then Commitment bears to the aggregate
Commitments then existing.
(b) If any Lender party to this Agreement shall not elect to
increase its Commitment pursuant to subsection (a) of this Section, the
Borrowers may designate another lender or other lenders (which may be, but
need not be, one or more of the existing Lenders) which at the time agree to
(i) in the case of any such lender that is an existing Lender, increase its
Commitment and (ii) in the case of any other such lender (an "Additional
Lender"), become a party to this Agreement. The sum of the increases in the
Commitments of the existing Lenders
27
<PAGE>
pursuant to this subsection (b) plus the Commitments of the Additional Lenders
shall not in the aggregate exceed the unsubscribed amount of the Increased
Commitments.
(c) An increase in the aggregate amount of the Commitments
pursuant to this Section 2.18 shall become effective upon the receipt by the
Agent of an agreement in form and substance satisfactory to the Agent signed
by the Borrowers, by each Additional Lender and by each other Lender whose
Commitment is to be increased, setting forth the new Commitments of such
Lenders and setting forth the agreement of each Additional Lender to become a
party to this Agreement and to be bound by all the terms and provisions
hereof, together with such evidence of appropriate corporate authorization on
the part of the Borrowers with respect to the Increased Commitments and such
opinions of counsel for the Borrowers with respect to the Increased
Commitments as the Agent may reasonably request.
Section 2.19 Term Loan.
---------
(a) Each Lender severally agrees on the terms and conditions
set forth in this Agreement to make A Advances to the Borrowers (upon request
of the Borrowers pursuant to this Agreement) on the Termination Date in an
amount up to the sum of (i) the outstanding principal amount of the A Advances
made by such Lender and outstanding as of the opening of business on the
Termination Date plus (ii) the amount available to be borrowed as A Advances
from such Lender as of the opening of business on the Termination Date. The
aggregate of such Committed Advances is collectively called the "Term Loans".
(b) The Term Loans shall be made upon the irrevocable
written notice (including notice via facsimile confirmed immediately by a
telephone call) of the Borrowers in the form of a Notice of Borrowing (which
notice must be received by the Administrative Agent not later than 11:00 a.m.
New York City time not less than three Business Days prior to the Termination
Date), specifying: (A) the amount of the Term Loan to each Borrower which
shall be in a principal amount not more than the sum of (i) the aggregate
principal amount of the A Advances made to such Borrower which will be
outstanding as of the opening of business on the Termination Date, plus (ii)
the amount available to be borrowed from the Lenders by such Borrower as of
the opening of business on the Termination Date; (B) whether the Term Loans
are to be comprised of Base Rate Advances or Eurodollar Advances, and the
amounts of such A Advances to each Borrower; and (C) the Interest Period
applicable to the A Advances included in such notice; provided, that, the Term
--------
Loans shall be made only if the Borrowers, in accordance with Section 2.16,
shall have requested that the then current Termination Date be extended; and,
provided further that if the Term Loans are made no Commitment Termination
- ----------------
Date of any Lender shall be extended.
The proceeds of the Term Loans, to the extent required, will be used to pay
the principal amount of the Advances outstanding as of the opening of business
on the Termination Date.
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<PAGE>
Section 2.20 Special Purpose Funding Vehicles.
--------------------------------
Notwithstanding anything to the contrary contained herein, any
Lender, (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC") the option to fund all or any part of any Loan that such Granting
Lender would otherwise be obligated to fund pursuant to this Agreement;
provided the (i) nothing herein shall constitute a commitment by an SPC to
- --------
fund any Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to fund all or any part of such Loan, the Granting Lender
shall be obligated to fund such Loan pursuant to the terms hereof. The
funding of a Loan by an SPC hereunder shall utilize the Revolving Credit
Commitment of the Granting Lender to the same extent, and as if, such Loan
were funded by such Granting Lender. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or payment under this Agreement for
which a Lender would otherwise be liable for so long as, and to the extent,
the Granting Lender provides such indemnity or makes such payment.
Notwithstanding anything to the contrary contained in this Agreement, any SPC
may disclose on a confidential basis any non-public information relating to
tits funding of Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee to such SPC. This Section may not be
amended without the prior written consent of each Granting Lender, all or any
part of whose outstanding Loans is being funded by an SPC at the time of such
amendment.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Condition Precedent to Effective Date.
-------------------------------------
The effectiveness of this Agreement and the obligation of each
Lender to make its initial Advance hereunder are subject to the condition
precedent that the Agent shall have received on or before the Effective Date
the following, each (other than items (f) and (i)) dated the Effective Date,
and each in form and substance satisfactory to the Agent and in sufficient
copies for each Lender:
(a) A certificate of an authorized officer of the Managing
Partner to the effect that the copy of the Partnership's Partnership Agreement
delivered to the Agent (and available for inspection by the Lenders) is a
complete and correct copy of the Partnership's Partnership Agreement, as
amended to date.
(b) Certified copies of resolutions of the Board of
Directors of the Managing Partner of the Partnership approving this Agreement,
and of all documents evidencing other necessary partnership action and
governmental approvals, if any, with respect to this Agreement.
(c) A certificate of the Secretary or an Assistant Secretary
of the Managing Partner of the Partnership certifying the names and true
signatures of the officers of the Managing Partner authorized to sign this
Agreement and the other documents to be delivered by the Partnership
hereunder.
(d) Certified copies of the resolutions of the Board of
Directors of the Corporation approving this Agreement, and of all documents
evidencing other necessary corporate action and governmental approvals, if
any, with respect to this Agreement;
29
<PAGE>
(e) A certificate of the Secretary or an Assistant Secretary
of the Corporation certifying the names and true signatures of the officers of
the Corporation authorized to sign this Agreement and the other documents to
be delivered by the Corporation hereunder;
(f) Certified copies of Corporation's and the Managing
Partner's Certificate of Incorporation, together with good standing
certificates from the states of their respective incorporation and their
respective principal places of business, each to be dated a recent date prior
to the Effective Date;
(g) Copies of the Corporation's and the Managing Partner's
Bylaws, certified as of the Effective Date by their respective Secretary or an
Assistant Secretary;
(h) A favorable opinion of Gibson, Dunn & Crutcher, special
counsel for the Partnership and the Corporation, substantially in the form of
Exhibit C-1 hereto, and a favorable opinion of Hayward D. Fisk, Esq., General
Counsel of the Corporation, substantially in the form of Exhibit C-2 hereto;
(i) Financial statements of the Corporation and its
Subsidiaries specified in Section 4.02(e);
(j) Evidence satisfactory to the Agent of (i) the absence of
any indebtedness of the Partnership or the Corporation under the Existing
Credit Agreement (including borrowings and accrued interest), (ii) the payment
of fees payable, if any, by the Partnership or the Corporation under the
Existing Credit Agreement and (iii) consent to the termination of the Existing
Credit Agreement on the Effective Date by any party thereto which is not a
party hereto.
Section 3.02 Conditions Precedent to Each A Borrowing.
----------------------------------------
The obligation of each Lender to make an A Advance on the occasion
of each A Borrowing (including the initial A Borrowing) shall be subject to
the further conditions precedent that (i) Agent shall have received a Notice
of A Borrowing with respect thereto in accordance with Section 2.02 and (ii)
on the date of such A Borrowing the following statements shall be true (and
each of the giving of the applicable Notice of A Borrowing and the acceptance
by the applicable Borrower of the proceeds of such A Borrowing shall
constitute a representation and warranty by the Partnership and the
Corporation that on the date of such A Borrowing such statements are true):
(a) The representations and warranties of the Partnership
and the Corporation contained in Article IV are correct on and as of the date
of such A Borrowing, before and after giving effect to such A Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were correct as of such
earlier date; and
(b) No event has occurred and is continuing, or would result
from such A Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or a Potential Event of Default.
Section 3.03 Conditions Precedent to Each B Borrowing.
----------------------------------------
The obligation of each Lender which is to make a B Advance on the
occasion of a B Borrowing (including the initial B Borrowing) to make such B
Advance as part of such B Borrowing is subject to the
30
<PAGE>
conditions precedent that (i) the Agent shall have received the written
confirmatory Notice of B Borrowing with respect thereto in accordance with
Section 2.03 and (ii) on the date of such B Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of B Borrowing
and the acceptance by the applicable Borrower of the proceeds of such B
Borrowing shall constitute a representation and warranty by the Partnership
and the Corporation that on the date of such B Borrowing such statements are
true):
(a) The representations and warranties of the Partnership
and the Corporation contained in Article IV are correct on and as of the date
of such B Borrowing, before and after giving effect to such B Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were correct as of such
earlier date, and
(b) No event has occurred and is continuing, or would result
from such B Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or a Potential Event of Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Partnership.
-------------------------------------------------
The Partnership represents and warrants as follows:
(a) Due Organization, etc.
---------------------
The Partnership is a general partnership duly organized
and validly existing under the laws of the jurisdiction indicated at the
beginning of this Agreement.
(b) Due Authorization, etc.
----------------------
The execution, delivery and performance by the
Partnership of this Agreement are within the Partnership's partnership powers,
have been duly authorized by all necessary partnership action, and do not
contravene (i) the Partnership's Partnership Agreement or (ii) applicable law
or any material contractual restriction binding on or affecting the
Partnership.
(c) Governmental Consent.
--------------------
No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Partnership of
this Agreement.
(d) Validity.
--------
This Agreement is the legal, valid and binding
obligation of the Partnership enforceable against the Partnership in
accordance with its terms subject to the effect of applicable bankruptcy,
insolvency, arrangement, moratorium and other similar laws affecting
creditors' rights generally and to the application of general principles of
equity.
(e) Condition of the Partnership.
----------------------------
The balance sheet of the Partnership and its
Subsidiaries as at April 2, 1999, and the related statements of income and
retained earnings of the Partnership and its Subsidiaries for the fiscal year
then ended, copies of which have been furnished to each Bank, fairly present
the financial condition of the Partnership and its Subsidiaries as at such
date and the results of the operations of the Partnership and its Subsidiaries
for the period ended on such date, all in accordance with GAAP consistently
31
<PAGE>
applied, and as of the Effective Date, there has been no material adverse
change in the business, condition (financial or otherwise), operations or
properties of the Partnership and its Subsidiaries, taken as a whole, since
April 2, 1999, except for any transfer of assets of the Partnership to
Subsidiaries of the Corporation of which the Corporation owns 80% or more of
the voting stock.
(f) Litigation.
----------
(i) There is no pending action or proceeding against the
Partnership or any of its Subsidiaries before any court, governmental agency
or arbitrator, and (ii) to the knowledge of the Managing Partner of the
Partnership, there is no pending or threatened action or proceeding affecting
the Partnership or any of its Subsidiaries before any court, governmental
agency or arbitrator, which in either case would reasonably be expected to
materially adversely affect the financial condition or operations of the
Partnership and its Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this Agreement.
(g) Margin Regulations.
------------------
The Partnership is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock in any manner that
violates, or would cause a violation of, Regulation T, Regulation U or
Regulation X.
(h) Payment of Taxes.
----------------
The Partnership and each of its Subsidiaries have filed
or caused to be filed all material tax returns (federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect
to which appropriate reserves are being maintained by the Partnership or any
such Subsidiary, as the case may be.
(i) Governmental Regulation.
-----------------------
The Partnership is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940, each as
amended, or to any Federal or state statute or regulation limiting its ability
to incur indebtedness for money borrowed. No Subsidiary of the Partnership is
subject to any regulation that would limit the ability of the Partnership to
enter into or perform its obligations under this Agreement.
(j) ERISA.
(i) No ERISA Event which might result in liability
(other than for premiums payable under Title IV of ERISA) has occurred or is
reasonably expected to occur with respect to any Pension Plan.
(ii) Schedule B (Actuarial Information) to the most
recently completed annual report (Form 5500 Series) for each Pension Plan,
copies of which have been filed with the Internal Revenue Service and
furnished to the Agent, is complete and, to the best knowledge of the
Partnership, accurate, and since the date of such Schedule B there has been no
material adverse change in the funding status of any such Pension Plan.
32
<PAGE>
(iii) Neither the Partnership nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Partnership, is reasonably expected
to incur, any Withdrawal Liability to any Multiemployer Plan.
(iv) Neither the Partnership nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of Title
IV of ERISA, and, to the best knowledge of the Partnership, no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA.
(k) Disclosure.
----------
No representation or warranty of the Partnership
contained in this Agreement (including any Schedule furnished in connection
herewith) contains any untrue statement of a material fact. No other
document, certificate or written statement furnished to the Agent or any
Lender by or on behalf of the Partnership for use in connection with the
transactions contemplated by this Agreement, taken as a whole with other
documents, certificates or written statements furnished contemporaneously
therewith, contains any untrue statement of fact or omits to state a material
fact (known to the Partnership in the case of any documents not furnished by
it) necessary in order to make the statements contained therein not misleading
in light of the circumstances under which the same were made.
(l) Insurance.
---------
The Partnership and its Subsidiaries (i) have in full
force insurance coverage of their respective properties, assets and business
(including casualty, general liability, products liability and business
interruption insurance) that is (A) no less protective in any material respect
than the insurance the Partnership and its Subsidiaries have carried in
accordance with their past practices or (B) prudent given the nature of the
business of the Partnership and its Subsidiaries and the prevailing practice
among companies similarly situated or (ii) maintain a plan or plans of self-
insurance to such extent and covering such risks as is usual for companies of
comparable size engaged in the same or similar business which plan or plans
provide for, among other things, adequate reserves for the risks being self-
insured.
(m) Environmental Matters.
---------------------
(i) The Partnership and each of its Subsidiaries is in
compliance in all material respects with all Environmental Laws the non-
compliance with which could reasonably be expected to have a material adverse
effect on the financial condition or operations of the Partnership and its
Subsidiaries, taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.) or any other release, emission or discharge into
the environment of any hazardous or toxic substance, pollutant or other
materials from the Partnership's or its Subsidiaries' property other than as
permitted under applicable Environmental Law and other than those which would
not have a material adverse effect on the financial condition or operations of
the Partnership and its Subsidiaries, taken as a whole. Other than disposals
for which the Partnership has been indemnified in full, all "hazardous waste"
(as defined by the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (1976) and the regulations thereunder, 40 CFR Part 261 ("RCRA"))
generated at the Partnership's or any Subsidiaries' properties have in the
past been and shall continue to be disposed of at sites which maintain valid
permits under RCRA and any applicable state or local Environmental Law.
(n) Year 2000 Compliance.
--------------------
The Partnership has developed and budgeted for a
comprehensive program to address the "year 2000 problem" (that is, the
inability of computers
33
<PAGE>
and computer software, as well as embedded microchips in non-computing
devices, to properly perform date-sensitive functions with respect to certain
dates prior to and after December 31, 1999). The Partnership has, to date,
implemented that program substantially in accordance with its timetable and
budget. The Partnership reasonably believes that the year 2000 problem will
not result in a material adverse change in the business, condition (financial
or otherwise), operations or properties of the Partnership and its
Subsidiaries, taken as a whole. The Partnership has developed adequate
contingency plans to ensure uninterrupted and unimpaired business operation in
the event of a failure of its own or a third party's systems or equipment due
to the year 2000 problem.
Section 4.02 Representations and Warranties of the Corporation.
