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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: NOVEMBER 13, 1996
DATE OF EARLIEST EVENT REPORTED: OCTOBER 24, 1996
PRIMARK CORPORATION
(Exact name of registrant as specified in its charter)
1-8260
(Commission File Number)
MICHIGAN 38-2383282
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
1000 WINTER STREET, SUITE 4300N, WALTHAM, MA 02154
(Address of principal executive offices) (Zip Code)
617-466-6611
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 24, 1996, Primark Corporation (the "Company") and Primark Information
Services UK Limited, a wholly owned subsidiary of the Company, acquired the
entire equity interest of ICV Limited, pursuant to the terms of an Agreement for
sale/purchase of the issued share capital of ICV Limited, between D. Taylor Esq.
and others, Primark Information Services UK Limited and the Company. The total
purchase price of $92,207,000 consisted of $23,987,000 in cash, 2,200,000 shares
of Primark common stock and $8,250,000 in six year notes (the "ICV notes"),
issued by the Company to the sellers. The ICV notes require interest to be paid
at LIBOR adjusted quarterly. The total consideration paid was determined based
upon arms length negotiations between the Company and the sellers.
Headquartered in London, ICV supplies a variety of real-time data and news
products to equity traders and investors in London and throughout the United
Kingdom. The company also provides computer and communications facilities
management services and sells turnkey electronic wall display systems for use on
exchange floors and in financial dealing rooms. ICV's revenues for the year
ended December 31, 1995 were approximately $40,100,000.
In connection with the purchase the Company entered into a $10,250,000 Credit
Agreement dated October 23, 1996 between, among others, the Company and Mellon
Bank, N.A. Pursuant to the terms of such Credit Agreement, Mellon Bank issued,
for the account of the Company, standby letters of credit which are used solely
to provide credit enhancement for the payment of the ICV Notes.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired:
In accordance with Item 7(a)(4) of Form 8-K, the financial statements required
by this item 7(a) shall be filed by amendment to this Form 8-K as soon as
practicable but no later than January 7, 1997.
(b) Pro Forma Financial Information:
In accordance with Item 7(b)(2) of Form 8-K, the pro forma financial information
required by this item 7(b) shall be filed by amendment to this Form 8-K as soon
as practicable but no later than January 7, 1997.
(c) Exhibits:
Exhibit
Number Description of Document
------- -----------------------
2-1 Agreement for sale/purchase of the issued share capital
of ICV Limited, between D. Taylor Esq. and others,
Primark Information Services UK Limited and Primark
Corporation dated October 24, 1996
10-1 Credit Agreement dated as of October 23, 1996 between
Primark Corporation, Lenders Parties, and Mellon Bank,
N.A.
99-1 Press Release dated October 24, 1996
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SIGNATURE
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.
PRIMARK CORPORATION
Date: November 13, 1996 By: /s/ STEPHEN H. CURRAN
-------------------------------------
Stephen H. Curran
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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Exhibit 2.1
DATED 24th October 1996
D. TAYLOR ESQ. AND OTHERS (1)
PRIMARK INFORMATION SERVICES UK LIMITED (2)
AND
PRIMARK CORPORATION (3)
--------------------
AGREEMENT
FOR SALE/PURCHASE OF THE ISSUED SHARE
CAPITAL OF ICV LIMITED
--------------------
NORTON ROSE
LONDON
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CONTENTS
--------
PAGE
RECITALS
CLAUSE HEADING
1 Definitions and interpretation ............................1
2 Purpose of this Agreement .................................9
3 Sale of the Sale Shares ...................................9
4 Consideration ............................................10
5 Completion ...............................................12
6 Post-Completion matters ..................................16
7 Warranties and qualifications to Warranties ..............16
8 Restrictive Covenants ....................................24
9 Indemnities ..............................................27
10 Continuing effects of this Agreement .....................28
11 Announcements ............................................28
12 Releases, waivers etc., by the Purchasers ................28
13 Notices ..................................................29
14 Time .....................................................30
15 Entire Agreement .........................................31
16 Alterations ..............................................31
17 Severability .............................................31
18 Counterparts .............................................31
19 Payment of costs .........................................32
20 Successors and Assigns ...................................32
21 Applicable law and submission to jurisdiction ............32
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SCHEDULE
1 Vendors, the Warrantors and the Covenantors ..............34
Part A - The Vendors of the Sale Shares ..................34
Part B - The Warrantors ..................................37
Part C - The Covenantors .................................38
2 The Company ..............................................39
3 The Subsidiaries .........................................40
4 The Properties ...........................................43
5 DELETED - INTENTIONALLY LEFT BLANK .......................46
6 Directors and employees
Part A - Additional Directors ............................46
Part B - Persons to receive Service Agreements ...........46
Part C - Persons to receive deed of variation to
current service agreements ......................46
Part D- Resigning Directors ..............................46
Part E- New and Resigning Secretaries ....................47
7 DELETED - INTENTIONALLY LEFT BLANK
8 Matters warranted ........................................53
Part A - Warranties from the Vendors .....................53
Part B - General Warranties from the Warrantors ..........55
Part C - Taxation and social security warranties
from the Warrantors..............................83
9 Purchasers' Warranties ...................................93
Agreed form documents
Service Agreements and amendments to contracts of employment
Loan Notes
Management Accounts
Letter from Cambridge Micro Applications (1985) Limited
Certificates referred to in clause 5.1(a)(viii)
Consents referred to in clause 5.1(b)(vii)
Letters of Credit
Legal opinions referred to in clause 5.1(d)(iv)
Taxation Deed
Registration Side Letter
Directors' and Secretary's resignation letters
GNI termination letter
Side letter relating to Royal Blue Technologies plc
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THIS AGREEMENT is dated 24th October 1996 and is made BETWEEN:
(1) The persons whose names and addresses are stated in Part A of schedule 1
(together the "VENDORS" and each a "VENDOR");
(2) PRIMARK INFORMATION SERVICES UK LIMITED (No. 2701093) whose registered
office is at Monmouth House, 58-64 City Road, London EC1Y 2AL ("PUK")
which expression shall include its successors and assigns) and
(3) PRIMARK CORPORATION whose principal place of business is 1000 Winter
Street, Suite 4300N Waltham, MA 02154 USA ("P CORPORATION"), PUK and P
Corporation being together ("THE PURCHASERS").
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
-------------------------------
1.1 In this Agreement unless the context otherwise requires:
"ACCOUNTS" means the Company's audited annual accounts (as defined in
section 262 CA 1985) for the financial year ended on the Accounts Date,
including the notes to those accounts and the associated directors' and
auditors' reports;
"ACCOUNTS DATE" means 31 December 1995;
"ACTUAL TAXATION LIABILITY" means a liability to make an actual payment
of, or of an amount in respect of, Taxation whether or not such Taxation
is also or alternatively chargeable against or attributable to any other
person;
"AUDITORS" means the auditors of the Company namely Robson Rhodes,
Chartered Accountants, of 186 City Road, London EC1V 2MU and where
applicable the auditors of the Subsidiaries;
"BOARD" means the board of directors of the Company;
"BUSINESS DAY" means a day on which banks are ordinarily open for the
transaction of normal banking business in London and Boston;
"CA 1985" means the Companies Act 1985;
"CASH VALUE" means the aggregate of the amount of cash in hand, deposited
but uncleared cheques (which subsequently clear in the normal period) and
sums standing to the credit of a current or other account of the Company
with banks or other financial institutions in the United Kingdom or
elsewhere as at the close of business on the Completion Date after
deduction of: (a) all outstanding cheques or other instruments drawn on or
before the Completion Date on such accounts; and (b) all sums paid or
payable by the Company in respect of which the
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passed a special resolution pursuant to section 155 CA1985 on 21 October
1996; and (c) all Taxation payable by the Company in respect of the
payments described in (b) above;
"CAUSE" means in relation to a Covenantor: (a) failure by him to carry out
any lawful and reasonable instruction of his employer after warning in
accordance with the Company's written disciplinary procedure; or (b) gross
negligence; or (c) misconduct by wilful violation of established corporate
policies; or (d) commission of any criminal offence other than a road
traffic offence without a custodial sentence; or (e) any other
circumstance, act or omission entitling his employer to terminate his
Contract of Employment summarily;
"COMPANY" means ICV Limited (No. 1557537);
"COMPLETION" means completion of the sale and purchase of the Sale Shares
by the performance by the parties of their respective obligations under
clause 5;
"COMPLETION DATE" means the date hereof,
"CONFIDENTIAL INFORMATION" means trade secrets and information equivalent
to them (including but not limited to formulae, processes, methods,
knowledge, business plans, forecasts, customer lists, sales information
and Know-how) in connection with the products and the services supplied by
the Group and the customers and suppliers of the Group and which are for
the time being confidential to any Group Company;
"CONTRACT OF EMPLOYMENT" means in relation to any Covenantor his service
agreement or contract of employment with P Corporation or any of its
subsidiaries from time to time (including any Group Company);
"COVENANTORS" means those of the Vendors whose names are set out in Part C
of schedule 1;
"DISCLOSURE LETTER" means the letter of the same date as this Agreement
from the Warrantors to the Purchasers disclosing certain matters in
relation to the Warranties which has been delivered to the Purchasers
prior to the execution of this Agreement;
"ENVIRONMENT" means the environment as defined in section 1(2) of the
Environmental Protection Act 1990;
"ENVIRONMENTAL CLAIM" means any claim, prosecution, lawful demand, action,
official warning, abatement or other order or notice (conditional or
otherwise), relating to Environmental Matters under or requiring
compliance with the terms of any Environmental Licence or Environmental
Law;
"ENVIRONMENTAL LAW" includes all or any law, statute, rule, regulation,
treaty, directive, direction, by-law, order, notice or, demand, decision
of the courts or
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of any governmental authority or agency or any regulatory body in any
relevant jurisdiction including the European Union relating to
Environmental Matters binding upon the Company and/or the business carried
on by the Company;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent
or other approval required at any time by the Company or in relation to
the business carried on by the Company pursuant to any Environmental Law;
"ENVIRONMENTAL MATTERS" includes any of the following: (1) any generation,
deposit, disposal, keeping, treatment, transportation, transmission,
handling or manufacture of any Relevant Substance; (2) nuisance, noise,
defective premises, health and safety at work or elsewhere; and (3) the
pollution, conservation or protection of the Environment whether relating
to man or any living organisms supported by the Environment or to natural
resources or any other matter whatsoever affecting the Environment or any
part of it;
"GROUP" means the Company and the Subsidiaries;
"GROUP COMPANY" means each and any body corporate in the Group save that
in relation to clause 8 (restrictive covenants) and the definitions used
therein (including Prohibited Area, Restricted Services and Restricted
Business) Group Company shall have the following meaning:
(a) in relation only to the restrictive covenants given by David Taylor
set out in clause 8 "Group Company" shall mean any holding company
for the time being of the Company (including P Corporation) or any
subsidiary for the time being of the Company or of any such holding
company with which he has been involved in the ordinary course of
his duties;
(b) in relation to the restrictive covenants given by all Covenantors
(save for David Taylor) "Group Company" shall mean each and any body
corporate in the Group together with such of PUK and its
subsidiaries with which the respective Covenantor shall have been
involved in the ordinary course of his duties.
"GUARANTEE" means any guarantee, indemnity, suretyship, letter of comfort
or other assurance, security or right of set-off given or undertaken by a
person to secure or support the obligations (actual or contingent) of any
third party and whether given directly or by way of counter-indemnity to
any third party who has provided a Guarantee;
"ICTA 1988" means the Income and Corporation Taxes Act 1988;
"INTELLECTUAL PROPERTY RIGHTS" means all patents, registered designs,
trade marks and service marks (whether registered or not), copyright,
design rights, and all similar property rights, including those subsisting
(in any part of the world) in inventions, designs, drawings, performances,
computer programs, semiconductor topographies, confidential information,
business or brand names,
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goodwill or the style of presentation of goods or services and in
applications for protection thereof,
"INTERIM ACCOUNTS" means the unaudited consolidated accounts of the Group
for the period from 1 January 1996 to 30 June 1996 (both dates inclusive)
and for the avoidance of doubt such accounts shall comprise the profit and
loss account, the balance sheet, the cash flow statement and the notes to
them;
"KNOW-HOW" means all confidential industrial and commercial information
and techniques, accounts, records and information (wherever situate)
pertaining to the activities of the Group;
"2002 LOAN NOTES" means variable rate unsecured loan notes 2002 of P
Corporation in the agreed form having an aggregate face value of
US$8,250,000 (eight million two hundred and fifty thousand);
"MANAGEMENT ACCOUNTS" means the management accounts of the Group for the
period from 1 July 1996 to 30 September 1996 (both dates inclusive) in the
agreed form;
"NEW AUDITORS" means Deloitte & Touche, Chartered Accountants, of
Stonecutter Court, 1 Stonecutter Street, London EC4A 4TR or such other
firm of Chartered Accountants as the Purchasers may from time to time
appoint as reporting accountants for the purposes of this Agreement;
"NOMINATED ACCOUNT" means the Vendors' Solicitors' client account numbered
12455082 at Royal Bank of Scotland PLC of Fleet Street, London - Sort Code
16-00-11 or such other account or accounts as the Vendors' Solicitors
shall specify;
"P CORPORATION GROUP" means P Corporation and any subsidiaries of P
Corporation from time to time;
"P CORPORATION SHARES" means the 2,200,000 shares of common stock in P
Corporation to be issued to the Vendors pursuant to clause 5;
"P CORPORATION WARRANTIES" means the warranties set out in schedule 9;
"PROHIBITED AREA" means the United Kingdom and such other territories in
which any Group Company (as defined in relation to clause 8) has a
commercial operation which produces an annual revenue of at least 5 per
cent. of its total annual revenue;
"PROPERTIES" means the properties details of which are set out in schedule
4;
"PURCHASE PRICE" means the sum of Sterling (pound)28,255,844;
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"PURCHASERS' SOLICITORS" means Norton Rose, of Kempson House, Camomile
Street, London EC3A 7AN;
"REGISTRATION SIDE LETTER" means the letter in the agreed form to be
entered into on Completion between P Corporation and the Vendors, relating
to the registration of the P Corporation Shares;
"RELATED COMPANY" in relation to any company means any subsidiary or
holding company of that company or any subsidiary of that holding company;
"RELEVANT SUBSTANCE" means any substance whatsoever (whether in a solid or
liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) or waste (as defined in the
Environmental Protection Act 1990) which is capable of causing harm to man
or any other living organism supported by the Environment or damaging the
Environment or public health or welfare;
"RELIEF" means any loss, relief, allowance, exemption, set-off, deduction,
credit or other relief relating to any Taxation or to the computation of
income, profits or gains for the purposes of any Taxation;
"THE RESTRICTED PERIOD" shall mean: (a) in relation to Adrian Dear only
the period of eighteen months from the Completion Date; (b) in relation to
David Taylor only the period of three years from the Completion Date and
thereafter the period of 12 months from the Termination Date; and (c) in
relation to the individuals listed in Part C of schedule 6 (save for David
Taylor) the period of three years from the Completion Date and thereafter
until the Termination Date or if the Covenantor's employment is terminated
for Cause 6 months from the Termination Date provided that if the Contract
of Employment of any such individual is terminated during such three year
period by his employer other than for Cause the relevant period shall be
from Completion to the date 6 months from the Termination Date. If any
such individual terminates his employment as a result of a breach by the
employer of such individual's Contract of Employment or if his employer
terminates his Contract of Employment by reason of redundancy the
Restricted Period shall cease on the Termination Date;
"RESTRICTED PRODUCTS" means:
(a) all products which are produced, distributed or sold by the Company
or any other Group Company at the Completion Date; and
(b) any other products which are of a type similar to and competing with
any of the products referred to in (a) above
which the relevant Covenantor has been involved with in the ordinary
course of his duties or had knowledge of and, in each case, for as long as
a Covenantor is employed or retained by a Group Company, any future
Restricted Products created during such employment or retainer;
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"RESTRICTED SERVICES" means:
(a) all services which are supplied by the Company or any other Group
Company at the Completion Date; and
(b) any other services which are of a type similar to and competing with
any of the services referred to in (a) above
which the relevant Covenantor has been involved with in the ordinary
course of his duties or had knowledge of and, in each case, for as long as
a Covenantor is employed or retained by a Group Company any future
Restricted Services provided during such employment or retainer;
"SALE SHARES" means all of the 1,100,000 ordinary shares of 10p each in
the capital of the Company in issue at the date of this Agreement referred
to in column (3) of Part A of schedule l;
"SECURITIES ACT" means the US Securities Act of 1933 (as amended);
"SECURITY INTEREST" means a mortgage, lien, pledge, charge, hypothecation
or other security interest (or an agreement or commitment to create any of
them), but excluding:
(a) any lien arising in the ordinary course of business to secure
amounts of (pound)5,000 or less;
(b) any unpaid vendor's or supplier's lien arising in the ordinary
course of any Group Company's trading business to secure amounts
due in respect of goods or services sold or supplied; and
(c) liens arising by operation of law, including a banker's lien;
"SERVICE AGREEMENTS" means the service agreements to be entered into
pursuant to clause 5.1(b)(v) between the Company and the persons listed in
Part B of schedule 6;
"SUBSIDIARIES" means the companies specified in schedule 3;
"SUBSIDIARY" means a subsidiary (as defined by sections 736 and 736A CA
1985) or a subsidiary undertaking (as defined by section 258 CA 1985);
"TAXATION" has the meaning given to that expression in the Taxation Deed;
"TAXATION AUTHORITY" has the meaning given to that expression in the
Taxation Deed;
"TAXATION DEED" means the deed in the agreed form;
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"TAX ELECTION" includes, but is not limited to, any election, claim,
disclaimer or waiver relating to Taxation;
"TAX RETURN" means any report, return, computation, estimate, declaration,
statement or other written information to be supplied to any Taxation
Authority in relation to any Taxation;
"TAX WARRANTIES" means the Warranties set out in Part C of schedule 8;
"TRUST" means the Murray 1987 Settlement;
"TERMINATION DATE" means, in relation to any Covenantor, the date of
termination (for whatever reason and whether in breach of contract or
not) of his Contract of Employment;
"US TRUST" means the Timothy James Ralph Sheldon Trust U/D/T May 27 1987;
"US TRUSTEES" means K Ahl and E Kaier as trustees of the US Trust
"VALUE ADDED TAX" or "VAT" means value added tax as provided for in the
Value Added Tax Act 1994 and legislation supplemental thereto or in any
primary or secondary legislation promulgated by the European Community or
any official body or agency thereof, any similar or equivalent tax imposed
by any country or jurisdiction other than the United Kingdom and any
similar or turnover tax replacing or introduced in addition to any of the
same;
"VENDORS' SOLICITORS" means Garrett & Co., of 180 Strand, London WC2R 2NN;
"VENDOR TRUSTEES" means Goddard Trustees (Jersey) Limited and Christopher
Murray;
"WARRANTIES" means the warranties contained in or referred to in clause
7.2;
"WARRANTORS" means those persons whose names are set out in Part B of
schedule 1.
1.2 In this Agreement unless the context otherwise requires:
(a) a document expressed to be "IN THE AGREED FORM" means a document in
a form which has been agreed by the parties contemporaneously with
or before the execution of this Agreement and which has, for the
purposes of identification, been initialled by them or on their
behalf;
(b) references to a clause or schedule are to a clause, of or a schedule
to, this Agreement, references to this Agreement include its
schedules and
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references in a schedule or part of a schedule to a paragraph are to
a paragraph of that schedule or that part of that schedule;
(c) references to this Agreement or any other document or to any
specified provision of this Agreement or any other document are to
this Agreement, that document or that provision as in force for the
time being and as amended from time to time in accordance with the
terms of this Agreement or that document or, as the case may be,
with the agreement of the relevant parties;
(d) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, legal status, Court,
official or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal term;
(e) words importing the singular include the plural and vice versa,
words importing a gender include every gender and references to
persons include corporations, partnerships and other unincorporated
associations or bodies of persons;
(f) the contents table and the descriptive headings to clauses,
schedules and paragraphs are inserted for convenience only, have no
legal effect and shall be ignored in the interpretation of this
Agreement;
(g) the word "company", except where used in reference to the Company,
shall be deemed to include any partnership, undertaking or other
body of persons, whether incorporated or not incorporated and
whether now existing or hereafter to be formed;
(h)
(i) all agreements, obligations and liabilities on the part of
each of the Vendors (other than the Warrantors) are several;
(ii) unless expressly stated to the contrary, all agreements,
obligations and liabilities (whether under warranties,
representations, indemnities or otherwise) on the part of the
Warrantors, whether in their capacity as Vendors or Warrantors
shall be joint and several. Without limiting the generality of
the foregoing and without prejudice to sub-clause (h)(i)
above, the Warrantors shall be jointly and severally liable in
respect of all agreements, obligations and liabilities of each
of the Vendors other than the Warrantors.
(i) the words and phrases "other", "including" and "in particular" shall
not limit the generality of any preceding words or be construed as
being
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limited to the same class as the preceding words where a wider
construction is possible.
1.3 In this Agreement, unless the context otherwise requires:
(a) "enactment" means any statute or statutory provision (whether of the
United Kingdom or elsewhere), subordinate legislation, as defined
by section 21(1) Interpretation Act 1978, and any other subordinate
legislation made under any such statute or statutory provision;
(b) a reference to any enactment shall be construed as including a
reference tO:
(i) any enactment which that enactment has directly or indirectly
replaced (whether with or without modification); and
(ii) that enactment as re-enacted, replaced or modified from time
to time, whether before, on or after the date hereof provided
that the Vendors shall not be placed under any greater
obligations than those obligations imposed on them under any
enactment in force on the Completion Date.
2 PURPOSE OF THIS AGREEMENT
-------------------------
2.1 This is an Agreement for the sale and purchase of the Sale Shares.
3 SALE OF THE SALE SHARES
-----------------------
3.1 The Vendors (relying, as the Purchasers acknowledge, on the P Corporation
Warranties and undertakings of the Purchasers referred to or contained in
this Agreement) shall sell to the Purchasers and the Purchasers (relying,
as the Vendors hereby acknowledge, on the Warranties, undertakings and
indemnities of the Vendors referred to or contained in this Agreement or
the Taxation Deed) shall purchase from the Vendors the Sale Shares.
3.2
(a)
(i) Each of the Vendors (save for the Vendors referred to in
clause 3.2(a)(ii) below) shall sell and transfer the Sale
Shares held by each Vendor as set forth in schedule 1 opposite
his name free from all encumbrances and with full title
guarantee.
(ii) The Vendor Trustees and the US Trustees shall sell and
transfer free from all encumbrances and with limited title
guarantee all of the Sale Shares held by them in that
capacity.
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(iii) For the purposes of this clause 3.2 "encumbrances" includes
all claims, liens, charges, encumbrances and equities and
other rights exercisable by third parties including any
Security Interest.
3.3 Title to, beneficial ownership of, and any risk attaching to, the Sale
Shares shall pass on Completion, and the Sale Shares shall be sold and
purchased together with all rights and benefits attached or accruing to
them at Completion (including the right to receive all dividends,
distributions or any return of capital declared, paid or made by the
Company on or after Completion).
3.4 Each of the Vendors hereby waives any rights of pre-emption conferred on
him by the Articles of Association of the Company or otherwise over Sale
Shares hereby agreed to be sold by the other Vendors including, without
limitation the rights conferred on Messrs. Taylor and Sharples by article
41 thereof.
3.5 The Purchasers shall not be obliged to complete the purchase of any of the
Sale Shares unless the purchase of all the Sale Shares is completed
simultaneously.
4 CONSIDERATION
-------------
4.1 The consideration for the sale of the Sale Shares shall be:
(a) the payment on Completion by PUK to the Vendors of the Purchase
Price; and
(b) the issue of the 2002 Loan Notes; and
(c) the issue of the P Corporation Shares.
4.2 The Purchase Price, the 2002 Loan Notes and the P Corporation Shares shall
be payable to and issued to the Vendors in the respective proportions and
amounts set out in columns 4(a), 4(b) and 4(c) of Part A of schedule 1
opposite their respective names.
4.3 If the Cash Value is:
(a) a positive sum which is greater than [Pounds Sterling]8 million, the
Purchasers shall pay to the Vendors by way of additional purchase
consideration in accordance with clauses 4.4 and 4.5 a sum equal to
the difference;
(b) a positive sum which is less than [Pounds Sterling]8 million, the
Vendors shall pay to the Purchasers in accordance with clauses 4.4
and 4.5 a sum equal to the difference;
(c) a negative sum, the Vendors shall pay to the Purchasers in
accordance with clauses 4.4 and 4.5 an amount equal to the negative
sum plus [Pounds Sterling]8 million;
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(b) a positive sum which is less than [Pounds Sterling]8 million, the
Vendors shall pay to the Purchasers in accordance with clauses 4.4
and 4.5 a sum equal to the difference;
(c) a negative sum, the Vendors shall pay to the Purchasers in
accordance with clauses 4.4 and 4.5 an amount equal to the negative
sum plus [Pounds Sterling]8 million;
(d) [Pounds Sterling]8 million, no payment or further payment from the
Purchasers or either of them to the Vendors or from the Vendors to
the Purchasers or either of them shall be made.
4.4
(a) The Purchasers shall either: (a) make a provisional payment on
Completion, under clause 4.3(a); or (as the case may be) (b)
provisionally reduce the purchase consideration paid on Completion
in respect of any sum payable by the Vendors under clauses 4.3(b) or
(c), in each case calculated by reference to the provisional Cash
Value agreed between the parties on the basis of statements and
other information to be provided by the Vendors under clause
4.4(b)(iii);
(b) Within 14 days after Completion the parties shall determine the
actual Cash Value and any consequent adjustment to the provisional
payment or provisional reduction in the purchase consideration (as
the case may be) required for the purposes of calculating final
amounts due under clauses 4.3(a) to (c). For this purpose each of
the Vendors hereby irrevocably authorises Mr. K. Underwood and Mr.
D. Taylor to agree the actual Cash Value and any such consequent
adjustment on their behalf. In the event that the parties cannot
reach agreement within such period any party may refer the matter
for resolution to an independent accountant (to act as expert not
arbitrator) agreed between the parties or, in default of agreement,
appointed on the application of either the Vendors or the
Purchasers, by the President of the Institute of Chartered
Accountants of England and Wales. Every sum payable as a result of
adjustment under this clause shall be paid within three business
days after the date of determination of the adjustment; and
(i) (where such sum is payable to the Vendors) by electronic funds
transfer for value on the same day into the Nominated Account
(and the Vendors' Solicitors are hereby authorised to receive
it in such account) and payment of it into such account shall
constitute a good discharge to the Purchasers in respect of it
and the Purchasers shall have no obligation as to the
distribution or allocation of such sum between the Vendors; or
(ii) (where such sum is payable to the Purchasers) by electronic
funds transfer for value on the same day into the client
account of the
ll
<PAGE> 15
Purchasers' Solicitors, account number 16122869 - Sort Code
15-10-00 at the Royal Bank of Scotland plc, 62-63 Threadneedle
Street, P.O. Box 412, London EC2R 8LA (and the Purchasers'
Solicitors are hereby authorised to receive it in such
account) and payment of it into such accounts shall constitute
a good discharge to the Vendors in respect of it and the
Vendors shall have no obligation as to the distribution or
allocation of such sum between the Purchasers.
(iii) The Vendors shall procure that bank statements in relation to
all the current and other accounts of the Company with banks
or other financial institutions in the United Kingdom or
elsewhere are produced as at close of business on the date
immediately preceding the Completion Date together with
details of all cheques or other instruments drawn on any such
accounts and that the same are delivered to the Purchasers at
Completion.
4.5 All payments to or from each Vendor under clauses 4.3 and 4.4 shall be
payable in the proportion that the Sale Shares sold by such Vendor bears
to the aggregate number of Sale Shares. All payments to or by each of the
Purchasers under clauses 4.3 and 4.4 shall be payable in the proportion
that the number of Sale Shares acquired by that Purchaser bears to the
aggregate number of Sale Shares.
5 Completion
5.1 Completion shall take place at the offices of the Purchasers' Solicitors
or at such other place as the parties may agree on the Completion Date
when all (but not part only unless the parties shall so agree) of the
following business shall be transacted:
(a) The Vendors shall deliver to the Purchasers or (in the case of the
items referred to in clause 5.1(a)(iii) make available for
collection by the Purchasers or their authorised representatives):
(i) transfers in respect of the Sale Shares being transferred by
each of them duly executed and completed in favour of the
Purchasers as to 720,795 Sale Shares in favour of P
Corporation and as to 379,205 Sale Shares in favour of PUK or
as either of them may direct or have directed, together with
the certificates for the Sale Shares therefor and the duly
executed powers of attorney or other authorities under which
any of the transfers and/or this Agreement or any other
document required to be entered into pursuant to the terms
hereof have been executed and certified copies of the Minutes
recording the Resolution of the Boards of Directors or
shareholders of such of the Vendors as are companies
authorising the sale of the Sale Shares held by those Vendors
and the execution of the transfers in respect of them;
12
<PAGE> 16
copies of its Memorandum and Articles of Association or other
constitutional documents;
(iv) the Taxation Deed duly executed by each of the parties
thereto (other than the Purchasers);
(v) duly executed transfers (in favour of such person or persons
as the Purchasers may direct or have directed) of all shares
or other interests in the Subsidiaries not registered in the
name of the Company or any other Group Company together with
the certificates therefor;
(vi) a certificate of non-crystallisation in respect of the
debenture dated 21 October 1994 creating fixed and floating
charges over the undertaking, property and assets of the
Company in favour of The Royal Bank of Scotland plc;
(vii) the Disclosure letter; and
(viii) a certificate from each of the Vendors who is to receive P
Corporation Shares in each case in the agreed form and
completed Forms 8 and 1001 from each of the Vendors who is to
receive 2002 Loan Notes.
(b) The Vendors shall:
(i) cause the transfers mentioned in clause 5. l(a)(i) and 5.
l(a)(v) to be resolved to be registered (subject only to
their being duly stamped) notwithstanding any provision
to the contrary in the Articles of Association or other
constitutional documents of any relevant Group Company;
(ii) cause the persons named in Part A of schedule 6 to be
validly appointed as additional directors of the Company
and the person named in Part E(i) of schedule 6 to be
validly appointed as Secretary of the Company;
(iii) on such appointments being made, cause the persons named in
Part D of schedule 6 to cease to be Directors and employees
and the person named in Part E(ii) of schedule 6 to cease
to be Secretary of the Company and further cause all such
persons to deliver to the Purchaser their written
resignations of their respective offices and letters
(executed as deeds) in the agreed form;
(iv) procure that the Auditors shall resign their office as
Auditors of each Group Company by depositing their written
notice of resignation at its registered office in
accordance with section 392
13
<PAGE> 17
CA 1985 along with a statement under section 394 of that Act
that there are no circumstances connected with their ceasing
to hold office which they consider should be brought to the
attention of the members or creditors of that Group Company;
(v) procure that the Service Agreements and variations to
contracts of employment (in each case in the agreed form) are
executed by the persons listed in Part B and Part C of
schedule 6; and
(vi) provide the Purchasers with evidence that Mr. A. Diprose, Miss
J. Faulkner-Smith and Miss J. Norombaba are no longer employed
by any Group Company together with confirmation in the agreed
form to the Company that such persons have no claim for loss
of office or compensation or otherwise against any Group
Company; and
(vii) provide evidence to the Purchasers that the following consents
and releases have been obtained in the agreed form;
(a) consent from each of the London Stock Exchange and
McGraw Hill International (UK) Limited to the transfer
of the Sale Shares by the Vendors to the Purchasers;
(b) a release from McGraw Hill International (UK) Limited to
the Company and Mr. David Taylor of their respective
obligations as set out in agreements dated 22 December
1992 and letters dated 6th April 1993, 1 November 1995,
8th January 1996, 8th February 1996 and 8th March 1996;
(c) Consents to change of control from Extel Financial
Limited, AFX News Limited and Midas-Kapiti International
Limited;
(d) a letter agreement in the agreed form evidencing the
transfer of intellectual property rights from Cambridge
Micro Applications (1985) Limited to the Company.
(c) PUK shall pay the Purchase Price by electronic funds transfer
for value on the day of Completion to the Nominated Account
(and the Vendors' Solicitors are hereby authorised to receive
it in such account) and payment of the Purchase Price into
such account shall constitute a good discharge to PUK in
respect of it and PUK shall have no obligation as to the
distribution or allocation of the Purchase Price between the
Vendors; and
14
<PAGE> 18
(d) P Corporation shall:
(i) issue the 2002 Loan Notes, to the Vendors in the amounts set
out in column (4)(b) of Part A of schedule 1 opposite their
respective names;
(ii) issue the P Corporation Shares to the Vendors in the amounts
set out in column (4)(c) of Part A of schedule 1 opposite
their respective names and each of the Vendors hereby
instructs P Corporation to register the P Corporation Shares
issued to him subject to and in accordance with the
Registration Side Letter;
(iii) deliver in accordance with the letter dated 23 October 1996
from Reed Shaw Smith & McClay to each of those Vendors who
have received the 2002 Loan Notes a letter of credit in the
agreed form executed by Mellon Bank N.A.;
(iv) deliver forms of legal opinion from each of Skadden Arps Slate
Meagher & Flom, M. Kargula Esq. and Reed Smith Shaw & McClay
in each case in the agreed form.
(e) The parties (other than 3i plc) shall join in procuring that:
(i) the New Auditors shall be appointed auditors of each Group
Company in place of the Auditors;
(ii) all existing bank mandates in force for all Group Companies
shall be altered (in such manner as the Purchasers shall at
Completion require) to reflect the resignations and
appointments referred to in sub-clause (b) above.
5.2 Each Vendor who receives P Corporation Shares hereby undertakes to P
Corporation not to sell, transfer, assign or otherwise dispose of or
pledge, charge or otherwise encumber in any manner all or any of such P
Corporation Shares or any interest therein at any time during the period
of 365 days from the Completion Date.
5.3 Notwithstanding the provisions of this clause 5, 3i plc ("3i"), one of the
Vendors shall be required to deliver only the following documents to the
Purchaser to satisfy its obligations pursuant to this clause 5:
(i) a duly executed transfer in respect of those Sale Shares being sold
by 3i hereunder;
(ii) a share certificate in respect of the Sale Shares mentioned at (i)
above;
(iii) the Registration Side Letter;
15
<PAGE> 19
(iv) a notification, in the agreed form, relating to 3i's status as a
non-US person; and
(v) a copy of a letter from 3i's company secretarial department
confirming the authorization of Mr. William Hiscocks to sign this
Agreement.
6 POST-COMPLETION MATTERS
-----------------------
6.1 Each of the Vendors hereby declares that for so long as he remains the
registered holder of any of the Sale Shares after Completion he will at
the Purchasers' reasonable cost (where applicable):
(a) hold the Sale Shares and the dividends and other distributions of
profits or surplus or other assets declared, paid or made in respect
of them after Completion and all rights arising out of or in
connection with them in trust for whichever of the Purchasers to
whom the same have been transferred and their respective successors
in title;
(b) deal with and dispose of the Sale Shares and all such dividends,
distributions and rights as are described in clause 6.l(a) as
whichever of the Purchasers to whom the same have been transferred
or its successors may direct; and
(c) if so requested by the Purchasers or either of them or any such
successor:
(i) vote at all meetings which he shall be entitled to attend as
the registered holder of the Sale Shares in such manner as the
Purchasers or any such successor may direct; and
(ii) execute all instruments of proxy or other documents which the
Purchasers may reasonably require and which may be necessary
or desirable or convenient to enable the Purchasers or any
such successor to attend and vote at any such meeting.
6.2 The Vendors shall execute or, so far as each is able, procure that any
necessary third party shall execute all such documents and/or do or, so
far as each is able, procure the doing of such acts and things as the
Purchasers shall after Completion reasonably require in order to give
effect to this Agreement and any documents entered into pursuant to it and
to give to the Purchasers the full benefit of all the provisions of this
Agreement and the Sale Shares.
7 WARRANTIES AND QUALIFICATIONS TO WARRANTIES
-------------------------------------------
7.1 In consideration of the Purchasers entering into this Agreement the
Warrantors hereby acknowledge that any statement in schedule 8 which is
qualified as being made "so far as the Warrantors are aware" or "to the
best of the knowledge, information and belief of the Warrantors" or any
similar expression has been so qualified after due diligent and careful
enquiries by the Warrantors (including
16
<PAGE> 20
enquiry of the executive directors, company secretary and financial
controller of each Group Company and the tax accountants (in relation to
tax issues only) and other accountants, pensions consultants and
administrators (in relation to pension issues only) who act, or at the
relevant time acted, for each Group Company) and that each of the
Warrantors has used all reasonable endeavours to ensure that all
information given, referred to or reflected in that statement is accurate
in all material respects.