-------------------------------------------------
The Corporation, in its capacity as a Borrower, represents and
warrants as follows, and the Corporation, in its capacity as the Guarantor, in
order to induce Lenders and Agent to accept the Guaranty and to enter into
this Agreement and to make the Advances hereunder, represents and warrants as
follows:
(a) Due Organization, etc.
---------------------
The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. The
Corporation is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions which require such qualification except to
the extent that failure to so qualify would not have a material adverse effect
on the Corporation. Each Subsidiary of the Corporation is duly organized and
validly existing under the laws of the jurisdiction of its incorporation or
formation. Each such Subsidiary is duly qualified to do business in all other
jurisdictions which require such qualification except to the extent that
failure to so qualify would not have a material adverse effect on such
Subsidiary.
(b) Due Authorization, etc.
----------------------
The execution, delivery and performance by the
Corporation of this Agreement are within the Corporation's corporate powers,
have been duly authorized by all necessary corporate action, and do not
contravene (i) the Corporation's certificate of incorporation or bylaws or
(ii) law or any material contractual restriction binding on or affecting the
Corporation.
(c) Governmental Consent.
--------------------
No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Corporation of
this Agreement.
(d) Validity.
--------
This Agreement is the legal, valid and binding
obligation of the Corporation enforceable against the Corporation in
accordance with its terms, subject to the effect of applicable bankruptcy,
insolvency, arrangement, moratorium and other similar laws affecting
creditors' rights generally and to the application of general principles of
equity.
(e) Condition of the Corporation.
----------------------------
The balance sheet of the Corporation and its
Subsidiaries as at April 2, 1999, and the related statements of income and
retained earnings of the Corporation and its Subsidiaries for the fiscal year
then ended, copies of which have been furnished to each Bank, fairly present
the financial condition of the Corporation and its Subsidiaries as at such
date and the results of the operations of the Corporation and its Subsidiaries
for the fiscal year ended on such date, all in accordance with GAAP
consistently applied, and as of the Effective Date, there has been no material
adverse change in the business,
34
<PAGE>
condition (financial or otherwise), operations or properties of the
Corporation and its Subsidiaries, taken as a whole, since April 2, 1999.
(f) Litigation.
----------
(i) There is no pending action or proceeding against the
Corporation or any of its Subsidiaries before any court, governmental agency
or arbitrator, and (ii) to the knowledge of the Corporation, there is no
pending or threatened action or proceeding affecting the Corporation or any of
its Subsidiaries before any court, governmental agency or arbitrator, which in
either case would reasonably be expected to materially adversely affect the
financial condition or operations of the Corporation and its Subsidiaries,
taken as a whole, or which purports to affect the legality, validity or
enforceability of this Agreement.
(g) Margin Regulations.
------------------
The Corporation is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock in any manner that violates
or would cause a violation of Regulation T, Regulation U or Regulation X.
(h) Payment of Taxes.
----------------
The Corporation and each of its Subsidiaries have filed
or caused to be filed all material tax returns (federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect
to which appropriate reserves are being maintained by the Corporation or any
such Subsidiary, as the case may be.
(i) Governmental Regulation.
-----------------------
The Corporation is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940, each as
amended, or to any Federal or state statute or regulation limiting its ability
to incur indebtedness for money borrowed. No Subsidiary of the Corporation is
subject to any regulation that would limit the ability of the Partnership or
the Corporation to enter into or perform their respective obligations under
this Agreement.
(j) ERISA.
(i) No ERISA Event which might result in liability
(other than for premiums payable under Title IV of ERISA) has occurred or is
reasonably expected to occur with respect to any Pension Plan.
(ii) Schedule B (Actuarial Information) to the most
recently completed annual report (Form 5500 Series) for each Pension Plan,
copies of which have been filed with the Internal Revenue Service and
furnished to the Agent, is complete and, to the best knowledge of the
Corporation, accurate, and since the date of such Schedule B there has been no
material adverse change in the funding status of any such Pension Plan.
(iii) Neither the Corporation nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Corporation, is reasonably expected
to incur, any Withdrawal Liability to any Multiemployer Plan.
35
<PAGE>
(iv) Neither the Corporation nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of Title
IV of ERISA, and, to the best knowledge of the Corporation, no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA.
(k) Disclosure.
----------
No representation or warranty of the Corporation
contained in this Agreement (including any Schedule furnished in connection
herewith) contains any untrue statement of a material fact. No other
document, certificate or written statement furnished to the Agent or any
Lender by or on behalf of the Corporation for use in connection with the
transactions contemplated in this Agreement, taken as a whole with other
documents, certificates or written statements furnished contemporaneously
therewith, contains any untrue statement of fact or omits to state a material
fact (known to the Corporation in the case of any documents not furnished by
it) necessary in order to make the statements contained therein not misleading
in light of the circumstances under which the same were made.
(l) Insurance.
---------
The Corporation and its Subsidiaries (i) have in full
force insurance coverage of their respective properties, assets and business
(including casualty, general liability, products liability and business
interruption insurance) that is (A) no less protective in any material respect
than the insurance the Corporation and its Subsidiaries have carried in
accordance with their past practices or (B) prudent given the nature of the
business of the Corporation and its Subsidiaries and the prevailing practice
among companies similarly situated or (ii) maintain a plan or plans of self-
insurance to such extent and covering such risks as is usual for companies of
comparable size engaged in the same or similar business which plan or plans
provide for, among other things, adequate reserves for the risks being self-
insured.
(m) Environmental Matters.
---------------------
(i) The Corporation and each of its Subsidiaries is in
compliance in all material respects with all Environmental Laws the non-
compliance with which could reasonably be expected to have a material adverse
effect on the financial condition or operations of the Corporation and its
Subsidiaries, taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.) or any other release, emission or discharge into
-- ---
the environment of any hazardous or toxic substance, pollutant or other
materials from the Corporation's or its Subsidiaries' property other than as
permitted under applicable Environmental Law and other than those which would
not have a material adverse effect on the financial condition or operations of
the Corporation and its Subsidiaries, taken as a whole. Other than disposals
for which the Corporation has been indemnified in full, all "hazardous waste"
(as defined by the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (1976) and the regulations thereunder, 40 CFR Part 261 ("RCRA"))
-- ---
generated at the Corporation's or any Subsidiaries' properties have in the
past been and shall continue to be disposed of at sites which maintain valid
permits under RCRA and any applicable state or local Environmental Law.
(n) Relationship between Corporation and Partnership;
-------------------------------------------------
Approval of Terms.
-----------------
(i) The Corporation is the owner, directly or indirectly
(through its Subsidiaries of which it owns at least 80% of the voting stock),
of more than 50% of the partnership interest of the Partnership; (ii) Lenders'
agreement to make the Advances to the Partnership is of substantial and
material benefit to the Corporation; and (iii) the Corporation has reviewed
and approved copies of this
36
<PAGE>
Agreement and is fully informed of the remedies Lenders may pursue upon the
occurrence of an Event of Default.
(o) Year 2000 Compliance.
--------------------
The Corporation has developed and budgeted for a
comprehensive program to address the "year 2000 problem" (that is, the
inability of computers and computer software, as well as embedded microchips
in non-computing devices, to properly perform date-sensitive functions with
respect to certain dates prior to and after December 31, 1999). The
Corporation has, to date, implemented that program substantially in accordance
with its timetable and budget. The Corporation reasonably believes that the
year 2000 problem will not result in a material adverse change in the
business, condition (financial or otherwise), operations or properties of the
Corporation and its Subsidiaries, taken as a whole. The Corporation has
developed contingency plans to address a failure of its own or a third party's
systems or equipment due to the year 2000 problem.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Partnership.
----------------------------------------
The Partnership covenants and agrees that the Partnership will, so
long as any Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, unless the Majority Lenders shall otherwise consent in
writing:
(a) Compliance with Laws, Etc.
-------------------------
Comply, and cause each of its Subsidiaries to comply,
with all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, (i) complying with all Environmental Laws and
(ii) paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith, except where failure to so comply would not have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Partnership and its Subsidiaries, taken as a
whole.
(b) Reporting Requirements.
----------------------
Furnish to the Lenders:
(i) as soon as available and in any event within 110
days after the end of each fiscal year of the Partnership, a copy of the
annual audit report for such year for the Partnership and its Subsidiaries,
containing financial statements (including a consolidated balance sheet,
consolidated statements of income and partners' equity and cash flows of the
Partnership and its Subsidiaries) for such year, accompanied by an opinion of
Deloitte & Touche or other nationally recognized independent public
accountants. The opinion shall be unqualified (as to going concern, scope of
audit and disagreements over the accounting or other treatment of offsets) and
shall state that such consolidated financial statements present fairly the
financial position of the Partnership and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years (except as stated therein) and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(ii) together with each delivery of the report of the
Partnership and its Subsidiaries pursuant to subsection (i) above, a
compliance certificate for the year
37
<PAGE>
executed by an authorized financial officer of the Partnership stating that
the signer has reviewed the terms of this Agreement and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the
transactions and condition of the Partnership and its Subsidiaries during the
accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting
period, and that the signer does not have knowledge of the existence as at the
date of the compliance certificate, of any condition or event that constitutes
an Event of Default or Potential Event of Default or, if any such condition or
event existed or exists, specifying the nature and period of existence thereof
and what action the Partnership has taken, is taking and proposes to take with
respect thereto;
(iii) as soon as possible and in any event within five
days after the occurrence of each Event of Default and each Potential Event of
Default, continuing on the date of such statement, a statement of an
authorized financial officer of the Partnership setting forth details of such
Event of Default or Potential Event of Default and the action which the
Partnership has taken and proposes to take with respect thereto;
(iv) promptly after any significant change in accounting
policies or reporting practices, notice and a description in reasonable detail
of such change;
(v) promptly and in any event within 30 days after the
Partnership or any ERISA Affiliate knows or has reason to know that any ERISA
Event referred to in clause (i) of the definition of ERISA Event with respect
to any Pension Plan has occurred which might result in liability to the PBGC a
statement of the chief accounting officer of the Partnership describing such
ERISA Event and the action, if any, that the Partnership or such ERISA
Affiliate has taken or proposes to take with respect thereto;
(vi) promptly and in any event within 10 days after the
Partnership or any ERISA Affiliate knows or has reason to know that any ERISA
Event (other than an ERISA Event referred to in (v) above) with respect to any
Pension Plan has occurred which might result in liability to the PBGC, a
statement of the chief accounting officer of the Partnership describing such
ERISA Event and the action, if any, that the Partnership or such ERISA
Affiliate has taken or proposes to take with respect thereto;
(vii) promptly and in any event within five Business Days
after receipt thereof by the Partnership or any ERISA Affiliate from the PBGC,
copies of each notice from the PBGC of its intention to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan;
(viii) promptly and in any event within seven Business
Days after receipt thereof by the Partnership or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice received by the
Partnership or any ERISA Affiliate concerning (w) the imposition of Withdrawal
Liability by a Multiemployer Plan, (x) the determination that a Multiemployer
Plan is, or is expected to be, in reorganization within the meaning of Title
IV of ERISA, (y) the termination of a Multiemployer Plan within the meaning of
Title IV of ERISA or (z) the amount of liability incurred, or expected to be
incurred, by the Partnership or any ERISA Affiliate in connection with any
event described in clause (w), (x) or (y) above;
38
<PAGE>
(ix) promptly after the commencement thereof, notice of
all material actions, suits and proceedings before any court or government
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Partnership or any of its Subsidiaries, of the type
described in Section 4.01(f);
(x) promptly after the occurrence thereof, notice of
(A) any event which makes any of the representations contained in Section
4.01(m) inaccurate in any material respect or (B) the receipt by the
Partnership of any notice, order, directive or other communication from a
governmental authority alleging violations of or noncompliance with any
Environmental Law which could reasonably be expected to have a material
adverse effect on the financial condition of the Partnership and its
Subsidiaries, taken as a whole;
(xi) promptly after any change in any Rating, a notice
of such change, which notice shall specify the new Rating, the date on which
such change was publicly announced (in the case of a public rating) or
disclosed to the Corporation (in the case of a private rating), and such other
information with respect to such change as any Lender through the Agent may
reasonably request; and
(xii) such other information respecting the condition or
operations, financial or otherwise, of the Partnership or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.
(c) Partnership Existence, Etc.
--------------------------
The Partnership will, and will cause each of its
Subsidiaries to, at all times maintain its fundamental business and preserve
and keep in full force and effect its partnership existence (except as
permitted under Section 5.02(b) hereof) and all rights, franchises and
licenses necessary or desirable in the normal conduct of its business.
(d) Maintenance of Insurance. The Partnership will and will
cause each of its Subsidiaries to maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering
such risks (i) as are usually insured by companies engaged in similar
businesses and (ii) with responsible and reputable insurance companies.
Notwithstanding the foregoing, the Partnership and its Subsidiaries may
maintain a plan or plans of self-insurance to such extent and covering such
risks as is usual for companies of comparable size engaged in the same or
similar business, which plans shall include, among other things, adequate
reserves for the risks that are self-insured. On request the Partnership will
advise the Agent and the Lenders concerning any such plan or plans for self-
insurance.
Section 5.02 Negative Covenants of the Partnership.
-------------------------------------
The Partnership covenants and agrees that, so long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, without the
written consent of the Majority Lenders:
(a) Liens, Etc.
----------
The Partnership will not create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Lien, upon or
with respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, in each case to secure or provide for the payment of any Debt
of any Person, unless the Partnership's obligations hereunder shall be secured
equally and ratably with, or prior to, any such Debt; provided however that
-------- -------
the foregoing restriction shall not apply to the following Liens which are
permitted:
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(i) set-off rights, arising by operation of law or
under any contract entered into in the ordinary course of business, and
bankers' Liens, Liens of carriers, warehousemen, mechanics, workmen,
employees, materialmen and other Liens imposed by law;
(ii) Liens in favor of the United States of America to
secure amounts paid to the Partnership or any of its Subsidiaries as advance
or progress payments under government contracts entered into by it so long as
such Liens cover only (x) special bank accounts into which only such advance
or progress payments are deposited and (y) supplies covered by such government
contracts and material and other property acquired for or allocated to the
performance of such government contracts;
(iii) attachment, judgment and other similar Liens
arising in connection with legal proceedings, provided that the execution or
other enforcement of such Liens is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings, and
provided that any such judgment does not constitute an Event of Default;
(iv) Liens on accounts receivable resulting from the sale of such accounts
receivable;
(v) Liens on assets of any Subsidiary of the
Partnership existing at the time such Person becomes a Subsidiary (other than
any such Lien created in contemplation of becoming a Subsidiary);
(vi) purchase money Liens upon or in any property
acquired or held by the Partnership or any Subsidiary in the ordinary course
of business to secure the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the acquisition of such property
(provided that the amount of Debt secured by such Lien does not exceed 100% of
the purchase price of such property and transaction costs relating to such
acquisition) and Liens existing on such property at the time of its
acquisition (other than any such Lien created in contemplation of such
acquisition); and the interest of the lessor thereof in any property that is
subject to a Capital Lease;
(vii) Liens, other than Liens described in clauses (i)
through (vi) and in clause (ix), to secure Debt not in excess of $75,000,000
principal amount at any time outstanding;
(viii) Liens resulting from any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or
in part, of any Debt secured by any Lien referred to in clauses (iv), (v) and
(vi) so long as (x) the aggregate principal amount of any such Debt shall not
increase as a result of any such extension, renewal or replacement and (y)
Liens resulting from any such extension, renewal or replacement shall cover
only such property which secured the Debt that is being extended, renewed or
replaced; and
(ix) Liens on any of the properties described in
Schedule II hereto to secure Debt, provided that the amount of such Debt does
not exceed 100% of the fair market value of the property encumbered by such
Lien at the time such Debt is incurred.