7.2 In consideration of the Purchasers entering into this Agreement:
(a) Subject to clause 7.8 the Warrantors hereby warrant to each of the
Purchasers (for itself and as trustee for its successors in title)
in the terms as set out in Parts A and B of schedule 8; and
(b) Each of the Vendors (other than the Warrantors) hereby warrants in
respect of matters relating to itself only to each of the Purchasers
(for itself and as trustee for its successors in title) in the terms
of Part A of schedule 8
7.3 The provisions of this Clause 7.3 shall operate to limit the liability
howsoever arising of the Vendors other than the Warrantors under the terms
of this Agreement. Subject to clause 7.8(d) (in relation to the US
Trustees only) the liability of each of the Vendors other than the
Warrantors pursuant to the Warranties given by it in Part A of schedule 8
or otherwise under this Agreement shall not exceed the following amounts:-
VENDOR AMOUNT[POUND]
3i Plc 3,088,058
GNI Holdings Ltd 3,186,867
Harry Ferguson Holdings Ltd 1,291,420
the US Trustees 2,582,840
Technical Investments Holdings SA 2,058,500
G. McCaldin 143,896
S. Barnby 102,956
R.A. James 102,956
K. Young 102,894
7.4 The Warranties are given subject to information fairly disclosed with
reasonable particularity in the Disclosure Letter.
7.5 Each of the paragraphs in schedule 8:
(i) shall be construed as a separate and independent Warranty; and
(ii) save as expressly otherwise provided in this Agreement, shall
not be limited by reference to any other paragraph in schedule
8 or by any other provision of this Agreement or the Taxation
Deed
17
<PAGE> 21
and each of the Purchasers shall have a separate claim and
right of action in respect of every breach of each such
Warranty.
7.6 The Warranties shall not in any respect be extinguished or affected by
Completion.
7.7 Each of the Warrantors hereby agrees with each of the Purchasers (for
itself and as trustee for each Group Company and each Group Company's
directors, employees, agents and advisers):
(a) that the giving by any Group Company and/or any of its directors,
employees, agents or advisers to any of the Vendors or their agents
or advisers of any information or opinion in connection with the
Warranties or the Taxation Deed or the Disclosure Letter or
otherwise in relation to the business or affairs of any Group
Company or in connection with the negotiation and preparation of
this Agreement, the Taxation Deed or the Disclosure Letter shall not
be deemed a representation, warranty or guarantee to the Vendors of
the accuracy of such information or opinion;
(b) to waive any right or claim which he may have against any Group
Company and/or any of its directors, employees agents or advisers
for any error, omission or misrepresentation in any such
information or opinion; and
(c) that any such right or claim shall not constitute a defence to any
claim by either of the Purchasers under or in relation to this
Agreement (including the Warranties) or the Taxation Deed.
7.8 The provisions of this clause 7.8 shall operate to limit the liability of
the Warrantors as follows:
(a) The Warrantors shall not be liable under the Warranties (other than
the Tax Warranties) in respect of any claim:-
(i) unless notice of it is given in writing by either of the
Purchasers to each Warrantor setting out with reasonable
particularity the grounds on which such claim is based within
2 years of Completion or, if later, the period from Completion
to the date 90 days after the date of the auditors' report
relating to the audited accounts of the Group for the
financial period immediately following the current financial
period of the Group after Completion (except that there shall
be no such time limit in so far as any claim relates directly
or indirectly to title to the Sale Shares);
(ii) unless the aggregate amount of all claims for which the
Warrantors would be liable under the Warranties exceeds
US$400,000 provided that if this limit is exceeded all claims,
18
<PAGE> 22
including those previously notified, shall be accrued against
the Warrantors;
(iii) if and to the extent that proper provision or reserve was made
for the matter giving rise to the claim in the Accounts or
Interim Accounts or Management Accounts;
(iv) for any loss arising from breach of the Warranties (other than
the Tax Warranties) to the extent that any such loss is
recovered under a policy of insurance in force on the date of
this Agreement or would have been covered but for any change
in the basis of cover, the cancellation of the relevant
policies or non-payment of the premiums in respect of the
relevant policies in each case at the direction of either of
the Purchasers;
(v) to the extent that the same arises out of any matter or thing
done or omitted to be done pursuant to this Agreement or
otherwise in each case at the written request or with the
written approval of either of the Purchasers after the date
hereof, save that this limitation will not apply to matters or
things done or omitted to be done as required by law or
pursuant to a legally binding commitment of a Group Company
created on or before Completion or otherwise than in the
ordinary course of business as carried on immediately before
Completion;
(b) The Warrantors shall not be liable under the Agreement (other than
the Tax Warranties, the covenants in clause 8 and the indemnities in
clause 9):-
(i) based upon a liability which is contingent only unless and
until such contingent liability becomes an actual liability
and is due and payable;
(ii) in respect of any matter, act, omission or circumstance to the
extent that the same would not have occurred but for:-
(A) the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation or administrative
practice of any government, governmental department,
agency or regulatory body;
(B) any change in accounting principles or practice of the
Purchasers or any of the Group Companies other than as
required to comply with U.K. generally accepted
accounting principles;
(c) Subject to clause 7.8(d) (in relation to the Vendor Trustees only)
the aggregate amount of the liability howsoever arising of each of
the
19
<PAGE> 23
Warrantors in respect of any claims under this Agreement and the
Taxation Deed shall not exceed the following amounts:-
[POUND]
Adrian George Dear 1,544,030
Paten Sarkis Knadjian 1,544,033
Claire Anne Stevens 1,852,824
David Anthony Taylor 11,734,593
Kevin Reginald Underwood 926,425
Barry Andrew Woodward 617,608
the Vendor Trustees 37,057,263
(d)
(i) If and so long as there is no breach of the covenants
contained in sub-clauses (ii) and (iii) below the aggregate
liability of the Vendor Trustees in respect of any claims
under this Agreement shall not exceed the realisable value of
the capital assets held upon the trusts of the Trust net of
the costs of realisation on the date(s) the Vendor Trustees
receive notice of any claim under this Agreement
(ii) The Vendor Trustees hereby covenant for the period of 2 years
from the date hereof or the resolution of any claim made
within that period under this Agreement not to sell transfer
assign or otherwise dispose of any assets held upon the trusts
of the Trust other than in the normal course of investment of
trust assets provided that such investments are authorised
under the terms of the Trust and that in making such
investments the Vendor Trustees take the same degree of care
that an ordinary reasonably prudent man of business would have
taken other than to meet reasonable capital expenses properly
incurred in the administration of the Trust nor to appoint new
additional or substitutional trustees of the Trust without the
prior written consent of the Purchasers
(iii) In the case of (A) a transfer assignment or disposal to a
beneficiary who is or becomes absolutely entitled to any
assets under the terms of the Trust and (B) the appointment of
a new or substitutional trustees of the Trust the Vendor
Trustees covenant that prior to such transfer assignment
disposal or appointment they shall procure that such
beneficiary or such new additional or substitutional trustees
shall enter into a direct covenant with the Purchasers in a
form satisfactory to the Purchasers in respect of claims by
the Purchasers under this Agreement and for the avoidance of
doubt if no such direct covenant is entered into then the
limitation on the liability of the Vendor Trustees contained
in paragraph (i) above shall not apply
2O
<PAGE> 24
(iv) The Purchasers covenant that in the event that the Vendor
Trustees produce reasonable evidence to the Purchasers that
the UK Inland Revenue has a valid claim against a beneficiary
or settlor of the Trust for tax interest or penalties in
respect of capital gains made by the Vendor Trustees or for
inheritance tax payable in relation to the Trust then the
Purchasers will give their written consent to the transfer to
such beneficiary or settlor of sufficient capital assets for
the sole purpose of discharging such tax interest or penalties
provided that such beneficiary or settlor enters into a direct
covenant with the Purchasers that such capital assets shall be
used to discharge such tax interest or penalties
(v) the limitations in sub-clauses 7.8 (d) (i) to (iv) (inclusive)
shall also apply in relation to the US Trust and for this
purpose reference in those sub-clauses to "the Vendor
Trustees" shall be deemed to be references to the US Trustees,
references to "the Trust" shall be deemed to be references to
the US Trust and references to "the UK Inland Revenue" shall
be deemed to be references to the US Internal Revenue Service
as well as the UK Inland Revenue
(e) none of the Vendor Trustees or the US Trustees shall incur any
personal liability in respect of a breach of the Warranties except
to the extent that such breach or claim arises as a result of or in
connection with fraud of the Vendor Trustees or the US Trustees
respectively;
(f) without being a condition to any claim hereunder the Purchasers
shall procure that all reasonable steps are taken and all reasonable
assistance is given to avoid or mitigate any loss or liability
which might give rise to a claim under the Warranties (other than
the Tax Warranties). If either of the Purchasers or any Group
Company becomes aware of a matter that may give rise to a claim
against the Warrantors under the Warranties (other than the Tax
Warranties) notice of that fact shall be given as soon as is
reasonably practicable to the Warrantors and if the claim in
question is as a result of or in connection with a claim by or
liability to a third party the claim shall not be compromised or
settled without the consent of the Warrantors (such consent not to
be unreasonably withheld or delayed) and that Purchaser (if
requested promptly in writing by the Vendors and indemnified to
their reasonable satisfaction by the Vendors against all costs,
charges, liabilities and reasonable expenses which may as a result
be incurred by that Purchaser or any Group Company) shall take and
shall procure the relevant Group Company to take all such action as
the Warrantors may reasonably request to avoid, dispute, resist,
appeal, compromise or contest such claim or liability and shall make
available and procure that the Group Companies shall make available
to the Warrantors all such information and reasonable assistance as
may be reasonably requested by the Warrantors and is available to it
or them being information relevant for the purpose of avoiding,
disputing, resisting,
21
<PAGE> 25
appealing, compromising or contesting any such claim or liability
and the Warrantors shall keep all such information confidential.
(g) if and to the extent that either of the Purchasers recovers from any
third party in relation to any matter which may give rise to a claim
under this Agreement (other than the Tax Warranties) which has been
settled in full by the Warrantors, such Purchaser shall reimburse to
the Warrantors who have settled such claim in proportion to the
amounts paid by them respectively the amount so recovered (net of
costs of recovery and of any Taxation suffered on the amount
recovered) up to the amount paid by each such Warrantor;
(h) in relation to any claim or alleged claim under this Agreement
(other than the Tax Warranties) and without prejudice to the
validity of the claim or alleged claim in question, the Purchasers
shall allow, and shall procure that the relevant Group Companies
allow, the Warrantors and their accountants and professional
advisers to investigate the matter or circumstance giving rise or
alleged to give rise to such claim and whether and to what extent
any amount is payable in respect of such claim and for such purpose
the Purchasers shall give and shall procure that the relevant Group
Companies give, subject to their being paid all reasonable out-of-
pocket expenses, all such assistance as the Warrantors or their
accountants or professional advisers may request including access to
and copies of any documents or other information in the possession
of the Purchasers or the relevant Group Companies;
7.9 The provisions of clauses 3, 4 and 5 of the Taxation Deed shall apply
mutatis mutandis in relation to any claim under the Tax Warranties as if
set out in full in this Agreement.
7.10 In the event that any Vendor is liable to P Corporation or any body
corporate to whom P Corporation has assigned the benefit of the warranties
given to it pursuant to the terms of clause 20 ("ASSIGNEE") in respect of
a claim under the Warranties then each such Vendor shall at its own choice
either:
(a) pay P Corporation or such Assignee a sum equal to the amount payable
by such Vendor to in respect of such claim; or
(b) calculate the number of P Corporation Shares which would be required
to be transferred to satisfy the amount payable to P Corporation or
such Assignee (as the case may be) by such Vendor in respect of such
claim and notify P Corporation or such Assignee (as the case may be)
that it requires P Corporation or such Assignee (as the case may be)
to repurchase or cancel the relevant number of P Corporation Shares
to satisfy such claim Provided that such Vendor may only require P
Corporation or such Assignee to repurchase or cancel P Corporation
Shares that have not been registered under the Securities Act with
the SEC. For the purpose of this Clause 7.10 the transfer value of a
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<PAGE> 26
P Corporation Share shall be deemed to be the closing price of such
share on the New York Stock Exchange on the day prior to the
Completion Date (the "P CORP SHARE PRICE").
(i) If the Vendor holds sufficient P Corporation Shares to satisfy
the mount payable under sub-clause (a) above, he shall deliver
(or procure the delivery of) such documentation to P
Corporation or such Assignee as may be required for P
Corporation or such Assignee to repurchase or cancel the
required number of P Corporation Shares.
(ii) If the Vendor holds less than the required number of P
Corporation Shares to satisfy the amount payable under
subclause (a) above, the claim shall be satisfied:-
(A) firstly, by delivery of such documentation to P
Corporation or such Assignee as may be required for P
Corporation or such Assignee to repurchase or cancel the
required number of P Corporation Shares; and
(B) secondly, by delivering to P Corporation or such
Assignee a sum equal to the amount payable by such
Vendor to satisfy the balance of his liability in
respect of the claim
Provided that if P Corporation or such Assignee is unable for legal or
regulatory reasons (including compliance with the rules or codes of
practice of any securities exchange) or reasonably determines that it
would have a significant adverse effect on it or its business or assets to
repurchase or cancel its shares at the time at which the relevant
Vendor(s) wish to transfer the same the Vendor shall pay and settle such
claim in cash. In the event that the amount of the liability of the
relevant Vendor(s) in respect of the claim by P Corporation or its
Assignee is finally determined or settled before registration of the P
Corporation Shares then to the extent that the relevant Vendor(s) elected
to satisfy such claims with P Corporation Shares which P Corporation or
its Assignee is unable or unwilling to repurchase or cancel pursuant to
the proviso above P Corporation or its Assignee (as the case may be) will
(without prejudice to the right to commence or pursue legal proceedings
for enforcement) defer actual collection of the cash amount equal to the
number of P Corporation Shares offered to P Corporation or its Assignee
multiplied by the P Corp Share Price until after registration of the P
Corporation Shares.
7.11 Any Vendor who transfers P Corporation Shares pursuant to clause shall
be responsible for and shall reimburse P Corporation in respect of all
stamp, registration, transfer or similar taxes or imposts that may be
payable in connection with such transfer.
7.12 The Purchasers hereby acknowledge that they do not enter into this
Agreement in reliance on any warranties, representations or undertakings
howsoever or to
23
<PAGE> 27
whomsoever made except in so far as such are embodied in the Agreement and
the Taxation Deed and the other documents referred to in this Agreement.
7.13 For the avoidance of doubt, this clause 7 shall not preclude any Vendor
from claiming against any other Vendor under any right of contribution or
indemnity to which he may be entitled.
7.14 The satisfaction by the Vendors and/or the Warrantors of any claim under
this Agreement (including the Warranties) shall be deemed to constitute a
reduction in the consideration payable by the Purchasers for the sale of
the Sale Shares.
7.15 The Purchasers hereby agree with the Vendors that in respect of any matter
which gives rise to a liability under this Agreement (including the
Warranties) and also under the Taxation Deed such liability shall not be
satisfied more than once.
7.16 If the Purchasers have a claim under this Agreement against any Vendor
(other than a Warrantor) and in respect of such claim the Purchasers or
either of them wishes to claim against any one or more Warrantors on the
basis of their joint and several liability the Purchasers or relevant
Purchaser (as the case may be) shall join the relevant Vendor in any claim
or proceedings brought against such Warrantor(s).
8 RESTRICTIVE COVENANTS
---------------------
8.1 Each of the Covenantors severally undertakes with each of the Purchasers
that without the prior consent in writing of each of the Purchasers he
will not directly, or indirectly whether by himself, his employees or
agents and whether on his own behalf or on behalf of any other person,
firm or company or otherwise howsoever, for the Restricted Period:
(a) (subject to clause 8.5) carry on, be employed or otherwise engaged,
concerned or interested in any capacity (whether for reward or
otherwise) in, provide any technical, commercial or professional
advice to, or in any way assist, any business which is or is about
to be engaged in the production, distribution or sale of the
Restricted Products or any of them, or the supply of the Restricted
Services or any of them in the Prohibited Area in competition with
the Company or any other Group Company and for the avoidance of
doubt this restriction shall not apply to a business which is only
an end user of the Restricted Products or the Restricted Services;
(b) in relation to the Restricted Products or any of them or the
Restricted Services or any of them solicit or canvass, accept orders
from or otherwise deal with any person, firm, company or other
organisation who:
(i) was a customer of the Company or any other Group Company at
any time during the three years prior to Completion; or
24
<PAGE> 28
(ii) at the date of Completion was in the process of negotiating or
contemplating doing business with the Company or any other
Group Company,
and with whom that Covenantor had personal dealings in the course of
his employment save that without prejudice to clause 8.1(a) this
shall not prevent the Covenantor from merely accepting employment or
engagement with such a person or organisation;
(c) solicit or entice away or endeavour to solicit or entice away from
the Company or any other Group Company any director or manager or
salesman or other person employed or otherwise engaged by that Group
Company on the date of Completion, whether or not that person would
commit any breach of his contract of employment by reason of his
leaving the service of that Group Company;
(d) employ or otherwise engage any person who at the date of Completion
or during the period of three years prior thereto was employed or
otherwise engaged by the Company or any other Group Company and who
by reason thereof is or is reasonably likely to be in possession of
any of the Confidential Information; and
8.2 Each of the Covenantors severally undertakes with each of the Purchasers
that he will not at any time after Completion directly or indirectly,
whether by himself, his employees or agents or otherwise howsoever:
(a) engage in any trade or business or be associated with any person
firm or company engaged in any trade or business using the name
Primark, ICV, Datastream, I/B/E/S, Disclosure, Worldscope and Vestek
or any name incorporating such words or any similar name or names or
any colourable imitation thereof unless and until (in relation to
any of those names) the Primark Group permanently discontinues use
of the same;
(b) (subject to clause 8.4) in the course of carrying on any trade or
business, claim, represent or otherwise indicate any present
association with the Company or any other Group Company;
(c) (subject to clause 8.4) without the consent of the Company use,
whether on his own behalf or on behalf of any third party, or
divulge to any third party, any of the Confidential Information.
8.3 Each of the Vendors severally undertakes with the Company and with each of
the Purchasers in the terms of clause 8.2(c) such that, if the Company or
any other Group Company shall have obtained any of the Confidential
Information from any third party under an agreement including any
restriction on disclosure known to him, he will not at any time without
the consent of the Company infringe that restriction.
25
<PAGE> 29
8.4
(a) The restriction in clause 8.1(a) shall not operate to prohibit the
Covenantors from holding in aggregate up to 5 percent of the shares
of any competing company the shares of which are listed or dealt in
on a recognised stock exchange;
(b) The restriction in clause 8.2(b) shall not operate to prohibit any
of the Covenantors who continues in the employment of any Group
Company after Completion from claiming, representing or indicating
his association in that capacity with that Group Company during the
continuance of that employment and in accordance with the terms of
his service agreement or contract of employment..
(c) The restrictions in clauses 8.2(c) and 8.3 shall not apply:
(i) in respect of any of the Confidential Information which is in
or becomes part of the public domain, other than through a
breach of the obligations of confidentiality set out in this
Agreement; or
(ii) to any of the Vendors to the extent only that he is required
to disclose Confidential Information by any applicable law,
governmental order, decree, regulation, licence or rule or
pursuant to the regulations of any securities exchange or
regulatory or governmental body to which he is subject
provided that in such circumstances the relevant Vendor(s)
shall take all reasonable steps to procure that such
disclosure is made in confidence.
8.5 Each of the Covenantors agrees with the Company and the Purchasers that
the restrictive covenants in clauses 8.1 to 8.3 inclusive are, and each of
the Vendors other than the Covenantors agrees that the restrictive
covenants in clause 8.3 are, reasonable and necessary for the protection
of the value of the Sale Shares and the Company and that having regard to
that fact those covenants do not work harshly on him.
8.6
(a) The Vendors hereby acknowledge that they have had the opportunity to
take independent advice on the restrictions in clauses 8.1 to 8.3
inclusive.
(b) While those restrictions are considered by the parties to be
reasonable in all the circumstances, it is agreed that if any of
those restrictions, by themselves or taken together, shall be
adjudged to go beyond what is reasonable in all the circumstances
for the protection of the legitimate interests of the Purchasers but
would be adjudged reasonable if part or parts of the wording thereof
were deleted or amended or qualified or the periods thereof were
reduced or the range of products or area dealt with were thereby
reduced in scope, then the relevant restriction or restrictions
26
<PAGE> 30
shall apply with such modification or modifications as may be
necessary to make it or them valid and effective.
9 INDEMNITIES
-----------
9.1 Subject to clause 7.8(c) the Warrantors hereby undertake and agree to
indemnify the Purchasers and hold them harmless in respect of all losses,
costs, claims, liabilities, fines, penalties, damages and expenses of
whatever nature and howsoever arising that may be suffered or incurred by
the Purchasers or the Company as a result of:
(a) any breach by the Company of the provisions of the Consumer Credit
Act 1974 or any other consumer credit laws or regulations in
relation to the supply of equipment to its customers under
agreements existing at Completion;
(b) any third party claim or action against the Company or termination
of any customer contract prior to the earliest date on which the
customer could otherwise terminate such contract on simple notice
for failure to perform or breach of or misrepresentation by or on
behalf of the Company prior to Completion in respect of any written
representation or commitment referred to in paragraph 7.2 of the
Disclosure Letter;
(c) any failure by the Company to obtain necessary landlord and other
consents or breach of obligations by the Company in respect of the
alterations improvements and other works described in paragraph 12.5
and 9 of the Disclosure Letter;
(d) any failure by the Company to obtain and/or maintain professional
indemnity; insurance as described in paragraph 11.3 of the
Disclosure Letter prior to Completion or any failure by Comstock to
obtain or maintain such insurance as a result of failure by the
Company to pay its agreed premium contribution when required prior
to Completion;
(e) any Environmental Claim in respect of the property described in
paragraph 13.1 of the Disclosure Letter save for a claim which
arises as a result of a voluntary act by the Purchasers after
Completion or by the Company at the direction of the Purchasers
other than the continued occupation of the relevant property.
(f) the Company being or becoming liable to make any payments to any
person as a result of the reconciliation referred to in paragraph
7.6 of the Disclosure Letter other than VAT that is recovered from
the UK tax authorities.
9.2 The Warrantors shall not be liable under the indemnities set out in clause
9.1:
27
<PAGE> 31
(a) unless the amount of all claims for which the Warrantors would be
liable under that clause exceeds US$75,000 provided that if this
limit is exceeded all claims including those previously notified
shall be accrued against the Warrantors;
(b) unless notice of it is given in writing by the Purchasers to each
Warrantor setting out with reasonable particularity the grounds on
which such claim is based within 2 years of Completion.
10 CONTINUING EFFECTS OF THIS AGREEMENT
------------------------------------
10.1 No provision of this Agreement or of any agreement or arrangement of which
this Agreement forms part and which is subject to registration under the
Restrictive Trade Practices Acts 1976 and 1977 shall take effect until the
day after the date on which particulars required by those Acts to be
furnished to the Director General of Fair Trading in respect of this
Agreement or of the agreement or arrangement of which it forms part have
been furnished to him in accordance with those Acts.
10.2 All provisions of this Agreement shall so far as they are capable of being
performed or observed continue in full force and effect notwithstanding
Completion except in respect of those matters then already performed and
Completion shall not constitute a waiver of any of the Purchasers' rights
in relation to this Agreement or the Taxation Deed.
11 ANNOUNCEMENTS
-------------
11.1 Each of the Vendors hereby undertakes with each of the Purchasers to
provide all such information known to him or which on reasonable enquiry
ought to be known to him and relating to the Company or the Group as each
of the Purchasers may reasonably require for the purpose of complying with
any requirements of law or of any stock exchange or other regulatory
authority.
11.2 Save as expressly required by law by any relevant national or
supra-national regulatory, governmental or quasi-governmental authority,
all announcements or circulars by, of or on behalf of any of the parties
hereto relating to the sale and purchase hereunder shall be in terms to be
approved in writing by each of the Purchasers in advance of issue. The
Purchasers undertake to provide the Vendors with a copy of any
announcement made in relation to this Agreement prior to its publication.
12 RELEASES, WAIVERS ETC., BY THE PURCHASERS
-----------------------------------------
12.1 Each of the Purchasers may, in its discretion, in whole or in part
release, compound or compromise, or waive its rights or grant time or
indulgence in respect of, any liability to it under this Agreement or the
Taxation Deed and may do so as regards any one or more of the Vendors or
the Warrantors under that liability without in any way prejudicing or
affecting the liability of or its rights
28
<PAGE> 32
against any other of the Vendors or Warrantors in respect of the same or a
like liability, whether joint and several or otherwise.
12.2 Subject to clause 12.3, neither the single or partial exercise or
temporary or partial waiver by either of the Purchasers of any right, nor
the failure by either of the Purchasers to exercise in whole or in part
any right or to insist on the strict performance of any provision of this
Agreement, nor the discontinuance, abandonment or adverse determination of
any proceedings taken by either of the Purchasers to enforce any right or
any such provision shall (except for the period or to the extent covered
by any such temporary or partial waiver) operate as a waiver of, or
preclude any exercise or enforcement or (as the case may be) further or
other exercise or enforcement by the Purchaser of, that or any other right
or provision.
12.3 All references in clause 12.2 to:
(a) any right shall include any power, right or remedy conferred by this
Agreement on, or provided by law or otherwise available to, the
Purchasers; and
(b) any failure to do something shall include any delay in doing it.
12.4 The giving by either of the Purchasers of any consent to any act which by
the terms of this Agreement requires such consent shall not prejudice the
right of that Purchaser to withhold or give consent to the doing of any
similar act.
12.5 Without prejudice to the generality of clause 12.1, if any Vendor or
Warrantor shall for any reason not be liable hereunder in respect of any
breach of this Agreement or be released by either of the Purchasers from
any such liability, the other Vendors or Warrantors, as the case may be,
shall remain liable in full in respect of such breach notwithstanding and
without prejudice to their right to a contribution.
13 NOTICES
-------
13.1 Except as otherwise provided in this Agreement, every notice under this
Agreement shall be in writing in the English language and shall be deemed
to be duly given if it (or the envelope containing it) identifies the
party to whom it is intended to be given as the addressee and:
(a) it is delivered by being handed personally to the addressee (or,
where the addressee is a corporation, any one of its directors or
its Secretary); or
(b) it is delivered by being left in a letter box or other appropriate
place for the receipt of letters at the addressee's authorised
address; or
(c) the envelope containing the notice is properly addressed to the
addressee at his authorised address and duly posted by first class
mail or express or
29
<PAGE> 33
other fast postal service or registered post or the recorded
delivery service (or by airmail registered post if overseas)
and, in proving the giving or service of such notice, it shall be
conclusive evidence to prove that the notice was duly given within the
meaning of this clause 13.1. The fact that the intended recipient of a
notice shows that he did not receive the same, whether or not that fact
was known to the giver of the notice, shall not derogate from the
effectiveness in law of the service as provided by this clause. Without
affecting the validity or effectiveness of service thereof, a copy of any
notice given under this clause to any Vendor shall be given to the
Vendors' Solicitors (reFRHK/LJF).
13.2 For the purposes of this clause 13 the authorised address of each of the
Vendors and the Warrantors shall be those addresses set out in schedule 1
or in relation to each Vendor such other address as that Vendor may notify
to the Purchasers, and the authorised address of (respectively) each of
the Purchasers and the Company and each of the Subsidiaries shall be the
address set out in this Agreement or such other address as either of the
Purchasers shall notify the Vendors and the Warrantors from time to time
13.3 Any notice duly given within the meaning of clause 13.1 shall be deemed to
have been both given and received:
(a) if it is delivered in accordance with clause 13.1(a) or 13.1(b), on
such delivery;
(b) if it is duly posted in accordance with clause 13.1(c) by any of the
methods there specified, on the second (or, when sent airmail,
fifth) business day after the day of posting or
13.4 P Corporation irrevocably appoints Datastream International Limited of
Monmouth House, 58-64 City Road, London, EC1Y 2AL as its agent to accept
service of process in England in any legal action or proceedings arising
out of or in connection with this Agreement or any document to be entered
into pursuant to this Agreement. If such process agent ceases to be able
to act as such or to have an address in England, P Corporation irrevocably
agrees to appoint a new process agent in England and to deliver to the
Vendors within fourteen days a copy of a written acceptance of appointment
by the process agent. Nothing in this Agreement shall affect the right to
service process in any manner permitted by law.
13.5 For the purposes of this clause 13 "notice" shall include any request,
demand, instructions, communication or other document.
14 TIME
----
14.1 Time shall be of the essence of this Agreement as regards any time, date
or period fixed by this Agreement for the performance of any obligation by
any of
30
<PAGE> 34
the parties hereto whether as originally fixed or as altered in any manner
provided herein.
15 ENTIRE AGREEMENT
----------------
15.1 This Agreement (together with all documents which are required by its
terms to be entered into by the parties or any of them and all those terms
of any other documents which this Agreement expressly preserves and all
other documents which are in the agreed form and are entered into by the
parties or any of them in connection with this Agreement) sets out the
entire agreement and understanding between the parties in connection with
the Company and the sale and purchase and other matters described in it.
15.2 Without prejudice to the generality of clause 15.1, this Agreement shall
supersede as from the date hereof a letter of intent dated 2nd August 1996
from P Corporation and confidentiality letters dated 14 August 1996 and 18
September 1996.
16 ALTERATIONS
-----------
16.1 No purported alteration of this Agreement shall be effective unless it is
in writing, refers specifically to this Agreement and is duly executed by
each party hereto.
17 SEVERABILITY
------------
17.1 Each provision of this Agreement is severable and distinct from the
others. The parties intend that every such provision shall be and remain
valid and enforceable to the fullest extent permitted by law. If any such
provision is or at any time becomes to any extent invalid, illegal or
unenforceable under any enactment or rule of law, it shall to that extent
be deemed not to form part of this Agreement but (except to that extent in
the case of that provision) it and all other provisions of this Agreement
shall continue in full force and effect and their validity, legality and
enforceability shall not be thereby affected for impaired, provided that
the operation of this clause would not negate the commercial intent and
purpose of the parties under this Agreement.
17.2 If any provision of this Agreement is illegal or unenforceable as a result
of any time period being stated to endure for a period in excess of that
permitted by a regulatory authority, that provision shall take effect with
a time period that is acceptable to the relevant regulatory authorities
subject to it not negating the commercial intent of the parties under this
Agreement.
18 COUNTERPARTS
------------
18.1 This Agreement may be entered into in the form of two or more counterparts
each executed by one or more of the parties but, taken together, executed
by all and, provided that all the parties so enter into the Agreement,
each of the
31
<PAGE> 35
executed counterparts, when duly exchanged or delivered, shall be deemed
to be an original, but, taken together, they shall constitute one
instrument.
19 PAYMENT OF COSTS
----------------
19.1 Each of the parties hereto shall be responsible for his/its respective
legal and other costs incurred in relation to the negotiation, preparation
and completion of this Agreement, the Taxation Deed and all ancillary
documents Provided that in the event that Completion of this Agreement
takes place (but not otherwise) the Purchasers shall pay the costs of the
Vendors' financial advisers Broadview Associates up to a maximum
of(pounds sterling)1.4 million.
20 SUCCESSORS AND ASSIGNS
----------------------
20.1 This Agreement shall be binding on and shall enure for the benefit of the
successors in title and personal representatives of each party.
20.2 Save as provided in clause 20.3, none of the parties hereto shall be
entitled to assign the benefit of any rights under this Agreement.
20.3
(a) The benefit of this Agreement (including the Warranties) and the
Taxation Deed shall subject to sub-clause (c) below be freely
assignable by each of the Purchasers to any wholly owned subsidiary
of P Corporation and, in the event of any such assignment, all
references in this Agreement and the Taxation Deed to that Purchaser
shall be deemed to include its assigns
(b) Any assignment by P Corporation shall be conditional upon the
assignee accepting the rights of the Warrantors under clause 7.10.
In the event of any assignment by either or both of the Purchasers
the liabilities of the Vendors under this Agreement shall not be
greater than they would have been had such assignment not taken
place;
(c) If any Assignee ceases to be a wholly owned subsidiary of P
Corporation, P Corporation shall procure that before such cessation
such Assignee reassigns the benefit of the Warranties to P
Corporation or a wholly owned subsidiary of P Corporation;
21 APPLICABLE LAW AND SUBMISSION TO JURISDICTION
---------------------------------------------
21.1 This Agreement shall be governed by and construed in accordance with
English law.
21.2 It is hereby agreed that if any party has any claim against another party
arising out of or in connection with this Agreement such claim shall be
referred to the
32
<PAGE> 36
High Court of Justice in England, to the jurisdiction of which each of the
parties hereto irrevocably submits.
IN WITNESS whereof this Agreement has been entered into the day and year first
above written.
33
<PAGE> 37
SCHEDULE 1
----------
Vendors, the Warrantors and the Covenantors
-------------------------------------------
<TABLE>
Part A - The Vendors of the Sale Shares
---------------------------------------
<CAPTION>
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
<S> <C> <C> <C> <C> <C>
GNI Holdings Ltd 4th Floor Atrium Building, 51,600 1,317,172 103,671
Cannon Bridge, Dowgate Hill,
London EC4R
David Taylor 42 Abbey Gardens London 189,890 1,389,659 5,500,000 381,735
NW8 9AT
Anita Taylor 42 Abbey Gardens London 110 6,694
NW8 9AT
3i plc 91 Waterloo Road London SE1 50,000 1,276,327 100,457
8XP
Harry Ferguson 24 Little Chester Street, London 20,910 533,755 42,011
Holdings Ltd SW1X 7AP
K.E. Ahl & E.J. Kaier, 1100 One Penn Center, 41,820 1,067,512 84,022
trustees for the Philadelphia, PA l9103 USA
Timothy James Ralph
Sheldon Trust U/D/T
May 27, 1987)
Technical Investments c/o Tapia, Linares & Alfaro 33,330 850,811 66,964
Holding SA Apurtado 7412,
Panama 5,
Republico de Panama
Goddard Trustees P O Box 344 600,010 15,316,178 1,205,501
(Jersey) Limited and 5 Osprey House
Christopher Murray 5 Old Street
(held as bare nominees St Helier Jersey
by Goddard Trustees JE4 8UZ
(Jersey) Limited
(150,000) and Goddard
Trustees Inc. (450,010)
G McCaldin 8 Christchurch Road, Bristol 2,330 59,474 4,681
</TABLE>
34
<PAGE> 38
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
<S> <C> <C> <C> <C> <C>
C A Stevens The Pond House Swelling Hill 30,000 137,846 1,000,000 60,274
Ropley, Alresford, Hampshire
S024 ODA
Adrian Dear 21 Waynefleet Tower Avenue, 25,000 167,214 750,000 50,228
Esher,
Surrey
KT10 8Q9
Paren Knadjian Red Leaves, 24,890 317,511 500,000 50,228
Summerhouse Road
Godalining, Surrey
GU7 1PY
Sarah Gant Red Leaves, 110 6,694
Summerhouse Road
Godalming, Surrey
GU7 1PY
Kevin Underwood 3 White Causeway 14,250 23,295 500,000 30,137
Chobham
Knaphill, Surrey
GU2 2TU
Karen Underwood 3 White Causeway 750 45,639
Chobham
Knaphill, Surrey
GU2 2TU
Barry Woodward 52 Woodham Park Road, 9,100 232,289 18,283
Woodham
Weybridge, Surrey
KT14 7AF
</TABLE>
35
<PAGE> 39
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
<S> <C> <C> <C> <C> <C>
Tracy Woodward 52 Woodham Park Road 900 22,981 1,808
Woodham
Weybridge, Surrey
KT15 3ST
Simon Barnby High Trees 1,667 101,440
Duncombe Road
Godalming, Surrey
GU7 1SF
Andy James 53 Bray Road, 1,667 101,440
Guildford, Surrey
GU2 5LM
Karen Young 15 Rugosa Road 1,666 101,379
West End
Woking, Surrey
GU24 9PA
</TABLE>
36
<PAGE> 40
Part B - The Warrantors
-----------------------
(1) (2)
Name Address
- ---- -------
Adrian George Dear 21 Waynefleet Tower Avenue, Esher,
Surrey KT10 8Q9
Paren Sarkis Knadjian Red Leaves, Summerhouse Road,
Godalming, Surrey GU7 1PY
Claire Ann Stevens The Pond House, Swelling Hill, Ropley,
Alresford, Hampshire SO24 0DA
David Anthony Taylor 42 Abbey Gardens, London NW8 9AT
Kevin Reginald Underwood 3 White Causeway, Chobham, Knaphill,
Surrey GU21 2TU
Barry Andrew Woodward 52 Woodham Park Road, Woodham,
Weybridge, Surrey KT14 7AF
the Vendor Trustees PO Box 344, 5 Osprey House,
5 Old Street, St. Helier, Jersey JE4 8UZ
37
<PAGE> 41
Part C - The Covenantors
------------------------
David Anthony Taylor
Kevin Reginald Underwood
Paten Sarkis Knadjian
Claire Ann Stevens
Adrian George Dear
Barry Andrew Woodward
38
<PAGE> 42
SCHEDULE 2
----------
The Company
-----------
Date and place of incorporation: 23 April 1981 in England and Wales
Registered number: 1557537
Registered office: ICV House
72 Chertsey Road
Woking
Surrey GU21 5B$
Authorised share capital: [Pound Sterling]1,740,000 divided into
1,100,000 ordinary shares of 10p each,
150,000 'A' cumulative redeemable preference
shares of [Pound Sterling]1 each, 880,000 'B'
redeemable preference shares of [Pound
Sterling]1 each and 600,000 'C' redeemable
preference shares of [Pound Sterling]1 each
Issued share capital: 1,100,000 ordinary shares of 10p each
Directors: Adrian George Dear
Paren Sarkis Knadjian
Christopher John Sharples
Claire Ann Stevens
David Anthony Taylor
Kevin Reginald Underwood
Barry Andrew Woodward
Secretary: Kevin Reginald Underwood
Auditors: Robson Rhodes
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
39
<PAGE> 43
SCHEDULE 3
----------
The Subsidiaries
----------------
Name: Interquote Limited
Date and place of Incorporation: 28 May 1981 in England and Wales
Registered number: 1564336
Registered office: ICV House
72 Chertsey Road
Woking
Surrey GU21 5BJ
Authorised share capital: [Pound Sterling]100 divided into 100 ordinary
shares of [Pound Sterling]1 each
Issued share capital: 2 ordinary shares
Directors: David Anthony Taylor
Christopher John Sharples
Secretary: Christopher John Sharples
Auditors: Robson Rhodes
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
40
<PAGE> 44
Name: ICV Europe Limited
Date and place of Incorporation: 23 February 1987, Jersey,
Channel Islands
Registered number: 37038
Registered office: 14 Britannia Place, Bath Street, St Helier,
Jersey
Authorised share capital: [Pound Sterling]10,000 divided into 10,000
ordinary shares of [Pound Sterling]1 each
Issued share capital: 9 Ordinary Shares
Directors: David Anthony Taylor, Christopher Murray,
Richard Harwood
Secretary: Onbond Secretaries Limited
Auditors: Robson Rhodes
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
41
<PAGE> 45
Name: ICV Benelux BV
Date and place of incorporation: 22 February 1983 - Rotterdam, The
Netherlands
Registered number: 236975
Registered office: c/o BDO Camps Obers Belastingadviseurs
Postbus 197,2670 AD Naaldwijk
Authorised share capital: DFL 50,000 divided into 50,000 ordinary
shares of DFL 1 each
Issued share capital: DFL 35,000
Directors: Kevin Underwood
Secretary: Kevin Underwood
Auditors: BDO Camps Obers
Bankers: Rabobank
Accounting reference date: 31 December
42
<PAGE> 46
SCHEDULE 4
----------
The Properties
--------------
Property Tenure Owning Use
-------- ------ ------ ---
Company
-------
Ground and First Leasehold ICV Limited Offices with
Floor Skandia from 1st July storage
House 23 College 1995 expiring communica-
Hill London EC4 24th June 2003 tions and
electronic
repair
Basement, part Leasehold ICV Limited Offices with
ground floor and Basement and storage
first floor Pellipar first floor for communica-
House Cloak Lane 15 years to tions and
London EC4 24th June electronic
2008. Ground repair
floor 10 years
to 28th
September
2003
ICV House 72 Leasehold 25 ICV Limited Offices with
(originally numbered years from storage
74) Chertsey Road May 1983 communica-
Woking Surrey tions and
electronic
repair
Room 22 Ground Leasehold 21 ICV Limited Offices with
Floor Churchill years from storage
House Pontefract 24th August communica-
West Yorkshire 1995 tions and
electronic
repair
Veritas House Freehold ICV Limited Offices with
68 & 70 Chertsey storage
Road, Woking communica-
Surrey tions and
electronic
repair
43
<PAGE> 47
Unit 4 Boundary Leasehold 25 ICV Limited Light
Business Centre years from 24 industrial
Boundary Road, June 1993
Woking, Surrey
Rooms 99 and 100 Leasehold 3 ICV Limited Offices with
Ground floor Royal years from 25 storage
London Buildings, March 1995 communica-
Baldwin Street, tions and
Bristol electronic
repairs
35/37 Great Charles Leasehold 6 ICV Limited Offices with
Street (Part) years from 29 storage
Birmingham September communica-
1995 to 28 tions and
September electronic
2001 repairs
44
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SCHEDULE 5
DELETED - INTENTIONALLY LEFT BLANK
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<PAGE> 49
SCHEDULE 6
----------
Directors and employees
-----------------------
Part A - Additional Directors
-----------------------------
Joseph E Kasputys
Part B - Persons to receive Service Agreements
----------------------------------------------
Christopher Shatples
David Anthony Taylor
Part C - Persons to receive deed of variation to current service agreements
- ---------------------------------------------------------------------------
Paren Sarkis Knadjian
Claire Ann Stevens
Kevin Reginald Underwood
Barry Andrew Woodward
Part D - Resigning Directors
----------------------------
Paren Knadjian
Claire Stevens
Kevin Underwood
Adrian Dear
Barry Woodward
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Part E - New and Resigning Secretaries
--------------------------------------
(i) Dorota Warren - New Secretary
(ii) Kevin Underwood - Resigning Secretary
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SCHEDULE 7
DELETED - INTENTIONALLY LEFT BLANK
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SCHEDULE 8
----------
MATTERS WARRANTED
-----------------
PART A - WARRANTIES FROM THE VENDORS
------------------------------------
1 POWERS AND OBLIGATIONS OF THE VENDORS
-------------------------------------
1.1 Each Vendor has the requisite power and authority to execute, deliver and
perform its obligations under this Agreement and, where appropriate, the
Taxation Deed.
1.2 The execution and delivery of, and the performance of the obligations of
each corporate Vendor under this Agreement and, where appropriate, the
Taxation Deed have been duly authorised by all necessary corporate action
on the part of that Vendor whether under its articles of association or
otherwise.
1.3 This Agreement constitutes, and, if appropriate, the Taxation Deed and the
other documents executed by the Vendors which are to be delivered at
Completion will, when executed, constitute legal, valid and binding
obligations of each Vendor in accordance with their respective terms.
1.4 The execution and delivery of, and the performance by each Vendor of its
obligations under, and compliance with the provisions of, this Agreement
and, where appropriate, the Taxation Deed by each Vendor will not:
(a) in relation to any corporate Vendor result in a violation of any
provision of the memorandum or articles of association or other
constitutional document of that Vendor; or
(b) result in a breach of, or constitute a default under, any instrument
to which that Vendor is a party or by which that Vendor or any of its
properties is subject or bound; or
(c) result in a violation of any law or regulation in any jurisdiction
having the force of law or of any order, judgement or decree of any
court or governmental agency or agreement to which any Vendor is a
party or by which any Vendor or any of its properties is subject or
bound; or
(d) conflict with, violate, result in a breach of, or cause a default
under any other material restriction of any kind or character to which
that Vendor or any of its properties is subject.
1.5 No consent, authorisation, licence or approval of any corporate Vendor's
shareholders or of any governmental, administrative, judicial or regulatory
body, authority or organisation is required to authorise the execution,
delivery, validity, enforceability or admissibility in evidence of this
Agreement or, if appropriate, the
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<PAGE> 53
Taxation Deed or the performance by any Vendor of its obligations under
this Agreement or, if appropriate, the Taxation Deed or to avoid the
violation or breach of, or a default under, any lease, commitment, note,
indenture, mortgage, lien, instrument, plan, licence, contract or agreement
to which any Vendor or any of its properties is subject.
1.6 Each Vendor hereby represents and warrants to the Purchasers that in
entering into and delivering this Agreement it has sought its own advice
and, in particular, acknowledges that it has not relied upon, in any manner
whatsoever, save to the extent set out in clause 3.1 of this Agreement, the
Purchasers or its professional advisers in entering into and delivering
this Agreement.
1.7 Set out in schedule 1 are the current legal and beneficial owners of all
the issued and outstanding shares of the Company and the shares owned by
each Vendor.
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PART B - GENERAL WARRANTIES FROM THE WARRANTORS
-----------------------------------------------
1 CONSTITUTION AND STRUCTURE OF THE GROUP
---------------------------------------
1.1 The Company is duly incorporated under the laws of England and Wales and
has all requisite power and authority to own, lease and operate its assets,
properties and business and to carry on its business as now being
conducted.
1.2 The shares set out in Part A of schedule 1 (being the Sale Shares)
constitute the entire issued share capital of the Company and all the other
information set out in Part A of schedule 1 and all the information set out
in schedules 2 and 3 is complete and accurate in all respects.
1.3 All issued and outstanding shares in the capital of the Company are validly
issued, and fully paid. There are no shares in the capital of the Company
or securities convertible into shares of the Company outstanding and there
are no outstanding options, warrants or rights to purchase or acquire any
shares in the capital of the Company or securities convertible into shares
in the capital of the Company.
1.4 No consent, authorisation, licence or approval of any person or of any
governmental, administrative, judicial or regulatory body authority or
organisation is required to authorise the validity, execution, or delivery
by the Vendors of this Agreement or, if appropriate the Taxation Deed, or,
the enforceability or admissibility in evidence of this Agreement or, if
appropriate, the Taxation Deed (as far as the Warrantors are aware) or to
avoid (a) the loss of any permit or licence or other governmental
authorisation held by the Company (b) the violation or breach of or a
default under any lease commitment note indenture mortgage lien instrument
plan licence contract or agreement to which the Company or any of its
properties is subject or (c) giving to others any interests or rights,
including rights of termination, acceleration or cancellation, in or with
respect to any of the properties, agreements, contracts or business of the
Company.
1.5 There are no contracts, commitments, understandings, arrangements or
restrictions by which the Company is bound to issue additional shares or
securities convertible into shares in the capital of the Company or which
give any third party voting rights or the right to a dividend.
1.6 The Company is not a party to any voting trust or other agreement
understanding with respect to the voting of shares in the capital of the
Company or to any other contract, commitment, understanding, or arrangement
regarding the shares in the capital of the Company.
1.7 Each of the Subsidiaries is duly incorporated under the laws of the
jurisdiction in which it was incorporated. Each of the Subsidiaries is
dormant, within the meaning of S.250(3) of the CA 1985 and has no assets
(save as set out in the Disclosure Letter), no outstanding liabilities
(whether contingent or actual) no
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commitments of whatever nature including, without limitation, in relation
to Taxation, breach of law or regulation, is not a party to any subsisting
agreements or arrangements and has no employees. The Subsidiaries are the
only subsidiaries of the Company and are all wholly owned by the Company
free from any liens, charges or encumbrances and the Company has no
subsidiary undertakings.
1.8 The Company has no:
(a) interest in the share capital of, or other investment in, any body
corporate other than the Subsidiaries; or
(b) branch, agency, place of business or permanent establishment outside
the United KIngdom as that expression is defined in the relevant
double taxation relief order at the date hereof ("OVERSEAS BRANCH") or
substantial assets outside the United Kingdom or, in relation to those
Subsidiaries incorporated outside the United Kingdom, its country of
incorporation
and has no outstanding obligation to acquire any such interest or overseas
branch or in respect of any such interest or overseas branch formerly
owned by it or agreed to be acquired by it.
1.9 The Company is not and has no intention of becoming a party to or member of
any partnership, joint venture, consortium or other unincorporated
association or arrangement for sharing profit other than the Subsidiaries;
1.10 The Company has not guaranteed the obligations of any other person, has no
obligation to acquire any additional ownership interest in or advance any
funds to any other person and does not have any liability for any
operations of other persons.
1.11 Up to date and accurate copies of the Memorandum and Articles of
Association or equivalent constitutional documents of each Group Company
(having attached thereto copies of all such resolutions as are by law
required to be attached thereto) are attached to the Disclosure Letter.
1.12 There is no shadow director of the Company.
2 COMPLIANCE WITH LEGAL REQUIREMENTS
----------------------------------
2.1 Compliance in all material respects has been made with all legal and
procedural requirements in relation to the Company concerning:
(a) the Memorandum and Articles of Association or other constitutional
documents (including all resolutions passed or purported to have been
passed);
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<PAGE> 56
(b) the filing of all documents required by the CA 1985 or by
legislation corresponding thereto in other jurisdictions to be
filed at Companies House or other corresponding registry;
(c) issues of shares, debentures or other securities or loans;
(d) payments of interest and dividends and the making of other
distributions; and
(e) directors (including and shadow directors) and other officers.
2.2 The Company has obtained all licences, permissions, consents and other
approvals required for the carrying on of its business in the places
and in the manner in which such business is now carried on. Such
licences, permissions, consents and approvals:
(a) are in full force and effect;
(b) are not limited in duration or subject to any unusual or
onerous conditions and have been complied with in all
material respects;
(c) may be assigned and transferred without restriction
and so far as the Warrantors are aware there are no circumstances
which indicate that any of such licences, permissions, consents, or
approvals will or may be revoked or not renewed or which may confer a
right of revocation.
2.3 All registers and minute books required by law to be kept by the
Company have been properly written up and contain an accurate and
complete record in all material respects of the matters which should
be dealt with therein and the Company has not received any written
application or request for rectification of its statutory registers
or any notice or allegation that any of them is incorrect.
2.4 The Company is conducting and has at all times conducted its business
in all material respects in accordance with all applicable laws and
regulations of the United Kingdom and elsewhere and has no liability
for any unlawful act committed by any other person.
2.5 So far as the Warrantors are aware no investigation or enquiry is being
or has been conducted by any governmental or regulatory body in respect
of its affairs and the Warrantors are not aware of any circumstances
which are likely to give rise to such investigation or enquiry.
2.6 There are attached to the Disclosure Letter copies of all charges
created by the Company and currently in force and all such charges
have been registered (if appropriate) under Part XII CA 1985 and
are valid and enforceable.
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<PAGE> 57
2.7 So far as the Warrantors are aware no statute, rule, regulation, order or
interpretation has been enacted, entered or deemed applicable by any
domestic government or governmental or administrative agency or court which
would make the transactions contemplated by this Agreement illegal or
otherwise adversely affect the business of the Company or the conduct of
such business.
3 ACCOUNTS, INTERIM ACCOUNTS AND MANAGEMENT ACCOUNTS
--------------------------------------------------
3.1 The Accounts:
(a) comply with the requirements of the Companies Acts 1985;
(b) comply with all generally accepted current statements of standard
accounting practice and financial reporting standards and statements
issued by the Urgent Issues Task Force applicable to a company
incorporated in the United Kingdom ("UK GAAP") and have been prepared
in accordance with the historical cost convention, on a consistent
basis and on the same basis and in accordance with the same accounting
policies as the corresponding audited accounts for the preceding 3
financial years;
(c) give a true and fair view of the state of affairs of the Group as at
the Accounts Date and of its assets and liabilities as at the Accounts
Date and its profit for the financial years ended on that date; and
have not been affected by any, extraordinary, exceptional or
non-recurring items;
(d) make provision to the extent required by CA 1985 and UK GAAP for all
established liabilities or make proper provision for (or contain a
note in accordance with UK GAAP) all deferred or contingent
liabilities (whether liquidated or unliquidated) at the date thereof,
including to the extent applicable for the cessation or diminution of
any part of the Company's business, closure costs and deferred
taxation, Provided that (without limitation) where provision for
deferred taxation is not made in the Accounts details of deferred
taxation liability have been disclosed to the Purchasers in the
Disclosure Letter.
3.2 Without limiting paragraph 3.1 above:
(a) adequate provision has been made in the Accounts:
(i) for depreciation of assets;
(ii) in valuing work-in-progress and stock for any foreseeable losses
which may arise on completion or realisation;
(iii) for any foreseeable liabilities in relation to the disposal of
any assets or the cessation or diminution of any part of the
Business or closures;
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<PAGE> 58
(iv) for bad or doubtful debts; and
(v) for the future cost (calculated on an acturial basis) of any
unfunded commitments under any pension scheme involving the
Company; and
(b) stock and work-in-progress have respectively been valued in the
Accounts at the lower of cost and net realisable value.
3.3 The results shown by the audited consolidated accounts for each of the
three financial periods of the Company immediately preceding the
financial year ended on the Accounts Date were not (save as disclosed
therein) affected by any extraordinary, exceptional or non-recurring
item or by any other factor rendering such results for all or any part
of such periods unusually high or low.
3.4 The books of account and other records of the Company which are maintained
for accounting purposes have been properly written up on a consistent basis
and accurately present and reflect in accordance with UK GAAP all the
transactions to which the Company has been a party and contain complete and
accurate details in all material respects of the business activities of the
Company and of all matters required by CA 1985 to be entered in them. All
other records of the Company are maintained in all material respects in
accordance with all applicable legal requirements on a proper and
consistent basis.
3.5 The Interim Accounts and Management Accounts have been prepared in
accordance with accounting policies consistent with those used in the
preparation of the Audited Accounts insofar as appropriate in the
preparation of unaudited accounts of their nature. Having regard to the
purpose for which the Interim Accounts and Management Accounts are prepared
they are sufficient to enable a reasonable judgment to be made of the
profits, losses, assets and liabilities of the Company at the date of such
accounts.
3.6 There have been no reports commissioned by the Company concerning the
Company by accountants or by auditors within the three years prior to the
date hereof.
3.7 The Company has not factored or discounted any of its debts or engaged in
financing of a type which would not require to be shown or reflected in the
Accounts.
3.8 So far as the Warrantors are aware all debts due to the Company as at 30th
September 1996 (less any specific provision made) have either prior to the
date hereof realised or will within 12 months after such date realise their
full amount in cash.
3.9 The accounting reference date of the Company is and has at all times during
the last five years been 31 December.
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3.10 The Company has no material indebtedness, obligations, claims, commitments
or liabilities, accrued, absolute, contingent, threatened or otherwise,
whether or not due or to become due since the Interim Accounts.
4 SHARE CAPITAL
-------------
4.1 There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance on, over, relating to or affecting
any Subsidiary its issued or authorised share capital and there is no
agreement or commitment to give or create any of the foregoing and no
person has made any claim to be entitled to any of the foregoing.
4.2 No share or loan capital of the Company is now under option or is agreed or
resolved conditionally or unconditionally to be created or issued or put
under option.
4.3 The Company has not at any time:
(a) purchased or redeemed or repaid or agreed to purchase, redeem or repay
any share capital; or
(b) given or agreed to give any financial assistance in connection with
any such acquisition of share capital as would fall within sections
151 to 158 (inclusive) CA 1985.
4.4 The Company has not made and is not proposing to make a distribution except
out of profits available for the purpose and none of the reserves appearing
in the Accounts are undistributable reserves.
5 OWNERSHIP AND CONDITION OF ASSETS
---------------------------------
5.1 The fixed and loose plant, machinery, furrniture, fixtures, fittings,
equipment, vehicles and all other assets used in relation to the Group's
business are the property of the relevant Group Company free from any hire
or hire-purchase agreement or agreement for payment on deferred terms or
bill of sale or Security Interest and have at all material times been and
are in the possession of or under the control of the relevant Group
Company.
5.2 The Company owns or has and will following Completion have, the right to
use all assets that it needs to carry on the Business as carried on
immediately prior to or currently contemplated by the Warrantors to be
carried on after Completion.
5.3 All plant, machinery, vehicles and equipment owned or used by the Company
is in good condition fair wear and tear excepted and in working order, has
been properly serviced and maintained, where appropriate, on a regular
basis by competent personnel and complies with appropriate safety
regulations and none is in need of renewal or replacement.
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5.4 The Company keeps an up to date plant register of the fixed assets used by
it in its business and such register is complete and accurate in all
material respects.
5.5 There has been no exercise or purported exercise of any Security Interest
over any of the fixed or other assets of the Company and so far as the
Warrantors are aware there is no dispute directly or indirectly relating to
any such assets.
5.6 In respect of all plant machinery and equipment held by the Company under
any hire-purchase, conditional sale, leasing or rental agreement:
(a) true and accurate particulars of all such hire-purchase and
conditional sale agreements, leases and rental agreements are attached
to the Disclosure Letter;
(b) all such hire-purchase and conditional sale agreements, leases and
rental agreements are in full force and effect;
(c) the Company is in compliance with all obligations under all material
hire- purchase and conditional sale agreemen[s, leases and rental
agreements;
(d) all consents required to be obtained under such hire purchase and
conditional sale agreements, leases and rental agreements in
connection with the transactions contemplated under this Agreement
have been obtained and are in full force and effect;
(e) so far as the Warrantors are aware at the date hereof no circumstance
exists by virtue of which the lessor or the owner is or might be
entitled to require an upward adjustment to the rental;
(f) so far as the Warrantors are aware no circumstances have occurred
which would entitle the lessor or the owner to terminate any such
hire-purchase, conditional sale, leasing or rental agreement; and
(g) so far as the Warrantors are aware no inquiry or investigation is
being conducted by the Inland Revenue concerning the availability to
the lessor of capital allowances in respect of the plant and machinery
concerned.
5.7 Other than in relation to the Properties the Company has good and
unencumbered title to all assets of the Company (whether personal, tangible
or intangible) and where necessary to establish title to such assets is
properly constituted by documents of title which are in the possession and
under the control of the Company.
6 INSURANCE
---------
6.1 The Company has effected all insurances required by law to be effected by
it.
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6.2 Full particulars of all insurance policies maintained by the Company and
currently in force (the "POLICIES") are contained in the Disclosure Letter.
6.3 All premiums due on the Policies in respect of such insurance cover have
been paid; all the other conditions of the Policies have been performed and
observed in all material respects; and so far as the Warrantors are aware
none of the Policies has or may become void or voidable as a result of an
act or omission of the Company.
6.4 The Policies, are in the possession of the Company.
6.5 The Policies will continue in full force and effect notwithstanding
Completion.
6.6 No claim exceeding [Pound Sterling]5,000 is outstanding either by the
insurer or the insured under any of the Policies and no claim against the
Company by any third party is outstanding in respect of any risk covered by
any of the Policies or by any policy previously held by the Company.
6.7 The Warrantors are not aware of any circumstances which would or might
entitle the Company to make a claim under any of the Policies or which
would or might be required under any of the Policies to be notified to the
insurers.
6.8 The Company has no keyman insurance or equivalent insurance with respect to
any of its directors or employees.
6.9 The Company is now and has at all material times been adequately covered by
insurance relating to all risks which in the reasonable commercial opinion
of the Directors of the Company are appropriate having regard to the
business and activities of the Group including in particular, but without
limitation against accident, damage, injury, third party loss (including
product liability) and loss of profits
7 TRADING
-------
7.1 The Company has not entered into any agreement or arrangement with any
customer on terms materially different from its standard terms of business,
copies of which are attached to the Disclosure Letter.
7.2 Save for any warranty implied by law or contained in its standard terms of
business, the Company has not given any warranty, power of attorney or
guarantee, or made any material representation, in respect of goods or
services supplied or agreed to be supplied by it.
7.3 No part of the Company's business has been materially and adversely
affected by the loss during the 24 months ended on the Accounts Date of:
(a) any important customer or source of supply, (being a customer or
supplier which over a period of three months or more during those 24
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<PAGE> 62
months has accounted for 10 per cent. or more in value of the goods or
services supplied by or to the Company during that period); or
(b) an overall decrease in the value of orders received by or supplies
made to the Company;
and no such customer or supplier as referred to in paragraph 7.3(a) has
given written notice to the Company of an intention to cease or reduce to a
material extent trading with or supplies to the Company.
7.4 So far as the Warrantors are aware neither this Agreement nor Completion
will cause the Company to lose the benefit of any right or privilege which
it presently enjoys.
7.5 So far as the Warrantors are aware neither this Agreement nor Completion is
likely to cause any person who normally does business with the Company not
to continue to do so on the same basis; and
7.6 The Company has not committed any breach of any agreement to which it is a
party.
7.7 Other than as set out in its standard terms of business the Company is not
under any liability:
(a) to replace or remedy defects in any products, or to make good any
errors or omissions in services, supplied or agreed to be supplied
under any contract; or
(b) to service, repair, maintain, take back or otherwise do or not do
anything in respect of products which would apply after such goods
have been delivered,
and so far as the Warrantors are aware there is no reason to expect the
Company to be called upon to do any such thing in the future in relation to
products or services previously supplied or agreed to be supplied.
7.8 The Company has not paid to any person any sum in the nature of a bribe or
inducement.
7.9 The Company is not a party to any written confidentiality or secrecy
agreement or undertaking which may restrict its use or disclosure of any
information.
7.10 The Company has direct control of and access to:
(a) all subsisting written agreements to which it is a party; and
(b) all records, systems, data and information held by it or on its behalf
which are recorded, maintained, stored or otherwise wholly or partly
dependent
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<PAGE> 63
on any system (including, without limitation, any electronic,
mechanical or photographic process whether computerised or not)
whether operated by the Company or not.
7.11 No substantial part of the Company's business is carried on under the
agreement or consent of a third party, nor is there any agreement which
significantly restricts the fields in which the Company carries on its
business.
7.12 There are not now outstanding any agreements or arrangements (whether by
way of guarantee, indemnity, warranty, representation or otherwise) under
which the Company is under a prospective or contingent liability in respect
of any disposal by the Company of all of its assets or business or any
substantial part thereof.
7.13 The Company is not a party to any agreement under which any consent is
necessary to consummate the transactions contemplated in this Agreement.
8 TRANSACTIONS SINCE THE ACCOUNTS DATE
------------------------------------
8.1 Since the Accounts Date:
(a) the Company has entered into transactions and incurred liabilities in
the ordinary course of day-to-day business operations and not
otherwise incurred any material liability;
(b) so far as the Warrantors are aware the assets of the Company have not
been depleted by any unlawful act on the part of any person;
(c) there has been no materially adverse change in the financial or
trading position of the Company and its business has been carried on
in the ordinary course and in the same manner (including nature and
scale) as immediately before the Accounts Date;
(d) no loan or loan capital has been repaid by the Company in whole or in
part or has become liable to be so repaid;
(e) save for the ordinary business of an Annual General Meeting, there has
been no resolution of or consent by the members or any class of
members of the Company;
(f) the Company has paid its creditors within the time limits agreed with
such creditors; and
(g) the Company has not offered price reductions or discounts or
allowances on sales of products or services or provided them at less
than cost to an extent that may materially affect its profitability.
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9 FINANCIAL MATTERS
-----------------
9.1 Full details of all bank accounts maintained or used by each Group Company
(including, in each case, the name and address of the bank with whom the
account is kept and the number and nature of the account) and of all direct
debit or standing order or similar authorities applicable to any of these
accounts and statements showing the balance on each account as at the close
of business on a date not being more than two days prior to Completion are
attached to the Disclosure Letter. Since the date of each statement no
payment out of any of the accounts has been made, except for routine
payments in the ordinary course of trading, and the present balances are
not substantially different from those shown in the statement.
9.2 Amounts represented by cheques, warrants, mandates or other payment
instructions issued or given by the Company which at the date of this
Agreement remain outstanding or unpaid or unperformed do not exceed in the
aggregate [Pound Sterling]1 million.
9.3 In relation to Security Interests and in relation to all overdraft, loan
and other financial and leasing facilities available to the Company:
(a) details in reasonable particularity thereof and true and correct
copies of all documents relating thereto are attached to the
Disclosure Letter;
(b) there has been no contravention of or non-compliance with any
provision of any such document;
(c) no steps for the have been taken or so far as the Warrantors are aware
threatened in relation thereto;
(d) all of the said arrangements or facilities are in full force and
effect;
(e) so far as the Warrantors are aware nothing has been done or omitted to
be done whereby the continuance of the said arrangements and
facilities in full force and effect might be affected or prejudiced;
and
(f) none of the arrangements is dependent on the guarantee or indemnity
of, or on any security provided by, a third party.
9.4 The total amount borrowed by the Company:
(a) from its bankers does not exceed its overdraft facilities; or
(b) from whatsoever source does not exceed any limitation on borrowing
contained in its Memorandum or Articles of Association or equivalent
constitutional documents or any debenture or loan instrument or other
deed or document binding on it.
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9.5 Save for the borrowings referred to in paragraphs 9.3 and 9.4 the Company:
(a) does not have outstanding any loan capital;
(b) has not incurred or agreed to incur any borrowing which it has not
repaid or satisfied;
(c) has not lent or agreed to lend any money which has not been repaid to
it other than trade credit incurred in the normal course of business;
(d) does not own the benefit of any debt present or future (other than
debts due to it in respect of the sale of trading stock in the normal
course of trading); and
(e) is not a party to or has any obligation under:
(i) any loan agreement, debenture, acceptance credit facility, bill
of exchange, promissory note, finance lease, debt or inventory
financing, discounting or factoring arrangement or sale and lease
back arrangement; or
(ii) any other arrangement the purpose of which is to raise money or
provide finance or credit.
9.6 So far as the Warrantors are aware no event has occurred or been alleged
which is or, with the passage of a time and/or the giving of any notice,
certificate, declaration or demand, would become an event of default under,
or a breach of any of, the terms of any loan capital, borrowing, debenture
or financial facility of the Company or would entitle any third party to
call for repayment prior to normal maturity.
9.7 The Company is neither a party to, nor has any liability (including, so far
as the Warrantors are aware, any prospective or contingent liability)
under, any guarantee, indemnity or other agreement or like obligation to
secure or support an obligation of a third party including (without limit)
any Group Company.
9.8 There is no outstanding indebtedness on any account whatsoever owing by the
Company to any Vendor or by any Vendor to the Company.
9.9 No Vendor has given any guarantee or indemnity or created any other like
obligation or given comfort in support of the Company which remains
outstanding.
9.10 The Company does not hold any security (including any guarantee or
indemnity) which is not valid and binding by the Company against the
grantor thereof in accordance with its terms.
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9.11 Completion of this Agreement will not result in the creation,
crystallisation or enforcement of any Security Interest over any asset of
the Company.
9.12 The Disclosure Letter contains full details of each grant or subsidy or
other financial assistance received or receivable by the Company from any
governmental or quasi-governmental authority and so far as the Warrantors
are aware the Company has not done, or omitted to do, any act which could
result in all or part of any such assistance becoming repayable early or
being forfeited or withheld and so far as the Warrantors are aware
Completion of this Agreement will not give rise thereto.
9.13 No loan has been made by the Company in breach of the Consumer Credit Act
1974 or any other law or regulation whether in the United Kingdom or
elsewhere.
10 EMPLOYEES
---------
10.1 There is attached to the Disclosure Letter a schedule showing the following
information in relation to each employee of the Company namely:
(a) name;
(b) date of birth;
(c) job title;
(d) emoluments (including any bonus, commission arrangements and any
non-cash benefits accrued or likely to accrue in the current fiscal
year);
(e) date of commencement of employment or of any previous employment with
which such employment is continuous;
(f) notice period required to be given by the Company and the employee;
(g) whether entitled to participate in the Company's personal pensions
salary sacrifice scheme and the extent of their sacrifice in the
current fiscal year or whether entitled to participate in any of the
Company's pension schemes;
(h) whether or not a member of a trade union; and
(i) date of last increase in salary
and such information is complete and correct in all material respects.
10.2 True, up to date and complete copies of the contracts of employment and the
confidentiality agreements between the Company and its employees and any
other documents currently in force relating to the employment of the
employees are
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attached to the Disclosure Letter together with all service agreements for
the Directors and Associate Directors and copies of all agreements with
consultants currently in force to which the Company is a party.
10.3 Since 1 July 1996 no change has been made in the terms and conditions of
any employee entitled to remuneration at a rate in excess of [Pound
Sterling]50,000 per annum and no such change is anticipated or due within 6
months from the date of this Agreement.
10.4 The Company has maintained adequate up to date records regarding the
service of each of its employees (including details of terms of employment,
payments of statutory or other sack pay, statutory or other maternity pay,
disciplinary and health and safety matters, income tax and social security
contributions and termination of employment).
10.5 Since 1 July 1996, no employee earning in excess of [Pound Sterling]20,000
per annum has given notice terminating his contract of employment or is
under notice of dismissal and no amount due to or in respect of any
employee or former employee is in arrear and unpaid other than his salary
for the month current at the date of this Agreement and in respect of the
reimbursement of the expenses claims already received by the Company from
the employees.
10.6 The Company is not involved in any dispute with its employees or any of
them or any trade union or other organisation formed for a similar purpose
and so far as the Warrantors are aware there are no present circumstances
(including Completion) which are likely to give rise to any such dispute.
10.7 Within the period of one year preceding the date of this Agreement:
(a) the Company has not given notice of any redundancies to the Secretary
of State for Employment or started consultations with any independent
trade union or unions or appropriate representatives and has not
failed to comply with any obligation under Part IV, Chapter II of the
Trade Union and Labour Relations (Consolidation) Act 1992; and
(b) the Company has not been a party to any relevant transfer as defined
in the Transfer of Undertakings (Protection of Employment) Regulations
1981 and the Company has not failed to comply with any duty to inform
and consult any independent trade union or appointed representative.
10.8 No gratuitous payment has been made or promised by the Company in
connection with the actual or proposed termination, breach, suspension or
variation of any employment or engagement of any present or former
director, officer or employee of or consultant to the Company; and there is
no outstanding obligation or ex gratia arrangement for the Company to pay
any compensation to any present or former director, officer, employee or
consultant following the termination of their employment or engagement.
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10.9 There is no collective bargaining agreement or other arrangement (whether
binding or not) between the Company and any trade union or other body
representing its employees.
10.10 With the exception of PAYE and national insurance contributions in respect
of the fiscal year current at Completion the Company does not have
outstanding any undischarged liability to pay to any governmental or
regulatory authority in any jurisdiction any contribution, taxation or
other levy arising in connection with the employment or engagement of
personnel by the Company.
10.11 Details of all existing share option schemes, profit related pay schemes
or other incentive schemes for any director, officer or employee have been
included in the Disclosure Letter and the Company is not proposing to
introduce any new share incentive scheme, share option scheme or profit
sharing bonus or other incentive scheme for any director, officer or
employee.
10.12 So far as the Warrantors are aware neither this Agreement nor Completion
will or is likely to cause any director, officer or senior employee to
terminate his engagement or employment with the Company.
11 CONTRACTS
---------
11.1 No circumstances exist which constitute a ground on which any material
contract to which the Company is a party could be avoided, repudiated,
rescinded, prematurely determined (whether as a result of this Agreement,
the sale of the Sale Shares or otherwise) or declared to be invalid or
which would give any other contracting party the right to impose any
material obligation (whether to make payment on or otherwise) on, the
Company and the Company has not received any notice of a claim to that
effect or notice indicating that such a claim is foreseeable.
11.2 So far as the Warrantors are aware no liability in respect of any claim
against the Company arising out of any defect in design, material or
workmanship of any products supplied by the Company before Completion or
out of any error or omission on the part of the Company in the supply of
any service before Completion will exceed in amount the limit of insurance
cover in force for the benefit of the Company against such a claim and all
such claims will be met under such insurance cover.
11.3 The Company is not a party to any contract, or legal obligation which:
(a) is of an unusual or abnormal nature, or outside the ordinary course of
trading or involving or which may involve obligations on the Company
calling for special mention; or
(b) is of a long term nature (that is, unlikely to have been fully
performed in accordance with its terms within 18 months after the date
on which it was entered into or undertaken); or
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(c) is incapable of termination by the Company in accordance with its
terms on no more than 12 months notice; or
(d) gives any party an option to acquire or dispose of any asset or
requires another person to do so; or
(e) is known by the Warrantors to be likely to result in a loss to the
Company on completion or performance; or
(f) cannot readily be fulfilled or performed by the Company on time
without undue or unusual expenditure of money, effort or personnel; or
(g) involves payments by or to the Company by reference to fluctuations in
any index of retail prices, any other index, the rate of exchange for
any currency or the cost or value of any raw material or commodity
(other than contracts in the ordinary course of trading); or
(h) (or in relation to which) any relevant requirements of section 319 CA
1985 have not been complied with; or
(i) other than in the ordinary course of business involves or is likely to
involve outstanding expenditure by the Company of more than
[Pound Sterling]20,000; or
(j) involves or is likely to involve the supply of goods or services the
aggregate sales value of which will, during the next two years,
represent in excess of 5 per cent. of the turnover of the Company for
the preceding financial year; or
(k) is a contract for hire or rent, hire-purchase or purchase by way of
credit or instalment payment or for maintenance of the Company's
assets the annual payment for which exceeds [Pound Sterling]20,000,
and the Company has no offer, bid, tender or proposal outstanding which by
the acceptance or other act of some other person would give rise to any
such transaction.
11.4 The Company has no liability for industrial training levy or for any other
statutory or governmental levy or charge.
11.5 There are no powers of attorney or other authorities (express or implied)
which are still outstanding or effective to or in favour of any person to
enter into any contract or commitment or to do anything on behalf of the
Company (other than on such authority of directors or of employees as
either is ostensible or is implied to enter into routine contracts in the
normal course of their duties).
11.6 The Company is not a party to any agreement or arrangement or under any
obligation under which it is or may become liable to make any investment
(as
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defined in section 1(1) of the Financial Services Act 1986) with, or to
deposit any money with or to provide any loan or financial accommodation or
credit (other than normal trade credit) to, any person or to subscribe,
convert, acquire, dispose of or underwrite any investment.