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(b) Restrictions on Fundamental Changes.
-----------------------------------
The Partnership will not, and will not permit any of its
Subsidiaries to, merge or consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or a substantial portion of its assets (whether now owned or
hereafter acquired) to any Person (other than the Corporation or any
Subsidiary of the Corporation, so long as the Corporation, directly or
indirectly, owns 80% or more of the voting stock thereof), or enter into any
partnership, joint venture, syndicate, pool or other combination, unless (a)
no Event of Default or Potential Event of Default has occurred and is
continuing or would result therefrom and (b) any prepayment required under
Section 2.06(b) has been made.
(c) Plan Terminations.
-----------------
The Partnership will not, and will not permit any ERISA
Affiliate to, terminate any Pension Plan so as to result in liability of the
Partnership or any ERISA Affiliate to the PBGC in excess of $15,000,000, or
permit to exist any occurrence of an event or condition which reasonably
presents a material risk of a termination by the PBGC of any Pension Plan with
respect to which the Partnership or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of $15,000,000.
(d) Employee Benefit Costs and Liabilities. The Partnership
will not, and will not permit any ERISA Affiliate to, create or suffer to
exist, (i) any Insufficiency with respect to a Pension Plan or any Withdrawal
Liability with respect to a Multiemployer Plan if, immediately after giving
effect thereto, such Insufficiencies and Withdrawal Liabilities of all Pension
Plans and Multiemployer Plans, respectively, of the Partnership and its ERISA
Affiliates exceeds $25,000,000 or (ii) except as provided in Section 4980B of
the Code and except as provided under the terms of any employee welfare
benefit plans provided pursuant to the terms of collective bargaining
agreements, any employee benefit plan to provide health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of the Partnership or any of its ERISA Affiliate unless the
Partnership and/or any of its ERISA Affiliates are permitted to terminate such
benefits pursuant to the terms of such employee benefit plan.
Section 5.03 Affirmative Covenants of the Corporation.
----------------------------------------
The Corporation covenants and agrees that the Corporation will,
unless and until all of the Advances shall have been indefeasibly paid in
full, the Commitments of the Lenders shall have terminated and all of the
Guarantied Obligations shall have been indefeasibly paid in full, unless
Majority Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc.
-------------------------
Comply, and cause each of its Subsidiaries to comply,
with all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, (i) complying with all Environmental Laws and
(ii) paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith, except where failure to so comply would not have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Corporation and its Subsidiaries, taken as a
whole.
(b) Reporting Requirements.
----------------------
Furnish to the Lenders:
(i) as soon as available and in any event within 60
days of the end of each of the first three fiscal quarters of each fiscal year
of the Corporation, a copy of the quarterly report for such quarter for the
Corporation and its Subsidiaries, containing
41
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financial statements (including a consolidated balance sheet, consolidated
statements of income and stockholders' equity and cash flows of the
Corporation and its Subsidiaries) for such quarter;
(ii) as soon as available and in any event within 110
days after the end of each fiscal year of the Corporation, a copy of the
annual audit report for such year for the Corporation and its Subsidiaries,
containing financial statements (including a consolidated balance sheet,
consolidated statements of income and stockholders' equity and cash flows of
the Corporation and its Subsidiaries) for such year, accompanied by an opinion
of Deloitte & Touche or other nationally recognized independent public
accountants. The opinion shall be unqualified (as to going concern, scope of
audit and disagreements over the accounting or other treatment of offsets) and
shall state that such consolidated financial statements present fairly the
financial position of the Corporation and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years (except as stated therein) and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iii) together with each delivery of the report of the
Corporation and its Subsidiaries pursuant to subsection (i) or subsection (ii)
above, a compliance certificate for the quarter or year, as applicable,
executed by an authorized financial officer of the Corporation (A) stating, in
the case of the financial statements delivered under Section 5.03(b)(i) for
such quarter, that such financial statements fairly present the financial
condition of the Corporation and its Subsidiaries as at the dates indicated
and the results of operations of the Corporation and its Subsidiaries and cash
flow for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise stated therein), subject to
changes resulting from audit and normal year-end adjustment, (B) stating that
the signer has reviewed the terms of this Agreement and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the
transactions and condition of the Corporation and its Subsidiaries during the
accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting
period, and that the signer does not have knowledge of the existence as at the
date of the compliance certificate, of any condition or event that constitutes
an Event of Default or a Potential Event of Default or, if any such condition
or event existed or exists, specifying the nature and period of existence
thereof and what action the Corporation has taken, is taking and proposes to
take with respect thereto and (C) demonstrating in reasonable detail
compliance during (as required thereunder) and at the end of such accounting
periods with the restrictions contained in Section 5.04(c).
(iv) together with each delivery of the Corporation's
annual report pursuant to subsection (ii) above, a written statement by the
independent public accountants giving the report thereon (so long as delivery
of such statement is not prohibited by AICPA rules) (A) stating that their
audit examination has included a review of the terms of this Agreement as they
relate to accounting matters and (B) stating whether, in connection with their
audit examination, any condition or event that constitutes an Event of Default
or a Potential Event of Default has come to their attention,
42
<PAGE>
and if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided, that such accountants shall
not be liable by reason of any failure to obtain knowledge of any such Event
of Default or Potential Event of Default that would not be disclosed in the
course of a reasonable audit examination;
(v) as soon as possible and in any event within five
days after the occurrence of each Event of Default and each Potential Event of
Default, continuing on the date of such statement, a statement of an
authorized financial officer of the Corporation setting forth details of such
Event of Default or Potential Event of Default and the action which the
Corporation has taken and proposes to take with respect thereto;
(vi) promptly after any significant change in
accounting policies or reporting practices, notice and a description in
reasonable detail of such change;
(vii) promptly and in any event within 30 days after the
Corporation or any ERISA Affiliate knows or has reason to know that any ERISA
Event referred to in clause (i) of the definition of ERISA Event with respect
to any Pension Plan has occurred which might result in liability to the PBGC a
statement of the chief accounting officer of the Corporation describing such
ERISA Event and the action, if any, that the Corporation or such ERISA
Affiliate has taken or proposes to take with respect thereto;
(viii) promptly and in any event within 10 days after the
Corporation or any ERISA Affiliate knows or has reason to know that any ERISA
Event (other than an ERISA Event referred to in (v) above) with respect to any
Pension Plan has occurred which might result in liability to the PBGC, a
statement of the chief accounting officer of the Corporation describing such
ERISA Event and the action, if any, that the Corporation or such ERISA
Affiliate has taken or proposes to take with respect thereto;
(ix) promptly and in any event within five Business Days
after receipt thereof by the Corporation or any ERISA Affiliate from the PBGC,
copies of each notice from the PBGC of its intention to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan;
(x) promptly and in any event within seven Business
Days after receipt thereof by the Corporation or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice received by the
Corporation or any ERISA Affiliate concerning (w) the imposition of Withdrawal
Liability by a Multiemployer Plan, (x) the determination that a Multiemployer
Plan is, or is expected to be, in reorganization within the meaning of Title
IV of ERISA, (y) the termination of a Multiemployer Plan within the meaning of
Title IV of ERISA or (z) the amount of liability incurred, or expected to be
incurred, by the Corporation or any ERISA Affiliate in connection with any
event described in clause (w), (x) or (y) above;
(xi) promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that the Corporation
or any of its Subsidiaries sends to its stockholders generally, and copies of
all regular, periodic and special reports, and all registration statements,
that the Corporation or any of its Subsidiaries files with the SEC or any
governmental authority that may be substituted therefor, or with any national
securities exchange;
43
<PAGE>
(xii) promptly after the furnishing thereof, copies of
any statement or report furnished to any other holder of the securities of the
Corporation or any of its Subsidiaries pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required to be furnished
to the Lenders pursuant to any other clause of this Section 5.03.
(xiii) promptly after the commencement thereof, notice of
all material actions, suits and proceedings before any court or government
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Corporation or any of its Subsidiaries, of the type
described in Section 4.02(f).
(xiv) promptly after the occurrence thereof, notice of
(A) any event which makes any of the representations contained in Section
4.02(l) inaccurate in any material respect or (B) the receipt by the
Corporation of any notice, order, directive or other communication from a
governmental authority alleging violations of or noncompliance with any
Environmental Law which could reasonably be expected to have a material
adverse effect on the financial condition of the Corporation and its
Subsidiaries, taken as a whole;
(xv) promptly after any change in any Rating, a notice
of such change, which notice shall specify the new Rating, the date on which
such change was publicly announced (in the case of a public rating) or was
disclosed to the Corporation (in the case of a private rating), and such other
information with respect to such change as any Lender through Agent may
reasonably request; and
(xvi) such other information respecting the condition or
operations, financial or otherwise, of the Corporation or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.
(c) Corporate Existence, Etc.
------------------------
The Corporation will, and will cause each of its
material Subsidiaries to, at all times maintain its fundamental business and
preserve and keep in full force and effect its corporate existence (except as
permitted under Section 5.04(b)) and all rights, franchises and licenses
necessary or desirable in the normal conduct of its business.
(d) Maintenance of Insurance.
------------------------
The Corporation will and will cause each of its
Subsidiaries to maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks (i) as are
usually insured by companies engaged in similar businesses and (ii) with
responsible and reputable insurance companies or associations.
Notwithstanding the foregoing, the Corporation and its Subsidiaries may
maintain a plan or plans of self-insurance to such extent and covering such
risks as is usual for companies of comparable size engaged in the same or
similar business, which plans shall include, among other things, adequate
reserves for the risks that are self-insured. On request the Corporation will
advise the Agent and the Lenders concerning any such plan or plans for self-
insurance.
(e) Relationship to the Partnership.
-------------------------------
The Corporation shall keep itself informed as to the
status of the transactions contemplated or referred to herein, the
Partnership's financial status and its ability to perform its obligations
under this Agreement.
44
<PAGE>
Section 5.04 Negative Covenants of the Corporation.
-------------------------------------
The Corporation covenants and agrees that, unless and until all of
the Advances shall have been indefeasibly paid in full, the Commitments of the
Lenders shall have terminated and all of the Guarantied Obligations shall have
been indefeasibly paid in full, unless Majority Lenders shall otherwise
consent in writing:
(a) Liens, Etc.
----------
The Corporation will not create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Lien, upon or
with respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, in each case to secure or provide for the payment of any Debt
of any Person, unless the Corporation's obligations hereunder shall be secured
equally and ratably with, or prior to, any such Debt; provided however that
-------- -------
the foregoing restriction shall not apply to the following Liens which are
permitted:
(i) set-off rights, arising by operation of law or
under any contract entered into in the ordinary course of business, and
bankers' Liens, Liens of carriers, warehousemen, mechanics, workmen,
employees, materialmen and other Liens imposed by law;
(ii) Liens in favor of the United States of America to
secure amounts paid to the Corporation or any of its Subsidiaries as advance
or progress payments under government contracts entered into by it so long as
such Liens cover only (x) special bank accounts into which only such advance
or progress payments are deposited and (y) supplies covered by such government
contracts and material and other property acquired for or allocated to the
performance of such government contracts;
(iii) attachment, judgment and other similar Liens
arising in connection with legal proceedings, provided that the execution or
other enforcement of such Liens is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings, and
provided that any such judgment does not constitute an Event of Default;
(iv) Liens on accounts receivable resulting from the
sale of such accounts receivable;
(v) Liens on assets of any Subsidiary of the
Corporation existing at the time such Person becomes a Subsidiary (other than
any such Lien created in contemplation of becoming a Subsidiary);
(vi) purchase money Liens upon or in any property acquired
or held by the Corporation or any Subsidiary in the ordinary course of
business to secure the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the acquisition of such property
(provided that the amount of Debt secured by such Lien does not exceed 100% of
the purchase price of such property and transaction costs relating to such
acquisition) and Liens existing on such property at the time of its
acquisition (other than any such Lien created in contemplation of such
acquisition); and the interest of the lessor thereof in any property that is
subject to a Capital Lease;
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(vii) Liens, other than Liens described in clauses (i)
through (vi) and in clause (ix), to secure Debt not in excess of an aggregate
of $75,000,000 principal amount at any time outstanding;
(viii) Liens resulting from any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or
in part, of any Debt secured by any Lien referred to in clauses (iv), (v) and
(vi) so long as (x) the aggregate principal amount of any such Debt shall not
increase as a result of any such extension, renewal or replacement and (y)
Liens resulting from any such extension, renewal or replacement shall cover
only such property which secured the Debt that is being extended, renewed or
replaced; and
(ix) Liens on any of the properties described in Schedule
III hereto to secure Debt, provided that the amount of such Debt does not
exceed 100% of the fair market value of the property encumbered by such Lien
at the time such Debt is incurred.
(b) Restrictions on Fundamental Changes.
-----------------------------------
The Corporation will not, and will not permit any of its
Subsidiaries to, merge or consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or a substantial portion of its assets (whether now owned or
hereafter acquired) to any Person (other than the Corporation or any
Subsidiary of the Corporation, so long as the Corporation, directly or
indirectly, owns 80% or more of the voting stock thereof), or enter into any
partnership, joint venture, syndicate, pool or other combination, unless (a)
no Event of Default or Potential Event of Default has occurred and is
continuing or would result therefrom and (b) in the case of any consolidation
or merger involving the Corporation either (i) the Corporation is the
surviving entity or (ii) the Person surviving or resulting from such
consolidation or merger shall have assumed the obligations of the Corporation
hereunder in an agreement or instrument reasonably satisfactory in form and
substance to the Agent.
(c) Financial Covenants.
-------------------
(i) Leverage Ratio.
--------------
The Corporation will not permit at any time the
ratio of Consolidated Total Debt to Consolidated Total Capitalization to
exceed 0.45 to 1.00.
(ii) Minimum Interest Coverage Ratio.
-------------------------------
The Corporation will not permit the ratio of
Consolidated Gross Cash Flow for the four consecutive fiscal quarters ending
on the last day of each fiscal quarter to Consolidated Interest Expense for
such four consecutive fiscal quarters ending on the last day of each fiscal
quarter to be less than 3.50 to 1.00.
(d) Plan Terminations.
-----------------
The Corporation will not, and will not permit any ERISA
Affiliate to, terminate any Pension Plan so as to result in liability of the
Corporation or any ERISA Affiliate to the PBGC in excess of $15,000,000, or
permit to exist any occurrence of an event or condition which reasonably
presents a material risk of a termination by the PBGC of any Pension Plan with
respect to which the Corporation or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of $15,000,000.
46
<PAGE>
(e) Employee Benefit Costs and Liabilities.