12 THE PROPERTIES AND OTHER INTERESTS IN LAND
------------------------------------------
12.1 The Company is the beneficial owner of those Properties set opposite its
name in schedule 4 and the Properties comprise all the properties owned or
occupied by any Group Company or in which the Group Company has any right
or interest. The information set out in schedule 4 is true and complete and
accurate at the date hereof.
12.2 The title to each of the Properties is properly constituted by documents of
title which are in the possession or under the control of the Company.
12.3 Copies of all the documents relating to the title to the Properties and
copies of all the documents in the Company's possession relating to the use
of the Properties have been produced to the Purchaser's Solicitors.
12.4 Each of the Properties is free from:
(a) any undisclosed mortgage, charge, rent-charge, lien or other third
party right in the nature of security and no such matter exists which
is capable of registration against any of the Properties; and
(b) so far as the Warrantors are aware any undisclosed overriding
interests (as defined in section 70 of the Land Registration Act
1925).
12.5 The Company has sole and exclusive possession of each of the Properties
vested in it and (subject as aforesaid) there are no circumstances known to
the Warrantors which would entitle or require any landlord to exercise any
powers of entry or right to forfeiture or right to take possession or which
would otherwise restrict or terrainate the continued sole and exclusive
possession or occupation of each of the Properties by the Company.
12.6 Save as revealed by the copy documents supplied to the Purchasers'
Solicitors, no person is entitled to any option, interest in, right of
pre-emption, first refusal, surrender or determination relating to the
Company's interest in any of the Properties. Any options or rights enjoyed
by the Company have been properly protected by the appropriate registration
where necessary and all appropriate notices have been properly served where
any such option or right has become exercisable.
12.7 Save as revealed by the copy documents supplied to the Purchaser's
Solicitors or apparent on inspection there is no undisclosed covenant,
stipulation, restriction, easement, right of way, exception, reservation,
grant, condition, agreement or
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declaration affecting any of the Properties or its use nor is there any
subsisting or alleged breach of any of the said matters.
12.8 Save as revealed by the copy documents supplied to the Purchasers'
Solicitors, the Properties are not subject to the payment of any outgoings
other than general business or water rates and the sums reserved by the
lease or tenancy agreement under which any of the Properties are held.
12.9 So far as the Warrantors are aware the Company has performed and observed
in all material respects the repairing and decorating obligations (whether
under statute or the relevant leases) in relation to the Properties
12.10 The Company has paid all outgoings for which proper demand has been made
and all rent or licence fees which have become due in respect of each of
the Properties. The Company has performed and observed all material
current obligations under all covenants (excluding all repairing and
decorating obligations) (whether affecting the freehold or leasehold
titles), conditions, agreements, statutory requirements, planning
consents, byelaws, orders and regulations affecting any of the Properties,
its use and any business of the Company there carried on. No notice of any
breach of any such matter has been received. No use of any of the
Properties contravenes in any material respect any of such covenants,
conditions, agreements, statutory requirements, planning consents,
byelaws, orders or regulations.
12.11 The actual existing use of each of the Properties is specified in schedule
4 and is lawful or permitted under the Town and Country Planning
legislation. The Company has received no notice of any contravention of
any of the provisions of the Town and Country Planning legislation. There
are no outstanding enforcement notices, Stop Notices, enforcement
proceedings or appeals (whether against refusal, deemed or otherwise,
conditions or enforcement). No existing user is stated to be personal. No
planning permission is suspended or remains unimplemented in whole or in
part. No planning application has been submitted which awaits
determination.
12.12 There are no outstanding orders or notices of any local or other authority
affecting any of the Properties.
12.13 There are not in force or required to be in force any licences (whether
under the Licensing Act 1988 or other statutes or regulations thereunder
or otherwise) which apply to any of the Properties or to the business
carried on therein.
12.14 The Company has not received notice of nor is it aware of any dispute
relating to any of the Properties.
12.15 So far as the Warrantors are aware, there is no material defect in the
construction or condition of any of the Properties.
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12.16 In relation to such of the Properties as are leasehold where the rent
reserved by the lease or tenancy of any one of the Properties is subject
to review, all rent review notices have been served within any requisite
time limits and there are no disputes outstanding as to the settlement of
the relevant level of rent nor have there been previous disputes as to the
interpretation or implementation of the rent review provisions.
12.17
(a) Written particulars (including copies of all documents where
requested) of all sub leases, sub tenancies and licences for
occupation of any of the Properties or any parts thereof and of all
variations and proposed variations thereof or derivative interests
therein of which the Company or the Warrantors is aware and of the
grant or proposed grant of any licerices pursuant to the provisions of
any such documents have been supplied to the Purchaser.
(b) There is no claim or dispute pending or, so far as the Warrantors are
aware expected, either by or with the Company or by or with any such
sub lessee, licensec or occupier.
12.18 No solicitors other than the Vendor's Solicitors or Messrs. W. Davies &
Son are instructed by or on behalf of the Company in connection with any
matter relating to any of the Properties.
12.19 Since the Accounts Date the Company has not acquired or disposed of or
agreed to acquire or dispose of the whole or any part of any land or
buildings or any interest therein, nor will it acquire or dispose of the
whole or any part of any land or buildings or interest therein without the
prior written consent of the Purchaser.
12.20 The Company has not at any time entered into either the lease of or a
licence to assign any leasehold property as a guarantor of the lessee's
covenants contained in any such document. The Company has not at any time
assigned or otherwise disposed of any leasehold property without receiving
a full and legally effective indemnity in respect of its liability under
the lease pursuant to which that property was held. No claim has been made
against the Company in respect of any leasehold property formerly held by
it or in respect of which it acted as a Guarantor nor is any such claim
anticipated.
13 ENVIRONMENTAL MATTERS
---------------------
13.1 The Company:
(a) complies and has at all times complied with all Environmental Laws and
Environmental Licences;
(b) has obtained and maintained in full force and effect all Environmental
Licences, and there are no conditions, facts or circumstances
entitling any
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such Environmental Licence to be revoked, suspended, amended, varied,
withdrawn or not renewed or which would prevent compliance with any
Environmental Licence; and
(c) is not required by any Environmental Licence or any Environmental Law
or as the result of any Environmental Claim to incur any expenditure
which is material in the context of the business of such Group Company
or to desist from taking any action which might have a material
adverse effect on such Group Company's financial condition.
13.2 There are attached to the Disclosure Letter complete and up-to-date copies
of all Environmental Licences and all orders, notices, directions,
applications, appeals, amendments and reports and any other communications
relating to or in connection with any Environmental Licence.
13.3 No Environmental Claim is pending or has been made or threatened against
the Company or any of its past or present directors, secretary or senior
employees in their capacity as such or any occupier of any property owned
or leased by the Company and the Warrantors do not have any reason to
believe that the Company or any of its officers has or is likely to have
any liability in relation to Environmental Matters.
13.4 No Relevant Substance has been deposited, disposed of, kept, treated,
imported, exported, transported, processed, manufactured, used, collected,
sorted or produced at any time, or is present in the environment (whether
or not on property owned, leased, occupied or controlled by a Group
Company) in circumstances, and there is nothing arising out of the business
of the Company which are likely to result in an Environmental Claim against
the Company or which would entitle any authority lawfully to bring an
Environmental Claim against the Company or which would have a material
adverse effect on the use or value of any property owned, leased, occupied
or controlled by a Group Company.
13.5 There are attached to the Disclosure Letter material details (including,
where appropriate copies of relevant reports or other documents) of any
inspections, investigations, studies, audits, tests, reviews or other
analyses by or supplied to the Company in relation to Environmental Matters
relating to the Company or any property now or previously owned, leased or
occupied by any of the Group Companies.
14 INSIDER MATTERS
---------------
14.1 There is not, nor during the six years prior to the date hereof has there
been, any agreement, arrangement, loan, quasi-loan or undertaking to which
the Company is a party and in which any Vendor or any other person
beneficially interested in the share capital of the Company at that time or
(except for service agreements) any director of the Company or any person
associated with any of them within the meaning of section 435 Insolvency
Act 1986 is or has been interested.
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14.2 The Company has not been party to any transaction falling within section
320 CA 1985 (substantial property transactions).
14.3 No member of the Group has transferred any asset to any Vendor or to any
subsidiary of any corporate Vendor, or to any person beneficially
interested in any part of the share capital of any member of the Group, or
any director of any member of the Group or any person associated with any
such director (within the meaning of section 435 Insolvency Act 1986),
except at market value.
15 INTELLECTUAL PROPERTY RIGHTS
----------------------------
15.1 Complete and accurate particulars of all Intellectual Property Rights of
which the Company is, or has applied to be, registered as proprietor are
set out in the Disclosure Letter.
15.2 Complete and accurate particulars of all material licences granted to or by
the Company in respect of Intellectual Property Rights or Confidential
Information are set out in the Disclosure Letter.
15.3 All application, renewal and other official statutory and regulatory fees
rendered to and received by the Company prior to the date hereof relating
to the application, maintenance and renewal of the Intellectual Property
Rights or for the protection or enforcement thereof have been duly paid.
15.4 All Intellectual Property Rights used by the Company in connection with its
business are subsisting and not the subject of any application for
cancellation or amendment or licence of fight or compulsory licence and are
either validly licensed to the Company or legally and beneficially owned
solely by the Company free from and clear of any liens, mortgages, security
interests, charges, restrictions or encumbrances (other than licences
granted by the Company to customers in the ordinary course of its business)
and (to the extent of rights arising in the UK where registration is the
only means of statutory protection) the Company is registered or has
applied to be registered as proprietor thereof. The Company has the fight
and authority to use all Intellectual Property Rights used by the Company.
15.5 The Company has not granted and is not obliged to grant any licences under
any Intellectual Property Rights owned by it or licensed to it nor to
provide Confidential Information to any person in each case other than to
customers in the ordinary course of its business.
15.6 The Company has not infringed the Intellectual Property Rights of any other
person.
15.7 There exists no actual or threatened infringement (including misuse of
Confidential Information) or so far as the Warrantors and Company are aware
any event likely to constitute an infringement or breach by any third party
of any
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of the Intellectual Property Rights held or used by the Company within the
past three years.
15.8 No disclosure has been made to any person other than the Purchaser of any
material Confidential Information of the Company except in the ordinary
course of business and on the footing that such disclosure is to be
treated as being of a confidential nature.
15.9 There has occurred no act, omission or event which would entitle any
authority or person to cancel, forfeit or modify any registerable
Intellectual Property Rights owned or used by the Company and there is no
litigation or other proceedings (whether legal or administrative) pending
or threatened involving any of the Intellectual Property Rights or so far
as Warrantors and the Company are aware any circumstance likely to give
rise to any such proceeding and to the best of the information, knowledge
and belief of the Vendor no person has made any claim adverse to the
continuing enjoyment by the Company of the Intellectual Property Rights.
15.10 Since the Accounts Date the Company has not sold, granted an option to
purchase in respect of or otherwise disposed of any Intellectual Property
Rights owned or used by the Company otherwise than by licences to
customers in the ordinary course of business.
15.11 The Company does not use or otherwise carry on its business under any name
other than its corporate name and its letters and order forms comply with
all applicable legislation.
15.12 All inventions, developments and software made by any employees of the
Company and used or enjoyed by the Company were made in the course of the
normal duties of the employee concerned and are owned by the Company and
no claim for compensation under section 40 Patents Act 1977 or otherwise
has been made against the Company nor to the best of the knowledge
information and belief of the Warrantors is any such claim likely to be
made.
15.13 No person is entitled to assert any moral or similar right in respect of
any Intellectual Property Rights used by the Company.
15.14 The Warrantors and the Company are not aware of any material
non-conformance in any computer programs owned or used by the Company with
the written specifications against which they were supplied to the Company
and such computer programs are sufficient for the requirements of the
Company's businesses as currently carried on.
15.15 The Company has in its possession and control all source codes relating to
the computer programs the Intellectual Property Rights in which are owned
by it.
15.16 All computer programs owned and used by the Company were either:
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(a) written or created by the employees of the Company in the ordinary
course of their duties; or
(b) written for the Company by a third party and such party has executed a
valid and effective assignment of all Intellectual Property Rights in
such computer programs in favour of the Company.
15.17 The Company operates logical, physical and environmental security
procedures and commercially available anti-virus software in line with
those procedures to detect so far as possible and deal with such
infections or contamination.
15.18 The hardware and computer programs used or acquired for the business of
the Company do not infringe any Intellectual Property Right or other right
of any third party and so far as the Warrantors and the Company are aware
no third parties are infringing the third party or other right in the
hardware and computer programs owned or used by the Company.
15.19 All necessary back-up systems are utilised to ensure that in the event of
any fault in any essential computer system used by the Company, no data
might be irrecoverably lost and no such faults have occurred in the last
12 months.
15.20 The Company has complied in all respects with the provisions of the Data
Protection Act 1984 and no order has been threatened against the Company
for erasure of personal data under section 24(3) Data Protection Act 1984.
16 LITIGATION
----------
16.1 Neither the Company nor so far as the Warrantors are aware any person for
whose acts the Company may be vicariously liable (in circumstances where
the company may be so liable) is engaged in any capacity in any
litigation, arbitration, prosecution or other legal proceedings or in any
proceedings or hearings before any statutory or governmental body,
department, board or agency; no such matters are pending or so far as the
Warrantors are aware threatened; and the Warrantors are not aware of any
circumstances which are likely to give rise to any such matter.
16.2 There is no outstanding judgment, order, decree, arbitral award or
decision of any court, tribunal, arbitrator or governmental agency against
the Company or so far as the Warrantors are aware any person for whose
acts the Company may be vicariously liable.
16.3 The Company is not a party to any subsisting undertaking given to any
court or third party arising out of any proceedings of the kind described
in paragraph 16.1.
17 INSOLVENCY
----------
17.1 No order has been made and no resolution has been passed for the winding
up of the Company or for a provisional liquidator to be appointed in
respect of the
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Company and no petition has been presented and no meeting has been
convened for the purpose of winding up the Company.
17.2 No administration order has been made and no petition for such an order
has been presented in respect of the Company.
17.3 No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Company or in respect of all or any
part of its assets.
17.4 No voluntary arrangement has been proposed under section 1 Insolvency Act
1986 in respect of the Company.
17.5 The Company is not insolvent or unable to pay its debts within the meaning
of section 123 Insolvency Act 1986 and has not stopped paying its debts as
they fall due.
17.6 No distress, execution or other process has been levied or threatened in
respect of any asset of the Company.
17.7 No composition in satisfaction of the debts of the Company or scheme of
arrangement of its affairs or compromise or arrangement between it and its
creditors and/or members or any class of its creditors and/or members has
been proposed, sanctioned or approved.
17.8 No event analogous to any of the circumstances mentioned in any of the
foregoing sub-paragraphs of this paragraph 17 has occurred in relation to
the Company outside England.
17.9 No guarantee, loan capital, borrowed money or interest is overdue for
payment by the Company and no other obligation or indebtedness is
outstanding which is substantially overdue for performance or payment.
17.10 So far as the Warrantors are aware no circumstances have arisen which are
likely to result in:
(a) a transaction to which the Company is a party being set aside; or
(b) a third party claim involving any asset owned or used by the Company
being made under section 238 or 339 (Transactions at an undervalue)
or sections 239 or 340 (Preferences) Insolvency Act 1986.
18 PENSIONS
--------
18.1 In this paragraph:
"DISCLOSED ARRANGEMENTS" means the Pension Schemes, the ICV Limited Group
Life Assurance Scheme ("LIFE SCHEME") the ICV Group Limited Permanent
Health Insurance Scheme ("PHI SCHEME") and the ICV Group Travel Insurance
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Scheme ("GROUP TRAVEL INSURANCE SCHEME") any other arrangements for
providing Relevant Benefits details of which are contained in the
Disclosure Letter;
"RELEVANT BENEFITS" means pensions, allowances, lump sums, gratuities,
expense payments or other like benefits in respect of retirement, death,
termination of employment (whether or not voluntary), ill-health, injury,
disablement or medical or dental treatment provided for or in respect of
any Relevant Employee;
"RELEVANT EMPLOYEE" means any director or former director or employee or
former employee of the Company;
"PENSIONS ACT" means the Pension Schemes Act 1993;
"PENSION SCHEMES" means the David Taylor SSAS ("SSAS"), the Selective
Pension Plan with Clerical and Medical Assurance Limited. ("SELECTIVE
PENSION PLAN"), the Personal Retirement Account with Save & Prosper (the
"PERSONAL RETIREMENT ACCOUNT"), the Directors Retirement Account with
Albany Life Assurance (the "ALBANY LIFE SCHEME") and the Professional Life
Executive Pension Scheme with Skandia Master Trust No. 1 (the "SKANDIA
SCHEME").
18.2 Apart from the Disclosed Arrangements, the Company is not under any legal
liability or voluntary or moral obligation to provide any Relevant Benefits
(whether on a funded or unfunded basis) or to contribute to any scheme or
arrangement providing Relevant Benefits (including any personal pension
scheme approved under Chapter IV, Part XIV ICTA 1988) nor has any proposal
been announced to pay any Relevant Benefits or establish or contribute to
any such scheme or arrangement.
18.3 True and complete copies have been supplied to the Purchaser of:
(a) all trust deeds, rules, notices and other documents governing the
Disclosed Arrangements and the participation therein of the Company;
(b) all announcements, members' booklets and other explanatory literature
of current effect relating to the Disclosed Arrangements and any
letters or other documents relating to provisions for individual
Relevant Employees or groups of Relevant Employees;
(c) all policies, agreements and other arrangements of current effect
entered into in relation to the Disclosed Arrangements with insurance
companies, investment managers, advisers or other persons;
(d) the latest actuarial valuation report and trustees' report and audited
accounts for the Pension Schemes together with any supplementary
actuarial or accounting advice relating to the Pension Schemes; and
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(e) those undertakings in relation to the Pension Schemes or the Life
Scheme given to the Occupational Pensions Board or the Pension Schemes
Offflee (or its predecessor, the Superannuation Funds Office) of the
Inland Revenue and any notification of approval of the Pension Schemes
or the Life Scheme by the Inland Revenue.
18.4 Full details in writing have been supplied to the Purchaser of all
discretionary practices in relation to the Disclosed Arrangements
(including, without limitation, in relation to eligibility, contributions,
increases in pensions in payment and in deferment, optional benefits and
augmentation of benefits) and the current terms applicable on early
retirement (voluntarily or as a result of ill-health or redundancy), late
retirement, commutation, optional dependant's pension and other optional
arrangements.
18.5 None of the resources of the Pension Schemes are invested in any loan or
other arrangement with any beneficiary or any employer-related investment
(as defined in section 112 Pensions Act) or are subject to any charge or
encumbrance or are being used for the purposes of stock lending or similar
arrangements.
18.6 All of the Company's current employees other than Mrs. S. Clayton and
Ms J. Letch are covered by the PHI Scheme and Life Scheme.
18.7 David Taylor is the only Relevant Employee for whom Relevant Benefits are
provided under the Pension Schemes and there are no other arrangements in
place in respect of Relevant Benefits for any other Relevant Employee
other than the PHI Scheme and the Life Scheme and the Group Travel
Insurance Scheme.
18.8 The current rates of contributions payable in respect of the Disclosed
Arrangements by the Company and, where applicable, the Relevant Employees
are as set out in the Disclosure Letter and all such contributions up to
and including the Completion Date have been paid or will have been paid by
the Completion Date.
18.9 All actuarial consultancy, legal and other fees, charges and expenses in
respect of the Disclosed Arrangements other than costs incurred in
connection with the preparation, negotiation and completion of this
Agreement and the day to day running costs incurred in the ordinary course
of business have been paid or will have been paid by the Completion Date
and so far as the Warrantors are aware no additional services have been
provided in relation to the Disclosed Arrangements in respect of which an
account or other invoice has not been rendered.
18.10 All death in service benefits (other than refunds of contributions)
payable under the Pension Schemes, and all benefits under the other
Disclosed Arrangements, are now and will up to and including the
Completion Date be insured in the sums disclosed in the Disclosure Letter;
under policies effected with the insurance companies listed in the
Disclosure Letter. So far as the Warrantors are aware cover under such
policies is provided at the relevant insurance company's normal
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rates and on its normal terms for persons in good health. All premiums due
under such policies have been paid or will have been paid by the
Completion Date; and so far as the Warrantors are aware there are no
grounds on which any such policies may be avoided.
18.11 The Pension Schemes are not contracted-out schemes within the meaning of
section 7(3) Pensions Act.
18.12 The Warrantors are not aware of any breach of trust in respect of the
Disclosed Arrangements. There are no material actions, suits or claims
(other than routine claims for benefits) which are pending or so far as
the Warrantors are aware threatened in respect of the Disclosed
Arrangements no or any circumstances existing which may give rise to any
such actions, suits or claims.
18.13 No payment of any of the assets of the Pension Schemes has been made to
the Company (or any other participating employer) or will have been so
made up to and including the Completion Date.
18.14 So far as the Warrantors are aware the Disclosed Arrangements have been
administered in accordance with their governing documents and all
applicable legal requirements, including (without limitation) (a) in
relation to the Pension Schemes, the requirements of the Pensions Act
relating to preservation (Part IV, Chapter I); equal access (section 118);
disclosure of information (section 113); registration (section 6);
revaluation of pensions (Part IV, Chapter II); and transfer values (Part
IV, Chapter Iv); and (b) the equal treatment requirements of Article 119
of the Treaty of Rome; and (c) in relation to the SSAS, the requirements
of the Retirement Benefits Schemes (Restriction on Discretion to Approve)
(Small Self-Administered Schemes)Regulations 1991.
18.15 The Pension Schemes and the Life Scheme have been formally approved by the
Board of Inland Revenue and are treated by them as exempt approved schemes
under Chapter I, Part XIV ICTA 1988 and there are no circumstances
existing which would cause such approval to be withdrawn or placed in
jeopardy.
18.16 So far as the Warrantors are aware all records relating to the Disclosed
Arrangements have been properly maintained.
18.17 There are no employers participating in the Disclosed Arrangements on a
temporary basis and there are no arrangements outstanding in relation to
paying or receiving any bulk transfer payment in connection with the
Pension Schemes.
18.18 So far as the Warrantors are aware the assets of the Pension Schemes have
not been depleted by any improper or unlawful act and, in respect of such
assets as are held to provide money purchase benefits or in respect of
additional voluntary contributions such assets represent fully all such
contributions paid by or in respect of the relevant members together with
all income and gains accruing thereto less any costs or deductions made by
the Trustees of the Pension Schemes.
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19 EC/COMPETITION MATTERS
----------------------
19.1 The Company conducts, and has conducted its business fully in accordance
with the requirements of all competition laws (whether of the UK, EEC, or
other jurisdiction) applicable to its business activities and has not
infringed such requirements nor been investigated for any alleged
non-compliance or infringement nor given any undertakings in connection
therewith.
19.2 For the purposes of paragraph 19.1 and 19.3 the term "competition laws"
includes any applicable rules dealing with state aid, public procurement,
or anti-dumping, and the requirements of any special regulatory regime to
which the Company may be subject in any area of its activities.
19.3 The Company is not subject to any prohibition, order, condition,
undertaking, assurance or similar measure or obligation imposed by or under
any of the laws referred to in paragraph 19.1.
19.4 The Company is not, and has not been subject to any investigation, request
for information, notice or other communication (whether formal or informal,
and whether or not in writing) by any court, governmental or regulatory
authority pursuant to any of the laws referred to in paragraph 19.1.
19.5 The Warrantors have no reason to believe that any such action as is
mentioned in paragraph 19.1 will be taken against it in relation to any of
its current activities.
20 MISCELLANEOUS
-------------
20.1 No Vendor has any interest in any other company or business which has a
close trading relationship with or is in competition with the Company.
20.2 No-one is entitled to receive from the Company any finder's fee, brokerage
or commission or other benefit in connection with the sale of the Sale
Shares.
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PART C - TAXATION AND SOCIAL SECURITY WARRANTIES FROM THE WARRANTORS
--------------------------------------------------------------------
1.1 The Tax Returns which ought to have been made by or in respect of the
Company, including (without limitation):
(i) returns under section 203 ICTA 1988 and the Income Tax
(Employments) Regulations 1993 (PAYE) and regulations governing
the deduction of national insurance contributions; and
(ii) returns of distributions and of income tax and advance
corporation tax under section 234(5)-(9) and Schedules 13 and 16
ICTA 1988
have been duly made; all such Tax Returns and any other notices
(including notification of chargeability to corporation tax under
section 10(1) Taxes Management Act 1970 ("TMA 1970")), accounts and
information supplied to the Inland Revenue or H.M. Commissioners of
Customs and Excise ("Customs") or other Taxation Authority concerned
for any such purposes are up-to-date, correct and have been made on a
proper basis; none of such Tax Returns, notices, accounts or
information is disputed in any material respect by the Taxation
Authority concerned and there is no fact known to the Warrantors,
having made all reasonable enquiries, which might give rise to any
such dispute or to any liability to Taxation not provided for in the
Accounts in respect of any accounting period (as defined in section 12
ICTA 1988) or any other period by reference to which such liability to
Taxation may arise, in either case ending on or before the Accounts
Date.
(b) Other than as disclosed in the Disclosure Letter, in relation to all
such Tax Returns, either the time limit for the assessment of any
liability to Taxation by reference thereto has expired or such Tax
Returns have been agreed with the relevant Taxation Authority such
that any liability to Taxation in respect of the accounting period (or
other relevant period) or matter the subject thereof has been finally
determined and any such liability to make an actual payment of
Taxation has been discharged by payment in full of the relevant amount
of Taxation.
1.2 In all computations submitted to the Inland Revenue proper adjustment has
so far as material been made for any disallowable expenditure by reason of
section 577 ICTA 1988.
1.3 Other than as disclosed in the Disclosure Letter, all Taxation for which
the Company is liable and which ought to have been paid has been paid.
Without prejudice to the generality of the foregoing, all income tax
deductible and payable under the PAYE system (including, but not limited
to, income tax in relation to the sub-contractor's tax deduction scheme,
casual labour and employee benefits) has so far as required been deducted
from all payments made by the Company; all amounts due to be paid to the
Inland Revenue in respect of such income tax have been paid, and all
deductions and payments required to be made by the Company
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in respect of National Insurance contributions (including employers
contributions) have been made.
1.4 Other than as disclosed in the Disclosure Letter, the Company is not
liable, and has not within three years prior to the date hereof, been
liable to pay any penalty, fine, surcharge or interest in connection with
any Taxation.
1.5 All payments required to be made by the Company by way of statutory sick
pay pursuant to section 151 Social Security Contributions and Benefits Act
1992 and the regulations made thereunder have been duly made; no such
payment or decision not to make a payment of statutory sick pay is under
dispute or, so far as the Warrantors are aware, will be disputed either by
an employee (or any person acting on his behalf) or by the Secretary of
State for Social Services; and no recovery of statutory sick pay paid by
the Company has been denied, whether by reason of section 158 Social
Security Contributions and Benefits Act 1992 or otherwise.
1.6 Other than as disclosed in the Disclosure Letter, no payment has been made
by the Company to or in respect of any of its directors or any director of
any of the Vendors (including, but not limited to, pension contributions)
which will not be deductible for corporation tax purposes, either in
computing its income profits or in computing the corporation tax payable by
it.
1.7 The provisions included in the Accounts are sufficient to cover all
Taxation in respect of all accounting periods ended on or before the
Accounts Date for which the Company was then or might at any time
thereafter become or have become liable including (without limitation)
Taxation:
(a) on or in respect of or by reference to the profits, gains or income
earned or accrued or deemed for Taxation purposes to be earned or
accrued for any period ended on or before the Accounts Date; or
(b) in respect of distributions made and interest and charges on income
paid on or before the Accounts Date.
1.8 Full disclosure has been made in the Disclosure Letter of any material
difference between the accounting and the taxation treatment of any items
in the Accounts.
1.9 Full disclosure has been made in the Disclosure Letter of all those matters
relating to Taxation in respect of which the Company has, or will at
Completion have, an outstanding entitlement under any statute relating to
Taxation to make:
(a) any claim, disclaimer or election for relief from Taxation;
(b) any election for an alternative basis or method of Taxation;
(c) any appeal against any assessment to Taxation; or
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(d) any application for postponement of Taxation,
in any case falling within (a) or (b) above, where, to the best of the
Warrantors' knowledge, such claim, disclaimer or election is material to
the Company.
1.10 The Company has sufficient records to determine the Taxation consequences
which would arise on any disposal or on the realisation of any asset owned
at the Accounts Date or acquired since that date but before Completion
(including, without limitation on the generality of the foregoing, the
Taxation consequences of any restriction on set-off of pre-entry losses
pursuant to Schedule 7A TCGA 1992).
1.11 Other than as disclosed in the Disclosure Letter, the amount of Taxation
chargeable on the Company during any accounting period ending on or within
six years before the Accounts Date has not, to any material extent,
depended on any concession, agreement or other formal or informal
arrangement with any revenue authority.
1.12 Since 1984, the Company has not been a close company within the terms of
section 414 ICTA 1988.
1.13 Since the Accounts Date:
(a) other than as disclosed in the Disclosure Letter, no dividend has been
declared or paid on, and no distribution of capital made in respect
of, any share capital of the Company and no loan or loan capital of
the Company has been paid in whole or in part;
(b) other than as disclosed in the Disclosure Letter, the Company has not
made any claim under any of sections 152, 153, 154, 175 and 279 TCGA
1992;
(c) other than as disclosed in the Disclosure Letter, no expenditure
(other than capital expenditure) has been incurred nor any rents,
interest, annual payments or any other sums have been paid or are
liable to be paid by the Company which are wholly or partly
disallowable as a deduction or a charge on income in computing profits
for the purposes of corporation tax;
(d) other than as disclosed in the Disclosure Letter, no event has
occurred which will result in the Company becoming liable to pay or
bear a Taxation liability directly or primarily chargeable against or
attributable to another person, firm or company;
(e) no accounting period (as defined in section 12 of ICTA 1988) of the
Company has ended as referred to in section 12(3) of ICTA 1988;
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(f) no disposal has taken place or other event occurred which, so far as
the Warrantors are aware, will or is likely to have the effect of
crystallising a liability to Taxation which should have been included
in a provision for deferred taxation contained in the Accounts if such
disposal or other event had been planned or predicted at the Accounts
Date;
(g) other than as disclosed in the Disclosure Letter, the Company has not
paid any Taxation after its due date for payment and does not owe any
Taxation the due date for payment of which has passed or will arise in
the 30 days after the date of this Agreement; and
(h) the Company has not been involved in any transaction which has given
or may give rise to a liability to Taxation on the Company (or would
have given or might give rise to such a liability but for the
availability of any relief) other than Taxation in respect of normal
trading income or receipts of the Company arising from transact'ions
entered into by it in the ordinary course of business.
1.14 No relief has been claimed by and/or given to the Company, or taken into
account in determining or eliminating any provision for Taxation or
deferred tax in the Accounts, which is likely to the knowledge of the
Warrantors to be effectively withdrawn, postponed, restricted or otherwise
lost as a result of any event or circumstance occurring or arising at any
time after Completion.
1.15 During the three years before the date hereof:
(a) there has been no major change in the nature or conduct of a trade
carried on by the Company; and
(b) the scale of activities of any trade carried on by the Company has not
been small or negligible within the meaning of sections 245 or 768
ICTA 1988.
1.16 Full disclosure (in the form of the tax computations as disclosed) has been
made to the Purchaser of all material capital expenditure qualififing for
capital allowances and all balancing adjustments pursuant to the Capital
Allowances Act 1990 ("CAA 1990") and Chapter I Part XIII ICTA 1988 in
respect of any accounting period (as defined in section 12 ICTA 1988) of
the Company ended in the six years before the Accounts Date.
1.17 In respect of all plant and machinery held by the Company under any lease,
hire purchase or conditional sale agreement, such plant and machinery is
and has at all times been used for a qualifying purpose in the requisite
period in accordance with Chapter V Part II CAA 1990.
1.18 Save as disclosed in the Accounts, since the end of the last such
accounting period referred to in paragraph 1.16 above other than in the
ordinary course of business the Company has neither done nor omitted to do
nor agreed to do nor
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permitted to be done any act as a result of which there may be made either
a balancing charge in respect of such capital expenditure within the
provisions referred to in paragraph 1.16 above or any recovery of excess
relief within section 47 CAA 1990.
1.19 No balancing charge in respect of any capital allowances claimed or given
will arise if any assets of the Company were to be realised for a
consideration equal to the amount of the book value thereof as shown or
included in the Accounts.
1.20 Other than as disclosed in the Disclosure Letter, and disregarding any
relief or allowance (including indexation relief) available to the Company
(other than amounts allowable under section 38 TCGA 1992), no chargeable
gain or profit would arise if any asset of the Company (other than trading
stock) were to be realised for a consideration equal to the book value
thereof as shown or included in the Accounts.
1.21 All capital assets of the Company were acquired at market value at the time
of acquisition and there are no circumstances giving rise or which may give
rise to liability or loss under or pursuant to any of sections 17, 30, 139,
140, 176, 177, 178 and 179 TCGA 1992 as a result of the proposed sale of
the Sale Shares or of any other transaction.
1.22 Other than as disclosed in the Disclosure Letter, the Company has neither:
(a) repaid, redeemed or purchased or agreed to repay, redeem or purchase
any of its share capital; nor
(b) capitalised or agreed to capitalise in the form of shares or
debentures, any profits or reserves of any class or description, or
otherwise issued or agreed to issue share capital otherwise than for
new consideration (as defined in section 254 ICTA 1988).
1.23 The Company has not made any disposals to which section 35 TCGA 1992
applies (1982 rebasing).
1.24 So far as the Warrantors are aware, the Company has made all withholdings,
deductions and retentions of or on account of Taxation as it was or is
obliged to make and all such payments of or on account of Taxation as
should have been made to any tax authority in respect of such withholdings,
deductions or retentions.
1.25 Except as provided for in the Accounts no distribution (within the meaning
of sections 209 and 210 ICTA 1988) has been made by the Company during the
6 years ended on the Accounts Date.
1.26 The Company is not, nor could it be treated as, thinly capitalised for any
Taxation purpose. No tax authority has denied relief for interest paid by
the Company, and no such relief is likely, to the knowledge of the
Warrantors, to be denied.
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1.27 The Company is not liable for any Taxation owed by any other company which
has been sold out of the same group of companies as the Company in respect
of accounting periods beginning before such sale.
1.28 Since 1st January 1990, the Company has not been concerned in any
transaction in which the following provisions have been or could be applied
except where all applicable clearances (based on full disclosure of
material facts and circumstances) have been obtained:
sections 703 and 704 ICTA 1988;
sections 765, 766 and 767 ICTA 1988;
section 770 ICTA 1988;
section 776 ICTA 1988;
sections 779 to 786 (inclusive) ICTA 1988;
sections 135, 136 and 137 TCGA 1992;
sections 139 and 140 TCGA 1992;
section 192 TCGA 1992 and sections 213 to 218 (inclusive) ICTA 1988;
sections 219 to 229 (inclusive) ICTA 1988.
1.29 The Company has not received notice of any direction made by the Inland
Revenue under section 747 ICTA 1988 and no circumstances exist which would
entitle the Inland Revenue to make such a direction and to apportion to the
Company any profits of a controlled foreign company pursuant to section 752
ICTA 1988.
1.30 No circumstances exist by virtue of which the provisions of Chapter V of
Part XVII ICTA 1988 could apply to a disposal of an asset by the Company.
1.31 There have been no claims by the Company for group relief under Chapter IV
of Part X ICTA 1988 or for the surrender of advance corporation tax under
section 240 ICTA 1988 for the four years ended on the Accounts Date. The
Company is not liable to make any payment for the relief or advance
corporation tax surrendered to it under those provisions. The Company is
not liable to surrender the relief or advance corporation tax under those
provisions. There are no arrangements whereby the Company may become liable
to repay any sums paid to it for the surrender of the relief or advance
corporation tax under those provisions.
1.32 So far as the Warrantors are aware, the Company is not liable for any
Taxation as the agent of any other person or business and the Company does
not constitute a permanent establishment of any other person, business or
enterprise for any Taxation purpose.
1.33 The Company is and has at all times been resident in the UK for tax
purposes and is not and has not been treated as resident or otherwise
subject to Taxation in any other jurisdiction for any Taxation purpose
(including for the purpose of any double taxation agreement).
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1.34 In relation to VAT:
(a) the Company is a registered and taxable person for the purposes of the
Value Added Tax Act 1994 ("VATA 1994") and has complied in all
material respects with VATA 1994 and any statutory modification or
re-enactment thereof and all orders, provisions, directions or other
conditions made or imposed thereunder or under any other law relating
to VAT;
(b) other than as disclosed in the Disclosure Letter, no company in the
Group has applied to Customs under section 43 VATA 1994 to be treated
as nor have two or more such companies been treated as a group for VAT
purposes;
(c) all amounts due to be paid to Customs prior to Completion will have
been paid at the date thereof, no dispute exists between the Company
and Customs and there are no present circumstances which are likely to
give rise to any such dispute;
(d) on all invoices issued by the Company, VAT at the percentage rate
which at the time of the relevant supply was chargeable thereon has
been so charged and all amounts of VAT which have been so charged
since the last return made by the Company to Customs have been
retained by the Company for the account of Customs pending the next
return date;
(e) all statutory records required to be kept by the Company have been
properly kept and all statutory returns required to be made by the
Company have been correctly made up to the date hereof, no defaults
have been suffered under the default surcharge provisions of section
59 VATA 1994 and all amounts claimed by way of input tax have been
properly and rightly claimed;
(f) the Disclosure Letter contains full details of any claim for bad debt
relief made by the Company under section 36 VATA 1994 and the
regulations thereunder;
(g) the Company has not made and does not make exempt supplies for VAT
purposes (except such exempt supplies as may be disregarded in
calculating the amount of input tax for which the Company may claim a
credit or repayment under section 24 VATA 1994);
(h) the Company has not made an election pursuant to paragraph 2 Schedule
10 VATA 1994;
(i) no asset of the Company is a capital item the input tax on which may
be subject to adjustment in accordance with the provisions of Part XV
of the Value Added Tax Regulations 1995;
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(j) the Company neither is nor has at any time been liable, nor taken any
ACTION likely to make it liable, to a self-supply charge under
paragraph 6 Schedule 10 VATA 1994;
(k) the Company is not required to make payments on account of VAT for
which it may become liable in a prescribed accounting period (pursuant
to the Value Added Tax (Payments on Account) Order 1993 and the Value
Added Tax Regulations 1995);
(1) the Company has not been required by Customs to give security under
paragraph 4 Schedule 11 VATA 1994;
(m) so far as the Warrantors are aware, no circumstances exist whereby the
Company would or might become liable for VAT as an agent or otherwise
by virtue of section 47 VATA 1994;
(n) all VAT due and payable upon the importation or acquisition of goods
and all customs and excise duties due and payable to Customs in
respect of any assets (including trading stock) imported or owned by
the Company have been paid in full;
(o) the Company has not been appointed as a tax representative by any
person pursuant to section 48 VATA 1994;
(p) the Company has not registered, and so far as the Warrantors are
aware, is not required to register, for VAT purposes in any country
other than the United Kingdom.
1.35 No claim has been made by the Company under section 42 Finance Act 1930
during the 12 months before the date hereof.
1.36 Other than as disclosed in the Disclosure Letter, all documents in the
possession of the Company or to the production of which the Company is
entitled and which attract stamp or transfer duty in the United Kingdom or
elsewhere have been duly stamped.
1.37 The Company has not been party to any transaction whereby the Company is or
could become liable to stamp duty reserve tax.
1.38 Other than as disclosed in the Disclosure Letter, neither the Inland
Revenue nor Customs nor any other Taxation Authority has at any time
carried out or is at present conducting any audit or investigation into the
business or affairs of the Company (or any aspect thereof) other than
routine compliance visits and correspondence and the Warrantors, having
made all reasonable enquiries, know of no reason why any such investigation
should be initiated.
1.39
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(a) Up-to-date copies of profit-related pay schemes which the Company has
applied to register or has registered with the Inland Revenue have
been supplied to the Purchaser.
(b) So far as the Warrantors are aware, no circumstances exist which will
entitle the Inland Revenue to recover tax from the Company under
section 179 ICTA 1988 and there are no other circumstances which have
resulted or will result in any excess tax relief being given to
employees who are or have been included in a profit-related pay
scheme.
(c) The annual returns and accountants' reports required under section 180
ICTA 1988 and any other information required under section 181 ICTA
1988 have been supplied to the Inland Revenue.
1.40
(a) No notice has been given to the Inland Revenue which includes the
Company as the surrendering or recipient company under section 102
Finance Act 1989 (surrender of company tax refund within group).
(b) The Company is not included in any special arrangements for group
relief purposes under which a group of companies makes joint amended
returns covering companies in the arrangement.
(c) Other than as disclosed in the Disclosure Letter, all corporation tax
due and payable by the Company in respect of accounting periods ending
on or after 1st October 1993 has been paid within nine months of the
end of each accounting period and no liability for interest or
penalties has arisen or is now accruing.
(d) Other than as disclosed in the Disclosure Letter, no estimated
assessments or determinations relating to the Company are under
discussion, or are a matter of dispute, with the Inland Revenue, or
are the subject of an appeal.
(e) All corporation tax returns that should have been filed pursuant to
notices served on the Company under section 11 TMA 1970 have been
filed within the relevant time limits so that no penalties or interest
have arisen or are accruing for late filing. The returns have been
complete and accurate in all respects and have not included any
estimated figures.
1.41 No charge exists in favour of any Taxation Authority over any of the
properties or assets of the Company.
1.42 Other than as disclosed in the Disclosure Letter, the Company has not
requested any extension of time within which to file any Tax Return which
Tax Return has not since been filed.
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1.43 Other than as disclosed in the Disclosure Letter, the Company does not have
in effect any extension, waiver or comparable consent of any time limit
with respect to any Taxation.
1.44 No power of attorney has been granted by the Company with respect to any
matter relating to Taxation which is currently in force.
1.45 The Company is not party to any agreement providing for the allocation or
sharing of any Taxation.
1.46 The Company has not made any Tax Election which, so far as the Warrantors
are aware, will or may have the effect of increasing any liability to
Taxation for the Company after the Completion Date.
1.47 The Company has never received any investment grant.
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SCHEDULE 9
----------
PURCHASERS' WARRANTIES
----------------------
1 Each Purchaser has the requisite power and authority to execute, deliver
and perform its obligations under this Agreement.
2 P Corporation has the requisite power and authority to allot and issue the
P Corporation Shares and the 2002 Loan Notes in accordance with the terms
of this Agreement without any further sanction.
3 This Agreement constitutes legal, valid and binding obligations of each
of the Purchasers in accordance with its terms.
4 The execution and delivery of, and the performance of the obligations of
each Purchaser under this Agreement have been duly authorised by all
necessary corporate action on the part of each Purchaser whether under its
constitutional documents or otherwise.
5 Subject to performance by the Vendors of their obligations hereunder the
execution and delivery of, and the performance by, each of the Purchasers
of its obligations under, and compliance with the provisions of, this
Agreement by each of the Purchasers will not:
(a) result in a violation of any provision of its constitutional
documents; or
(b) result in a breach of, or constitute a default under, any instrument
to which it is a party or by which it or any of its assets is subject
or bound; or
(c) result in a violation of any law or regulation in any jurisdiction
having the force of law or of any order, judgement or decree of any
court or governmental agency or agreement to which it is party or by
which it or any of its assets is subject or bound; or
(d) conflict with, violate, result in a breach of, or cause a default
under any other material restriction of any kind or character to which
it or any of its assets is subject.
6 The issue of the P Corporation Shares and the 2002 Loan Notes will comply
in all respects with all relevant laws and regulations in the United States
of America and the State of New York and all agreements to which any member
of the P Corporation Group is a party or by which any member of the P
Corporation Group is bound.
7 It is not necessary in connection with the offer and sale by P Corporation
to the Vendors who are not US persons within the meaning of Regulation S
promulgated under the Securities Act 1933 to register such P Corporation
Shares or 2002 Loan Notes under the Securities Act in reliance on the
exemption
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afforded by Regulation S. In addition, it is not necessary in connection
with the offer and sale by P Corporation to the Vendors who are US persons
within the meaning of Regulation S to register such P Corporation Shares or
2002 Loan Notes under the Securities Act in reliance on the exemption
afforded by Section 4 (2) of such Act.
8 P Corporation has delivered to the Vendors correct and complete copies of
each report, schedule, registration statement and definitive proxy
statement (other than preliminary material) filed by P Corporation with the
SEC on or after 1 September 1994 which are all the documents that P
Corporation was required to file with the SEC on or after such date ("P
CORP SEC DOCUMENTS"). As of their respective dates or, in the case of
registration statements, their effective dates (or if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing), none of the P Corp SEC Documents (including all exhibits and
schedules thereto and documents incorporated by reference therein)
contained any untrue statements of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and the P Corp SEC Documents complied when filed in
all material respects with the then applicable requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated by the SEC thereunder. P. Corporation has ,filed
all documents and agreements which were required to be filed as exhibits to
the P Corp SEC Documents.
9 The financial statements of P Corporation included in the P Corp SEC
Documents complied as to form in all material respects with the then
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may have been indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form
10-Q promulgated by the SEC) and fairly present (subject, in the case of
the unaudited statements, to normal, year-end audit adjustments) the
consolidated financial position of P Corporation and its consolidated P
Corporation Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended.
10 No governmental consents approvals or authorities are required by P
Corporation for the valid execution and delivery of this Agreement or the
2002 Loan Notes by P Corporation or the performance of its obligations
hereunder.
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SIGNED by /s/ Joseph E. Kasputys )
for and on behalf of )
PRIMARK INFORMATION ) /s/ Joseph E. Kasputys
SERVICES UK LIMITED )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Joseph E. Kasputys )
for and on behalf of )
PRIMARK CORPORATION ) /s/ Joseph E. Kasputys
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by )
DAVID TAYLOR ) /s/ David Taylor
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp )
as attorney of GNI HOLDINGS ) /s/ Richard Kemp
LIMITED in exercise of a )
power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of ANITA TAYLOR )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp )
as attorney of HARRY FERGUSON ) /s/ Richard Kemp
HOLDINGS LIMITED )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
91
<PAGE> 95
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of TECHNICAL )
INVESTMENTS HOLDING S.A. )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by WILLIAMS J. HISOCKS ) /s/ William J. Hisocks
for and on behalf of )
3i plc )
in the presence of: )
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of GODDARD TRUSTEE )
(JERSEY) LIMITED )
in exercise of a power of attorney )
dated 18th October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of GEVA McCALDIN )
in exercise of a power of attorney )
dated 28th September 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of ADRIN DEAR )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
92
<PAGE> 96
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of SARAH GANT )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of KAREN UNDERWOOD )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of BARRY WOODWARD )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of TRACY WOODWARD )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of SIMON BARNBY )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of ANDY JAMES )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
93
<PAGE> 97
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of KAREN YOUNG )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by /s/ Richard Kemp ) /s/ Richard Kemp
as attorney of CHRISTOPHER MARK )
HENRY MURRAY )
in exercise of a power of attorney )
dated 17th October 1996 )
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by ) /s/
KENNETH E. AHL and EDWARD )
J. KAIER as trustees of the Timothy )
James Ralph Sheldon Trust U/D/T May )
27 1987 in the presence of: )
SIGNED by )
KEVIN REGINALD UNDERWOOD ) /s/ K. Underwood
in the presence of: )
/s/ Richard Kemp
solicitor
SIGNED by )
PAREN KNADJIAN ) /s/ Paren Knadjian
in the presence of: )
/s/ Richard Kemp
solicitor
94
<PAGE> 98
SIGNED by ) /s/ Claire Stevens
CLAIRE STEVENS )
in the presence of: )
/s/ Richard Kemp
solicitor
95
<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of October 23, 1996
by and among
PRIMARK CORPORATION,
as Borrower,
THE LENDERS PARTIES HERETO FROM TIME TO TIME,
THE ISSUING BANK REFERRED TO HEREIN,
and
MELLON BANK, N.A.,
as Agent
----------------
U.S. $10,250,000
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
SECTION TITLE PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS; CONSTRUCTION ...................................... 1
1.01 Definitions; Construction ...................................... 1
ARTICLE II [RESERVED] ..................................................... 1
ARTICLE III THE FACILITIES ................................................. 1
3.01 The Letter of Credit Facility .................................. 1
3.02 Procedure for Issuance and Amendment of Letters of Credit ...... 2
3.03 Letter of Credit Participating Interests ....................... 3
3.04 Letter of Credit Drawings and Reimbursements ................... 4
3.05 Obligations Absolute ........................................... 5
3.06 Further Assurances ............................................. 5
3.07 Cash Collateral for Letters of Credit .......................... 5
3.08 Certain Provisions Relating to the Issuing Bank ................ 6
3.09 Interest Rates ................................................. 7
3.10 Conversion or Renewal of Interest Rate Options ................. 10
3.11 Prepayments Generally .......................................... 10
3.12 Optional Prepayments ........................................... 11
3.13 Mandatory Prepayment and Cash Collateralization ................ 11
3.14 Interest Payment Dates ......................................... 11
3.15 Payments Generally ............................................. 12
3.16 Additional Compensation in Certain Circumstances ............... 12
3.17 Taxes .......................................................... 14
3.18 Funding by Branch, Subsidiary or Affiliate ..................... 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES ................................. 16
4.01 Corporate Status ............................................... 16
4.02 Corporate Power and Authorization .............................. 16
4.03 Execution and Binding Effect ................................... 16
4.04 Governmental Approvals and Filings ............................. 16
4.05 Absence of Conflicts ........................................... 17
4.06 Audited Financial Statements ................................... 17
4.07 Interim Financial Statements ................................... 17
4.08 Absence of Undisclosed Liabilities ............................. 18
4.09 Accurate and Complete Disclosure ............................... 18
4.10 [Reserved] ..................................................... 18
4.11 Solvency ....................................................... 18
4.12 Margin Regulations ............................................. 18
4.13 Regulatory Restrictions ........................................ 18
4.14 Subsidiaries ................................................... 19
4.15 Partnerships, etc .............................................. 19
4.16 Litigation ..................................................... 19
4.17 Absence of Other Conflicts ..................................... 19
4.18 Insurance ...................................................... 19
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
4.19 Title to Property .............................................. 19
4.20 Intellectual Property .......................................... 20
4.21 Taxes .......................................................... 20
4.22 Employee Benefits .............................................. 20
4.23 Environmental Matters .......................................... 20
4.24 [Reserved] ..................................................... 21
ARTICLE V CONDITIONS OF ISSUANCE ......................................... 21
5.01 Conditions to Issuance ......................................... 21
ARTICLE VI AFFIRMATIVE COVENANTS .......................................... 23
6.01 Basic Reporting Requirements ................................... 23
6.02 Insurance ...................................................... 26
6.03 Payment of Taxes and Other Potential Charges
and Priority Claims ......................................... 26
6.04 Preservation of Corporate Status ............................... 27
6.05 Governmental Approvals and Filings ............................. 27
6.06 Maintenance of Properties, Franchises, etc. .................... 27
6.07 Avoidance of Other Conflicts ................................... 27
6.08 Financial Accounting Practices ................................. 28
6.09 Use of Proceeds ................................................ 28
6.10 Continuation of or Change in Business .......................... 28
6.11 Plans and Multiemployer Plans .................................. 28
6.12 Disaster Recovery Plan ......................................... 29
6.13 Annual Bank Meeting ............................................ 29
6.14 Separate Corporate Existence ................................... 29
6.15 Additional Security ............................................ 30
6.16 [Reserved] ..................................................... 30
ARTICLE VII NEGATIVE COVENANTS ............................................. 30
7.01 Financial Covenants ............................................ 30
7.02 Liens .......................................................... 32
7.03 Indebtedness ................................................... 33
7.04 Guaranties, Indemnities, etc. .................................. 35
7.05 Loans, Advances and Investments ................................ 36
7.06 Dividends and Related Distributions ............................ 38
7.07 Sale-Leasebacks ................................................ 39
7.08 Mergers, etc. .................................................. 39
7.09 Dispositions of Properties ..................................... 40
7.10 Corporate Structure ............................................ 41
7.11 Dealings with Affiliates ....................................... 41
7.12 Limitations on Modification of
Certain Agreements and Instruments .......................... 41
7.13 Limitation on Payments on Certain Obligations .................. 42
7.14 [Reserved] ..................................................... 42
7.15 Limitation on Other Restrictions on Liens,
Dividend Restrictions on Subsidiaries, etc. ................. 42
7.16 Limitation on Other Restrictions on Amendment
of the Loan Documents, etc. ................................. 43
7.17 Limitation on Certain Benefit Liabilities ...................... 43
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
7.18 Fiscal Year .................................................... 44
7.19 Certain Covenants Relating to the
TWN(UK) Entities ............................................ 44
7.20 [Reserved] ..................................................... 44
ARTICLE VIII DEFAULTS ....................................................... 44
8.01 Events of Default .............................................. 44
8.02 Consequences of an Event of Default ............................ 48
8.03 Application of Proceeds ........................................ 48
ARTICLE IX THE AGENT ...................................................... 49
9.01 Appointment .................................................... 49
9.02 General Nature of Agent's Duties ............................... 49
9.03 Exercise of Powers ............................................. 49
9.04 General Exculpatory Provisions ................................. 50
9.05 Administration by the Agent .................................... 50
9.06 Lenders Not Relying on Agent or Other Lenders .................. 51
9.07 Indemnification of Agent by Lenders ............................ 51
9.08 Agent in its Individual Capacity ............................... 52
9.09 [Reserved] ..................................................... 52
9.10 Successor Agent ................................................ 52
9.11 Calculations ................................................... 52
9.12 [Reserved] ..................................................... 52
9.13 [Reserved] ..................................................... 52
9.14 [Reserved] ..................................................... 53
ARTICLE X MISCELLANEOUS .................................................. 53
10.01 Holidays ....................................................... 53
10.02 Records ........................................................ 53
10.03 Amendments and Waivers ......................................... 53
10.04 No Implied Waiver; Cumulative Remedies ......................... 54
10.05 Notices ........................................................ 54
10.06 Expenses; Taxes; Indemnity ..................................... 55
10.07 Severability ................................................... 56
10.08 Prior Understandings ........................................... 56
10.09 Duration; Survival ............................................. 56
I0.10 Counterparts ................................................... 56
10.11 Limitation on Payments ......................................... 56
10.12 Set-Off ........................................................ 56
10.13 Sharing of Collections ......................................... 57
10.14 Successors and Assigns; Participations; ........................ 57
Assignments ................................................. 57
10.15 Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial; Limitation of Liability ............... 59
10.16. Withholding Taxes, etc. ........................................ 60
10.17. Defeasance of Certain Covenants ................................ 61
ANNEX A DEFINITIONS; CONSTRUCTION ...................................... A-1
</TABLE>
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<PAGE> 5
Exhibit A-1 [Reserved]
Exhibit A-2 [Reserved]
Exhibit B Form of Transfer Supplement
Exhibit C Form of Annual and Quarterly Compliance Certificate
Exhibit D [Reserved]
Exhibit E [Reserved]
Exhibit F Form of Group Liquidity Manager Agreement
Exhibit G Form of Letter of Credit
Schedule 4.04 Governmental Approvals and Filings
Schedule 4.05 Conflicts
Schedule 4.08 Liabilities
Schedule 4.13 Regulatory Restrictions
Schedule 4.14 Subsidiaries
Schedule 4.16 Litigation
Schedule 4.21 Taxes
Schedule 4.23 Environmental Matters
Schedule 7.02 Liens
Schedule 7.03 Indebtedness
Schedule 7.04 Guaranty Equivalents
Schedule 7.07 Sale-Leasebacks
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<PAGE> 6
CREDIT AGREEMENT
THIS AGREEMENT, dated as of October 23, 1996, by and among
PRIMARK CORPORATION, a Michigan Corporation (the "Borrower"), the Lenders
parties hereto from time to time, the Issuing Bank referred to herein, and
MELLON BANK, N.A., a national banking association, as agent for the Lender
Parties hereunder (in such capacity, together with its successors in such
capacity, the "Agent").
In consideration of the mutual covenants herein contained and
intending to be legally bound, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. DEFINITIONS; CONSTRUCTION. In addition to other words
and terms defined elsewhere in this Agreement, as used in this Agreement the
words and terms defined in Annex A hereto have the meanings given them in such
Annex A, and this Agreement shall be construed in accordance with the provisions
of Annex A.
ARTICLE II
[RESERVED]
ARTICLE III
THE FACILITY
3.01. THE LETTER OF CREDIT FACILITY.
(a) GENERAL. Subject to the terms and conditions of this
Agreement, and relying upon the representations and warranties herein set forth
and upon the agreements of the Lenders set forth in Sections 3.03 and 3.04
hereof, the Issuing Bank agrees (such agreement being herein referred to as the
"Letter of Credit Commitment") to issue for the account of the Borrower letters
of credit (each, as amended, modified or supplemented from time to time, a
"Letter of Credit") at any time on or after the date hereof. Issuance of any
Letter of Credit shall be subject to the following limitations: (i) all Letters
of Credit shall be issued on the same date (the "Closing Date"), which shall not
be later than October 31, 1996 (the "Letter of Credit Commitment Termination
Date"), (ii) no Letter of Credit shall be issued if the Agent shall have
received the notice from the Required Lenders referred to in Section
3.02(c)(iii) hereof, and (iii) the aggregate Letter of Credit Exposure shall not
exceed $10,250,000.
(b) TERMS OF LETTERS OF CREDIT. Each Letter of Credit shall be
in substantially the form of Exhibit G hereto (or such other form as may be
satisfactory to the Issuing Bank), completed in a manner satisfactory in form
and substance to the Issuing Bank. Each Letter of Credit shall have an
expiration date not later than November 15, 2002 (the "Letter of Credit Final
Termination Date"), and shall be in a minimum stated amount of $250,000. Unless
the Issuing Bank otherwise agrees in writing, the number of Letters of Credit
issued hereunder shall not exceed five.
(c) PURPOSES OF LETTERS OF CREDIT. Each Letter of Credit shall
be used by the Borrower as a standby letter of credit used solely to provide
credit enhancement for the ICV Notes. The provisions of this Section 3.01(c)
represent only an obligation of the Borrower to the Issuing Bank and the
Lenders; no Issuing Bank shall have any obligation to the Lenders to ascertain
the purpose of any
<PAGE> 7
Letter of Credit, and the rights and obligations of the Lenders and the Issuing
Bank among themselves shall not be impaired or affected by a breach of this
Section 3.01(c).
(d) LETTER OF CREDIT FEE. The Borrower shall pay to the Agent
for the account of each Lender a fee (the "Letter of Credit Fee") for each
Letter of Credit for each day from and including the date of issuance thereof to
and including the date of expiration or termination thereof, equal to (x) the
Letter of Credit Undrawn Availability on such day, times (y) the Letter of
Credit Fee Rate applicable on such day, times (z) 1/365 (or 1/366, as the case
may be). Such Letter of Credit Fee shall be due and payable for the preceding
period for which such fee has not been paid on each of the following dates: (i)
each Regular Quarterly Payment Date, and (ii) the date of expiration or
termination of such Letter of Credit. The "Letter of Credit Fee Rate" for any
day shall mean (A) if such day is on or before the first anniversary of the date
hereof, then 1.50%, (B) thereafter (whether before or after the Reimbursement
Target Date), the Applicable Margin applicable under the Euro-Rate Option on
such day.
(e) FACING FEE; ADMINISTRATION FEES. The Borrower shall pay to
the Agent, for the sole account of the Issuing Bank, a fee (the "Letter of
Credit Facing Fee") for each Letter of Credit for each day from and including
the date of issuance thereof to and including the date of expiration or
termination thereof, equal to (x) the Letter of Credit Undrawn Availability on
such day, times (y) 0.25 %, times (z) 1/365 (or 1/366, as the case may be). Such
Letter of Credit Facing Fee shall be due and payable for the preceding period
for which such fee has not been paid on each of the following dates: (i) each
Regular Quarterly Payment Date, and (ii) the date of expiration or termination
of such Letter of Credit. In addition, the Borrower shall pay to the Agent, for
the sole account of the Issuing Bank, such other administration, maintenance,
amendment, drawing and negotiation fees as may be customarily charged by the
Issuing Bank from time to time in connection with letters of credit.
(f) LETTER OF CREDIT COMMITMENT FEE. The Borrower shall pay to
the Agent for the account of each Lender a commitment fee (the "Letter of Credit
Commitment Fee") equal to 0.375% per annum (based on a year of 365 or 366 days,
as the case may be, and actual days elapsed), for each day from and including
the date hereof to but not including the Closing Date (or, if the Closing Date
does not occur, the Letter of Credit Commitment Termination Date), times such
Lender's Pro Rata Share of $10,250,000. Such Letter of Credit Commitment Fee
shall be due and payable on the Closing Date (or, if the Closing Date does not
occur, the Letter of Credit Commitment Termination Date).
(g) ORIGINATION FEE. The Borrower shall pay to the Issuing
Bank, for its own account, an origination fee of $25,625 (equal to 0.25% of
$10,250,000). Such origination fee shall be due and payable on the Closing Date
(or, if the Closing Date does not occur, the Letter of Credit Commitment
Termination Date).
3.02. PROCEDURE FOR ISSUANCE AND AMENDMENT OF LETTERS OF
CREDIT.
(a) REQUEST FOR ISSUANCE. The Borrower may request, upon at
least three Business Days' notice, the Issuing Bank to issue the Letters of
Credit by delivering to the Issuing Bank and the Agent a written request to such
effect, specifying the date on which Letters of Credit are to be issued, the
expiration dates thereof, the stated amount thereof, and the beneficiaries
thereof, together with such other certificates, documents and other papers and
information as the Issuing Bank may request. The Issuing Bank shall promptly
notify the Agent (by telephone or otherwise), and furnish the Agent with the
proposed form of Letter of Credit to be issued. The Agent shall determine, as of
the close of business on the day before such proposed issuance, whether such
proposed Letter of Credit complies with the limitations set forth in Sections
3.01(a) and 3.01(b) hereof. Unless such limitations are not satisfied, or unless
the Required Lenders have given notice to the Agent to cease issuing Letters of
Credit pursuant to Section 3.02(c)(iii) hereof, the Agent shall notify the
Issuing Bank (in writing or by telephone promptly confirmed in writing) that the
Issuing Bank is authorized to issue such Letter of Credit. If the Issuing Bank
issues a Letter of Credit, it shall deliver the original of such Letter of
Credit
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<PAGE> 8
to the beneficiary thereof or as the Borrower shall otherwise direct, and shall
promptly notify the Agent thereof and furnish a copy thereof to the Agent.
(b) EXTENSION OR INCREASE. The Borrower shall have no right
hereunder to request the Issuing Bank to extend the expiration date of an
outstanding Letter of Credit or to increase the Letter of Credit Undrawn
Availability of an outstanding Letter of Credit.
(c) LIMITATIONS ON ISSUANCE, EXTENSION AND AMENDMENT.
(i) As between the Borrower, on the one hand, and the Lender
Parties, on the other hand, the issuance of any Letter of Credit is
within the discretion of the Issuing Bank.
(ii) As between the Issuing Bank, on the one hand, and the
Agent and the Lenders, on the other hand, the Issuing Bank shall be
justified and fully protected in issuing any Letter of Credit after
receiving authorization from the Agent as provided in Section 3.02(a)
hereof, notwithstanding any subsequent notices to the Issuing Bank, any
knowledge of an Event of Default or Potential Default, any knowledge of
failure of any condition specified in Section 5.02 hereof to be
satisfied, any other knowledge of the Issuing Bank, or any other event,
condition or circumstance whatever.
(iii) As between the Agent, on the one hand, and the Lenders,
on the other hand, the Agent shall not authorize issuance of any Letter
of Credit pursuant to Section 3.02(a) if the Agent shall have received,
at least two Business Days before authorizing such issuance, from the
Required Lenders an unrevoked written notice that any condition
precedent set forth in Section 5.02 will not be satisfied and expressly
requesting that the Agent direct the Issuing Bank to cease to issue
Letters of Credit. Unless the Agent has received such notice or has
determined that the applicable limitations set forth in Sections
3.01(a) and 3.01(b) hereof are not satisfied, the Agent shall be
justified and fully protected, as against the Lenders, in authorizing
the Issuing Bank to issue such Letter of Credit, notwithstanding any
subsequent notices to the Agent, any knowledge of an Event of Default
or Potential Default, any knowledge of failure of any condition
specified in Section 5.02 hereof to be satisfied, any other knowledge
of the Agent, or any other event, condition or circumstance whatever.
(d) AMENDMENTS. At the request of the Borrower from time to
time, and subject to satisfaction of such conditions as the Issuing Bank may
require, the Issuing Bank may amend, modify or supplement Letters of Credit, or
waive compliance with any condition of issuance or payment, without the consent
of, and without liability to, the Agent or any Lender, provided that no such
amendment, modification or supplement shall extend the expiration date or
increase the Letter of Credit Undrawn Availability of an outstanding Letter of
Credit.
3.03. LETTER OF CREDIT PARTICIPATING INTERESTS.
(a) GENERALLY. Concurrently with the issuance of each Letter
of Credit, the Issuing Bank automatically shall be deemed, irrevocably and
unconditionally, to have sold, assigned, transferred and conveyed to each other
Lender, and each other Lender automatically shall be deemed, irrevocably and
unconditionally, severally to have purchased, acquired, accepted and assumed
from the Issuing Bank, without recourse to, or representation or warranty by,
the Issuing Bank, an undivided interest, in a proportion equal to such Lender's
Pro Rata share, in all of the Issuing Bank's rights and obligations in, to or
under such Letter of Credit, the Letter of Credit Reimbursement Obligations, and
all collateral, guarantees and other rights from time to time directly or
indirectly securing the foregoing (such interest of each Lender being referred
to herein as a "Letter of Credit Participating Interest"). Amounts other than
Letter of Credit Reimbursement Obligations and Letter of Credit Fees payable
from time to time under or in connection with a Letter of Credit shall be for
the sole account of the Issuing Bank. On the
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<PAGE> 9
date that any Purchasing Lender becomes a party to this Agreement in accordance
with Section 10.14 hereof, Letter of Credit Participating Interests in any
outstanding Letters of Credit held by the Lender from which such Purchasing
Lender acquired its interest hereunder shall be proportionately reallotted
between such Purchasing Lender and such transferor Lender (and, to the extent
such transferor Lender is the Issuing Bank, the Purchasing Lender shall be
deemed to have acquired a Letter of Credit Participating Interest from such
transferor Lender to such extent).
(b) OBLIGATIONS ABSOLUTE. Notwithstanding any other provision
hereof, each Lender hereby agrees that its obligation to participate in each
Letter of Credit issued in accordance herewith, and its obligation to make the
payments specified in Section 3.04 hereof, are each absolute, irrevocable and
unconditional and shall not be affected by any event, condition or circumstance
whatever. The failure of any Lender to make any such payment shall not relieve
any other Lender of its funding obligation hereunder on the date due, but no
Lender shall be responsible for the failure of any other Lender to meet its
funding obligations hereunder.
3.04. LETTER OF CREDIT DRAWINGS AND REIMBURSEMENTS.
(a) BORROWER'S REIMBURSEMENT OBLIGATION. The Borrower hereby
agrees to reimburse the Issuing Bank, by making payment to the Agent for the
account of the Issuing Bank in accordance with Section 3.15(b) hereof, in the
amount of each Letter of Credit Unreimbursed Draw, on October 16, 2000 (the
"Reimbursement Target Date") and thereafter ON DEMAND. Such reimbursement shall
also be due at such earlier times as are provided elsewhere in this Agreement
and the other Loan Documents.
(b) PAYMENT BY LENDERS ON ACCOUNT OF UNREIMBURSED DRAWS. If
the Issuing Bank makes a payment under any Letter of Credit and is not
reimbursed in full therefor on such payment date, the Issuing Bank will promptly
notify the Agent thereof (which notice may be by telephone), and the Agent shall
forthwith notify each Lender (which notice may be by telephone promptly
confirmed in writing) thereof. No later than the Agent's close of business on
the date such notice is given, each such Lender will pay to the Agent, for the
account of the Issuing Bank, in immediately available funds, an amount equal to
such Lender's Pro Rata share of the unreimbursed portion of such payment by the
Issuing Bank. If and to the extent that any Lender fails to make such payment to
the Agent for the account of the Issuing Bank on such date, such Lender shall
pay such amount on demand, together with interest, for the Issuing Bank's own
account, for each day from and including the date of the Issuing Bank's payment
to and including the date of payment to the Issuing Bank (before and after
judgment) at the following rates per annum: (x) for each day from and including
the date of such payment by the Issuing Bank to and including the second
Business Day thereafter, at the Federal Funds Effective Rate for such day, and
(y) for each day thereafter, at the rate applicable to such Letter of Credit
Unreimbursed Draw for such day.
(c) DISTRIBUTIONS TO PARTICIPANTS. If, at any time, after the
Issuing Bank has made a Letter of Credit Unreimbursed Draw and has received from
any Lender such Lender's share of such Letter of Credit Unreimbursed Draw, the
Issuing Bank receives any payment or makes any application of funds on account
of the Letter of Credit Reimbursement Obligation arising from such Letter of
Credit Unreimbursed Draw, the Issuing Bank will pay to the Agent, for the
account of such Lender, such Lender's Pro Rata share of such payment or
application.
(d) RESCISSION. If any amount received by the Issuing Bank on
account of any Letter of Credit Reimbursement Obligation shall be avoided,
rescinded or otherwise returned or paid over by the Issuing Bank for any reason
at any time, whether before or after the termination of this Agreement (or the
Issuing Bank believes in good faith that such avoidance, rescission, return or
payment is required, whether or not such matter has been adjudicated), each such
Lender will, promptly upon notice from the Agent or the Issuing Bank, pay over
to the Agent for the account of the Issuing Bank its Pro Rata share
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<PAGE> 10
of such amount, together with its Pro Rata share of any interest or penalties
payable with respect thereto.
(e) EQUALIZATION. If any Lender receives any payment or makes
any application on account of its Letter of Credit Participating Interest, such
Lender shall forthwith pay over to the Issuing Bank, in Dollars and in like kind
of funds received or applied by it the amount in excess of such Lender's ratable
share of the amount so received or applied.
3.05. OBLIGATIONS ABSOLUTE. The payment obligations of the
Borrower under Section 3.04 hereof shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of this Agreement,
any Letter of Credit, any other Loan Document, any ICV Note or any
documents, instruments or agreements evidencing or otherwise relating
to any obligation of the Borrower or Subsidiary of the Borrower secured
or supported by any Letter of Credit;
(b) the existence of any claim, set-off, defense or other
right which the Borrower or any other Person may have at any time
against any beneficiary or transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or transferee may be acting), the
Issuing Bank, any Lender, or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or any
unrelated transaction;
(c) any purported Letter of Credit, draft, certificate,
statement or other document presented under any Letter of Credit
proving to be not genuine, stolen, forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(d) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft, certificate or documents which do not
comply with the terms of such Letter of Credit, or payment by the
Issuing Bank under any Letter of Credit in any other circumstances in
which conditions to payment are not met, except any such payment
resulting solely from the gross negligence or willful misconduct of the
Issuing Bank; or
(e) any other event, condition or circumstance whatever,
whether or not similar to any of the foregoing.
The Borrower bears the risk of, and neither the Issuing Bank, any of its
directors, officers, employees or agents, nor any Lender, shall be liable or
responsible for the use which may be made of any Letter of Credit, or acts or
omissions of the beneficiary or any transferee in connection therewith.
3.06. FURTHER ASSURANCES. The Borrower hereby agrees, from
time to time, to do and perform any and all acts and to execute any and all
further instruments reasonably requested by the Issuing Bank more fully to
effect the purposes of this Agreement and the issuance of the Letters of Credit
hereunder.
3.07. CASH COLLATERAL FOR LETTERS OF CREDIT. The Borrower
agrees that, without limitation of other rights and remedies under this
Agreement or the Loan Documents or at law or in equity, if the Borrower is
required to cash collateralize outstanding Letters of Credit pursuant to Section
3.13, Section 8.02 or any other provision of this Agreement or any other Loan
Document, the Borrower shall immediately pay to the Collateral Agent, for
deposit in the Letter of Credit Collateral Account, an amount equal to the
excess, if any, of the aggregate Letter of Credit Exposure at such time over the
balance in the Letter of Credit Collateral Account. The Agent shall direct the
Collateral Agent to
-5-
<PAGE> 11
release funds in the Letter of Credit Collateral Account to the Issuing Bank for
payment of Letter of Credit Reimbursement Obligations constituting Letter of
Credit Unreimbursed Draws, as and when the same become due and payable if and to
the extent the Borrower fails to pay the same.
3.08. CERTAIN PROVISIONS RELATING TO THE ISSUING BANK.
(a) GENERAL. The Issuing Bank shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Issuing Bank shall be read into this Agreement or any Loan Document or shall
otherwise exist. The duties and responsibilities of the Issuing Bank to the
other Lender Parties under this Agreement and the other Loan Documents shall be
mechanical and administrative in nature, and the Issuing Bank shall not have a
fiduciary relationship in respect of any Lender Party or any other Person. The
Issuing Bank shall not be liable for any action taken or omitted to be taken by
it under or in connection with this Agreement or any other Loan Document, unless
caused by its own gross negligence or willful misconduct. The Issuing Bank shall
not be under any obligation to ascertain, inquire or give any notice relating to
(i) the performance or observance of any of the terms or conditions of this
Agreement or any other Loan Document on the part of the Borrower, (ii) the
business, operations, condition (financial or otherwise) or prospects of the
Borrower or any other Person, or (iii) the existence of any Event of Default or
Potential Default. The Issuing Bank shall not be under any obligation, either
initially or on a continuing basis, to provide the Agent or any Lender with any
notices, reports or information of any nature, whether in its possession
presently or hereafter, except for such notices, reports and other information
expressly required by this Agreement to be so furnished.