--------------------------------------
The Corporation will not, and will not permit any ERISA
Affiliate to, create or suffer to exist, (i) any Insufficiency with respect to
a Pension Plan or any Withdrawal Liability with respect to a Multiemployer
Plan if, immediately after giving effect thereto, such Insufficiencies and
Withdrawal Liabilities of all Pension Plans and Multiemployer Plans,
respectively, of the Corporation and its ERISA Affiliates exceeds $25,000,000
or (ii) except as provided in Section 4980B of the Code and except as provided
under the terms of any employee welfare benefit plans provided pursuant to the
terms of collective bargaining agreements, any employee benefit plan to
provide health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Corporation or any of its
ERISA Affiliate unless the Corporation and/or any of its ERISA Affiliates are
permitted to terminate such benefits pursuant to the terms of such employee
benefit plan.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.
-----------------
If any of the following events ("Events of Default") shall occur and
be continuing:
(a) Either Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable or either Borrower shall fail to
pay any interest on any Advance or any fees or other amounts payable hereunder
within five days of the date due; or
(b) The Guarantor shall fail to pay any Guarantied
Obligations when the same becomes due and payable; or
(c) Any representation or warranty made by the Partnership
or the Corporation herein or by the Partnership (or any of its or the Managing
Partner's officers) or the Corporation in connection with this Agreement shall
prove to have been incorrect in any material respect when made; or
(d) The Partnership shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.01(c) or 5.02, or (ii) any
other term, covenant or agreement contained in this Agreement on its part to
be performed or observed if the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after the
Partnership obtains knowledge of such breach; or
(e) The Corporation shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.03(c) or 5.04, or (ii) any
other term, covenant or agreement contained in this Agreement on its part to
be performed or observed if the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after the
Corporation obtains knowledge of such breach; or
(f) The Corporation, the Partnership or any of their
respective Subsidiaries shall fail to pay any principal of or premium or
interest on any Debt which is outstanding in a principal amount of at least
$35,000,000 in the aggregate (but excluding Debt arising under this Agreement)
of the Corporation, the Partnership or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace
47
<PAGE>
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment or by a required prepayment of insurance
proceeds or by a required prepayment as a result of formulas based on asset
sales or excess cash flow), redeemed, purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(g) The Corporation, the Partnership or any of their
respective Significant Subsidiaries shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Corporation, the
Partnership or any of their respective Significant Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Corporation, the
Partnership or any of their respective Significant Subsidiaries shall take any
corporate or partnership action to authorize any of the actions set forth
above in this subsection (g); or
(h) Any judgment or order for the payment of money in excess
of $35,000,000 shall be rendered against the Corporation, the Partnership or
any of their respective Significant Subsidiaries and is not promptly paid by
the Corporation, the Partnership or any of their respective Significant
Subsidiaries 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;
(i) Any provision of the Guaranty shall for any reason cease to
be valid and binding on the Guarantor or the Guarantor shall so state in
writing; or
(j)
(i) Any ERISA Event with respect to a Pension Plan shall
have occurred and, 30 days after notice thereof shall have been given to the
Borrowers by the Agent, (x) such ERISA Event shall still exist and (y) the sum
(determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Pension Plan and the Insufficiency of any and all other
Pension Plans with respect to which an ERISA Event shall have occurred and
then exist (or in the case of a Pension Plan with respect to which an ERISA
Event described in clause (iii) through (vi) of the definition of ERISA Event
48
<PAGE>
shall have occurred and then exist, the liability related thereto) is equal to
or greater than $15,000,000; or
(ii) Either Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred an
aggregate Withdrawal Liability for all years to such Multiemployer Plan in an
amount that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by such Borrower and its ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$15,000,000; or
(iii) Either Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title
IV or ERISA, if as a result of such reorganization or termination the
aggregate annual contributions of such Borrower and its ERISA Affiliates to
all Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan year of such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by
an amount exceeding $15,000,000; or
(k) Any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities and Exchange Act
of 1934, as amended), directly or indirectly, of securities of the Corporation
(or other securities convertible into such securities) representing 35% or
more of the combined voting power of all securities of the Corporation
entitled to vote in the election of directors, other than securities having
such power only by reason of the happening of a contingency; or
(l) The Corporation or any of its Subsidiaries shall be
suspended or debarred by any governmental entity from entering into any
government contract or government subcontract from otherwise engaging in any
business relating to government contracts or from participation in government
non-procurement programs, and such suspension or debarment could reasonably be
expected to have a material adverse effect on the business, condition
(financial or otherwise), operations or properties of the Corporation and its
Subsidiaries, taken as a whole;
then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrowers, declare the
obligation of each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrowers, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are here expressly waived by the Borrowers; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to
the Corporation, the Partnership or any of their respective Subsidiaries under
the Federal Bankruptcy Code, (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrowers.
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ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action.
------------------------
Each Lender hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including, without limitation, enforcement or
collection of the Advances and other amounts owing hereunder), the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that the Agent shall not be required to take any action
- -------- -------
which exposes the Agent to personal liability or which is contrary to this
Agreement or applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by either Borrower pursuant to the terms of
this Agreement.
Section 7.02 Agent's Reliance, Etc.
---------------------
Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Agent: (i) may treat the payee of any Advance as the
holder thereof until the Agent receives and accepts an Assignment and
Acceptance entered into by the Lender which is the payee of such Advance, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(ii) may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement on the part of
the Partnership or the Corporation or to inspect the property (including the
books and records) of the Partnership or the Corporation; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
Section 7.03 CUSA and Affiliates.
-------------------
With respect to its Commitment, the Advances made by it, CUSA shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include CUSA in its
individual capacity. CUSA and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrowers, any of their respective subsidiaries and any
Person who may do business with or own securities of either Borrower or any
such subsidiary, all as if CUSA were not the Agent and without any duty to
account therefor to the Lenders.
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Section 7.04 Lender Credit Decision.
----------------------
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 7.05 Indemnification.
---------------
The Lenders agree to indemnify the Agent (to the extent not
reimbursed by the Borrowers), ratably according to the respective principal
amounts of the A Advances then held by each of them (or if no A Advances are
at the time outstanding or if any A Advances are held by Persons which are not
Lenders, ratably according to the respective amounts of their Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Agent under this Agreement, provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, syndication,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrowers.
Section 7.06 Successor Agent.
---------------
The Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrowers and may be removed at any time with or without
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Majority Lenders' removal of
the retiring Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof or any Bank and,
in each case having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
ARTICLE VIII
THE GUARANTY
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Section 8.01 Guaranty of the Guarantied Obligations.
--------------------------------------
The Guarantor hereby irrevocably and unconditionally guaranties, as
primary obligor and not merely as surety, the due and punctual payment in full
of all Guarantied Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment or declaration of (or in certain
circumstances automatic) acceleration (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "Guarantied Obligations"
is used herein in its most comprehensive sense and includes:
(a) any and all obligations of the Partnership in respect of
notes, advances, borrowings, loans, debts, interest, fees, costs, expenses
(including, without limitation, legal fees and expenses of counsel),
indemnities and liabilities of whatsoever nature now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, arising under or in connection with this
Agreement, including those arising under successive borrowing transactions
under this Agreement which shall either continue such obligations of the
Partnership or from time to time renew them after they have been satisfied;
and
(b) those expenses set forth in Section 8.07 hereof.
This Article VIII, as it may be amended, amended and restated, supplemented or
otherwise modified from time to time, is sometimes referred to herein as the
"Guaranty" or this "Guaranty".
Section 8.02 Liability of the Guarantor.
--------------------------
The Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor
or surety other than indefeasible payment in full of the Guarantied
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, the Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not
of collectibility.
(b) The obligations of the Guarantor hereunder are
independent of the obligations of the Partnership hereunder and the
obligations of any other guarantor of the obligations of the Partnership
hereunder, and a separate action or actions may be brought and prosecuted
against the Guarantor whether or not any action is brought against the
Partnership or any of such other guarantors and whether or not the Partnership
is joined in any such action or actions.
(c) The Guarantor's payment of a portion, but not all, of
the Guarantied Obligations shall in no way limit, affect, modify or abridge
the Guarantor's liability for any portion of the Guarantied Obligations which
has not been paid. Without limiting the generality of the foregoing, if Agent
is awarded a judgment in any suit brought to enforce the Guarantor's covenant
to pay a portion of the Guarantied Obligations, such judgment shall not be
deemed to release the Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit.
(d) The Agent or any Lender, upon such terms as it deems
appropriate, without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction, limitation,
impairment, discharge or termination of the Guarantor's liability hereunder,
from time to time may (i) renew, extend (whether pursuant to Section 2.16 or
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otherwise), accelerate (in accordance with the terms of this Agreement),
increase the rate of interest on, or otherwise change the time, place, manner
or terms of payment of the Guarantied Obligations, (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guarantied Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guarantied
Obligations, any other guaranties of the Guarantied Obligations, or any other
obligation of any Person with respect to the Guarantied Obligations; (v)
enforce and apply any security now or hereafter held by or for the benefit of
Agent or any Lender in respect of this Guaranty or the Guarantied Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that Agent or Lenders, or any of them, may have against any such
security, as Agent in its discretion may determine consistent with this
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or non-judicial sales, whether
or not every aspect of any such sale is commercially reasonable, and even
though such action operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of the Guarantor against the
Partnership or any security for the Guarantied Obligations; and (vi) exercise
any other rights available to it hereunder.
(e) This Guaranty and the obligations of the Guarantor
hereunder shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason
(other than indefeasible payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following, whether
or not the Guarantor shall have had notice or knowledge of any of them: (i)
any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy (whether arising hereunder, at law, in equity or
otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guarantied Obligations; (ii) any rescission, waiver, amendment
or modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events of
default) of this Agreement, or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied Obligations,
in each case whether or not in accordance with the terms of this Agreement or
any agreement relating to such other guaranty or security; (iii) the
Guarantied Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
from the proceeds of any security for the Guarantied Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though Agent or Lenders, or any of them, might
have elected to apply such payment to any part or all of the Guarantied
Obligations; (v) any Lender's or Agent's consent to the change, reorganization
or termination of the corporate or partnership structure or existence of the
Partnership or any of its Subsidiaries and to any corresponding restructuring
of the Guarantied Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guarantied Obligations; (vii) any defenses which the Partnership may allege or
assert against Agent or any Lender in respect of the Guarantied
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Obligations, including but not limited to statute of frauds, statute of
limitations, and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of the Guarantor as an obligor in respect of the
Guarantied Obligations.
Section 8.03 Waivers by the Guarantor.
------------------------
The Guarantor hereby waives, for the benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition of
payment or performance by the Guarantor, to (i) proceed against the
Partnership, any other guarantor of the Guarantied Obligations or any other
Person, (ii) proceed against or exhaust any security held from the
Partnership, any other guarantor of the Guarantied Obligations or any other
Person, (iii) proceed against or have resort to any balance of any deposit
account or credit on the books of Agent or any Lender in favor of the
Partnership or any other Person, or (iv) pursue any other remedy in the power
of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Partnership including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Partnership from any cause other than indefeasible payment in
full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal;
(d) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this Guaranty
and any legal or equitable discharge of the Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting the Guarantor's
liability hereunder or the enforcement hereof, and (iii) promptness, diligence
and any requirement that Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto;
(e) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default hereunder or any agreement or
instrument related thereto, notices of any renewal, extension or modification
of the Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to the Partnership and notices of any of the matters
referred to in Section 8.02 and any right to consent to any thereof; and
(f) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
Section 8.04 Payment by the Guarantor.
------------------------
The Guarantor hereby agrees, in furtherance of the foregoing and not
in limitation of any other right which Agent or any other Person may have at
law or in equity against the Guarantor by virtue hereof, upon the failure of
the Partnership to pay any of the Guarantied Obligations when and as the same
shall become due,
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whether at stated maturity, by required prepayment or declaration of (or, in
certain circumstances, automatic) acceleration, (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), the Guarantor will forthwith
pay, or cause to be paid, in cash, to Agent for the benefit of Lenders, an
amount equal to the sum of the unpaid principal amount of all Guarantied
Obligations then due as aforesaid, accrued and unpaid interest on such
Guarantied Obligations (including, without limitation, interest which, but for
the filing of a petition in bankruptcy with respect to the Partnership, would
have accrued on such Guarantied Obligations, whether or not a claim is allowed
against the Partnership for such interest in any such bankruptcy proceeding)
and all other Guarantied Obligations then owed to Agent and/or Lenders as
aforesaid.
Section 8.05 Subrogation.
-----------
Until the Guarantied Obligations shall have been indefeasibly paid
in full, the Guarantor shall withhold exercise of (a) any right of
subrogation, (b) any right of contribution the Guarantor may have against any
other guarantor of the Guarantied Obligations, (c) any right to enforce any
remedy which Agent or any Lender now has or may hereafter have against the
Partnership or (d) any benefit of, and any right to participate in, any
security now or hereafter held by Agent or any Lender. The Guarantor further
agrees that, to the extent that its agreement to defer exercising any of its
rights of subrogation and contribution as set forth herein is found by a court
of competent jurisdiction to be void or voidable for any reason, any rights of
subrogation the Guarantor may have against the Partnership or against any
collateral or security, and any rights of contribution the Guarantor may have
against any other guarantor, shall be junior and subordinate to any rights
Agent or Lenders may have against the Partnership, to all right, title and
interest Agent or Lenders may have in any such collateral or security, and to
any right Agent or Lenders may have against such other guarantor. Agent, on
behalf of Lenders, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights the Guarantor
may have, and upon any such disposition or sale any rights of subrogation the
Guarantor may have shall terminate. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all
Guarantied Obligations shall not have been paid in full, such amount shall be
held in trust for Agent on behalf of Lenders and shall forthwith be paid over
to Agent for the benefit of Lenders to be credited and applied against the
Guarantied Obligations in accordance with the terms of this Agreement or any
applicable security agreement.
Section 8.06 Subordination of Other Obligations.
----------------------------------
Any indebtedness of the Partnership or any Subsidiary of the
Partnership now or hereafter held by the Guarantor is hereby subordinated in
right of payment to the Guarantied Obligations, and any such indebtedness of
the Partnership or any Subsidiary of the Partnership to the Guarantor
collected or received by the Guarantor after an Event of Default resulting
from a payment default has occurred and is continuing or after an acceleration
of the Guarantied Obligations shall be held in trust for Agent on behalf of
Lenders and shall forthwith be paid over to Agent for the benefit of Lenders
to be credited and applied against the Guarantied Obligations but without
affecting, impairing or limiting in any manner the liability of the Guarantor
under any other provision of this Guaranty.
Section 8.07 Expenses.
--------
The Guarantor agrees to pay, or cause to be paid, and to save Agent
and Lenders harmless against liability for, any and all reasonable costs and
out-of-pocket expenses (including fees and disbursements of counsel) incurred
or expended by
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Agent or any Lender in connection with the enforcement of or preservation of
any rights under this Guaranty.
Section 8.08 Continuing Guaranty; Termination of Guaranty.
--------------------------------------------
This Guaranty is a continuing guaranty and shall remain in effect
until all of the Guarantied Obligations shall have been indefeasibly paid in
full and the Commitments of all Lenders shall have terminated.
Section 8.09 Authority of the Guarantor or the Partnership.
---------------------------------------------
It is not necessary for Lenders or Agent to inquire into the
capacity or powers of the Guarantor or the Partnership or the officers,
directors or any agents acting or purporting to act on behalf of any of them.
Section 8.10 Financial Condition of the Partnership.