(b) ADMINISTRATION. The Issuing Bank may rely upon any notice
or other communication of any nature (written or oral, including but not limited
to telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties, and no Issuing
Bank shall have any duty to verify the identity or authority of any Person
giving such notice or other communication. The Issuing Bank may consult with
legal counsel (including, without limitation, in-house counsel for the Issuing
Bank or in-house or other counsel for the Borrower), independent public
accountants and any other experts selected by it from time to time, and no
Issuing Bank shall be liable for any action taken or omitted to be taken in good
faith in accordance with the advice of such counsel, accountants or experts.
Whenever the Issuing Bank shall deem it necessary or desirable that a matter be
proved or established with respect to the Borrower or any Lender Party, such
matter may be established by a certificate of the Borrower or such Lender Party,
as the case may be, and the Issuing Bank may conclusively rely upon such
certificate.
(c) INDEMNIFICATION OF ISSUING BANK BY LENDERS. Each Lender
hereby agrees to reimburse and indemnify the Issuing Bank and its directors,
officers, employees and agents (to the extent not reimbursed by the Borrower and
without limitation of the obligations of the Borrower to do so), Pro Rata, from
and against any and all amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any
kind or nature (including, without limitation, the fees and disbursements of
counsel (other than in-house counsel) for the Issuing Bank or such other Person
in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Issuing Bank or such other Person
shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Issuing Bank, in its capacity as such, or
such other Person, as a result of, or arising out of, or in any way related to
or by reason of, this Agreement, any other Loan Document, any transaction from
time to time contemplated hereby or thereby, or any transaction secured or
financed in whole or in part, directly or indirectly, with any Letter of Credit
or the proceeds thereof, provided, that no Lender shall be liable for any
portion of such amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
resulting from the gross negligence or willful misconduct of the Issuing Bank or
such other Person, as finally determined by a court of competent jurisdiction.
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<PAGE> 12
3.09. INTEREST RATES.
(a) INTEREST RATE OPTIONS. Before the Reimbursement Target Date,
the unpaid amount of Letter of Credit Unreimbursed Draws shall bear interest for
each day until due on one or more bases selected by the Borrower from among the
interest rate Options set forth below. From and after the Reimbursement Target
Date, the unpaid amount of Letter of Credit Unreimbursed Draws shall bear
interest in accordance with Section 3.15(c) hereof, at the rate set forth in
clause (ii) thereof. Subject to the provisions of this Agreement, for the period
before the Reimbursement Target Date, each Letter of Credit Unreimbursed Draw
shall bear interest for each day until due at the Base Rate Option, unless and
until converted to the Euro-Rate Option in accordance with the provisions of
this Agreement. Subject to the provisions of this Agreement, for the period
before the Reimbursement Target Date, the Borrower may select different Options
to apply simultaneously to different Portions of the Letter of Credit
Unreimbursed Draws and may select different Funding Segments to apply
simultaneously to different parts of the Euro-Rate Portion of the Letter of
Credit Unreimbursed Draws. The interest rate Options applicable before the
Reimbursement Target Date are as follows:
(i) BASE RATE OPTION: A rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) for each day equal to the Base Rate for such day plus the
Applicable Margin for such day.
(ii) EURO-RATE OPTION: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus the Applicable Margin for such day.
(b) APPLICABLE MARGINS.
(i) The "Applicable Margin" for each interest rate Option for
any day on or before the first anniversary of the date hereof shall mean the
applicable percentage set forth in Section 3.09(b)(ii)(B) below under "Level B
Performance Margins".
<TABLE>
(ii) (A) Except and to the extent that the conditions set
forth in Section 3.09(b)(ii)(B) below apply on a particular day, the "Applicable
Margin" for each interest rate Option for any day after the first anniversary of
the date hereof shall mean the applicable percentage set forth below:
<CAPTION>
Interest Rate Option Applicable Margin
-------------------- -----------------
<S> <C>
Base Rate Option 0.75%
Euro-Rate Option 2.00%
</TABLE>
(B) The Applicable Margin for each interest rate Option for
each day after the first anniversary of the date hereof shall mean the
applicable percentage set forth below under "Level A Performance Margins,"
"Level B Performance Margins" or "Level C Performance Margins," as the case may
be, if and for so long as (x) no Event of Default or Potential Default shall
have occurred and be continuing or exist and (y) Financial Test A, Financial
Test B or Financial Test C, respectively, set forth below shall be satisfied for
such day. For purposes of determining the Applicable Margin, Financial Test A,
Financial Test B or Financial Test C, as the case may be, shall be deemed to be
satisfied effective on the first day of the calendar month following the
calendar month in which the Agent shall have received from the Borrower a
certificate, duly completed and signed by a Responsible Officer, accompanied by
the Borrower's financial statements for the fiscal quarter most recently ended
(or, if such most recently ended fiscal quarter is the last of a fiscal year,
for the fiscal year then ended), demonstrating compliance with the applicable
financial test, and such financial test shall be deemed to remain satisfied
until the last day of the calendar month in which the Borrower's next annual or
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<PAGE> 13
quarterly financial statements are required to be delivered under Section
6.01(a) or 6.01(b) hereof, as the case may be (or, if earlier, the last day of
the calendar month in which the Borrower's next annual or quarterly financial
statements are actually delivered in compliance with such Section):
<TABLE>
LEVEL A PERFORMANCE MARGINS:
<CAPTION>
Interest Rate Option Applicable Margin
-------------------- -----------------
<S> <C>
Base Rate Option 0.50%
Euro-Rate Option 1.75%
</TABLE>
Level A Performance Margins shall apply in the event that Financial Test A is
satisfied and the other conditions set forth above are met. "Financial Test A"
means that, as of the end of the relevant fiscal quarter, the Consolidated
Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters
ending on the last day of such fiscal quarter, considered as a single accounting
period, is less than 3.50 and greater than or equal to 3.00.
<TABLE>
LEVEL B PERFORMANCE MARGINS:
<CAPTION>
Interest Rate Option Applicable Margin
-------------------- -----------------
<S> <C>
Base Rate Option 0.25%
Euro-Rate Option 1.50%
</TABLE>
Level B Performance Margins shall apply in the event that Financial Test B is
satisfied and the other conditions set forth above are met. "Financial Test B"
means that, as of the end of the relevant fiscal quarter, the Consolidated
Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters
ending on the last day of such fiscal quarter, considered as a single accounting
period, is less than 3.00 and greater than or equal to 2.50.
<TABLE>
LEVEL C PERFORMANCE MARGINS:
<CAPTION>
Interest Rate Option Applicable Margin
-------------------- -----------------
<S> <C>
Base Rate Option Zero
Euro-Rate Option 1.25%
</TABLE>
Level C Performance Margins shall apply in the event that Financial Test C is
satisfied and the other conditions set forth above are met. "Financial Test C"
means that, as of the end of the relevant fiscal quarter, the Consolidated
Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters
ending on the last day of such fiscal quarter, considered as a single accounting
period, is less than 2.50.
<TABLE>
(c) FUNDING PERIODS. At any time when the Borrower shall
select, convert to or renew the Euro-Rate Option to apply to any part of the
Letter of Credit Unreimbursed Draws, the Borrower shall specify one or more
periods (the "Funding Periods") during which each such Option shall apply, such
Funding Periods being as set forth below:
<CAPTION>
Interest Rate Option Available Funding Periods
- -------------------- -------------------------
<S> <C>
Euro-Rate Option One, two, three or six months
("Euro-Rate Funding Period");
</TABLE>
provided, that:
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<PAGE> 14
(i) Each Euro-Rate Funding Period shall begin on a London
Business Day, and the term "month," when used in connection with a
Euro-Rate Funding Period, shall be construed in accordance with
prevailing practices in the interbank eurodollar market at the
commencement of such Euro-Rate Funding Period, as determined in good
faith by the Agent (which determination shall be conclusive);
(ii) The Borrower may not select a Funding Period that would
end after the Reimbursement Target Date; and
(iii) The aggregate number of Funding Segments of the
Euro-Rate Portion at any time shall not exceed two.
<TABLE>
(d) TRANSACTIONAL AMOUNTS. Each selection of, conversion from,
conversion to or renewal of an interest rate Option and each payment or
prepayment of any Letter of Credit Unreimbursed Draws shall be in a principal
amount such that after giving effect thereto the aggregate principal amount of
the Base Rate Portion, and the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion, shall be as set forth below:
<CAPTION>
Portion or Funding Segment Allowable Aggregate Principal Amounts
- -------------------------- -------------------------------------
<S> <C>
Base Rate Portion Any
Each Funding Segment $500,000 or an integral
of the Euro-Rate Portion multiple thereof
</TABLE>
(e) EURO-RATE UNASCERTAINABLE; IMPRACTICABILITY. IF
(i) on any date on which a Euro-Rate would otherwise be set
the Agent (in the case of clauses (A) or (B) below) or any Lender (in
the case of clause (c) below) shall have determined in good faith
(which determination shall be conclusive) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the interbank eurodollar market, or
(C) the effective cost to such Lender of funding a
proposed Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds shall exceed the Euro-Rate
applicable to such Funding Segment, or
(ii) at any time any Lender shall have determined in good
faith (which determination shall be conclusive) that the making,
maintenance or funding of any part of the Euro-Rate Portion has been
made impracticable or unlawful by compliance by such Lender or a
Notional Euro-Rate Funding Office in good faith with any Law or
guideline or interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof or with any request or directlye of any such
Governmental Authority (whether or not having the force of law);
then, and in any such event, the Agent or such Lender, as the case may be, may
notify the Borrower of such determination (and any Lender giving such notice
shall notify the Agent). Upon such date as shall be specified in such notice
(which shall not be earlier than the date such notice is given), the obligation
of each of the Lenders to allow the Borrower to select, convert to or renew the
Euro-Rate Option shall
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<PAGE> 15
be suspended until the Agent or such Lender, as the case may be, shall have
later notified the Borrower (and any Lender giving such notice shall notify the
Agent) of the Agent's or such Lender's determination in good faith (which
determination shall be conclusive) that the circumstance giving rise to such
previous determination no longer exist. If any Lender notifies the Borrower of a
determination under clause (ii) of this Section 3.09(e), the Euro-Rate Portion
of the Letter of Credit Unreimbursed Draws in which such Lender (the "Affected
Lender") has a Letter of Credit Participating Interest shall automatically be
converted to the Base Rate Option as of the date specified in such notice (and
accrued interest thereon shall be due and payable on such date).
3.10. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS.
(a) CONVERSION OR RENEWAL. Subject to the provisions of
Section 3.16(b) hereof and the other provisions of this Agreement, before the
Reimbursement Target Date the Borrower may convert any part of the Letter of
Credit Unreimbursed Draws from any interest rate Option or Options to one or
more different interest rate Options and may renew the Euro-Rate Option as to
any Funding Segment of the Euro-Rate Portion:
(i) At any time with respect to conversion from the
Base Rate Option; or
(ii) At the expiration of any Funding Period with
respect to conversions from or renewals of the Euro-Rate
Option, as to the Funding Segment corresponding to such
expiring Funding Period.
Whenever the Borrower desires to convert or renew any interest rate Option or
Options, the Borrower shall provide to the Agent Standard Notice setting forth
the following information:
(w) The date, which shall be a Business Day, on which the
proposed conversion or renewal is to be made;
(x) The principal amounts selected in accordance with Section
3.09(d) hereof of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed;
(y) The interest rate Option or Options selected in accordance
with Section 3.09(a) hereof and the principal amounts selected in
accordance with Section 3.09(d) hereof of the Base Rate Portion and
each Funding Segment of the Euro-Rate Portion to be converted to; and
(z) With respect to each Funding Segment to be converted to or
renewed, the Funding Period selected in accordance with Section 3.09(c)
hereof to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the amount of the Letter of
Credit Unreimbursed Draws as so converted or renewed. Interest on any Letter of
Credit Unreimbursed Draws convened or renewed (automatically or otherwise) shall
be due and payable on the conversion or renewal date.
(b) FAILURE TO CONVERT OR RENEW. Absent due notice from the
Borrower of conversion or renewal in the circumstances described in Section
3.10(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is
not received shall be converted automatically to the Base Rate Option on the
last day of the expiring Funding Period.
3.11. PREPAYMENTS GENERALLY. Whenever the Borrower desires or
is required to prepay any part of the Letter of Credit Unreimbursed Draws, it
shall provide Standard Notice to the Agent setting forth the following
information:
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<PAGE> 16
(a) The date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(b) The total principal amount of such prepayment, which shall
be the sum of the principal amounts selected pursuant to clause (c) of
this Section 3.11, and which, if a partial prepayment, shall be an
integral multiple of $500,000; and
(c) The principal amounts selected in accordance with Section
3.09(d) hereof of the Base Rate Portion and each part of each Funding
Segment of the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice, the principal amounts of the Base Rate Portion and each part of the
Euro-Rate Portion specified in such notice, together with interest on each such
principal amount to such date, shall be due and payable.
3.12. OPTIONAL PREPAYMENTS. The Borrower shall have the right
at its option from time to time to prepay any Letter of Credit Unreimbursed
Draws in whole or part without premium or penalty (subject, however, to Section
3.16(b) hereof):
(a) At any time with respect to any part of the Base Rate
Portion; or
(b) At the expiration of any Funding Period with respect to
prepayment of the Euro-Rate Portion with respect to any part of the
Funding Segment corresponding to such expiring Funding Period.
Any such prepayment shall be made in accordance with Section 3.11 hereof.
3.13. MANDATORY PREPAYMENT AND CASH COLLATERALIZATION. The
Borrower shall prepay the Letter of Credit Unreimbursed Draws in full, and shall
provide cash collateral for all outstanding Letters of Credit in accordance with
Section 3.07 hereof, in the event that at any time
(i) there shall fail to be in force a Revolving Credit
Agreement (which, so long as the Senior Note Indenture is in force,
shall constitute a "Credit Agreement" as defined therein), under which
the Borrower at such time has the right to borrow from financial
institutions on a revolving basis from time to time an aggregate
principal amount not less than $75,000,000, or the Revolving Credit
Maturity Date thereunder shall have occurred, or the Borrower shall be
required to make any prepayment of principal thereunder or to post cash
collateral thereunder (except prepayments of principal or the posting
of cash collateral which otherwise would be mandatory solely as a
result of the Borrower's provision of notice of prepayment), or
(ii) the Borrower shall not have procured a commitment from a
financial institution to provide a successor Revolving Credit Agreement
complying with the foregoing clause (i) by the 90th day before the
Revolving Credit Maturity Date under the then-current Revolving Credit
Agreement.
If prepayment of the Letter of Credit Unreimbursed Draws and cash
collateralization of outstanding Letters of Credit is required under this
Section 3.13, the Borrower shall give notice of such prepayment in accordance
with Section 3.11 hereof so that such prepayment is made not later than the
date of the applicable event referred to in the foregoing clause (a) or (b), and
shall make such cash collateralization not later than such date.
3.14. INTEREST PAYMENT DATES. Accrued and unpaid interest on
the Letter of Credit Unreimbursed Draws shall be due and payable on the
following dates (and on such other dates as may
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<PAGE> 17
be specified elsewhere in this Agreement and the other Loan Documents): (a) in
the case of the Base Rate Portion, on each Regular Monthly Payment Date, and (b)
in the case of each Funding Segment of the Euro-Rate Portion, on the last day of
the corresponding Euro-Rate Funding Period and, if such Euro-Rate Funding Period
is longer than three months, also on the last day of the third month during such
Funding Period. After maturity of any part of the Letter of Credit Unreimbursed
Draws (by acceleration or otherwise), interest on such part of the Letter of
Credit Unreimbursed Draws shall be due and payable on demand.
3.15. PRO RATA TREATMENT; PAYMENTS GENERALLY.
(a) [Reserved].
(b) PAYMENTS GENERALLY. All payments and prepayments to be
made by the Borrower in respect of Letter of Credit Unreimbursed Draws,
interest, fees, indemnities, expenses or other amounts due from the Borrower
hereunder or under any other Loan Document shall be payable in Dollars at 1:00
p.m., Pittsburgh time, on the day when due without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived, and an action
therefor shall immediately accrue, without setoff, counterclaim, withholding or
other deduction of any kind or nature (except for payments to a Lender subject
to a withholding deduction under Section 3.17(c) hereof). Except for payments
under Sections 3.16 or 10.06 hereof, such payments shall be made to the Agent at
its Office in funds immediately available at such Office, and payments under
Sections 3.16 or 10.06 hereof shall be made to the applicable Lender or Issuing
Bank at such domestic account as it shall specify to the Borrower from time to
time in funds immediately available at such account. Any payment received by the
Agent or such Lender or Issuing Bank after 1:00 p.m., Pittsburgh time, on any
day shall be deemed to have been received on the next succeeding Business Day.
The Agent shall distribute to the Lenders or the Issuing Bank, as the case may
be, all such payments received by the Agent for their respective accounts as
promptly as practicable after receipt by the Agent.
(c) INTEREST ON OVERDUE AMOUNTS. To the extent permitted by
law, after there shall have become due (by acceleration or otherwise) Letter of
Credit Unreimbursed Draws, interest, fees, indemnity, expenses or any other
amounts due from the Borrower hereunder or under any other Loan Document, such
amounts shall bear interest for each day until paid (before and after judgment),
payable on demand, at a rate per annum (in each case based on a year of 365 or
366 days, as the case may be, and actual days elapsed) which for each day shall
be equal to the following:
(i) In the case of any part of the Euro-Rate Portion, (A)
until the end of the applicable then-current Funding Period at a rate
per annum 2.00% above the rate otherwise applicable to such part, and
(B) thereafter in accordance with the following clause (ii); and
(ii) In the case of any other amount due from the Borrower
hereunder or under any Loan Document, 2.00% above the then-current Base
Rate Option.
To the extent permitted by law, interest accrued on any amount which has become
due hereunder or under any Loan Document shall compound on a day-by-day basis,
and hence shall be added daily to the overdue amount to which such interest
relates.
3.16. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.
(a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or guideline
or interpretation or application thereof by any Governmental Authority charged
with the interpretation or administration thereof or compliance with any request
or directive of any Governmental Authority (whether or not having the force of
law) now existing or hereafter adopted:
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<PAGE> 18
(i) subjects any Lender Party or any Notional Euro-Rate
Funding Office to any tax or changes the basis of taxation with respect
to this Agreement, the Letter of Credit Unreimbursed Draws, the Letters
of Credit, or the Letter of Credit Participating Interests, or payments
by the Borrower of principal, interest, fees or other amounts due from
the Borrower hereunder (except for taxes on the overall net income or
overall gross receipts of such Lender Party or such Notional Euro-Rate
Funding Office imposed by the jurisdictions (federal, state and local)
in which the Lender Party's principal office or Notional Euro-Rate
Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit, insurance assessment or any other requirement against
credits or commitments to extend credit extended by, assets (funded or
contingent) of, deposits with or for the account of, other acquisitions
of funds by, such Lender Party or any Notional Euro-Rate Funding Office
(other than requirements expressly included herein in the determination
of the Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement against assets (funded or contingent)
of, or credits or commitments to extend credit extended by, any Lender
Party or any Notional Euro-Rate Funding Office, or applicable to the
obligations of any Lender Party or any Notional Euro-Rate Funding
Office under this Agreement, or
(iv) imposes upon any Lender Party or any Notional Euro-Rate
Funding Office any other condition or expense with respect to this
Agreement or its making, maintenance or funding of any Letter of Credit
Unreimbursed Draw, Letter of Credit, or Letter of Credit Participating
Interest,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender Party, any Notional Euro-Rate Funding Office or, in the case of clause
(iii) hereof, any Person controlling a Lender Party, with respect to this
Agreement or the making, maintenance or funding of any Letter of Credit
Unreimbursed Draw, Letter of Credit, or Letter of Credit Participating Interest
(or, in the case of any capital adequacy or similar requirement, to have the
effect of reducing the rate of return on such Lender Party's or controlling
Person's capital, taking into consideration such Lender Party's or controlling
Person's policies with respect to capital adequacy) by an amount which such
Lender Party deems to be material (such Lender Party being deemed for this
purpose to have made, maintained or funded each Funding Segment of the Euro-Rate
Portion from a Corresponding Source of Funds), such Lender Party may from time
to time notify the Borrower of the amount determined in good faith by such
Lender Party (which determination shall be conclusive) to be necessary to
compensate such Lender Party or such Notional Euro-Rate Funding Office for such
increase, reduction or imposition. In making any such determination such Lender
Party may take into account any special, supplemental or other nonrecurring
items, may apply any averaging or attribution methods, and may make such
determination prospectively or retrospectively. Such amount shall be due and
payable by the Borrower to such Lender Party five Business Days after such
notice is given, together with an amount equal to interest on such amount from
the date two Business Days after the date demanded until such due date at the
Base Rate Option. The Borrower shall not be required to make any payment in
respect of clause (a)(i) above to a Lender to the extent that such payment is
attributable to a breach by such Lender of its obligations under Section 3.17(c)
below.
(b) FUNDING BREAKAGE. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any Funding Segment
of any Euro-Rate Portion becomes due (by acceleration or otherwise), or is paid,
prepaid or converted to another interest rate Option (whether or not such
payment, prepayment or conversion is mandatory or automatic and whether or not
such payment or prepayment is then due), on a day other than the last day of the
corresponding Funding
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<PAGE> 19
Period (the date such amount so becomes due, or is so paid, prepaid or
converted, being referred to as the "Funding Breakage Date"), the Borrower shall
pay each Lender an amount ("Funding Breakage Indemnity") determined by such
Lender as follows'
(i) first, calculate the following amount: (A) such Lender's
Pro Rata share of the principal amount of such Funding Segment which so
became due, or which was so paid, prepaid or converted, times (B) the
rate of interest applicable to such principal amount on the Funding
Breakage Date minus the Treasury Rate as of the Funding Breakage Date
(but not less than zero), times (C) the number of days from and
including the Funding Breakage Date to but not including the last day
of such Funding Period, times (D) 1/360;
(ii) then, the Funding Breakage Indemnity to be paid by the
Borrower to such Lender shall be the amount equal to the present value
as of the Funding Breakage Date (discounted at the Treasury Rate as of
such Funding Breakage Date, and calculated on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed) of the
amount described in the preceding clause (i) (which amount described in
the preceding clause (i) is assumed for purposes of such present value
calculation to be payable on the last day of the corresponding Funding
Period).
Such Funding Breakage Indemnity shall be due and payable upon ten Business Days'
prior notice, and each Lender shall, upon giving such notice, notify the Agent
of the amount so demanded. In addition, the Borrower shall, on the due date for
payment of any Funding Breakage Indemnity, pay to such Lender an additional
amount equal to interest on such Funding Breakage Indemnity from the Funding
Breakage Date to but not including such due date at the Base Rate Option
(calculated on the basis of a year of 360 days and actual days elapsed). The
amount payable to each Lender under this Section 3.16(b) shall be determined in
good faith by such Lender, and such determination shall be conclusive.
3.17. TAXES.
(a) PAYMENT NET OF TAXES. All payments made by the Borrower
under this Agreement or any other Loan Document shall be made free and clear of,
and without reduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, and all liabilities with respect
thereto, excluding
(i) in the case of each Lender Party, income or franchise
taxes imposed on such Lender Party by the jurisdiction under the laws
of which such Lender Party is organized or any political subdivision or
taxing authority thereof or therein or as a result of a connection
between such Lender Party and any jurisdiction other than a connection
resulting solely from this Agreement and the transactions contemplated
hereby, and
(ii) in the case of each Lender, income or franchise taxes
imposed by any jurisdiction in which such Lender's lending offices
which make or book Letter of Credit Unreimbursed Draws are located or
any political subdivision or taxing authority thereof or therein
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld or deducted from any amounts payable to any Lender Party under this
Agreement or any other Loan Document, the Borrower shall pay the relevant amount
of such Taxes and the amounts so payable to such Lender Party shall be increased
to the extent necessary to yield to such Lender Party (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the other Loan Documents. Whenever
any Taxes are paid by the Borrower with respect to payments made in
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<PAGE> 20
connection with this Agreement or any other Loan Document, as promptly as
possible thereafter, the Borrower shall send to the Agent for its own account or
for the account of such Lender Party, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof.
(b) INDEMNITY. The Borrower hereby indemnifies each Lender
Party for the full amount of all Taxes attributable to payments by or on behalf
of the Borrower to such Lender Party hereunder or under any of the other Loan
Documents, any Taxes paid by such Lender Party, and any present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any Taxes (including any incremental Taxes, interest or
penalties that may become payable by such Lender Party as a result of any
failure to pay such Taxes). Such indemnification shall be made within five
Business Days from the date such Lender Party makes written demand therefor. The
Borrower shall not be required to make any payment under this Section 3.17(b) to
a Lender to the extent that such payment is attributable to a breach by such
Lender of its obligations under Section 3.17(c) below.
(c) WITHHOLDING. Each Lender that is incorporated or organized
under the laws of any jurisdiction other than the United States or any state
thereof agrees that, on or prior to the date it becomes party to this Agreement,
it will furnish to the Borrower and the Agent two valid, duly completed copies
of United States Internal Revenue Service Form 4224 or United States Internal
Revenue Service Form 1001 or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to receive payments under
this Agreement and the other Loan Documents without deduction or withholding of
any United States federal income taxes. Each Lender which so delivers to the
Borrower and the Agent a Form 1001 or 4224, or a successor applicable form,
agrees to deliver to the Borrower and the Agent two further copies of the said
Form 1001 or 4224 or a successor applicable form, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax, or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it, and such extensions or renewals thereof as may reasonably be
requested by the Borrower or the Agent, certifying in the case of a Form i001 or
Form 4224 that such Lender is entitled to receive payments under this Agreement
or any other Loan Document without deduction or withholding of any United States
federal income taxes, unless in any such cases an event (including any changes
in law) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises the Borrower and the Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax. In addition, if at any time the Borrower believes
that payments to any Lender (foreign or domestic) may be subject to U.S. backup
withholding tax, such Lender shall, at the Borrower's reasonable request from
time to time, if such Lender is legally able to do so, provide the Borrower with
evidence establishing an exemption from U.S. backup withholding tax.
(d) CREDITS. If any payment by the Borrower is made to or for
the account of the Lender Party after deduction for or on account of any Taxes,
and increased payments are made by the Borrower pursuant to Section 3.17(a),
then, if such Lender Party in its reasonable opinion determines that it has
received or been granted a credit against or remission for such Taxes, such
Lender Party shall, to the extent it can do so without prejudice to the
retention of the amount of such credit or remission, reimburse to the Borrower
such amount as such Lender Party shall, in its reasonable opinion acting in good
faith, have determined to be attributable to the relevant Taxes or deduction or
withholding. Any payment made by a Lender Party under this Section 3.17(d) shall
be prima facie evidence of the amount due to the Borrower hereunder. Nothing
herein contained shall interfere with the right of any Lender Party to arrange
its tax affairs in whatever manner it thinks fit and, in particular, no Lender
Party shall b4 under any obligation to claim relief from its corporate profits
or similar tax
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<PAGE> 21
liability in respect of such tax in priority to any other claims, reliefs,
credits or deductions available to it nor oblige any Lender Party to disclose
any information relating to its tax affairs or any computations in respect
thereof.
3.18. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE. Each Lender
shall have the right from time to time, prospectively or retrospectively,
without notice to the Borrower, to deem any branch, subsidiary or affiliate of
such Lender to have made, maintained or funded any part of the Euro-Rate Portion
at any time, Any branch, subsidiary or affiliate so deemed shall be known as a
"Notional Euro-Rate Funding Office." Such Lender shall deem any part of the
Euro-Rate Portion or the funding therefor to have been transferred to a
different Notional Euro-Rate Funding Office if such transfer would avoid or cure
an event or condition described in Section 3.09(e)(ii) hereof or would lessen
compensation payable by the Borrower under Section 3.16(a) hereof, and if such
Lender determines in its sole discretion that such transfer would be practicable
and would not have a material adverse effect on such part of the Letter of
Credit Unreimbursed Draws, such Lender or any Notional Euro-Rate Funding Office
(it being assumed for purposes of such determination that each part of the
Euro-Rate Portion is actually made or maintained by or funded through the
corresponding Notional Euro-Rate Funding Office). Notional Euro-Rate Funding
Offices may be selected by such Lender without regard to such Lender's actual
methods of making, maintaining or funding Letter of Credit Unreimbursed Draws or
any sources of funding actually used by or available to such Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Lender
Party as follows:
4.01. CORPORATE STATUS. The Borrower and each Subsidiary of
the Borrower is a Corporation duly organized and validly existing under the laws
of its jurisdiction of organization. The Borrower and each Subsidiary of the
Borrower has corporate power and authority to own its property and to transact
the business in which it is engaged or presently proposes to engage. The
Borrower and each Subsidiary of the Borrower is duly qualified to do business as
a foreign Corporation and, to the extent applicable, is in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary or advisable, except for
matters that, individually or in the aggregate, do not, and would not be likely
to, have a Material Adverse Effect.
4.02. CORPORATE POWER AND AUTHORIZATION. The Borrower has
corporate power and authority to execute, deliver, perform, and take all actions
contemplated by, each Loan Document to which it is a party, and all such action
has been duly and validly authorized by all necessary corporate proceedings on
its part. Without limitation of the foregoing, the Borrower has the corporate
power and authority to request Letters of Credit to be issued pursuant to the
Loan Documents to the fullest extent permitted hereby and thereby from time to
time, and has taken all necessary corporate action to authorize such requests
for issuance of Letters of Credit.
4.03. EXECUTION AND BINDING EFFECT. This Agreement, each other
Loan Document to which the Borrower is a party and which is executed and
delivered or required to be executed and delivered on or before the date as of
which this representation and warranty is made, has been duly and validly
executed and delivered by the Borrower. This Agreement and each such Loan
Document constitutes, and each other Loan Document when executed and delivered
by the Borrower will constitute, the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
4.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval, order,
consent, authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing,
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<PAGE> 22
recording or registration with, or notice to, any Governmental Authority
(collectively, "Governmental Action") is or will be necessary or advisable in
connection with execution and delivery of any Loan Document, consummation of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions hereof or thereof or to ensure the legality, validity,
binding effect, enforceability or admissibility in evidence hereof or thereof,
except for the following: (a) filings and recordings in respect of the Liens in
favor of the Collateral Agent and the Agent contemplated hereby and thereby, and
(b) other matters set forth in Schedule 4.04 hereof. Each Governmental Action
referred to in the foregoing clauses (a) and (b) has been duly obtained or made,
as the case may be, and is in full force and effect (except, in the case of
clause (a), for the filing of continuation statements and like renewal filings
and recordings which are not yet required to be made). There is no action, suit,
proceeding or investigation pending or (to the Borrower's knowledge after due
inquiry) threatened which seeks or may result in the reversal, rescission,
termination, modification or suspension of any such Governmental Action.
4.05. ABSENCE OF CONFLICTS. Neither the execution and delivery
of any Loan Document nor consummation of the transactions herein or therein
contemplated, nor performance of or compliance with the terms and conditions
hereof or thereof, does or will
(a) violate or conflict with any Law, or
(b) violate or conflict with, or constitute a default under,
or result in (or give rise to any right, contingent or other, of any
Person to cause) any termination, cancellation, prepayment or
acceleration of performance of, or result in the creation or imposition
of (or give rise to any obligation, contingent or other, to create or
impose) any Lien upon any property of the Borrower or any Subsidiary of
the Borrower (except for any Lien in favor of the Collateral Agent
securing the Obligations) pursuant to, or otherwise result in (or give
rise to any right, contingent or other, of any Person to cause) any
change in any right, power, privilege, duty or obligation of the
Borrower or any Subsidiary of the Borrower under or in connection with,
(i) the articles of incorporation or by-laws (or other constituent
documents) of the Borrower or any Subsidiary of the Borrower, or (ii)
any agreement or instrument to which the Borrower or any Subsidiary of
the Borrower is a party or by which any of them or any of their
respective properties may be subject or bound,
except, in the case of the foregoing clause (b)(ii), for matters set forth on
Schedule 4.05 hereof.
4.06. AUDITED FINANCIAL STATEMENTS. The Borrower has
heretofore furnished to the Agent and each Lender consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of December 31, 1994 and
December 31, 1995 and the related consolidated statements of income, cash flows
and changes in stockholders' equity for the fiscal years then ended, as audited
and reported on by Deloitte & Touche, independent certified public accountants
for the Borrower, who delivered an unqualified opinion in respect thereof. Such
financial statements (including the notes thereto) present fairly the financial
position of the Borrower and its consolidated Subsidiaries as of the end of each
such fiscal year and the results of their operations and their cash flows for
the fiscal years then ended, all in conformity with GAAP.
4.07. INTERIM FINANCIAL STATEMENTS. The Borrower has
heretofore furnished to the Agent and each Lender interim consolidated balance
sheets of the Borrower and its consolidated Subsidiaries as of June 30, 1996,
together with the related consolidated statements of income, cash flows and
changes in stockholders' equity for the period from January 1, 1996 to such
date. Such financial statements (including the notes thereto) present fairly the
financial condition of the Borrower and its consolidated Subsidiaries as of June
30, 1996, and their respective results of operations and cash flows for the
fiscal period then ended, all in conformity with GAAP (except that such
financial
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<PAGE> 23
statements do not contain all of the footnote disclosures required by GAAP),
subject to normal and recurring year-end audit adjustments.
4.08. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Borrower
nor any Subsidiary of the Borrower has any liability or obligation of any nature
(whether absolute, accrued, contingent or other, whether or not due, including
but not limited to forward or long-term commitments or unrealized or anticipated
losses from unfavorable commitments) that would be required by GAAP to be
reflected on a consolidated balance sheet of the Borrower and its Subsidiaries
(including the notes thereto) or that has, or would be likely to have, a
Material Adverse Effect, except (a) matters set forth on Schedule 4.08 hereto,
(b) liabilities and obligations disclosed in the financial statements referred
to in Sections 4.05 and 4.06 hereof, (c) liabilities and obligations incurred
after December 31, 1995 in the ordinary course of business and consistent with
past practices, and (d) obligations under the Credit Facilities.
4.09. ACCURATE AND COMPLETE DISCLOSURE. All written
information heretofore, contemporaneously or hereafter provided by or on behalf
of the Borrower or any Subsidiary of the Borrower to any Secured Party pursuant
to or in connection with any Loan Document or any transaction contemplated
hereby or thereby is or will be (as the case may be) true and accurate in all
material respects on the date as of which such information is dated (or, if not
dated, when received by such Secured Party) and does not or will not (as the
case may be) omit to state any material fact necessary to make such information
not misleading at such time in light of the circumstances in which it was
provided. Except as disclosed to the Agent and each Lender in writing, the
Borrower is not aware of any event, change or effect (other than political,
social or economic events, changes or effects of general national or global
scope) having or likely to have individually or in the aggregate, a Material
Adverse Effect.
4.10. [Reserved]
4.11. SOLVENCY. On and as of the date hereof, and on the date
of each Letter of Credit issued hereunder, the Borrower and each Significant
Subsidiary of the Borrower is and will be Solvent (and for this purpose, each
Subsidiary of the Borrower which is not Solvent shall be deemed a Significant
Subsidiary if, collectively, together with their respective Subsidiaries,
treated as a single entity, they would constitute a Significant Subsidiary).
4.12. MARGIN REGULATIONS. No part of the proceeds of any
extension of credit hereunder will be used for the purpose of buying or carrying
any "margin stock," as such term is used in Regulations G and U of the Board of
Governors of the Federal Reserve System, as amended from time to time, to extend
credit to others for the purpose of buying or carrying any "margin stock," or to
extend credit to any Subsidiary of the Borrower that is a Broker-Dealer. Neither
the Borrower nor any Subsidiary of the Borrower is engaged in the business of
extending credit to others for the purpose of buying or carrying "margin stock."
Neither the Borrower nor any Subsidiary of the Borrower owns "margin stock"
sufficient to cause any Loan Obligations to be deemed "indirectly secured" by
"margin stock" within the meaning of such Regulations. Neither any issuance of
any Letter of Credit or other extension of credit pursuant to this Agreement nor
any use of proceeds of any such extension of credit will violate or conflict
with the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System, as amended from time to time.
4.13. REGULATORY RESTRICTIONS. Except as set forth in Schedule
4.13 hereof, neither the Borrower nor any Subsidiary of the Borrower is (a) an
"investment company" or a company "controlled" by an investment company within
the meaning of the Investment Company Act of 1940, as amended, (b) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, (c) subject to
regulation under the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, as amended, or (d) subject to any
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<PAGE> 24
other Law which purports to restrict or regulate its ability to borrow money or
obtain credit as a consequence of the nature of the business conducted by such
Person.