--------------------------------------
Any Advances may be granted to the Partnership or continued from
time to time without notice to or authorization from Guarantor regardless of
the financial or other condition of the Partnership at the time of any such
grant or continuation. Lenders and Agent shall have no obligation to disclose
or discuss with the Guarantor their assessment, or the Guarantor's assessment,
of the financial condition of the Partnership. The Guarantor has adequate
means to obtain information from the Partnership on a continuing basis
concerning the financial condition of the Partnership and its ability to
perform its obligations hereunder, and the Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
the Partnership and of all circumstances bearing upon the risk of nonpayment
of the Guarantied Obligations. The Guarantor hereby waives and relinquishes
any duty on the part of Agent or any Lender to disclose any matter, fact or
thing relating to the business, operations or conditions of the Partnership
now known or hereafter known by Agent or any Lender.
Section 8.11 Rights Cumulative.
-----------------
The rights, powers and remedies given to Lenders and Agent by this
Guaranty are cumulative and shall be in addition to and independent of all
rights, powers and remedies given to Lenders and Agent by virtue of any
statute or rule of law or under this Agreement or any agreement between the
Corporation and Lenders and/or Agent or between the Partnership and Lenders
and/or Agent. Any forbearance or failure to exercise, and any delay by any
Lender or Agent in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.
Section 8.12 Bankruptcy; Post-Petition Interest; Reinstatement
-------------------------------------------------
of the Guaranty.
---------------
(a) So long as any Guarantied Obligations remain
outstanding, the Guarantor shall not, without the prior written consent of
Agent in accordance with the terms of this Agreement, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency
proceedings of or against the Partnership. The obligations of the Guarantor
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of the Partnership or by any defense which the
Partnership may have by reason of the order, decree or decision of any court
or administrative body resulting from any such proceeding.
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(b) The Guarantor acknowledges and agrees that any interest
on any portion of the Guarantied Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if
interest on any portion of the Guarantied Obligations ceases to accrue by
operation of law by reason of the commencement of said proceeding, such
interest as would have accrued on such portion of the Guarantied Obligations
if said proceedings had not been commenced) shall be included in the
Guarantied Obligations because it is the intention of the Guarantor and Agent
that the Guarantied Obligations which are guarantied by the Guarantor pursuant
to this Guaranty should be determined without regard to any rule of bankruptcy
or other similar laws or which may relieve the Partnership of any portion of
such Guarantied Obligations. The Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent, or allow the claim of Agent in
respect of, any such interest accruing after the date on which such proceeding
is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by the Partnership, the obligations of the Guarantor
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Agent or any Lender as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guarantied Obligations for all
purposes under this Guaranty.
Section 8.13 Notice of Events.
----------------
As soon as the Guarantor obtains knowledge thereof, the Guarantor
shall give Agent written notice of any condition or event which has resulted
or might reasonably be expected to result in (a) a material adverse change in
the financial condition of the Guarantor or the Partnership, or (b) a breach
of or noncompliance with any term, condition or covenant contained in this
Agreement or in any document delivered pursuant hereto, or (c) a material
breach of, or material noncompliance with, any material term, condition or
covenant of any material contract to which the Guarantor or the Partnership is
a party or by which the Guarantor or the Partnership or the Guarantor's or the
Partnership's property may be bound, or (d) the Guarantor or any of its
Subsidiaries being suspended or debarred by any governmental entity from
entering into any government contract or government subcontract, from
otherwise engaging in any business relating to government contracts or from
participation in government non-procurement programs, if such suspension or
debarment may have a material adverse effect on the business, condition
(financial or otherwise), operations or properties of the Guarantor and its
Subsidiaries, taken as a whole.
Section 8.14 Set Off.
-------
In addition to any other rights any Lender may have under law or in
equity, if any amount shall at any time be due and owing by the Guarantor to
any Lender under this Guaranty, such Lender is authorized at any time or from
time to time, without notice (any such notice being hereby expressly waived),
to set off and to appropriate and to apply any and all deposits (including but
not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured, time or demand deposits, provisional or final deposits,
or general deposits but not special deposits) and any other indebtedness of
such Lender or any Affiliate thereof owing to the Guarantor and any other
property of the Guarantor held by such Lender to or for the credit or the
account of the Guarantor against and on account of the Guarantied Obligations
and liabilities of Guarantor to such Lender under this Guaranty, and each such
Affiliate is hereby irrevocably authorized to permit such setoff and
application.
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Section 8.15 Determination of the Guarantied Obligations.
-------------------------------------------
Notwithstanding anything to the contrary contained in this Guaranty,
the determination of the amount and terms of repayment of the Guarantied
Obligations under this Guaranty shall be consistent with such determination
pursuant to this Agreement (without giving effect to the effect upon such
determination of the Bankruptcy Code) with the result that the liability of
the Guarantor under this Guaranty will not exceed the liability which the
Guarantor would have had if it had been the Partnership under this Agreement
(plus any amounts payable pursuant to Section 8.07 hereof); provided however
that the Guarantor's agreements and waivers set forth herein with respect to
suretyship defenses (including, without limitation, defenses based on lack of
authority of the Partnership or persons signing on behalf of the Partnership
or the illegality, invalidity or unenforceability of this Agreement against
the Partnership) shall be fully effective, it being understood that the
limitation on the Guarantor's liability set forth above relates only to the
determination of the amount and payment terms of the Guarantied Obligations
and does not otherwise limit the Guarantor's obligations under this Guaranty.
Section 8.16 Successors and Assigns.
----------------------
This Guaranty is a continuing guaranty and shall be binding upon the
Guarantor and its successors and assigns. This Guaranty shall inure to the
benefit of Lenders, Agent and their respective successors and assigns. The
Guarantor shall not assign this Guaranty or any of the rights or obligations
of the Guarantor hereunder without the prior written consent of all Lenders.
Any Lender may, without notice or consent, assign its interest in this
Guaranty in whole or in part. The terms and provisions of this Guaranty shall
inure to the benefit of any assignee or transferee of any rights and
obligations under this Agreement, and in the event of such transfer or
assignment the rights and privileges herein conferred upon Lenders and Agent
shall automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions hereof.
Section 8.17 Further Assurances.
------------------
At any time or from time to time, upon the request of Agent or
Majority Lenders, the Guarantor shall execute and deliver such further
documents and do such other acts and things as Agent or Majority Lenders may
reasonably request in order to effect fully the purposes of this Guaranty.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement, nor
consent to any departure by the Partnership or the Corporation therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in
- -------- -------
writing and signed by all the Lenders, do any of the following: (a) waive any
of the conditions specified in Section 3.01, (b) increase the Commitments of
the Lenders (except pursuant to Section 2.18) or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the A
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the A Advances or any
fees or other amounts payable hereunder (except pursuant to Section 2.16), (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the A Advances, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action hereunder, (f) limit or
release the liability of the Guarantor under the Guaranty, (g)
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postpone any date fixed for payment under the Guaranty or (h) amend Section
2.16, Section 2.18 or this Section 9.01; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Lenders required above to take such action, affect the
rights or duties of the Agent under this Agreement; and provided further, that
any amendment, modification, termination or waiver of the principal amount of
any B Advance or payments or prepayments by either Borrower in respect
thereof, the scheduled maturity dates of any B Advance, the dates on which
interest is payable and decreases in interest rates borne by B Advances shall
not be effective without the written concurrence of the Lender which has
funded such B Advance.
Section 9.02 Notices, Etc.
------------
All notices and other communications provided for hereunder shall be
in writing (including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or delivered, if to the
Corporation, at its address at Computer Sciences Corporation, 2100 East Grand
Avenue, El Segundo, California, 90245, Attention: Leon J. Level; if to the
Partnership, at its address at CSC Enterprises, 2100 E. Grand Avenue, El
Segundo, California 90245, Attention: Leon J. Level; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if
to any other Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Agent, (A) for all notices and communications relating to borrowings or
repayments, including, without limitation, any Notice of Borrowing, Notice of
Conversion/Continuation or notice of repayment or prepayment, at its address
at Citicorp USA, Inc., c/o Citibank Agency Services, 2 Penns Way, Suite 200,
New Castle, Delaware 19720, Attention: Janet Wallace, and (B) for all other
notices and communications at its address at Citicorp USA, Inc., 787 West 5th
Street, 27th Floor, Los Angeles, California 90071, Attention: Walter Larsen;
or, as to the Corporation, the Partnership or the Agent, at such other address
as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Corporation, the Partnership and the
Agent. All such notices and communications shall, when personally delivered,
mailed, telecopied, telegraphed, telexed or cabled, be effective when
personally delivered, after five (5) days after being deposited in the mails,
when delivered to the telegraph company, when confirmed by telex answerback or
when delivered to the cable company, respectively, except that notices and
communications to the Agent pursuant to Article II or VII shall not be
effective until received by the Agent.
Section 9.03 No Waiver; Remedies.
-------------------
No failure on the part of any Lender or the Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 9.04 Costs, Expenses and Indemnification.
-----------------------------------
(a) The Partnership and the Corporation jointly and
severally agree to pay promptly on demand all reasonable costs and out-of-
pocket expenses of Agent in connection with the preparation, execution,
delivery, administration, syndication, modification and amendment of this
Agreement, and the other documents to be delivered hereunder or thereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Agent with respect thereto and with respect to advising the
Agent as to its rights and
59
<PAGE>
responsibilities hereunder. The Partnership and the Corporation further
jointly and severally agree to pay promptly on demand all costs and expenses
of the Agent and of each Lender, if any (including, without limitation,
reasonable counsel fees and out-of-pocket expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other documents to be delivered hereunder, including,
without limitation, reasonable counsel fees and out-of-pocket expenses in
connection with the enforcement of rights under this Section 9.04(a).
(b) If any payment of principal of any Eurodollar Rate
Advance or B Advance extended to either Borrower is made other than on the
last day of the interest period for such Advance, as a result of a payment
pursuant to Section 2.06 or acceleration of the maturity of the Advances
pursuant to Section 6.01 or for any other reason, such Borrower shall, upon
demand by any Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such
Advance.
(c) The Partnership and the Corporation jointly and
severally agree to indemnify and hold harmless the Agent, each Lender and each
director, officer, employee, agent, attorney and affiliate of the Agent and
each Lender (each an "indemnified person") in connection with any expenses,
losses, claims, damages or liabilities to which the Agent, a Lender or such
indemnified persons may become subject, insofar as such expenses, losses,
claims, damages or liabilities (or actions or other proceedings commenced or
threatened in respect thereof) arise out of the transactions referred to in
this Agreement or arise from any use or intended use of the proceeds of the
Advances, or in any way arise out of activities of the Borrowers or the
Guarantor that violate Environmental Laws, and to reimburse the Agent, each
Lender and each indemnified person, upon their demand, for any reasonable
legal or other out-of-pocket expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability, or action or other proceeding, whether commenced or threatened
(whether or not the Agent, such Lender or any such person is a party to any
action or proceeding out of which any such expense arises). Notwithstanding
the foregoing, the Corporation and the Partnership shall have no obligation
hereunder to an indemnified person with respect to indemnified liabilities
which have resulted from the gross negligence, bad faith or willful misconduct
of such indemnified person.
Section 9.05 Right of Set-off.
----------------
Upon (i) the occurrence and during the continuance of any Event of
Default and (ii) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Agent to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each 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 (time or demand, provisional
or final, or general, but not special) at any time held and other indebtedness
at any time owing by such Lender or any Affiliate thereof to or for the credit
or the account of either Borrower against any and all of the obligations of
such Borrower now or hereafter existing under this Agreement that are then due
and payable, whether or not such Lender shall have made any demand under this
Agreement, and each such Affiliate is hereby irrevocably authorized to permit
such setoff and application. Each Lender agrees promptly to notify the
applicable Borrower after any such set-off and application made by such
Lender,
60
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provided that the failure to give such notice shall not affect the validity
- --------
of such set-off and application. The rights of each Lender under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
Section 9.06 Binding Effect.
--------------
This Agreement shall be deemed to have been executed and delivered
when it shall have been executed by the Partnership, the Corporation and the
Agent and when the Agent shall have been notified by each Bank that such Bank
has executed it and thereafter shall be binding upon and inure to the benefit
of the Partnership, the Corporation, the Agent and each Lender and their
respective successors and permitted assigns, except that the Partnership and
the Corporation shall not have the right to assign their rights hereunder or
any interest herein without the prior written consent of all Lenders. At the
time of the effectiveness of this Agreement, (i) this Agreement shall
supersede the Existing Credit Agreement and (ii) the Existing Credit Agreement
shall automatically terminate and be of no further force and effect.
Section 9.07 Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the A
Advances owing to it); provided, however, that (i) each such assignment shall
-------- -------
be of a constant, and not a varying, percentage of all rights and obligations
under this Agreement (other than any B Advances), (ii) after giving effect to
any such assignment, (1) the assigning Lender shall no longer have any
Commitment or (2) the amount of the Commitment of each of the assigning Lender
and the Eligible Assignee party to such assignment (in each case determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall not be less than $10,000,000, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, and a processing and recordation fee of $3,500.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto). Any Lender may
at any time pledge or assign all or any portion of its rights hereunder to any
Affiliate of such Lender or any Federal Reserve Bank; provided, that no such
--------
pledge or assignment shall release such Lender from any of its obligations
hereunder.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such
61
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assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Partnership or
the Corporation or the performance or observance by the Partnership or the
Corporation of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and Section 4.02, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Commitment of, the Commitment Termination Date of, and,
with respect to each Borrower, principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Within five days of its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee representing that
it is an Eligible Assignee (together with a processing and recordation fee of
$3,500 with respect thereto) and upon consent of the Borrowers thereto, which
consent shall not be unreasonably withheld, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit B hereto, (1) accept such Assignment and Acceptance and (2) record
the information contained therein in the Register. All communications with
the Borrowers with respect to such consent of the Borrowers shall be either
sent pursuant to Section 9.02 or sent to the following: CSC Enterprises, 2100
E. Grand Avenue, El Segundo, California 90245, Attention: Leon J. Level,
Telephone No.: (310) 615-1728, Facsimile No.: (310) 322-9767.
(e) Each Lender may assign to one or more banks or other
entities any B Advance or B Advances made by it.
(f) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Advances owing to it; provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrowers hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such
62
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Lender shall remain the holder of any such Advance for all purposes of this
Agreement, (iv) the Borrowers, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and (v) no Lender shall grant
any participation under which the participant shall have rights to require
such Lender to take or omit to take any action hereunder or approve any
amendment to or waiver of this Agreement, except to the extent such amendment
or waiver would: (A) extend the Termination Date of such Lender; or (B)
reduce the interest rate or the amount of principal or fees applicable to
Advances or the Commitment in which such participant is participating.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Partnership or the Corporation
furnished to such Lender by or on behalf of the Partnership or the
Corporation; provided that, prior to any such disclosure, the assignee or
Participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Partnership or
the Corporation received by it from such Lender.
Section 9.08 Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
Section 9.09 Execution in Counterparts.
-------------------------
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
Section 9.10 Consent to Jurisdiction; Waiver of Immunities.