4.14. SUBSIDIARIES. Schedule 4.14 hereof states the authorized
capitalization of each Subsidiary of the Borrower, the number of Shares of
Capital Stock of each class issued and outstanding of each such Subsidiary, and
the number and percentage of outstanding Shares of Capital Stock of each such
class owned by the Borrower and by each Subsidiary of the Borrower. The
outstanding Shares of Capital Stock of each Subsidiary of the Borrower have been
duly authorized and validly issued and are fully paid and nonassessable. The
Borrower and each Subsidiary of the Borrower owns beneficially and of record and
has good title to all of the Shares of Capital Stock it is listed as owning in
such Schedule 4.14, free and clear of any Lien, except for Liens in favor of the
Collateral Agent securing the Obligations. Except as set forth on Schedule 4.14
hereof, there are no options, warrants, calls, subscriptions, conversion rights,
exchange rights, preemptire rights or other rights, agreements or arrangements
(contingent or other) which may in any circumstances now or hereafter obligate
any Subsidiary of the Borrower to issue any Shares of its Capital Stock or any
other securities.
4.15. PARTNERSHIPS, ETC. Neither the Borrower nor any
Subsidiary of the Borrower is a panner (general or limited) of any partnership,
is a party to any joint venture, or owns (beneficially or of record) any equity
or similar interest in any Person (including but not limited to any interest
pursuant to which the Borrower or such Subsidiary has or may in any circumstance
have an obligation to make capital contributions to, or be generally liable for
or on account of the liabilities, acts or omissions of such other Person),
except (a) distributorship or similar arrangements that do not involve liability
on the part of the Borrower or any of its Subsidiaries in the nature of the
liability of a general partner, and (b) partnership interests permitted under
Sections 7.05(f) and 7.05(k) hereof.
4.16. LITIGATION. There is no pending or (to the knowledge of
the Borrower after due inquiry) threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or affecting the
Borrower or any Subsidiary of the Borrower, except for (x) matters set forth on
Schedule 4.16 hereto, and (y) matters that if adversely decided, individually or
in the aggregate, do not, and would not be likely to, have a Material Adverse
Effect.
4.17. ABSENCE OF OTHER CONFLICTS. Neither the Borrower nor any
Subsidiary of the Borrower is in violation of or conflict with, or is subject to
any contingent liability on account of any violation of or conflict with:
(a) any Law,
(b) its articles of incorporation or by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which it or any of its properties may be subject or bound,
except for matters that, individually or in the aggregate, do not, and would not
be likely to, have a Material Adverse Effect.
4.18. INSURANCE. The Borrower and each Subsidiary of the
Borrower maintains, or causes there to be maintained, with financially sound and
reputable insurers not related to or affiliated with the Borrower insurance with
respect to its properties and business and against at least such liabilities,
casualties and contingencies and in at least such types and amounts as is
customary in the case of Persons engaged in the same or a similar business or
having similar properties similarly situated.
4.19. TITLE TO PROPERTY. The Borrower and each Subsidiary of
the Borrower has good and marketable title in fee simple to all real property
owned or purported to be owned by it and good
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title to all other property of whatever nature owned or purported to be owned by
it, including but not limited to all property reflected in the most recent
audited balance sheet referred to in Section 4.06 hereof or submitted pursuant
to Section 6.01(a) hereof, as the case may be (except as sold or otherwise
disposed of in the ordinary course of business, or in a transaction permitted by
the Loan Documents, after the date of such balance sheet), in each case free and
clear of all Liens, other than Permitted Liens.
4.20. INTELLECTUAL PROPERTY. The Borrower and each Subsidiary
of the Borrower owns, or is licensed or otherwise has the right to use, all the
patents, trademarks, service marks, names (trade, service, fictitious or other),
copyrights, technology (including but not limited to computer programs and
software), know-how, processes, data bases and other rights, free from
burdensome restrictions, necessary to own and operate its properties and to
carry on its business as presently conducted and presently planned to be
conducted without conflict with the rights of others, except for matters that,
individually or in the aggregate, do not, and would not be likely to, have a
Material Adverse Effect.
4.21. TAXES. All federal income tax returns required to be
filed by or on behalf of the Borrower or any Subsidiary of the Borrower have
been properly prepared, executed and filed. All other tax and information
returns required to be filed by or on behalf of the Borrower or any Subsidiary
of the Borrower have been properly prepared, executed and filed, except for
matters that, individually or in the aggregate, do not, and would not be likely
to, have a Material Adverse Effect. All taxes, assessments, fees and other
governmental charges upon the Borrower or any Subsidiary of the Borrower or upon
any of their respective properties, incomes, sales or franchises which are due
and payable have been paid, other than those not yet delinquent and payable
without premium or penalty, and except for those being diligently contested in
good faith by appropriate proceedings, and in each case such reserves and
provisions for taxes as may be required by GAAP shall have been made on the
books of the Borrower and each Subsidiary of the Borrower. The reserves and
provisions for taxes on the books of the Borrower and each Subsidiary of the
Borrower for all open years and for its current fiscal period are adequate in
accordance with GAAP. As of the Closing Date, neither the Borrower nor any
Subsidiary of the Borrower knows of any proposed additional assessment or basis
for any material assessment for additional taxes (whether or not reserved
against), other than as set forth on Schedule 4.21 hereto.
4.22. EMPLOYEE BENEFITS. Except for matters disclosed to the
Agent before the date as of which this representation and warranty is made or
reaffirmed, neither the Borrower, any Subsidiary of the Borrower or Controlled
Group Member has incurred any liability that has not been fully discharged (or
any contingent or other potential liability that represents a material risk of
becoming an actual liability) exceeding $150,000 in the aggregate for all such
Persons for or in connection with any of the following: (a) any Pension-Related
Event (whether or not any such Pension-Related Event has occurred) or (b) any
complete or partial withdrawal from any Multiemployer Plan (whether or not such
withdrawal has occurred). All employee benefit arrangements covering employees
of the Borrower or any of its Subsidiaries have been administered in substantial
compliance with, and funded in accordance with, applicable Law.
4.23. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule
4.23 hereof, the Borrower and each Subsidiary of the Borrower and each of their
respective Environmental Affiliates is and has been in full compliance with all
applicable Environmental Laws, except for matters which, individually or in the
aggregate, do not, and would not be likely to, have a Material Adverse Effect.
Except as disclosed in Schedule 4.23 hereof, there is no Environmental Claim
pending or to the knowledge of the Borrower threatened, and there are no past or
present acts, omissions, events or circumstances (including but not limited to
any dumping, leaching, deposition, removal, abandonment, escape, emission,
discharge or release of any Environmental Concern Material at, on or under any
facility or property now or previously owned, operated or leased by the Borrower
or any Subsidiary of the Borrower or any of their respective Environmental
Affiliates) that could form the basis of any Environmental Claim, against the
Borrower or any Subsidiary of the Borrower or any of their respective
Environmental Affiliates, except for matters which do not, and, if adversely
decided, individually or in
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<PAGE> 26
the aggregate, would not, have a Material Adverse Effect. Except as disclosed in
Schedule 4.23 hereof, no facility or property now or previously owned, operated
or leased by the Borrower or any Subsidiary of the Borrower or any of their
respective Environmental Affiliates is an Environmental Cleanup Site. No Lien
exists, and no condition exists which would be likely to result in the filing of
a Lien, against any property of the Borrower or any Subsidiary of the Borrower
under any Environmental Law.
4.24. [Reserved]
ARTICLE V
CONDITIONS OF ISSUANCE
5,01. CONDITIONS TO ISSUANCE. The obligation of the Issuing
Bank to issue the Letters of Credit on the Closing Date is subject to the
satisfaction, immediately prior to or concurrently with the issuance of such
Letters of Credit, as the case may be, of the following conditions precedent:
(a) AGREEMENT. The Agent shall have received, with a copy for
each Lender, this Agreement, duly executed on behalf of the Borrower.
(b) LIEN SEARCH. The Agent shall have received evidence of
contemporaneous searches of UCC, tax and other appropriate registers,
dockets and records, which shall have revealed no fillings or
recordings with respect to the Shared Collateral purported to be
covered by the above Security Documents (other than those relating to
Permitted Liens).
(c) OTHER CREDIT FACILITIES; SPREADING OF EXISTING LIEN. The
Agent shall have received evidence satisfactory to it that the Term
Loan Agreement, the Revolving Credit Agreement, the Collateral Agency
Agreement and the other Secured Party Documents shall have been amended
in a manner satisfactory in form and substance to the Agent (and,
without limiting the generality of the foregoing, such amendments to
the Term Loan Agreement and the Revolving Credit Agreement shall permit
the transactions contemplated by this Agreement, and such amendments to
the Collateral Agency Agreements and the other Shared Security
Documents shall spread the benefit of the Liens in favor of the
Collateral Agency Agreement so as to secure the obligations of the
Borrower under this Agreement).
(d) ICV ACQUISITION. A Wholly Owned Subsidiary of the Borrower
shall, concurrently with the issuance of the Letters of Credit
hereunder, acquire good title, free of all Liens, to of all of the
outstanding Shares of Capital Stock of ICV.
(e) ACQUISITION DOCUMENTS. The Agent shall have received, with
copies for each Lender, true and correct copies (in each case certified
as to authenticity on behalf of the Borrower) of the following, each of
which shall be satisfactory in form and substance to the Agent: the ICV
Notes; and all agreements(s) relating to the acquisition of the shares
of Capital Stock of ICV and the issuance of the ICV Notes (including in
each case all exhibits, schedules and disclosure letters delivered
pursuant thereto), all amendments, waivers and consents relating
thereto, all other side letters or agreements affecting the terms
thereof or other transactions contemplated thereby.
(f) GOVERNMENTAL APPROVALS AND FILINGS. The Agent shall have
received, with copies for each Lender, true and correct copies (in each
case certified as to authenticity on such date on behalf of the
Borrower) of all items referred to in clause (b) of Section 4.04 hereof
and such items shall be satisfactory in form and substance to the Agent
and shall be in full force and effect.
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(g) OTHER CONFLICTS. The Agent shall have received, with copies for
each Lender, true and correct copies (in each case certified as to
authenticity on such date on behalf of the Borrower) of each consent,
waiver, amendment or agreement which has been obtained by or on behalf of
the Borrower or any Subsidiary of the Borrower in respect of any matter
which would, absent such consent, waiver, amendment or agreement, be within
the scope of clause (b)(ii) of Section 4.05 hereof, and such items shall be
satisfactory in form and substance to the Agent and shall be in full force
and effect.
(h) CORPORATE PROCEEDINGS. The Agent shall have received, with a
counterpart for each Lender, certificates by the Secretary or Assistant
Secretary of the Borrower dated as of the Closing Date as to (i) true
copies of the articles of incorporation and by-laws (or other constituent
documents) of the Borrower in effect on such date (which, in the case of
articles of incorporation or other constituent documents flied or required
to be filed with the Secretary of State or other Governmental Authority in
its jurisdiction of incorporation, shall be certified to be true, correct
and complete by such Secretary of State or other Governmental Authority not
more than 30 days before the Closing Date), (ii) true copies of all
corporate action taken by the Borrower relative to this Agreement and the
other Loan Documents and (iii) the incumbency and signature of the
respective officers of the Borrower executing this Agreement and the other
Loan Documents to which the Borrower is a party, together with satisfactory
evidence of the incumbency of such Secretary or Assistant Secretary. The
Agent shall have received, with a copy for each Lender, certificates from
the appropriate Secretaries of State or other applicable Governmental
Authorities dated not more than 30 days before the Closing Date showing the
good standing of the Borrower in its state of incorporation.
(i) FORM U-1. The Agent shall have received, with a counterpart for
each Lender, a Federal Reserve Board Form U-l, duly executed by the
Borrower, satisfactory in form and substance to the Agent.
(j) LITIGATION. There shall not be pending or (to the knowledge of the
Borrower after due inquiry, threatened) action, suit, proceeding or
investigation by or before any Governmental Authority seeking to challenge,
prevent or declare illegal any of the transactions contemplated by the Loan
Documents.
(k) LEGAL OPINION OF COUNSEL TO THE BORROWER. The Agent shall have
received, with an executed counterpart for each Lender, an opinion
addressed to the Agent and each Lender, dated the Closing Date, of counsel
to the Borrower, as to such matters as may be requested by the Agent and
from counsel and in form and substance satisfactory to the Agent.
(1) OFFICERS' CERTIFICATES. The Agent shall have received, with an
executed counterpart for each Lender, certificates from such officers of
the Borrower as to such matters as the Agent may request.
(m) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred in the business, operations, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole since December 31, 1995.
(n) REPRESENTATIONS AND WARRANTIES, ETC. All representations and
warranties set forth in Article IV hereof shall be true and correct on and
as of the Closing Date as if made on and as of the Closing Date, after
giving effect to the Letters of Credit requested to be issued on the
Closing Date, and the other transactions contemplated by the Loan Documents
to occur on or before the Closing Date.
(o) NOTICE. Notice with respect to such Letter of Credit shall have
been given by the Borrower in accordance with Article III hereof.
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<PAGE> 28
(p) NO DEFAULTS. No Event of Default or Potential Default shall have
occurred and be continuing or exist on such date or after giving effect to
the Letters of Credit requested to be issued on such date.
(q) NO VIOLATIONS OF LAW, ETC. Neither the making nor use of the
Letters of Credit shall cause any Lender Party to violate any Law.
(r) FEES, EXPENSES, ETC. All fees and other compensation required to
be paid to the Agent or the Lenders pursuant hereto or pursuant to any
other written agreement on or prior to the Closing Date shall have been
paid or received.
(s) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
shall be satisfactory in form and substance to the Agent. The Agent shall
have received such other documents, instruments and other items as the
Agent may reasonably request.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower hereby covenants to each Lender Party as follows:
6.01. BASIC REPORTING REQUIREMENTS.
(a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any
event within 105 days after the close of each fiscal year of the Borrower, the
Borrower shall furnish to the Agent, with a copy for each Lender, audited
consolidated statements of income, cash flows and stockholders' equity of the
Borrower and its consolidated Subsidiaries for such fiscal year, an unaudited
consolidating statement of income of the Borrower and its consolidated
Subsidiaries for such fiscal year, and an audited consolidated balance sheet and
unaudited consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal year, and notes to each, all in
reasonable detail, prepared on a comparative basis in accordance with GAAP. Such
audited financial statements shall be accompanied by an opinion of Deloitte &
Touche or other independent certified public accountants of recognized national
standing selected by the Borrower and reasonably satisfactory to the Agent. Such
opinion shall be free of any exception, qualification or explanation not
acceptable to the Agent (and in any event shall be free of any exception,
qualification or explanation relating to ability to continue as a going concern,
a limited scope of examination or independence). Such opinion in any event shall
contain a written statement of such accountants substantially to the effect that
(i) such accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards and (ii) in the opinion of
such accountants such audited financial statements present fairly the financial
position of the Borrower and its consolidated Subsidiaries as of the end of such
fiscal year and the results of their operations and their cash flows and
stockholders' equity for such fiscal year, in conformity with GAAP. Such
unaudited financial statements shall be certified by a Responsible Officer of
the Borrower as presenting fairly the consolidated and consolidating financial
position of the Borrower and its consolidated Subsidiaries as of the end of such
fiscal year, and the respective consolidated and consolidating results of their
operations and their cash flows and stockholders' equity for such fiscal year,
in conformity with GAAP.
(b) QUARTERLY REPORTS. As soon as practicable, and in any
event within 60 days after the close of each of the first three fiscal quarters
of each fiscal year of the Borrower, the Borrower shall furnish to the Agent,
with a copy for each Lender, unaudited consolidated statements of income, cash
flows and stockholders' equity of the Borrower and its consolidated Subsidiaries
for such fiscal quarter and for the period from the beginning of such fiscal
year to the end of such fiscal quarter, an unaudited
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<PAGE> 29
consolidating statement of income for such fiscal quarter and for the period
from the beginning of such fiscal year to the end of such fiscal quarter, and
unaudited consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as of the close of such fiscal quarter, and notes to
each, all in reasonable detail, setting forth in comparative form the
corresponding figures for the same periods or as of the same date during the
preceding fiscal year (except for the consolidated balance sheet, which shall
set forth in comparative form the corresponding balance sheet as of the prior
fiscal year end, and cash flow statements, which shall report only year to date
periods). Such financial statements shall be certified by a Responsible Officer
of the Borrower as presenting fairly the consolidated and consolidating
financial position of the Borrower and its consolidated Subsidiaries as of the
end of such fiscal quarter and the respective consolidated and consolidating
results of their operations and their cash flows and stockholders' equity for
such fiscal quarter, in conformity with GAAP, subject to normal and recurring
year-end audit adjustments.
(c) COMPLIANCE CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Sections 6.01(a) and 6.01(b), the
Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for
each Lender, a certificate in substantially the form set forth as Exhibit C,
duly completed and signed by a Responsible Officer of the Borrower.
(d) ACCOUNTANTS' CERTIFICATES. Concurrently with the Agent's
receipt from the Borrower of each set of audited financial statements delivered
pursuant to Section 6.01(a), the Borrower shall deliver, or cause to be
delivered, to the Agent, with sufficient copies for each Lender, a report signed
by the independent certified public accountants who opined on such financial
statements and dated the date of such financial statements, stating in substance
that they have reviewed this Agreement and the other Loan Documents and that in
making the examination necessary for their opinion on such financial statements
they did not become aware of any Event of Default or Potential Default pursuant
to Sections 7.01, 7.02(e)(iv), 7.03(f) and 7.03(g) as of the end of such fiscal
year, or, if they did become so aware, such certificate or report shall state
the nature and period of existence thereof.
(e) ANNUAL BUSINESS PLAN. Not later than January 31 of each
year, the Borrower shall furnish to the Agent, with a copy for each Lender, a
business plan for the Borrower and its Subsidiaries for the next five years,
certified as such by a Responsible Officer of the Borrower. Such business plan
shall be not less detailed than the 1995-1999 corporate plan heretofore
delivered to the Agent and each Lender, and shall include or be accompanied by,
among other matters reasonably requested from time to time, projected income,
cash flows and summary balance sheet for the Borrower and its Subsidiaries, on
both a consolidated and a separate unconsolidated basis for each year in such
five year period.
(f) QUARTERLY PLAN UPDATES. Concurrently with the delivery of
the financial reports referred to in Section 6.01(b), the Borrower shall furnish
to the Agent, with a copy for each Lender, a quarterly update to the most recent
annual business plan, certified as such by Responsible Officer of the Borrower.
Such business plan shall be not less detailed than the first quarter update for
1995 heretofore delivered to the Agent and each Lender.
(g) MONTHLY FINANCIAL INFORMATION. Within 45 days after the
end of each month after the Closing Date, the Borrower shall provide the Agent,
with a copy for each Lender, summary financial information as to the Borrower
and its consolidated Subsidiaries on a consolidated basis (and separate
financial information for such Subsidiaries as the Agent may reasonably request)
as of the end of the preceding month, all in reasonable detail and in any case
including, among other matters reasonably requested by the Agent from time to
time, financial information on a monthly and year-to-date basis, and separate
line-items showing EBIT, depreciation and amortization, all certified by a
Responsible Officer of the Borrower.
(h) CERTAIN OTHER REPORTS AND INFORMATION. Promptly upon
their becoming available to the Borrower, the Borrower shall deliver, or cause
to be delivered, to the Agent, with a copy for each
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Lender, a copy of (i) all regular or special reports, registration statements
and amendments to the foregoing which the Borrower or any Subsidiary of the
Borrower shall file with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange, (ii) all reports, proxy
statements, financial statements and other information distributed by the
Borrower to its security holders or the financial community generally, and (iii)
upon request by any Lender Party, all reports submitted by outside accountants
in connection with any audit of the Borrower or any Subsidiary of the Borrower,
including but not limited to all management letters commenting on the internal
controls of the Borrower or any Subsidiary of the Borrower submitted in
connection with any such audit.
(i) FURTHER INFORMATION. The Borrower will promptly furnish,
or cause to be furnished, to the Agent, with a copy for each Lender, such other
information and in such form as the Agent or any Lender may reasonably request
from time to time.
(j) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware of
any of the following, the Borrower shall give the Agent notice thereof, together
with a written statement of a Responsible Officer of the Borrower setting forth
the details thereof and any action with respect thereto taken or proposed to be
taken by the Borrower, and the Agent shall promptly notify each Lender thereof:
(i) Any Event of Default or Potential Default.
(ii) Any material adverse change in the business, operations,
condition (financial or otherwise) or prospects (exclusive, in the case
of prospects, of political, social or economic events, changes or
effects of general national or global scope) of the Borrower and its
Subsidiaries taken as a whole.
(iii) Any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or
affecting the Borrower or any Subsidiary of the Borrower which, if
adversely decided, individually or in the aggregate, would, or would be
likely to, have a Material Adverse Effect.
(iv) (A) Any termination for default of any contract
potentially involving aggregate revenues in excess of $1,000,000 to
which the Borrower or any Subsidiary of the Borrower is a party, (B)
any termination for convenience or other early termination or failure
to exercise any option to renew by the other party to any contract
potentially involving annual revenues in excess of $5,000,000, (c) any
actual or threatened suspension, debarment or declaration of
ineligibility of the Borrower or any Subsidiary by the U.S. Government
or any agency or department thereof, (D) any actual or threatened
cessation of business with the Borrower or any Subsidiary by any agency
or department of the U.S. Government, or (E) any actual or threatened
suspension or withdrawal of any security clearance of the Borrower or
any Subsidiary.
(v) Any Pension-Related Event, except (w) any Reportable Event
described in subsection (i) of the defInition of such term herein as to
which the 30 day notice requirement to the PBGC is waived under
applicable regulations, and (x) any Pension-Related Event described in
subsection (d) or (f) of the defInition thereof unless it involves a
liability of the Borrower, any Subsidiary of the Borrower or any
Controlled Group Member that has not been fully discharged (or a
contingent or other potential liability that represents a material risk
of becoming an actual liability) of more than $100,000 in the aggregate
for all such Persons. Such notice shall be accompanied by the
following: (y) a copy of any notice, request, return, petition or other
document received by the Borrower, any Subsidiary of the Borrower or
any Controlled Group Member from any Person, or which has been or is to
be fIled with or provided to any Person (including, without limitation,
the Internal Revenue Service, the Department of Labor, the PBGC or any
Plan participant, benefIciary, alternate payee or employer
representative), in
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connection with such Pension-Related Event, and (z) in the case of any
Pension-Related Event with respect to a Plan, the most recent Annual
Report (5500 Series), with attachments thereto, and if such Plan is
required by applicable Law to have an actuarial valuation report, the
most recent actuarial valuation report, for such Plan.
(k) VISITATION AND VERIFICATION GENERALLY. The Borrower shall
permit such Persons as the Agent or any Lender may designate from time to time
to visit and inspect any of the properties of the Borrower and any Subsidiary of
the Borrower, to examine their respective books and records and take copies and
extracts therefrom and to discuss their respective affairs with their respective
directors, officers, employees and independent accountants at such times and as
often as the Agent or any Lender may reasonably request, subject to mandatory
national security regulations. The Borrower hereby authorizes such officers,
employees and independent accountants to discuss with the Agent or any Lender
the affairs of the Borrower and its Subsidiaries, subject to mandatory national
security regulations. The Agent and the Lenders shall have the right to examine
and verify accounts, inventory and other properties and liabilities of the
Borrower and its Subsidiaries from time to time, and the Borrower shall
cooperate, and shall cause each of its Subsidiaries to cooperate, with the Agent
and the Lenders in such verification, subject to mandatory national security
regulations.
(l) DUTY TO MAINTAIN INDEPENDENT ACCOUNTANTS WITH SECURITY
CLEARANCES; VERIFICATION OF CLASSIFIED CONTRACTS. The Borrower shall, and shall
cause each such Subsidiary to, retain at all times an independent certified
public accountant of national standing having personnel who at all times have
security clearances sufficient to permit them to examine and verify all such
classified contracts, accounts and other assets which, individually or in the
aggregate, are material to the business, operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
The Borrower shall, from time to time at the reasonable request of the Agent,
cause such independent accountants to examine, verify and report to the Agent on
such classified contracts, accounts and assets as the Agent may request, to the
fullest extent permitted by mandatory national security regulations.
(m) CHANGES IN CORPORATE STRUCTURE. Promptly after any change
in the matters set forth in Section 4.14 hereof, the Borrower shall deliver to
the Agent notice of such change, together with an amended and restated Schedule
4.14 which reflects such change.
6.02. INSURANCE. The Borrower shall, and shall cause each of
its Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business and against such
liabilities, casualties and contingencies and of such types as are reasonably
satisfactory to the Agent from time to time, and in any case as is customary in
the case of Persons engaged in the same or a similar business or having similar
properties similarly situated. The Borrower shall, if so requested by the Agent,
deliver to the Agent original or duplicate policies or certificates of such
insurance and, as often as the Agent may reasonably request, a report of a
reputable insurance broker, or an insurance company representative if an
insurance broker is not involved, with respect to such insurance.
6.03. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND
PRIORITY CLAIMS. The Borrower shall promptly notify the Agent in writing if it
or any of its Subsidiaries learns of any proposed additional assessment or basis
for any assessment for additional taxes (whether or not reserved against) which,
if paid or incurred, would have a Material Adverse Effect. The Borrower shall,
and shall cause each of its Subsidiaries to, pay and discharge, or cause to be
paid and discharged,
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges imposed upon it,
or any of them, or any of its, or any of their, properties;
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(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons which, if unpaid, might result in the creation of a Lien
upon any such property; and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property or which, if unpaid, might give rise to a claim entitled to
priority over general creditors of the Borrower or such Subsidiary in
any bankruptcy, insolvency, receivership or similar proceeding;
PROVIDED, that, unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, the Borrower or such Subsidiary need not
pay or discharge, or cause the payment or discharge, of any such tax,
assessment, charge or claim above so long as (x) the validity thereof is
contested in good faith and by appropriate proceedings diligently conducted, and
(y) such reserves or other appropriate provisions as may be required by GAAP
shall have been made therefor.
6.04. PRESERVATION OF CORPORATE STATUS. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain its status as a
Corporation duly organized, validly existing and, to the extent applicable, in
good standing under the laws of its jurisdiction of organization, except for
Permitted Mergers. The Borrower shall, and shall cause each of its Subsidiaries
to, at all times be duly qualified to do business as a foreign Corporation and,
to the extent applicable, in good standing in all jurisdictions in which the
ownership of its properties or the nature of its business or both make such
qualification necessary or advisable, except for matters that, individually or
in the aggregate, do not, and would not be likely to, have a Material Adverse
Effect.
6.05. GOVERNMENTAL APPROVALS AND FILINGS. The Borrower shall,
and shall cause each of its Subsidiaries to, keep and maintain in full force and
effect all Governmental Actions necessary or advisable in connection with
execution and delivery of any Loan Document, consummation of the transactions
herein or therein contemplated, performance of or compliance with the terms and
conditions hereof or thereof, or to ensure the legality, validity, binding
effect, enforceability or admissibility in evidence hereof or thereof.
6.06. MAINTENANCE OF PROPERTIES, FRANCHISES, ETC. The Borrower
shall, and shall cause each of its Subsidiaries to, (a) maintain or cause to be
maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by it and shall make or cause to
be made all needful and proper repairs, renewals, replacements and improvements
thereto so that the business carried on in connection therewith may be properly
and advantageously conducted at all times, except where failure to do so does
not, and would not be likely to, have a Material Adverse Effect, and (b)
maintain and hold in full force and effect all franchises, licenses, permits,
certificates, authorizations, qualification, accreditations and other rights,
consents and approvals (whether issued, made or given by a Governmental
Authority or otherwise), necessary to own and operate its properties and to
carry on its business as presently conducted and as presently planned to be
conducted, except where failure to do so does not, and would not be likely to,
have a Material Adverse Effect.
6.07. AVOIDANCE OF OTHER CONFLICTS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, violate or conflict with, be in
violation of or conflict with, or be or remain subject to any liability
(contingent or other) on account of any violation or conflict with
(a) any Law,
(b) its certificate or articles of incorporation or by-laws
(or other constituent documents), or
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(c) any agreement or instrument to which it or any of its
Subsidiaries is a party or by which any of them or any of their
respective properties may be subject or bound,
except for matters of the type referred to in clauses (a) and (c) that could
not, individually or in the aggregate, do not, and would not be likely to, have
a Material Adverse Effect.
6.08. FINANCIAL ACCOUNTING PRACTICES. The Borrower shall, and
shall cause each of its Subsidiaries to, make and keep books, records and
accounts which, in reasonable detail, accurately and fairly reflect its
transactions and dispositions of its assets, and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
6.09. USE OF PROCEEDS. The Borrower shall not use any Letters
of Credit directly or indirectly for any unlawful purpose, in any manner
inconsistent with Section 4.12, or inconsistent with any other provision of this
Agreement or any other Loan Document.
6.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Borrower
shall, and shall cause each of its Subsidiaries to, engage in the businesses
they have engaged in during the present and preceding fiscal years and the
Borrower shall not, and shall not permit any of its Subsidiaries to, engage in
any business other than the financial information services business, other
information services businesses and matters incidental thereto; PROVIDED, that
TIMCO may continue to conduct its business in substantially the manner in which
it conducts such business as of June 29, 1995. Without limitation of the
foregoing, the Borrower shall continue to operate as a holding company and shall
not conduct any material business other than holding the capital stock of
Subsidiaries and matters incidental thereto.
6.11. PLANS AND MULTIEMPLOYER PLANS.
(a) REQUIRED CONTRIBUTIONS. The Borrower shall, and shall
cause each Subsidiary of the Borrower and Controlled Group Members to, make
contributions to each Plan when due in accordance with the minimum funding
requirements under ERISA and the Code applicable to such Plan and pay any
required PBGC premiums as and when due for such Plan.
(b) REQUIRED CONTRIBUTIONS TO MULTIEMPLOYER PLANS. The
Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled
Group Members to, make contributions required to be made by it, or any of them,
to each Multiemployer Plan, if any, when due in accordance with its, or any of
their, obligations under any collective bargaining agreement related to such
Multiemployer Plan or participation agreements applicable to such Multiemployer
Plan, except those contributions the requirement of which are reasonably being
contested by a Controlled Group Member provided that failure to make such
contested contributions is not a violation of applicable Law and does not
present a material risk of resulting in liability (contingent or other) to the
Borrower or any Subsidiary of the Borrower.
(c) FUNDING. The Borrower shall, and shall cause each of its
Subsidiaries to, make any required contributions to any arrangements for
providing retirement and/or death benefits when due, in accordance with the
terms of the arrangement and/or any minimum funding requirements which are
applicable to the arrangement from time to time. The Borrower shall not, nor
shall it permit any of its Subsidiaries to, allow any arrangement for providing
retirement and/or death benefits to become underfunded (as determined on the
basis of reasonable actuarial assumptions) by an amount which, in the aggregate
for all such arrangements, exceeds $5,000,000.
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6.12. DISASTER RECOVERY PLAN. The Borrower shall cause
Datastream to maintain in full force and effect at all times a disaster recovery
plan which shall provide computer redundancy (either through a third party
servicing agent or through off-site facilities owned by Datastream) sufficient
to permit Datastream to resume substantially all operations within 48 hours. The
Borrower shall cause the members of the Disclosure Group to implement no later
than December 1, 1996, and thereafter to maintain in full force and effect at
all times, a disaster recovery plan which shall provide computer redundancy
(either through a third party servicing agent or through off-site facilities
owned by Disclosure Group) sufficient to permit Disclosure Group to resume
substantially all operations within 72 hours.
6.13. ANNUAL BANK MEETING. The Borrower shall hold meetings
of the Lenders annually at the request of the Agent.
6.14. SEPARATE CORPORATE EXISTENCE. The Borrower acknowledges
that the Lender Parties are entering into the transactions contemplated by this
Agreement and the other Loan Documents in reliance upon the identity of the
Subsidiaries of the Borrower as legal entities separate from the Borrower.
Accordingly, the Borrower shall take, and shall cause its Subsidiaries to take,
all reasonable steps to continue the identities of its Subsidiaries as separate
legal entities, and to make it apparent to third Persons that its Subsidiaries
are entities with assets and liabilities distinct from those of the Borrower.
Without limiting the generality of the foregoing, the Borrower shall take such
actions as shall be required in order that:
(a) For each Subsidiary of the Borrower in which the Borrower
directly owns, beneficially or of record, Shares of Capital Stock, at
least one director or officer of the Borrower shall be a person who is
not a director or officer of such Subsidiary.
(b) The books and records of each Subsidiary of the Borrower
shall be maintained separately from those of the Borrower and each of
its other Subsidiaries.
(c) The assets of each Subsidiary of the Borrower will be
maintained in a manner that facilitates their identification and
segregation from those of the Borrower and its other Subsidiaries (it
being understood that such requirement shall not be interpreted to
forbid operation of the Group Liquidity Manager Agreement referred to
in Section 7.03(n) hereof.
(d) The Borrower and each Subsidiary of the Borrower shall
strictly observe corporate formalities. The Borrower and each of its
Subsidiaries will conduct their respective businesses in their own
respective names. The business and affairs of the Borrower and each
Subsidiary shall be managed by or under the direction of the board of
directors of such Person.
(e) Funds or other assets of Subsidiaries of the Borrower will
not be commingled with those of the Borrower and its other Subsidiaries
(it being understood that such restriction shall not be interpreted to
forbid (i) intercompany loans and Advances that have been properly
documented and accounted for on the books and records of each relevant
entity, made in compliance with corporate formalities, and otherwise
made in compliance with this Agreement and the other Loan Documents, or
(ii) the operation of the Group Liquidity Manager Agreement referred to
in Section 7.03(n) hereof.
(f) The operating expenses of the Borrower and each Subsidiary
of the Borrower will be paid by such Person. To the extent, if any,
that the Borrower and any of its Subsidiaries share items of expenses,
such expenses will be allocated to the extent practical on the basis of
actual use or the value of services rendered, and otherwise on a basis
reasonably related to actual use or the value of services rendered, and
each such Person shall pay its allocated share of such expenses on a
current basis. To the extent, if any, that the Borrower and any of its
Subsidiaries
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<PAGE> 35
provides services to one another, the provider shall be compensated by
the recipient on a current basis at fair and reasonable rates. To the
extent, if any, that any consolidated or combined tax return is filed
including any of the Borrower or its Subsidiaries, each such Person
shall pay or be paid, as the case may be, on a current basis an
equitable share of the consolidated tax payment or refund associated
therewith.
(g) Annual financial statements of the Borrower which are
consolidated to include its Subsidiaries will contain notes clearly
stating that each such Subsidiary is a corporate or similar entity
separate from the Borrower and its other Subsidiaries, and that the
stock of each direct Subsidiary of the Borrower has been pledged to
secure the Obligations.
6.15. ADDITIONAL SECURITY.
(a) GENERAL. Promptly upon the request of the Agent from time
to time, the Borrower shall as promptly as practicable (and in any case within
30 days after such request, or such longer period as the Agent may specify in
writing) further secure the Obligations by granting to the Collateral Agent a
valid and perfected Lien, prior to all other Liens except Permitted Liens, on
such of its properties from time to time as the Agent may designate (except for
property subject to a Permitted Lien as to which the Borrower is required to
obtain the consent of the holder of such Permitted Lien before granting such a
Lien to the Collateral Agent and as to which the Borrower is unable, using
reasonable efforts, to obtain such consent). In connection therewith, the
Borrower shall (i) execute and deliver to the Agent such mortgages, security
agreements and other agreements and instruments, and do such other acts and
things as shall be necessary or, in the judgment of the Agent, appropriate to
grant to the Collateral Agent a valid and perfected Lien on such property, prior
to all other Liens except Permitted Liens, and (ii) procure and deliver to the
Agent such other items (including but not limited to lien searches, title
insurance policies, surveys, environmental audits, insurance endorsements and
opinions of counsel), and do such other acts and things, as the Agent may
request in connection with the foregoing. All of the foregoing shall be in form
and substance satisfactory to the Agent. From time to time as requested by the
Agent, the Borrower shall use reasonable efforts to (x) obtain the consent of
any Person whose consent is necessary or advisable to the creation, perfection
or maintenance of any such Lien, including but not limited to that of any lessor
whose consent may be required in connection with any such Lien on any leasehold
interest, and to obtain nondisturbance and like agreements from mortgagees and
other holders of superior rights in the property subject to any such leasehold
interest, (y) obtain waivers of Liens from such landlords and mortgagees and
from other Persons described in Section 6.03(b) hereof, and (z) do such other
acts and things as the Agent may deem appropriate to enhance, preserve or
protect the security for the Obligations.
(b) NOTICE OF CERTAIN REALTY TRANSACTIONS. The Borrower shall
promptly give notice to the Agent of any acquisition by the Borrower of any
interest or interests in real property (fee, leasehold or otherwise) or fixtures
having a fair market value, individually or in the aggregate, in excess of
$1,000,000 (except for leasehold interests having a term, including all options
exercisable by the lessee, less than 5 years).