---------------------------------------------
The Partnership and the Corporation hereby irrevocably submit to the
jurisdiction of any New York state or Federal court sitting in New York, New
York in any action or proceeding arising out of or relating to this Agreement,
and the Partnership and the Corporation hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such New York state or Federal court. The Partnership and the Corporation
hereby irrevocably waive, to the fullest extent they may effectively do so,
the defense of an inconvenient forum to the maintenance of such action or
proceeding. The Partnership and the Corporation agree 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 Section 9.10 shall affect the right of any Lender or
Agent to serve legal process in any other manner permitted by law or affect
the right of any Lender or Agent to bring any action or proceeding against the
Partnership and the Corporation or their respective property in the courts of
any other jurisdiction.
Section 9.11 Waiver of Trial by Jury.
-----------------------
THE PARTNERSHIP, THE CORPORATION, THE BANKS, THE AGENT AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, OTHER LENDERS EACH HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. The Partnership, the Corporation, the Banks,
the Agent and, by its acceptance of the benefits hereof, other Lenders
63
<PAGE>
each (i) acknowledges that this waiver is a material inducement for the
Partnership, the Corporation, the Lenders and the Agent to enter into a
business relationship, that the Partnership, the Corporation, the Lenders and
the Agent have already relied on this waiver in entering into this Agreement
or accepting the benefits thereof, as the case may be, and that each will
continue to rely on this waiver in their related future dealings and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
Section 9.12 Limited Liability of Merel Corporation.
--------------------------------------
The Agent and each Lender agree for themselves and their successors
and assigns that any claim against Merel Corporation or its successors (the
"Limited Liability Partner") which may arise hereunder shall be made only
against and shall be limited to the partnership interest in the Partnership
owned by such Limited Liability Partner, any right to proceed against the
Limited Liability Partner individually or any of its respective assets, other
than with respect to its respective partnership interests in the Partnership,
being hereby expressly waived and renounced by the Agent and each Lender.
Nothing in this Section 9.12 shall be construed so as to prevent the Agent or
any Lender from commencing any legal action, suit or proceeding with respect
to, or causing legal papers to be served upon, the Limited Liability Partner
for the purpose of obtaining jurisdiction over the Partnership or the Limited
Liability Partner.
Section 9.13 Survival of Warranties.
----------------------
All agreements, representations and warranties made in this
Agreement shall survive the execution and delivery of this Agreement and any
increase in the Commitments under this Agreement.
Section 9.14 Severability.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 9.15 Headings
--------
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
64
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CSC ENTERPRISES, a Delaware partnership
By: CSC Enterprises, Inc., its Managing Partner
By /s/ Hayward D. Fisk
----------------------------------
Name: Hayward D. Fisk
Title: Vice President
COMPUTER SCIENCES CORPORATION,
a Nevada corporation
By /s/ Leon J. Level
------------------------------------
Name: Leon J. Level
Title: Vice President
CITICORP USA, INC., as Agent and a Lender
By /s/ J. Gregory Davis
------------------------------------
Name: J. Gregory Davis
Title: Vice President
Commitment: $23,750,000
S-1
<PAGE>
Commitment Banks
- ---------- -----
$21,250,000 MORGAN GUARANTY TRUST CO. OF
NEW YORK (As a lender and
as a Senior Managing Agent)
By /s/ Robert Bottamedi
-------------------------------
Name: Robert Bottamedi
Title: Vice President
$21,250,000 THE BANK OF NEW YORK (As a
Lender and as a Senior Managing Agent)
By /s/ Jonathan Rollins
-------------------------------
Name: Jonathan Rollins
Title: Vice President
$21,250,000 THE FIRST NATIONAL BANK OF CHICAGO
(As a Lender and as a
Senior Managing Agent)
By /s/ Mark A. Isley
-------------------------------
Name: Mark A. Isley
Title: FVP/Credit Officer II
$21,250,000 FIRST UNION NATIONAL BANK
(As a Lender and as a Senior Managing Agent)
By /s/ Peter D. Steffen
-------------------------------
Name: Peter D. Steffen
Title: Senior Vice President
$21,250,000 MELLON BANK N.A. (As a Lender and
as a Senior Managing Agent)
By /s/ Lawrence C. Ivey
-------------------------------
Name: Lawrence C. Ivey
Title: Vice President
S-2
<PAGE>
$16,500,000 BANCA DI ROMA (As a Lender and as
a Co-Agent)
By /s/ Augusto Bianchi
-------------------------------
Name: Augusto Bianchi
Title: First Vice President 97911
By /s/ Richard Dietz
-------------------------------
Name: Richard Dietz
Title: Vice President 97271
$16,500,000 BANCA COMMERCIALE ITALIANA
Los Angeles Foreign Branch
(As a Lender and as a Co-Agent)
By /s/ E. Bermant
-------------------------------
Name: E. Bermant
Title: First Vice President/
Deputy Manager
By /s/ J. Carlani
-------------------------------
Name: J. Carlani
Title: Vice President
$16,500,000 WELLS FARGO BANK (As a Lender
and as a Co-Agent)
By /s/ Donald A. Hartmann
-------------------------------
Name: Donald A. Hartmann
Title: Senior Vice President
By /s/ Frieda Youlios
-------------------------------
Name: Frieda Youlios
Title: Vice President
S-3
<PAGE>
$11,750,000 BANCA NAZIONALE DEL LAVORO S.p.A.
(As a Lender)
By /s/ Francesco Ingargiola
-------------------------------
Name: Francesco Ingargiola
Title: Assistant Vice President
By /s/ Leonardo Valentini
-------------------------------
Name: Leonardo Valentini
Title: First Vice President
$11,750,000 BBL INTERNATIONAL (U.K.) LTD.
(As a Lender)
By /s/ C. F. Wright
-------------------------------
Name: C. F. Wright
Title: Authorised Signatory
By /s/ M-C Swinnen
-------------------------------
Name: M-C Swinnen
Title: Authorised Signatory
$11,750,000 THE BANK OF NOVA SCOTIA
(As a Lender)
By /s/ Edward Kofman
-------------------------------
Name: Edward Kofman
Title: Relationship Manager
$11,750,000 NATIONAL WESTMINSTER BANK, Plc
(As a Lender)
By /s/ Simon Millsop
-------------------------------
Name: Simon Millsop
Title: Vice President
S-4
<PAGE>
$11,750,000 STANDARD CHARTERED BANK
(As a Lender)
By /s/ John Biscette
-------------------------------
Name: John Biscette
Title: Vice President
By /s/ Sylvia Rivera
-------------------------------
Name: Sylvia Rivera
Title: Vice President
$11,750,000 DRESDNER BANK AG,
New York and Grand Cayman Branches
(As a Lender)
By /s/ A. Richard Morris
-------------------------------
Name: A. Richard Morris
Title: First Vice President
By /s/ Vincent Carotenuto
-------------------------------
Name: Vincent Carotenuto
Title: Assistant Treasurer
S-5
<PAGE>
SCHEDULE I
APPLICABLE LENDING OFFICES
Bank Domestic Lending Office Eurodollar Lending Office
- ---- ----------------------- -------------------------
Banca Commerciale Banca Commerciale Banca Commerciale
Italiana Italiana Italiana
(Los Angeles (N.Y. Branch) (N.Y. Branch)
Foreign Branch) One South William Street One South William Street
New York, NY 10004 New York, NY 10004
Attention: Brigitte Sacin Attention: Brigitte Sacin
Tel. No. 212-607-3899 Tel. No. 212-607-3899
Fax No. 212-809-2124 Fax No. 212-809-2124
Banca di Roma Banca di Roma Banca di Roma
One Market Street, One Market Street,
Stuart Tower Stuart Tower
Suite 1000 Suite 1000
San Francisco, CA 94105 San Francisco, CA 94105
Attention: Tom Woodruff Attention: Tom Woodruff
Tel. No. 415-977-7308 Tel. No. 415-977-7308
Fax No. 415-357-9869 Fax No. 415-357-9869
Banca Nazionale del Banca Nazionale del Banca Nazionale del
Lavoro Lavoro S.p.A. Lavoro S.p.A.
New York Branch New York Branch
25 W. 51st St. 25 W. 51st St.
New York, NY 10019 New York, NY 10019
Attention: Giulio Giovine Attention: Giulio Giovine
Tel. No. 212-341-0239 Tel. No. 212-314-0239
Fax No. 212-765-2978 Fax No. 212-765-2978
BBL International BBL International BBL International
(U.K.) Limited (U.K.) Limited (U.K.) Limited
6 Broadgate 6 Broadgate
London EC2M2AJ London EC2M2AJ
Attention: Chris Wright Attention: Chris Wright
Tel. No. 44-171-392-5533 Tel. No. 44-171-392-5533
Fax No. 44-171-562-0208 Fax No. 44-171-562-0208
The Bank of New York The Bank of New York The Bank of New York
One Wall Street, One Wall Street,
2nd Floor 2nd Floor
New York, NY 10005 New York, NY 1005
Attention: Dawn Hertling Attention: Dawn Hertling
Tel. No. 212-635-6742 Tel. No. 212-635-6742
Fax No. 212-635-6933 Fax No. 212-635-6933
Schedule I-1
<PAGE>
The Bank of Nova Scotia The Bank of Nova Scotia The Bank of Nova Scotia
580 California Street 580 California Street
San Francisco, CA 94104 San Francisco, CA 94104
Attention: John Quick Attention: John Quick
Tel. No. 415-986-1100 Tel. No. 415-986-1100
Fax No. 415-397-0791 Fax No. 415-397-0791
Citicorp USA, Inc. Citicorp USA, Inc. Citicorp USA, Inc.
Citibank Agency Services Citibank Agency Services
2 Penns Way, Suite 200 2 Penns Way, Suite 200
New Castle, DE 19720 New Castle, DE 19720
Attention: Janet Wallace Attention: Janet Wallace
Tel. No.: 302-894-6029 Tel. No.: 302-894-6029
Fax No.: 302-894-6120 Fax No.: 302-894-6120
Dresdner Bank AG Dresdner Bank AG, Dresdner Bank AG,
New York Branch New York Branch
Grand Cayman Branch Grand Cayman Branch
75 Wall Street 75 Wall Street
New York, NY 10005 New York, NY 10005
Attention: Thomas A. Lowe Attention: Thomas A. Lowe
Tel. No. 212-429-3037 Tel. No. 212-429-3037
Fax No. 212-429-2780 Fax No. 212-429-2780
The First National The First National The First National
Bank of Chicago Bank of Chicago Bank of Chicago
One First National Plaza One First National Plaza
Chicago, IL 60670 Chicago, IL 60670
Attention: Sharon Bosh Attention: Sharon Bosh
Tel. No. 312-732-5694 Tel. No. 312-732-5694
Fax No. 312-732-4840 Fax No. 312-732-4840
First Union National First Union National Bank First Union National Bank
Bank 301 S. College St. 301 S. College St.
Mail Code: NC1183 Mail Code: NC1183
Charlotte, NC 28288 Charlotte, NC 28288
Attention: Todd Tucker Attention: Todd Tucker
Tel. No. 704-383-0905 Tel. No. 704-383-0905
Fax No. 704-383-7999 Fax No. 704-383-7999
Mellon Bank, N.A. Mellon Bank, N.A. Mellon Bank, N.A.
Three Mellon Center, Three Mellon Center,
Room 1203 Room 1203
Pittsburgh, PA 15259 Pittsburgh, PA 15259
Attn: Loan Administration Attn: Loan Administration
Tel. No. 412-234-7365 Tel. No. 412-234-7365
Fax No. 412-209-6122 Fax No. 412-209-6122
Schedule I-2
<PAGE>
Morgan Guaranty Trust Morgan Guaranty Trust Morgan Guaranty Trust
Company of New York Company of New York Company of New York
60 Wall Street Nassau Bahamas Office
New York, NY 10260 c/o J.P. Morgan
Attention: Dennis Wilczek Services Inc
Tel. No. 212-648-5018 Euro-Loan Servicing Unit
Fax No. 212-648-1265 500 Stanton Christiana
Road
Newark, DE 19713
Attention: Andrew Lipsett
Telex 177425MBDELUT
Fax No. 302-634-1094
National Westminster National Westminister National Westminster
Bank, Plc Bank, Plc Bank, Plc
New York Branch Nassau Branch
65 East 55th Street, c/o East 55th Street,
24th Floor 24th Floor
New York, NY 10022 New York, NY 10022
Attention: Sheila Shaw, Attention: Sheila Shaw,
Commercial Loans Commercial Loans
Tel. No. 212-401-1406/1424 Tel.No. 212-401-1406/1424
Fax No. 212-401-1494 Fax No. 212-401-1494
Standard Chartered Bank Standard Chartered Bank Standard Chartered Bank
7 World Trade Center 7 World Trade Center
New York, NY 10048 New York, NY 10048
Attn: Larry Fitzgerald Attn: Larry Fitzgerald
Tel. No. 212-667-0107 Tel. No. 212-667-0107
Fax No. 212-667-0568 Fax No. 212-667-0568
Wells Fargo Bank Wells Fargo Bank Wells Fargo Bank
707 Wilshire Boulevard, 707 Wilshire Boulevard,
16th Floor 16th Floor
MAC 2818-165 MAC 2818-165
Los Angeles, CA 90017 Los Angeles, CA 90017
Attn: Catherine Wallace Attn: Catherine Wallace
Tel. No. 213-614-4763 Tel. No. 213-614-4763
Fax No. 213-614-2569 Fax No. 213-614-2569
Schedule I-3
<PAGE>
SCHEDULE II
PROPERTY OF PARTNERSHIP
Approximate
Square
Address Footage Acreage
------- ------- -------
1. 100 Winnenden Road 147,000 51.0
Norwich, CT
2. 5021 Kearney Villa Road 161,000 9.5
San Diego, CA
3. 1500 S. Edgewood Street 20,000 3.9
Baltimore, MD
4. 45154 Underwood Lane 45,000 5.4
Sterling, VA
5. 71 Deerfield Lane 119,000 18.0
Meriden, CT
Schedule II-1
<PAGE>
SCHEDULE III
PROPERTY OF CORPORATION
Approximate
Square
Address Footage Acreage
------- ------- -------
1. 301 Harper Drive 41,000 4.2
Moorestown, NJ
2. 3001 Centreville Road 87,000 16.5
Herndon, VA
3. 2100 E. Grand Avenue 206,000 5.9
El Segundo, CA
4. 304 W. Route 38 58,000 5.5
Moorestown, NJ
5. 300 Fellowship Road 12,000 8.3
Mt. Laurel, NJ
6. 3170 Fairview Park Drive 290,000 11.1
Falls Church, VA
7. 100 Winnenden Road 149,000 51.0 *
Norwich, CT
8. 5021 Kearney Villa Road 161,000 9.5 *
San Diego, CA
9. 460 Pacific Highway 60,000 1.0
St. Leonards, Australia
10. 2 Crawford Drive 2,000 0.2
Nowra, Australia
11. 1500 S. Edgewood Street 20,000 3.9 *
Baltimore, MD
12. 45154 Underwood Lane 45,000 5.4 *
Sterling, VA
13. 71 Deerfield Lane 119,000 18.0 *
Meriden, CT
14. 9500 Arboretum Boulevard 187,000 5.4
Austin, TX
15. Retortevj 8 293,000 11.8
Copenhagen, Denmark
16. Oldenborg Alle 1 130,000 3.4
Copenhagen, Denmark
17. 21-25 Church Street West 10,000 0.3
Woking, Surrey, United Kingdom
18. 645 Paper Mill Road 183,000
Newark, DE
19. Lodgehouse, Vinters Park 79,000 11.3
Maidstone, United Kingdom
20. 221 Henderson Road 61,000 1.0
Singapore
Schedule III-1
<PAGE>
Approximate
Square
Address Footage Acreage
------- ------- -------
21. Topsail Plaza 73,000
11 Sum Street
Shatin NT, Hong Kong
22. 19 Chaoyanmen Wai Avenue 5,000
Beijing, China
23. #2 Consolate Avenue 2,000
Chendu, China
24. 836 Dong Feng Road East 6,000
Guangzhou, China
25. Parlevinkerweg 1 20,000
Venlo, Netherlands
26. Aldershot, United Kingdom 35.0
* Owned by the Partnership and also listed on Schedule II.
Schedule III-2
<PAGE>
EXHIBIT A-1
-----------
NOTICE OF A BORROWING
Citicorp USA, Inc., as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
c/o Citibank Agency Services
2 Penns Way, Suite 200
New Castle, Delaware 19720 [Date]
Attention: Janet Wallace
Ladies and Gentlemen:
Each of the undersigned, CSC Enterprises (the "Partnership") and
Computer Sciences Corporation (the "Corporation"), refers to the Credit
Agreement (Short Term Facility) dated as of August 20, 1999 (as amended from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the Partnership, the Corporation, certain
Lenders party thereto and Citicorp USA, Inc., as Administrative Agent for said
Lenders (the "Agent"). The [Partnership] [Corporation] hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
[Partnership] [Corporation] hereby requests an A Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such A Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a)
of the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is ___________,
____.
(ii) The Type of A Advances comprising the Proposed A Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$______________.
(iv) If the Type of A Advances comprising the Proposed A Borrowing
is Eurodollar Rate Advances, the Interest Period for each A
Advance made as part of the Proposed A Borrowing is __
month[s].
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
Proposed A Borrowing:
<PAGE>
(A) the representations and warranties contained in Article IV
of the Credit Agreement are correct, before and after giving
effect to the Proposed A Borrowing and to the application of
the proceeds therefrom, as though made on and as of such
date, except to the extent that any such representation and
warranty expressly relates only to an earlier date, in
which case they were correct as of such earlier date;
(B) no event has occurred and is continuing, or would result
from such Proposed A Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of Default
or a Potential Event of Default; and
(C) the amount of the Proposed A Borrowing does not exceed the
aggregate amount of the unused Commitments of the Lenders
(after giving effect to any B Reductions).
The Corporation hereby further certifies that after giving effect to
the Proposed A Borrowing, the aggregate amount of the Guarantied Obligations
(as defined in the Credit Agreement), together with all other Debt (including
any Advances under the Credit Agreement) incurred by the Corporation pursuant
to the resolutions of the Board of Directors of the Corporation authorizing
the Credit Agreement, does not exceed the aggregate amount of Debt authorized
by such resolutions.
Very truly yours,
CSC ENTERPRISES, a Delaware general partnership
By CSC Enterprises, Inc.,
Its Managing Partner
By:______________________
Title:
COMPUTER SCIENCES CORPORATION
By:___________________________
Title:
<PAGE>
EXHIBIT A-2
-----------
NOTICE OF B BORROWING
Citicorp USA, Inc., as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
c/o Citibank Agency Services
2 Penns Way, Suite 200
New Castle, Delaware 19720 [Date]
Attention: Janet Wallace
Ladies and Gentlemen:
Each of the undersigned, CSC Enterprises (the "Partnership") and
Computer Sciences Corporation (the "Corporation"), refers to the Credit
Agreement (Short Term Facility) dated as of August 20, 1999 (as amended from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the Partnership, the Corporation, certain
Lenders party thereto and Citicorp USA, Inc., as Administrative Agent for said
Lenders (the "Agent"). The [Partnership] [Corporation] hereby gives you
notice pursuant to Section 2.03 of the Credit Agreement that the [Partnership]
[Corporation] hereby requests a B Borrowing under the Credit Agreement, and in
that connection sets forth the terms on which such B Borrowing (the "Proposed
B Borrowing") is requested to be made:
(A) Date of B Borrowing ____________________
(B) Amount of B Borrowing ____________________
(C) Maturity Date ____________________
(D) Interest Rate Basis ____________________
(E) Interest Payment Date(s) ____________________
(F) [Additional Terms] ____________________
(G) [Additional Terms] ____________________
(H) [Additional Terms] ____________________
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
Proposed B Borrowing:
(a) the representations and warranties contained in Article IV of the
Credit Agreement are correct, before and after giving effect to
the Proposed B Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except to the
<PAGE>
extent that any such representation and warranty expressly relates
only to an earlier date, in which case they were correct as of
such earlier date;
(b) no event has occurred and is continuing, or would result from the
Proposed B Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or a Potential
Event of Default;
(c) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement
is within the aggregate amount of the unused Commitments of the
Lenders.
The [Partnership] [Corporation] hereby confirms that the Proposed B
Borrowing is to be made available to it in accordance with Section 2.03(a)(v)
of the Credit Agreement.
The Corporation hereby further certifies that after giving effect to
the Proposed B Borrowing, the aggregate amount of the Guarantied Obligations
(as defined in the Credit Agreement), together with all other Debt (including
any Advances under the Credit Agreement) incurred by the Corporation pursuant
to the resolutions of the Board of Directors of the Corporation authorizing
the Credit Agreement, does not exceed the aggregate amount of Debt authorized
by such resolutions.
Very truly yours,
CSC ENTERPRISES, a Delaware general partnership
CSC ENTERPRISES, INC.,
Its Managing Partner
By: _______________________
Title:
COMPUTER SCIENCES CORPORATION
By: ___________________________
Title:
<PAGE>
EXHIBIT B
---------
ASSIGNMENT AND ACCEPTANCE
Dated ________, ____
Reference is made to the Credit Agreement (Short Term Facility)
dated as of August 20, 1999 (as amended from time to time, the "Credit
Agreement") among Computer Sciences Corporation, a Nevada corporation (the
"Corporation"), CSC Enterprises, a Delaware general partnership (the
"Partnership"), the Lenders (as defined in the Credit Agreement) and Citicorp,
USA, Inc., as Administrative Agent for the Lenders (the "Agent"). Terms
defined in the Credit Agreement and not defined herein are used herein with
the same meaning.
_________________ (the "Assignor") and ___________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns without recourse to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
that interest in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the Effective Date (other than in respect of B
Advances) which represents the percentage interest specified on Schedule 1
attached hereto of all outstanding rights and obligations under the Credit
Agreement (other than in respect of B Advances), including, without
limitation, such interest in the Assignor's Commitment and the A Advances
owing to the Assignor. After giving effect to such sale and assignment, the
Assignee's Commitment, the amount of the A Advances owing to the Assignee, and
the Commitment Termination Date of the Assignee will be as set forth in
Section 2 of Schedule 1 attached hereto. In consideration of Assignor's
assignment, Assignee hereby agrees to pay to Assignor, on the Effective Date,
the amount of $__________ in immediately available funds by wire transfer to
Assignor's office at ________________________________________.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Partnership or the Corporation or the performance
or observance by the Partnership or the Corporation of any of its obligations
under the Credit Agreement or any other instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 and Section 4.02 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
<PAGE>
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vii) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty].<FN1>
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance
and recording by the Agent. The effective date of this Assignment and
Acceptance shall be the date of acceptance thereof by the Agent, unless
otherwise specified on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
[FN]
<FN1> If the Assignee is organized under the laws of a jurisdiction outside
the United States.
</FN>
<PAGE>
Schedule 1
to
ASSIGNMENT AND ACCEPTANCE
Dated ________, ____
Section 1.
- ---------
Percentage Interest: ______%
Section 2.
- ---------
Assignee's Commitment: $______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignee: $______
A Advances payable to the Assignee
Principal amount: _______
A Advances payable to the Assignor
Principal amount: _______
Assignee's Commitment Termination Date: _________, _____
Section 3.
- ---------
Effective Date<FN2>: __________, _____
[NAME OF ASSIGNOR]
By: ____________________________
Title:
[NAME OF ASSIGNEE]
By: ____________________________
Title:
[FN]
<FN2> This date should be no earlier than the date of acceptance by the Agent.
</FN>
<PAGE>
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ____ day
of _____________, _____
CITICORP USA, INC., as Agent
By: ______________________
Title:
COMPUTER SCIENCES CORPORATION,
a Nevada corporation
By: ______________________
Title:
CSC ENTERPRISES, a Delaware
general partnership
By CSC ENTERPRISES, INC.,
Its Managing Partner
By: ____________________________
Title:
<PAGE>
EXHIBIT C-1
-----------
[FORM OF OPINION OF ________________________________]
[EFFECTIVE DATE]
Citicorp USA, Inc., as Administrative Agent
under the Credit Agreement
(as hereinafter defined), and each
of the lending institutions party
to the Credit Agreement and listed
on Schedule I attached hereto
(collectively, the "Banks")
787 West 5th Street
27th Floor
Los Angeles, California 90071
Re: Credit Agreement (Short Term Facility) dated as of August 20, 1999,
among CSC Enterprises, Computer Sciences Corporation, the Banks and
Citicorp USA, Inc., as Administrative Agent for the Banks
-------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to CSC Enterprises, a Delaware
general partnership (the "Partnership"), and Computer Sciences Corporation, a
Nevada corporation (the "Corporation"), in connection with the Credit
Agreement (Short Term Facility) dated as of August 20, 1999 (the "Credit
Agreement") among the Partnership, the Corporation, the Banks and Citicorp
USA, Inc., as Administrative Agent for the Banks (in such capacity, the
"Agent"). Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as therein defined. This opinion is rendered to you
pursuant to Section 3.01(h) of the Credit Agreement.
In rendering this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction as being true copies, of
the following documents and instruments:
(a) the Credit Agreement;
(b) a certificate of even date herewith of the corporate
secretary of the Managing Partner attaching thereto and certifying (i) a copy
of the certificate of incorporation and by-laws of the Managing Partner in
effect on the date hereof, (ii) a copy of the corporate resolutions of the
Managing Partner in respect of the Credit Agreement and the transactions
contemplated thereby, (iii) incumbencies of certain officers of the Managing
Partner, and (iv) a copy of the partnership agreement of the Partnership (the
"Partnership Agreement") in effect on the date hereof; and
<PAGE>
(c) certificates of even date herewith of officers of the
Managing Partner and the Corporation setting forth or certifying certain
factual matters, a copy of such certificates having been delivered to the
Agent.
The Partnership and the Corporation are sometimes referred to herein
collectively as the "Obligors".
We have also reviewed such other documents, certificates or
statements of public officials and such other persons, and have considered
such matters of law, as we deem necessary for purposes of this opinion.
We have, with your permission, assumed, without investigation or
inquiry with respect to any such matter, that:
(a) The Corporation is a validly existing corporation in good
standing under the laws of the State of Nevada and has all requisite corporate
power and authority to execute, deliver and perform its obligations under the
Credit Agreement. The Credit Agreement has been duly authorized by all
necessary corporate action on the part of the Corporation and has been duly
executed and delivered by the Corporation. The Managing Partner is a
corporation validly existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power and authority to execute and
deliver the Credit Agreement on behalf of the Partnership. The execution and
delivery of the Credit Agreement by the Managing Partner, acting in its
capacity as the managing general partner on behalf of the Partnership, has
been duly authorized by all necessary corporate action on behalf of the
Managing Partner, and the Credit Agreement has been duly executed and
delivered by the Managing Partner. We understand that there has been
delivered to you an opinion of Hayward D. Fisk, Vice President and General
Counsel of the Corporation, dated the Effective Date to such effect.
(b) To the extent that the obligations of the Obligors may be
dependent upon such matters, each of the Banks and the Agent has all requisite
power and authority to execute, deliver and perform its obligations under the
Credit Agreement; the execution and delivery of the Credit Agreement and
performance of such obligations have been duly authorized by all necessary
action on the part of such Bank and the Agent; the Credit Agreement has been
duly executed and delivered by such Bank or the Agent; and the Credit
Agreement is the legal, valid and binding obligation of such Bank or the
Agent, enforceable against it in accordance with its terms.
(c) The signatures on all documents examined by us are genuine,
and, except as to the Partnership (with respect to which the following
assumption in this clause (c) does not apply), all individuals executing such
documents were thereunto duly authorized.
(d) The documents submitted to us as originals are authentic and
the documents submitted to us as certified or reproduction copies conform to
the originals.
<PAGE>
With respect to questions of fact material to the opinions expressed
below, we have, with your consent, relied upon certificates of public
officials and officers of the Managing Partner and the Corporation, in each
case without having independently verified the accuracy or completeness
thereof.
With respect to any opinion herein in regard to the existence or
absence of facts that is stated to be to our actual knowledge, such statement
means that, during the course of our representation of the Obligors, no
information has come to the attention of the lawyers in our Firm participating
in such representation that has given them actual knowledge of facts contrary
to the existence or absence of the facts indicated. No inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of the Obligors.
Based upon the foregoing, and subject to the qualifications,
exceptions, limitations and assumptions hereinafter set forth, we are of the
opinion that:
1. The Partnership is a general partnership validly existing and in
good standing under the laws of the State of Delaware and has all requisite
partnership power and authority to own and operate its properties, to conduct
its business as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all necessary
partnership action on the part of the Partnership and has been duly executed
and delivered by the Partnership. The Credit Agreement constitutes the legal,
valid and binding obligation of the Partnership, enforceable against the
Partnership in accordance with its terms. The Credit Agreement constitutes
the legal, valid and binding obligation of the Corporation, enforceable
against the Corporation in accordance with its terms.
3. Neither the execution and delivery by the Partnership of the
Credit Agreement, nor consummation of the transactions contemplated thereby,
nor compliance on or prior to the date hereof with the terms and conditions
thereof by the Partnership conflicts with or is a violation of, the
Partnership Agreement, as in effect on the date hereof. Neither the execution
and delivery by each Obligor of the Credit Agreement, nor the consummation of
the transactions contemplated thereby, nor compliance on or prior to the date
hereof with the terms and conditions thereof by each Obligor will result in a
violation of any applicable federal or New York law, governmental rule or
regulation or of the General Corporation Law of the State of Delaware.
4. Neither the making of the Advances on the Effective Date
pursuant to, nor application of the proceeds thereof in accordance with, the
Credit Agreement, will violate Regulations T, U or X promulgated by the Board
of Governors of the Federal Reserve System.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority of the United States of America or the State of New York or under
the General Corporation Law of the State of Delaware is required by law to be
obtained or made by either Obligor for the execution, delivery and performance
<PAGE>
by such Obligor of the Credit Agreement, except such filings as may be
required in the ordinary course to keep in full force and effect rights and
franchises material to the business of the Obligors and in connection with the
payment of taxes.
6. Neither Obligor is an "investment company" or a Person directly
or indirectly "controlled" by or "acting on behalf of" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Each of the opinions set forth, above are subject to the following
qualifications, exceptions, limitations and assumptions:
(a) Our opinions are subject to (i) the effect of bankruptcy,
insolvency, reorganization, moratorium, arrangement or other similar laws
affecting enforcement of creditors' rights generally, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or laws affecting
distributions by corporations to stockholders and (ii) general principles of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or other equitable relief (whether sought in a proceeding
at law or in equity).
(b) We have assumed that no agreement exists that would expand,
modify or otherwise affect the respective rights or obligations of the parties
to the Credit Agreement. We have no actual knowledge of any such agreement.
(c) We express no opinion with respect to the legality, validity,
binding effect or enforceability of (i) any provision of the Credit Agreement
regarding the remedies available to any party which permit any party to take
discretionary action which is arbitrary, unreasonable or capricious, or is not
taken in good faith or in a commercially reasonable manner, whether or not
such action is permitted under the Credit Agreement; (ii) any provision of the
Credit Agreement to the effect that rights or remedies are not exclusive or
may be exercised without notice, that every right or remedy is cumulative and
may be exercised in addition to any other right or remedy, that the election
of some particular remedy does not preclude recourse to one or more others or
that failure to exercise or delay in exercising rights or remedies will not
operate as a waiver of any such right or remedy; (iii) any waiver or any
consents (whether or not characterized as a waiver or consent in the Credit
Agreement) relating to the rights of the Obligors or duties owing to the
obligations existing as a matter of law to the extent such waivers or consents
are found by a court to be against public policy or are ineffective pursuant
to New York statutes or judicial decisions; (iv) provisions construed as
imposing penalties or forfeitures; (v) waivers of broadly or vaguely stated
rights or unknown future rights; (vi) any provisions waiving the applicable
statute of limitations; (vii) any rights of setoff, other than as provided by
Section 151 of the Debtor and Creditor Law of the State of New York, as
interpreted by applicable judicial decisions; (viii) any provision relating to
indemnification or contribution to the extent such indemnification or
contribution relates to any claims made under the Federal securities laws or
state securities or Blue Sky laws or is otherwise limited by public policy; or
<PAGE>
(ix) any provisions requiring written amendments, waivers or other
modifications of the Credit Agreement insofar as they suggest that the
doctrine of promissory estoppel might not apply.
We render no opinion herein as to matters involving the laws of any
jurisdiction other than the United States of America and the State of New
York; however, we are generally familiar with the General Corporation Law of
the State of Delaware and the Uniform Partnership Law as in effect in the
State of Delaware and have made such inquiries as we consider necessary to
render our opinions expressed in Paragraphs 1, 2, 3 and 5 hereof. This
opinion is limited to the effect of the present state of the laws of the
United States of America and the State of New York and, to the extent set
forth in the preceding sentence, the State of Delaware. In rendering this
opinion, we assume no obligation to revise or supplement this opinion should
the present laws, or the interpretation thereof, be changed.
This opinion is rendered to the Agent and the Banks as of the date
hereof in connection with the Credit Agreement, and may not be relied upon by
any person other than the Agent and the Banks and their permitted assignees,
or by them in any other context, and may not be furnished to any other person
or entity without our prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their
normal examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action to which the Bank is a party
arising out of the transactions contemplated by the Credit Agreement, or (v)
in connection with the assignment of or sale of participations in the
Advances.
Very truly yours,
[FIRM NAME]
<PAGE>
Schedule I
to
[FORM OF OPINION OF _____________________________________________]
[List lending institutions party to Credit Agreement]
<PAGE>
EXHIBIT C-2
-----------
[FORM OF OPINION OF GENERAL COUNSEL OF
COMPUTER SCIENCES CORPORATION]
[EFFECTIVE DATE]
Citicorp USA, Inc., as Administrative Agent
under the Credit Agreement
(as hereinafter defined), and each
of the lending institutions party
to the Credit Agreement and listed
on Schedule I attached hereto
(collectively, the "Banks")
787 West 5th Street
27th Floor
Los Angeles, California 90071
RE: Credit Agreement (Short Term Facility) dated as of August 20, 1999,
among Computer Sciences Corporation, CSC Enterprises, the Banks and
Citicorp USA, Inc., as Administrative Agent for the Banks
-------------------------------------------------------------------
Ladies and Gentlemen:
I am the General Counsel of Computer Sciences Corporation, a Nevada
corporation (the "Corporation"). This opinion is being rendered to you in
connection with the Credit Agreement (Short Term Facility) dated as of August
20, 1999 (the "Credit Agreement") among the Corporation, CSC Enterprises, a
Delaware general partnership (the "Partnership"), the Banks and Citicorp USA,
Inc., as Administrative Agent for the Banks (in such capacity, the "Agent").
Terms defined in the Credit Agreement and not otherwise defined herein are
used herein as therein defined.
In rendering this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction as being true copies, of
the following documents and instruments:
(a) the Credit Agreement;
(b) a certificate of even date herewith of the corporate
secretary of the Corporation as to corporate resolutions in respect of the
Credit Agreement and the transactions contemplated thereby, incumbencies of
certain officers and a copy of the certificate of incorporation and by-laws of
the Corporation in effect on the date hereof;
(c) a certificate of even date herewith of the corporate
<PAGE>
secretary of the Managing Partner as to corporate resolutions in respect of
the Credit Agreement and the transactions contemplated thereby, incumbencies
of certain officers and a copy of the certificate of incorporation and by-laws
of the Managing Partner in effect on the date hereof; and
(d) certificates of recent date of the Secretary of State of the
State of Nevada as to the legal existence of each of the Corporation and the
Managing Partner in good standing under the laws of the State of Nevada.
I have also reviewed such other documents, certificates or
statements of public officials and such other persons, and have made such
other investigation of fact and law, as I deem necessary for purposes of this
opinion.
With respect to questions of fact material to the opinions expressed
below, I have, with your consent, relied upon certificates of public officials
and officers of the Corporation and the Managing Partner, in each case without
having independently verified the accuracy or completeness thereof.
Based upon the foregoing, I am of the opinion that:
1. The Corporation is a validly existing corporation in good
standing under the laws of the State of Nevada, and is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions
which require such qualification, except to the extent that failure to so
qualify would not have a material adverse effect on the Corporation. The
Corporation has all requisite corporate power and authority to own and operate
its properties, to conduct its business as presently conducted, and to
execute, deliver and perform its obligations under the Credit Agreement. The
Managing Partner is a corporation validly existing and in good standing under
the laws of the State of Nevada and has all requisite corporate power and
authority to own and operate its properties, to conduct its business as
presently conducted and to execute and deliver the Credit Agreement on behalf
of the Partnership.
2. The Credit Agreement has been duly authorized by all necessary
corporate action on the part of the Corporation, and has been duly executed
and delivered by the Corporation. The execution and delivery of the Credit
Agreement by the Managing Partner, acting in its capacity as the managing
general partner of the Partnership, has been duly authorized by all necessary
corporate action on behalf of the Managing Partner, and the Credit Agreement
has been duly executed and delivered by the Managing Partner.
3. Neither the execution and delivery of the Credit Agreement by
the Corporation, nor the consummation of the transactions contemplated
thereby, nor compliance on or prior to the date hereof with the terms and
conditions thereof, conflicts with or results in a breach of the certificate
of incorporation or bylaws of the Corporation, each as in effect on the date
hereof.
4. Neither the execution and delivery by the Corporation of the
Credit Agreement, performance of its respective obligations thereunder, nor
<PAGE>
the consummation of the transactions contemplated thereby, constitutes a
violation of the General Corporation Law of the State of Nevada.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority is required to be obtained or made by the Corporation under the
General Corporation Law of the State of Nevada for the execution, delivery and
performance by the Corporation of the Credit Agreement, except such filings as
may be required in the ordinary course to keep in full force and effect rights
and franchises material to the business of the Corporation and in connection
with the payment of taxes.
I am admitted to the practice of law before the United States
Supreme Court and several lower federal courts as well as the state courts of
Kansas, Pennsylvania and the District of Columbia. My opinion with respect to
foreign qualification contained in numbered paragraph 1 is based solely upon a
review of unofficial compilations of the provisions of the statutory laws of
the relevant jurisdictions. I expressly disclaim any obligation or
undertaking to update or modify this opinion as a consequence of any future
changes in the applicable laws or in the facts bearing upon this opinion.
I call to your attention that I am not admitted to the practice of
law in the State of Nevada; however I am familiar with the General Corporation
Law of the State of Nevada and have made such inquiries as I consider
necessary to render the opinions expressed herein with respect to the General
Corporation Law of the State of Nevada.
This opinion is limited to the effect of the present state of the
General Corporation Law of the State of Nevada and the laws of the relevant
jurisdictions, to the extent set forth in the preceding two paragraphs. In
rendering this opinion, I assume no obligation to revise or supplement this
opinion should the present laws, or the interpretation thereof, be changed.
This opinion is rendered to the Agent and the Banks as of the date
hereof in connection with the Credit Agreement, and may not be relied upon by
any person other than the Agent and the Banks and their permitted assignees,
or by them in any other context, and may not be furnished to any other person
or entity without my prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their
normal examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action to which the Bank is a party
arising out of the transactions contemplated by the Credit Agreement, or (v)
in connection with the assignment of or sale of participations in the
Advances.
Very truly yours,
Hayward D. Fisk, Esq.
<PAGE>
Schedule I
to
[FORM OF OPINION OF GENERAL COUNSEL OF
COMPUTER SCIENCES CORPORATION]
[List lending institutions party to Credit Agreement]
<PAGE>
EXHIBIT D
[FORM OF EXTENSION REQUEST]
CSC ENTERPRISES,
A DELAWARE GENERAL PARTNERSHIP
COMPUTER SCIENCES CORPORATION
REQUEST FOR EXTENSION OF COMMITMENT
TERMINATION DATE
[Date]
[Name and Address of Lender]
Pursuant to that certain Credit Agreement (Short Term Facility)
dated as of August 20, 1999 (as amended from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined)
among Computer Sciences Corporation (the "Corporation"), CSC Enterprises (the
"Partnership"), certain Lenders party thereto and Citicorp USA, Inc., as
Administrative Agent for said Lenders (the "Agent"), this represents the
Partnership's and the Corporation's joint request to extend the Commitment
Termination Date of each Lender pursuant to Section 2.16 of the Credit
Agreement.
Each of the undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
effectiveness of the extension requested hereby ("Proposed Extension"):
(a) the representations and warranties contained in Article IV
of the Credit Agreement are correct, before and after giving
effect to the Proposed Extension, except to the extent that
any such representation and warranty expressly relates only
to an earlier date, in which case they were correct as of
such earlier date;
(b) no event has occurred and is continuing, or would result from
the Proposed Extension, which constitutes an Event of Default
or a Potential Event of Default; and
(c) the balance sheet of the Corporation and its Subsidiaries as
at ___________, ____<FN1>, and the related statements of
income and retained earnings of the Corporation and its
Subsidiaries for the fiscal year then ended, and the balance
sheet of the Partnership and its Subsidiaries as at
[FN]
<FN1> Insert date of the most recent audited balance sheet of the Corporation
and its Subsidiaries.
</FN>
<PAGE>
_________, ____<FN2>, and the related statements of income
and retained earnings of the Partnership for the fiscal year
then ended, copies of each of which have been furnished to
each Lender, fairly present the financial condition of the
Corporation and its Subsidiaries or the Partnership and its
Subsidiaries, as the case may be, as at such applicable date
and the results of the operations of Corporation and its
Subsidiaries or the Partnership and its Subsidiaries, as the
case may be, for the fiscal year ended on such applicable
date, all in accordance with GAAP consistently applied, and
since __________, ____<FN1>, and ___________, ____<FN2>,
respectively, there has been no material adverse change in
the business, condition (financial or otherwise), operations
or properties of the Corporation and its Subsidiaries, taken
as a whole, or of the Partnership and its Subsidiaries,
taken as a whole.
The Corporation hereby further certifies that after giving effect to
the Proposed Extension, the aggregate amount of the Guarantied Obligations (as
defined in the Credit Agreement), together with all other Debt (including any
Advances under the Credit Agreement) incurred by Corporation pursuant to the
resolutions of the Board of Directors of the Corporation authorizing the
Credit Agreement, does not exceed the aggregate amount of Debt authorized by
such resolutions.
Please indicate your consent to such extension of the Commitment
Termination Date by signing the attached copy of this request in the space
provided below and returning the same to the undersigned by _______________,
_____<FN3>.
Very truly yours,
CSC ENTERPRISES, a Delaware general partnership
By CSC ENTERPRISES, INC.,
Its Managing Partner
By: _____________________
Title:
[FN]
<FN2> Insert date of the most recent audited balance sheet of the Partnership
and its Subsidiaries.
<FN3> Insert fifteenth day prior to the Current Termination Date (as defined
in Section 2.16 of Credit Agreement).
<PAGE>
COMPUTER SCIENCES CORPORATION
By: __________________________
Title:
The undersigned Lender
hereby consents to the extension
of its Commitment Termination
Date as requested above. This
consent is subject to the terms
of Section 2.16 of the Credit
Agreement.
DATED: ___________________
[LENDER]
By: _____________________
Title:
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-START> Apr-02-1999
<PERIOD-END> Oct-01-1999
<PERIOD-TYPE> 6-MOS
<CASH> 262,919
<SECURITIES> 0
<RECEIVABLES> 2,058,600
<ALLOWANCES> 74,857
<INVENTORY> 0
<CURRENT-ASSETS> 2,555,983
<PP&E> 2,509,474
<DEPRECIATION> 1,346,383
<TOTAL-ASSETS> 5,131,384
<CURRENT-LIABILITIES> 1,740,959
<BONDS> 667,413
<COMMON> 160,571
0
0
<OTHER-SE> 2,444,148
<TOTAL-LIABILITY-AND-EQUITY> 5,131,384
<SALES> 0
<TOTAL-REVENUES> 4,189,480
<CGS> 0
<TOTAL-COSTS> 3,549,817
<OTHER-EXPENSES> 366,194
<LOSS-PROVISION> 2,949
<INTEREST-EXPENSE> 18,329
<INCOME-PRETAX> 252,191
<INCOME-TAX> 84,300
<INCOME-CONTINUING> 167,891
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167,891
<EPS-BASIC> 1.05
<EPS-DILUTED> 1.03
</TABLE>
<TABLE>
EXHIBIT 28
COMPUTER SCIENCES CORPORATION
REVENUES BY MARKET SECTOR
(In millions)
<CAPTION>
Fiscal Period Ended % of Total
--------------------- ---------------------
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SECOND QUARATER
Global commercial:
U.S. commercial $ 859.9 $ 744.5 41% 40%
Europe 621.5 542.6 29 29
Other International 195.4 119.8 9 7
-------- -------- -------- --------
Total 1,676.8 1,406.9 79 76
U.S. federal government:
Department of Defense 270.3 277.2 13 15
Civil agencies 179.0 163.7 8 9
-------- -------- -------- --------
Total 449.3 440.9 21 24
-------- -------- -------- --------
Total revenues $2,126.1 $1,847.8 100% 100%
======== ======== ======== ========
SIX MONTHS
Global commercial:
U.S. commercial $1,696.1 $1,462.4 41% 41%
Europe 1,190.8 1,031.5 28 29
Other International 402.9 223.4 10 5
-------- -------- -------- --------
Total 3,289.8 2,717.3 79 75
U.S. federal government:
Department of Defense 549.4 565.7 13 16
Civil agencies 350.3 318.7 8 9
-------- -------- -------- --------
Total 899.7 884.4 21 25
-------- -------- -------- --------
Total revenues $4,189.5 $3,601.7 100% 100%
======== ======== ======== ========
</TABLE>
</PAGE>