6.16. [Reserved]
ARTICLE VII
NEGATIVE COVENANTS
The Borrower hereby covenants to each Lender Party as
follows:
7.01. Financial Covenants.
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<PAGE> 36
<TABLE>
(a) CONSOLIDATED NET WORTH. Consolidated Net Worth shall not
at any time be less than the applicable amount specified below:
<CAPTION>
Consolidated Net Worth
From and including To and including shall not be less than
------------------ ---------------- ----------------------
<S> <C> <C>
Closing Date December 31, 1996 $235,000,000
January 1, 1997 December 31, 1997 $250,000,000
January 1, 1998 December 31, 1998 $265,000,000
January 1, 1999 December 31, 1999 $280,000,000
January 1, 2000 December 31, 2000 $295,000,000
January 1, 2001 December 31, 2001 $310,000,000
Thereafter $325,000,000
</TABLE>
<TABLE>
(b) CONSOLIDATED LEVERAGE RATIO. The Consolidated Leverage
Ratio shall not at any time exceed the applicable amount specified below:
<CAPTION>
Consolidated Leverage Ratio
From and including To and including shall not exceed
------------------ ---------------- ----------------
<S> <C> <C>
Closing Date December 30, 1996 2.00
December 31, 1996 December 30, 1997 1.85
December 31, 1997 December 30, 1998 1.70
December 31, 1998 December 30, 1999 1.50
December 31, 1999 December 30, 2000 1.40
Thereafter 1.25
</TABLE>
<TABLE>
(c) CONSOLIDATED INTEREST COVERAGE RATIO. As of the end of
each fiscal quarter of the Borrower ending on or after the Closing Date, the
Consolidated Interest Coverage Ratio for the period of four consecutive fiscal
quarters ending on the last day of such fiscal quarter, considered as a single
accounting period, shall not be less than the applicable amount set forth below:
<CAPTION>
Fiscal quarter ending on Consolidated Interest Coverage Ratio
a date in the following for the four fiscal quarters ending
period (inclusive) on such date shall not be less than
------------------------ ------------------------------------
<S> <C>
Closing Date through December 31, 1996 2.50
January 1, 1997 through December 31, 1997 2.75
January 1, 1998 through December 31, 1998 3.00
Thereafter 3.50
</TABLE>
<TABLE>
(d) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of
each fiscal quarter of the Borrower ending on or after the Closing Date, the
Consolidated Fixed Charge Coverage Ratio for the period of four consecutive
fiscal quarters ending on the last day of such fiscal quarter, considered as a
single accounting period, shall not be less than the applicable amount set forth
below.
<CAPTION>
Fiscal quarter ending on Consolidated Fixed Charge Coverage Ratio a date
in the following for the four fiscal quarters ending
period (inclusive) on such date shall not be less than
------------------ -----------------------------------
<S> <C>
Closing Date through December 31, 1996 1.60
January 1, 1997 through December 31, 1997 1.75
</TABLE>
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<PAGE> 37
<TABLE>
<S> <C>
January 1, 1998 through December 31, 1998 2.00
Thereafter 2.25
</TABLE>
<TABLE>
(e) CONSOLIDATED FUNDED DEBT RATIO. As of the end of each
fiscal quarter of the Borrower ending on or after the Closing Date, the
Consolidated Funded Debt Ratio for the period of four consecutive fiscal
quarters ending on the last day of such fiscal quarter, considered as a single
accounting period, shall not be greater than the applicable amount set forth
below.
<CAPTION>
Fiscal quarter ending on Consolidated Funded Debt Ratio
a date in the following for the four fiscal quarters ending
period (inclusive) on such date shall not be greater than
------------------ --------------------------------------
<S> <C>
Closing Date through June 29, 1996 N/A
June 30, 1996 through June 29, 1997 5.00
June 30, 1997 through June 29, 1998 4.00
Thereafter 3.00
</TABLE>
7.02. LIENS. The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, at any time create, incur, assume or permit to
exist any Lien on any of its property (now owned or hereafter acquired), or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except for the following (referred to herein as "Permitted Liens"):
(a) Liens pursuant to the Shared Security Documents in favor of
the Collateral Agent for the benefit of the Secured Parties to secure
the Obligations;
(b) Liens arising from taxes, assessments, charges or claims
described in Sections 6.03(a) and 6.03(b), to the extent permitted to
remain unpaid under such Section 6.03;
(c) Deposits or pledges of cash or securities in the ordinary
course of business to secure (i) workmen's compensation, unemployment
insurance or other social security obligations, (ii) performance of
bids, tenders, trade contracts (other than for payment of money) or
leases, (iii) stay, surety or appeal bonds, or (iv) other obligations
of a like nature incurred in the ordinary course of business;
(d) Judgment liens fully bonded pending appeal;
(e) Liens by the Borrower or a Subsidiary of the Borrower on
property securing all or part of the purchase price thereof and Liens
(whether or not assumed) existing on property at the time of purchase
thereof by the Borrower or a Subsidiary of the Borrower, provided
that:
(i) such Lien is created before or substantially
simultaneously with the purchase of such property in the ordinary
course of business by the Borrower or such Subsidiary (or is a
Lien securing successor obligations incurred to extend or
refinance predecessor obligations allowed under this Section
7.02(e), provided that in each case the successor obligation is
an obligation of the same Person subject to the predecessor
obligation, is not greater than (and is not otherwise on terms
less advantageous than) the predecessor obligation, and the Lien
securing the successor obligation does not extend to any property
other than that subject to the Lien securing the predecessor
obligation);
(ii) such Lien is confined solely to the property so
purchased, improvements thereto and proceeds thereof;
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<PAGE> 38
(iii) the aggregate amount secured by all such Liens on any
particular property at the time purchased by the Borrower or such
Subsidiary, as the case may be, shall not exceed the lesser of
the purchase price of such property or the fair market value of
such property at the time of purchase thereof ("purchase price"
for this purpose including the amount secured by each such Lien
thereon whether or not assumed); and
(iv) the obligation secured by such Lien is Indebtedness
permitted under Section 7.03(f) hereof;
(f) Liens in favor of the United States Government which arise in
the ordinary course of business resulting from progress payments or
partial payments under United States Government contracts or
subcontracts thereunder;
(g) Rights arising or reserved to the lessor under any
Capitalized Lease Obligations permitted by Section 7.03(f) hereof;
(h) Zoning restrictions, easements, minor restrictions on the use
of real property, minor irregularities in title thereto and other
minor Liens that do not secure the payment of money or the performance
of an obligation and that do not in the aggregate materially detract
from the value of a property or asset to, or materially impair its use
in the business of, the Borrower or such Subsidiary;
(i) Liens existing on June 29, 1995 and listed on Schedule 7.02
hereof (but not any extension, renewal or replacement Liens);
(j) Liens on property of TIMCO to secure payment of reimbursement
obligations of TIMCO with respect to the TIMCO Bonds Letter of Credit,
and Liens on property of TIMCO securing Indebtedness of TIMCO
constituting a refinancing of the TIMCO Bonds and the TIMCO Lease
permitted by Section 7.03(k) hereof; and
(k) [Reserved].
Notwithstanding the foregoing, "Permitted Lien" in respect of the Borrower or
any Subsidiary of the Borrower shall in no event include (x) any Lien imposed
by, or required to be granted pursuant to, ERISA, the Code or any Environmental
Law, (y) except as provided in Section 7.02(a) hereof, any Lien on the Shared
Collateral Account, the Letter of Credit Collateral Account, the Investment
Account or any other account maintained by the Collateral Agent pursuant to the
Shared Security Documents, or (z) except as provided in Section 7.02(a) hereof,
any Lien on Shares of Capital Stock of, or obligations owed by, a Subsidiary of
the Borrower.
7.03. INDEBTEDNESS. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, at any time create, incur, assume or
permit to exist any Indebtedness, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except:
(a) Indebtedness of the Borrower under the Revolving Credit
Agreement, in aggregate principal amount not to exceed $75,000,000
(including any extension, renewal or refinancing thereof made in
compliance with Section 7.12(c) hereof);
(b) Indebtedness of the Borrower under the Term Loan Agreement,
in aggregate principal amount not to exceed $125,000,000 (but not any
extensions, renewals or refinancings of any thereof);
(c) [Reserved];
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<PAGE> 39
(d) Indebtedness of the Borrower under the Senior Notes, in
aggregate principal amount not to exceed $112,000,000 (but not any
extensions, renewals or refmancings of any thereof);
(e) Indebtedness of the Borrower under the Existing Preferred
Stock (but not any extensions, renewals or refmancings of any
thereof);
(f) Indebtedness constituting Capitalized Lease Obligations of
the Borrower and its Subsidiaries incurred in the ordinary course of
business from time to time, and Indebtedness of the Borrower and its
Subsidiaries secured by purchase money Liens described in Section
7.02(e) on property used in the ordinary course of business of the
Borrower or such Subsidiary from time to time; provided, that the
aggregate amount of Indebtedness described in this Section 7.03(f)
shall not exceed $20,000,000 at any time;
(g) Other Indebtedness for borrowed money of the Borrower (but
not any Subsidiaries) not exceeding $5,000,000 aggregate principal
amount at any time outstanding;
(h) Current accounts payable of the Borrower or any of its
Subsidiaries on normal trade terms to trade creditors arising out of
purchases of goods or services in the ordinary course of business;
(i) Indebtedness of the Borrower pursuant to any Interest Rate
Hedge Agreement required to be entered into pursuant to Section
6.16(a) hereof; and Indebtedness of the Borrower or any of its
Subsidiaries under any other interest rate or currency swap, cap,
floor, collar, future, forward or option agreement, or similar
interest rate or currency protection agreement, entered into for the
purpose of hedging and not for purposes of speculation (and not
structured to contain an embedded loan);
(j) Indebtedness constituting intercompany loans and Advances
permitted by Sections 7.05(e), 7.05(g), 7.05(h) and 7.05(j) hereof;
(k) Indebtedness of TIMCO constituting a letter of credit issued
for its account not exceeding $14,200,000 in stated amount, which
letter of credit effectively secures the TIMCO Bonds; any extension,
renewal or refinancing of such letter of credit, provided, however,
that the stated amount thereof is not increased and TIMCO remains the
account party with respect thereto (such letter of credit, together
with any such extension, renewal or refinancing letter of credit,
being referred to herein as the "TIMCO Bonds Letter of Credit"); and
any Indebtedness of TIMCO which amends, renews or refinances
(collectively, "refmances") the TIMCO Bonds, the TIMCO Lease and the
TIMCO Bonds Letter of Credit, provided, however, that after giving
effect to such refinancing, (i) the principal amount of Indebtedness
is not increased, (ii) neither the stated maturity nor the average
life of the Indebtedness is reduced, and (iii) TIMCO remains the
obligor on such refinancing Indebtedness;
(l) [Reserved];
(m) Indebtedness of Datastream from time to time in the maximum
amounts and for the purposes set forth as follows: (i) customs and
excise duty deferment guarantee, (Pound Sterling)4,000; (ii)
negotiation limit for foreign checks received, (Pound
Sterling)100,000; (iii) credit card, (Pound Sterling)20,000; (iv)
daylight overdrafts in the ordinary course of business, (Pound
Sterling)5,100,000;
(n) Indebtedness from time to time pursuant to the Group
Liquidity Manager Agreement between each Subsidiary of the Borrower
named therein as a "Customer" and The Chase Manhattan Bank, N.A. in
the form attached hereto as Exhibit F;
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<PAGE> 40
(o) Indebtedness (other than Indebtedness described in the other
subsections of this Section 7.03) of the Borrower or any of its
Subsidiaries outstanding on June 29, 1995 and described on Schedule
7.03 thereof (but not any extensions, renewals or refinancings of any
thereof); and
(p) Indebtedness of the Worldscope Entities in the maximum
amounts and for the purposes set forth as follows: (i) for borrowed
money and Capitalized Lease Obligations not in excess of $6,000,000 in
the aggregate at any time outstanding; and (ii) current accounts
payable on normal trade terms to trade creditors arising out of
purchases of goods or services in the ordinary course of business;
(q) Indebtedness of a TWN(UK) Entity permitted under Section
7.19(b) hereof;
(r) Indebtedness of the Borrower or any of its Subsidiaries not
exceeding $10,000,000 in principal amount, issued in connection with
the acquisition by the Borrower or a Subsidiary of all of the Shares
of Capital Stock of ICV (such Indebtedness being referred to herein as
the "ICV Notes"); and Indebtedness of the Borrower in favor of the
Lender Parties pursuant to this Agreement and the other Loan
Documents; and
(s) Indebtedness for borrowed money of Primark Economics or any
of its Subsidiaries not exceeding $6,000,000 in aggregate principal
amount at any time outstanding.
7.04. GUARANTIES, INDEMNITIES, ETC. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, be or become subject to
or bound by any Guaranty Equivalent, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except:
(a) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business;
(b) Indemnities by the Borrower or a Subsidiary of the
liabilities of its directors, officers and employees in their
capacities as such as permitted by Law;
(c) Guaranty Equivalents existing on June 29, 1995 and listed in
Schedule 7.04 hereof (but not extensions, renewals or refinancings
thereof or of any associated Assured Obligation); PROVIDED, that this
Section 7.04(c) shall not apply to any Guaranty Equivalent as to which
the Deemed Obligor is, on June 29, 1995, a Subsidiary of the Borrower
if such Subsidiary thereafter ceases to be a Subsidiary of the
Borrower;
(d) Guaranty Equivalents by the Borrower or a Subsidiary
constituting usual and customary indemnities with respect to
liabilities (other than Indebtedness) in connection with a disposition
of stock or assets by the Borrower or such Subsidiary;
(e) Other Guaranty Equivalents by the Borrower or a Subsidiary of
the Borrower from time to time of obligations of (i) a Wholly Owned
Subsidiary of the Borrower (other than PSLC), PROVIDED that the Deemed
Obligor in respect of such Guaranty Equivalent is a Wholly Owned
Subsidiary of the Deemed Guarantor, and (ii) upon or after the
acquisition by the Borrower of a 51% or greater interest in the
capital, profits and losses of the Worldscope Entities, a Worldscope
Entity, PROVIDED that such Worldscope Entity is a Subsidiary of the
Deemed Guarantor;
(f) Other Guaranty Equivalents by a Borrower or a Subsidiary of
the Borrower from time to time, PROVIDED that (i) the Deemed Obligor
in respect of such Guaranty Equivalent is not an Affiliate or
Subsidiary of the Borrower, and (ii) the sum of (A) the maximum
aggregate
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<PAGE> 41
potential obligation of the Borrower or any Subsidiary of the Borrower
under Guaranty Equivalents described in this Section 7.04(f), plus (B)
the aggregate amount of all payments made by the Borrower and its
Subsidiaries after June 29, 1995 under Guaranty Equivalents described
in this Section 7.04(f), shall not exceed $1,000,000;
(g) Obligations of a Subsidiary of the Borrower as general
partner of a partnership permitted under Sections 7.05(f) or 7.05(k);
and
(h) Guaranty Equivalents by a TWN(UK) Entity permitted under
Section 7.19(c) hereof.
7.05. LOANS, ADVANCES AND INVESTMENTS. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, at any time make or
permit to exist or remain outstanding any loan or Advance to, or purchase,
acquire or own (beneficially or of record) any Shares of Capital Stock of, any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited), membership interest or beneficial interest in, or any other
debt or equity interest in, OR make any capital contribution to or other
investment in, any other Person, or agree, become or remain liable (contingently
or otherwise) to do any of the foregoing, except:
(a) Receivables owing to the Borrower or any Subsidiary of the
Borrower arising from performance of services and sales of goods under
usual and customary terms in the ordinary course of business;
(b) Loans and Advances extended by the Borrower or any Subsidiary
of the Borrower to contractors or suppliers (excluding contractors or
suppliers that are Affiliates of the Borrower) under usual and
customary terms in the ordinary course of business and in amount at
any one time outstanding not exceeding $200,000 (or the equivalent
thereof in one or more foreign currencies) in the aggregate;
(c) Advances to officers and employees of the Borrower and its
Subsidiaries in the ordinary course of business, in amounts at any
time outstanding not exceeding $1,000,000 (or the equivalent thereof
in one or more foreign currencies) to any one officer or employee and
$2,000,000 (or the equivalent thereof in one or more foreign
currencies) in the aggregate; PROVIDED, HOWEVER, that for purposes of
this Section 7.05(c) only, the outstanding amount of Advances shall
not be deemed to include amounts secured by perfected liens on shares
of the publicly-traded common stock of the Borrower, to the extent of
the market value of such common stock (as determined at least
quarterly, based on publicly-available quotations);
(d) Ownership by the Borrower or a Subsidiary of the Borrower of
Shares of Capital Stock of Wholly Owned Subsidiaries of the Borrower,
as owned on the Closing Date and listed on Schedule 4.14 as
constituted on the Closing Date (but not any additional capital
contributions, except as otherwise permitted by this Section 7.05);
(e) Loans and Advances by a Subsidiary of the Borrower to the
Borrower;
(f) Ownership by Subsidiaries of the Borrower on the Closing Date
and thereafter of general partnership interests and other equity
interests in the Worldscope Entities representing a 51% or greater
interest in the capital, profits and losses of each of the Worldscope
Entities plus additional amounts paid to acquire additional equity
interests in the Worldscope Entities as stated in the Letter of Intent
dated April 9, 1996, plus demand loans or additional capital
contributions from the Borrower or its Subsidiaries to the Worldscope
Entities not to exceed $10,000,000;
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<PAGE> 42
(g) Capital contributions, loans and Advances by the Borrower or
a Subsidiary of the Borrower to a Wholly Owned Subsidiary of the
Borrower, and acquisition by the Borrower or a Subsidiary of the
Borrower of Shares of Capital Stock of a Corporation which,
immediately after such acquisition, will be a Wholly Owned Subsidiary
of the Borrower; PROVIDED, that no capital contribution, loan or
Advance may be made or maintained under this Section 7.05(g) to any of
the following or their respective Subsidiaries: (i) [Reserved], or
(ii) any Subsidiary which is a Broker-Dealer; and FURTHER PROVIDED,
that (x) no capital contributions, loans or Advances may be made or
maintained under this Section 7.05(g) by the Borrower or its domestic
Subsidiaries to any foreign Subsidiary of the Borrower, and (y) no
acquisition may be made under this Section 7.05(g) by the Borrower or
a domestic Subsidiary of Shares of Capital Stock of a Corporation
which, immediately after such acquisition, will be a foreign
Subsidiary;
(h) [Reserved];
(i) Capital contributions by the Borrower or its Subsidiaries
from time to time to a Subsidiary that is a Broker-Dealer, so long as
such Subsidiary does not at the time of such capital contribution, or
immediately thereafter and after giving effect thereto, have net
capital (calculated in accordance with regulatory standards) in excess
of 150% of the minimum capital required by Law;
(j) Capital contributions and demand loans by the Borrower or its
domestic Subsidiaries to foreign Wholly Owned Subsidiaries from time
to time, and acquisition by the Borrower or a domestic Subsidiary of
the Borrower of Shares of Capital Stock of a Corporation which,
immediately after such acquisition, will be a foreign Wholly Owned
Subsidiary of the Borrower, PROVIDED, that (i) the sum of the
aggregate amount of all such capital contributions and acquisitions
made after June 29, 1995 (other than acquisitions made solely in
exchange for Shares of Capital Stock of the Borrower or options or
warrants therefor), plus the aggregate outstanding principal amount of
all such loans, shall not at any time exceed the amount equal to the
sum of 20% of the common shareholders' equity of the Borrower and its
consolidated Subsidiaries, determined on a consolidated basis as of
the end of the most recently completed fiscal year for which financial
information is available, plus the amount (not in excess of
$56,000,000) of all such loans outstanding on June 29, 1995, and (ii)
no such capital contributions may be made and no such demand loans may
remain outstanding except to a Wholly Owned Subsidiary of the
Borrower;
(k) Partnerships and joint ventures of which all partners,
participants and other Persons having ownership interests therein are
Wholly Owned Subsidiaries of the Borrower;
(1) Ownership of fewer than fifty Shares of Capital Stock in any
publicly-traded Corporation (for the purpose of receiving reports as a
shareholder and not for purposes of investment) and other DE MINIMIS
stockholdings;
(m) Ownership of not more than 5% of the outstanding Shares of
Capital Stock of Corporate Financials Online, Inc., a New York
corporation (but not any additional capital contributions, except as
otherwise permitted by this Section 7.05);
(n) Cash Equivalent Investments;
(o) Acquisition and ownership by the Borrower or its Subsidiaries
of equity interests in the TWN(UK) Entities representing a 50% or
greater interest in the capital, profits, and losses of each of the
TWN(UK) Entities, and capital contributions and demand loans by the
Borrower or its Subsidiaries to the TWN(UK) Entities from time to
time; PROVIDED, that (i) the sum of the aggregate amount of all
consideration paid for such equity interests, plus the aggregate
amount
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<PAGE> 43
of all such capital contributions, plus the aggregate outstanding
principal amount of all such loans, shall not exceed $3,500,000 (or
its equivalent in pounds sterling), and (ii) no such acquisitions,
capital contributions or loans may be made unless the Borrower
continues to own (directly or indirectly) at least a 50% interest in
the capital, profits and losses of such TWN(UK) Entity; and
(p) Acquisition and ownership by the Borrower or its Subsidiaries
of equity interests, including convertible loans, in Primark Economics
representing initially a 20% interest and, thereafter, a 51% or
greater interest (assuming full conversion of the convertible loans
due to the Borrower or its Subsidiaries) in the capital, profits and
losses of Primark Economics, and capital contributions and demand
loans by the Borrower or its Subsidiaries to Primark Economics from
time to time; PROVIDED, that (i) the sum of the aggregate amount of
all consideration paid for such equity interests including convertible
debt, plus the aggregate amount of all such capital contributions,
plus the aggregate amount of all such loans, shall not exceed
$5,000,000, and (ii) no such acquisitions, capital contributions or
loans may be made unless the Borrower continues to own (directly or
indirectly) at least a 20% interest (and, assuming full conversion of
convertible loans due to the Borrower or its Subsidiaries, a 51% or
greater interest) in the capital, profits and losses of Primark
Economics.
7.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall not, and
shall not permit any Subsidiary to, declare or make any Stock Payment, or agree,
become or remain liable (contingently or otherwise) to do any of the foregoing,
except as follows:
(a) The Borrower may from time to time repurchase for cash shares
of its common stock of a series publicly traded, subject to the
following conditions:
(i) Repurchases under this Section 7.06(a) in any calendar
year shall not exceed $1,000,000 in the aggregate in any calendar
year, and no more than $100,000 of such repurchases in the
aggregate in any calendar year may be from any one director,
officer or employee of the Borrower or any of its Subsidiaries
(and for this purpose repurchases from relatives or Affiliates of
any such Person shall be attributed to such Person); and
(ii) No Event of Default or Potential Default shall exist on
the date of such repurchase, or immediately thereafter and after
giving effect to such repurchase;
(b) The Borrower may from time to time declare and pay cash
dividends on the Existing Preferred Stock to the extent required by
the terms thereof as constituted on June 29, 1995, subject to the
condition that no Event of Default or Potential Default shall exist on
the date of declaration or payment of such dividend, or immediately
thereafter and after giving effect to such proposed declaration or
payment;
(c) The Borrower may from time to time make mandatory redemptions
of the Existing Preferred Stock as and when required to do so by the
mandatory terms of the Existing Preferred Stock as constituted on June
29, 1995; PROVIDED, that in the event that an Event of Default or
Potential Default shall exist on the date of such mandatory
redemption, or immediately thereafter and after giving effect thereto,
such mandatory redemption shall constitute an Event of Default;
(d) The Borrower may from time to time make optional redemptions
of the Existing Preferred Stock in accordance with the terms thereof
as constituted on June 29, 1995, subject to the following conditions:
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(i) On the date of such repurchase (and after giving effect
to any extensions of credit hereunder on such date), the
unborrowed commitments available to be borrowed by the Borrower
under the Revolving Credit Agreement shall be at least
$20,000,000;
(ii) The Consolidated Funded Debt Ratio for the period of
four consecutive fiscal quarters ending on the last day of the
fiscal quarter ending most recently before such repurchase, after
giving effect on a PRO FORMA basis to such repurchase as if such
repurchase had occurred as of such last day, shall be less than
2.50;
(iii) No Event of Default or Potential Default shall exist
on the date of such repurchase, or immediately thereafter and
after giving effect to such repurchase; and
(iv) The Agent shall receive, with a copy for each Lender,
not later than the Business Day after the date such repurchase is
made, a certificate signed by a Responsible Officer of the
Borrower, dated such repurchase date, describing such dividend,
certifying that such repurchase is in compliance with the
provisions of this Section 7.06(c), and including a statement in
reasonable detail of the information and calculations necessary
to establish compliance with this Section 7.06(d);
(e) A Subsidiary of the Borrower may declare and pay dividends or
other distributions with respect to its Shares of Capital Stock,
PROVIDED, that such dividend or other distribution is made on a PRO
RATA basis, consistent with the ownership interests in such Shares of
Capital Stock, to the owners of such shares;
(f) The Borrower may make Stock Payments if such Stock Payment is
paid solely in Shares of Capital Stock (or warrants, options or rights
therefor) of the Borrower; and
(g) The Borrower may make Designated Share Repurchases.
The Borrower shall not declare any dividend payable later than 60 days after
declaration, and the Borrower shall not permit any Subsidiary to declare any
dividend payable later than 15 days after declaration.
7.07. SALE-LEASEBACKS. The Borrower shall not, and shall not
permit any Subsidiary to, at any time enter into or permit to remain in effect
any transaction to which the Borrower or such Subsidiary is a party involving
the sale, transfer or other disposition by the Borrower or any Subsidiary of any
property (now owned or hereafter acquired), with a view directly or indirectly
to the leasing back of any part of the same property or any other property used
for the same or a similar purpose or purposes, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except for transactions
existing on June 29, 1995 and listed in Schedule 7.07 hereof (but not
extensions, renewals or refinancings thereof).
7.08. MERGERS, ETC. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with
or into or consolidate with any other Person, or (x) liquidate, Wind-Up,
dissolve or divide, (y) acquire all or any substantial portion of the properties
of any going concern or going line of business (whether or not constituting a
distinct legal entity), or (z) acquire all or any substantial portion of the
properties of any other Person other than in the ordinary course of business, or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except for the following (referred to herein as "Permitted Mergers"):
(a) A Subsidiary of the Borrower may merge with or into or
consolidate with, or acquire all or any, substantial portion of the
properties of, or liquidate or dissolve into, any other
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Subsidiary of the Borrower, if the acquiring, surviving or new
Corporation shall be a Wholly Owned Subsidiary of the Borrower; and
(b) The Borrower, or a Subsidiary of the Borrower, may make
acquisitions of the types referred to in the foregoing clauses (y) and
(z) of properties of Persons other than a Subsidiary of the Borrower,
consistent with the other provisions of this Agreement and the other
Loan Documents, PROVIDED that if and so long as any Indebtedness is
outstanding under the Term Loan Agreement having a scheduled maturity
later than the scheduled maturity of the Senior Notes, then the
aggregate amount of all consideration (including transaction expenses)
paid or payable by the Borrower and its Subsidiaries in connection
with all such acquisitions made after June 29, 1995 (exclusive of
consideration in the form of Shares of Capital Stock of the Borrower
or options or warrants therefor) shall not exceed the sum of
$20,000,000 plus the amount, not less than zero, equal to (A) the
aggregate amount of cash proceeds (net of underwriting discounts, fees
and other transaction costs) received by the Borrower after June 29,
1995 from issuance of Shares of Capital Stock of the Borrower (or
options or warrants therefor), minus (B) the aggregate amount of Stock
Payments made by the Borrower under Section 7.06(a) hereof after June
29, 1995 (it being understood that Designated Stock Repurchases are
not Stock Payments of the type referred to in this clause (B)).
7.09. DISPOSITIONS OF PROPERTIES. The Borrower shall not, and
shall not permit any Subsidiary to, sell, convey, assign, lease, transfer,
abandon or otherwise dispose of, voluntarily or involuntarily, directly or
indirectly, any of its properties, now existing or hereafter acquired, or agree,
become or remain liable (contingently or otherwise) to do any of the foregoing,
except:
(a) Sales of inventory, licenses (as licensor) of software or
other intellectual property, all in the ordinary course of business;
(b) [Reserved];
(c) Disposition of equipment and other operating assets which are
obsolete or no longer useful in the business of the Borrower or such
Subsidiary, as the case may be;
(d) Lease or sublease of unoccupied office space;
(e) Dispositions in Permitted Mergers, and other dispositions
between Wholly Owned Subsidiaries of the Borrower; and
(f) Disposition outside the ordinary course of business of all
(but not less than all) of the Shares of Capital Stock of TIMCO, or
substantially all the assets of TIMCO (but not less than substantially
all of such assets), subject to the following conditions:
(i) any such disposition of property is for not less than
the Fair Market Value of the property disposed of (as determined
in good faith by the Board of Directors of the transferor, whose
determination shall be evidenced by a written resolution of such
Board), and the consideration received by the Borrower or the
relevant Subsidiary in respect of such disposition consists
entirely of cash or Cash Equivalent Investments;
(ii) [Reserved]; and
(iii) in the case of disposition of Shares of Capital Stock
of, or assets of, TIMCO, TIMCO shall be conducting substantially
the business conducted by it on June 29, 1995, and shall not be
conducting any different or additional business or have any
material assets in addition to those it had on June 29, 1995.
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Without limitation of the foregoing, it is understood that the following are
dispositions of property subject to this Section 7.09: any disposition of
accounts, chattel paper or general intangibles, with or without recourse; any
disposition of any leasehold interest; and any disposition of any Shares of
Capital Stock in or Indebtedness of any Subsidiary. The Borrower shall not, and
shall not permit any Subsidiary to sell, convey, assign, transfer or otherwise
dispose of, voluntarily or involuntarily, any of its accounts, chattel paper,
general intangibles or other financial assets with or without recourse, in any
factoring, structured financing, or other transaction having the practical
effect, directly or indirectly, of a financing, whether or not such transaction
is in the form of a "true sale" of such financial assets by the Borrower or such
Subsidiary.
7.10. CORPORATE STRUCTURE. The Borrower shall not at any time
(a) have, or have any Subsidiary that has, any Subsidiary that is
not a Wholly Owned Subsidiary of the Borrower (except for the
Worldscope Entities, the TWN(UK) Entities and Primark Economics);
(b) permit any Subsidiary (other than a Worldscope Entity, a
TWN(UK) Entity or Primark Economics) to issue, sell or otherwise
dispose of, or permit to remain outstanding, voluntarily or
involuntarily, any Shares of Capital Stock of such Subsidiary (except
for Shares of Capital Stock owned by a Wholly Owned Subsidiary of the
Borrower), or any options, warrants, calls, subscriptions, conversion
rights, exchange rights, preemptive rights or other rights, agreements
or arrangements (contingent or other) which may in any circumstances
now or hereafter obligate such Person to issue any Shares of Capital
Stock of such Person; or
(c) [Reserved].
7.11. DEALINGS WITH AFFILIATES. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, enter into or carry out any
transaction with (including, without limitation, purchase or lease property or
services from, sell or lease property or services to, loan or advance to, or
enter into, permit to remain in existence or amend any contract, agreement or
arrangement with) any Affiliate of the Borrower, directly or indirectly, or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except:
(a) Transactions between (i) on the one hand, any Affiliate of
the Borrower, and (ii) on the other hand, the Borrower or any of its
Subsidiaries, in good faith and on fair and reasonable terms;
(b) Compensation of directors, officers, employees and
consultants of the Borrower and its Subsidiaries for services rendered
in such capacity in good faith and on fair and reasonable terms, which
terms (in the case of compensation under employment contracts entered
into after June 29, 1995) will be approved by a majority of the board
of directors of such Borrower or Subsidiary (including a majority of
the directors having no direct or indirect interest in such
transaction); and
(c) [Reserved].
7.12. LIMITATIONS ON MODIFICATION OF CERTAIN AGREEMENTS AND
INSTRUMENTS.
(a) SENIOR NOTES AND EXISTING PREFERRED STOCK. The Borrower shall
not amend, modify or supplement the terms or provisions contained in, or
applicable to, the Senior Notes, the Senior Note Indenture, the Existing
Preferred Stock, or any agreement or instrument evidencing or applicable to any
of the foregoing.
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(b) TERM LOAN AGREEMENT. The Borrower shall not amend, modify
or supplement the Term Loan Agreement or its obligations thereunder, in any way
that would (i) increase the principal amount thereof, or require payments on
account of principal to be made (by way of scheduled amortization, mandatory
prepayment or otherwise) earlier or in greater amount than is required under the
terms of the Term Loan Agreement as constituted on the Closing Date, (ii)
increase the rate or shorten the date for payment of interest thereon, or (iii)
require payment of any fee or other amount not provided for under the Term Loan
Agreement as constituted on the Closing Date. The Borrower shall promptly (and
in any event within five days) give the Agent, with a copy for each Lender, a
copy of any amendment, modification or supplement to the Term Loan Agreement.
(c) REVOLVING CREDIT AGREEMENT. The Borrower shall not amend,
modify, supplement, renew or refinance the Revolving Credit Agreement or its
obligations thereunder, in any way that would change its nature as a revolving
credit facility, increase or reduce the principal amount available to be
borrowed thereunder, or cause the Revolving Credit Maturity Date or the final
date on which loans may be borrowed thereunder by the Borrower to occur sooner
than the relevant dates applicable under the Revolving Credit Agreement as
constituted on the Closing Date. The Borrower shall promptly (and in any event
within five days) give the Agent, with a copy for each Lender, a copy of any
amendment, modification or supplement to, or renewal or refinancing of, the
Revolving Credit Agreement.
(d) ICV NOTES. The Borrower shall not amend, modify or
supplement the terms and provisions contained in, or applicable to, the ICV
Notes.
7.13. LIMITATION ON PAYMENTS ON CERTAIN OBLIGATIONS. The
Borrower shall not, and shall not permit any Subsidiary to, directly or
indirectly, pay, prepay, purchase, redeem, retire, defease or acquire, or
otherwise make any payment (on account of principal, interest, premium or
otherwise) of, any obligation under or evidenced by the Senior Notes, except
that the Borrower may (x) pay principal and interest on the Senior Notes as and
when expressly required to do so by the mandatory terms of the Senior Notes, and
(y) purchase Senior Notes as and when expressly required to do so by the
mandatory terms of Sections 4.12 and 4.13 of the Senior Note Indenture (it being
understood that the foregoing may nevertheless give rise to an Event of
Default).
7.14. [Reserved]
7.15. LIMITATION ON OTHER RESTRICTIONS ON LIENS, DIVIDEND
RESTRICTIONS ON SUBSIDIARIES, ETC. The Borrower shall not, and shall not
permit any Subsidiary to,
(x) enter into, become or remain subject to any agreement or
instrument to which the Borrower or such Subsidiary is a party or by which
any of them or any of their respective properties (now owned or hereafter
acquired) may be subject or bound that would (i) prohibit the grant of any
Lien upon any of its properties (now owned or hereafter acquired), or (ii)
restrict or prohibit the transfer or disposition of any of its properties
(now owned or hereafter acquired), or require it to dispose of or apply the
proceeds of any such disposition in a specified manner, or
(y) be or become subject to any restriction of any nature (whether
arising by operation of Law, by agreement, by its certificate or articles
of incorporation, by-laws or other constituent documents, or otherwise) on
the right of the Borrower or such Subsidiary from time to time (i) in the
case of a Subsidiary, to declare and pay Stock Payments with respect to
Shares of Capital Stock owned by the Borrower or any Subsidiary of the
Borrower, (ii) in the case of the Borrower or any Subsidiary of the
Borrower, to pay any obligations from time to time owed to the Borrower or
any Subsidiary of the Borrower, or (iii) in the case of the Borrower or any
Subsidiary of the Borrower, make loans or advances to the Borrower or any
Subsidiary of the Borrower,
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except:
(a) the Credit Facilities;
(b) the Senior Notes and the Senior Note Indenture;
(c) with respect to the foregoing clause (x), non-assignment
provisions of any executory contract or software or programs or of any
lease by the Borrower or such Subsidiary as lessee;
(d) with respect to the foregoing clause (x), restrictions on property
subject to a Permitted Lien in favor of the holder of such Permitted Lien;
(e) restrictions with respect to TIMCO imposed pursuant to an
agreement entered into for sale or disposition (which sale or disposition
is not in violation of this Agreement or any other Loan Document) of all or
substantially all of the Shares of Capital Stock or assets of such
Subsidiary; PROVIDED, that such restriction, by its terms, terminates on
the earlier of the termination of such agreement or the consummation of
such agreement, and is agreed to in good faith; and
(f) in the case of the foregoing clause (y), legal restrictions of
general applicability under the corporation or similar law under which the
Borrower or such Subsidiary is incorporated, fraudulent conveyance or
similar laws or general applicability for the benefit of creditors
generally, and other legal restrictions of general applicability to
similarly situated business corporations; and
(g) in the case of subclause (ii) of the foregoing clause (x),
restrictions on transfer of property arising in the ordinary course of
business; PROVIDED, that such restrictions do not directly or indirectly
secure any obligation of the Borrower or such Subsidiary to pay money or to
perform an obligation, and do not in the aggregate materially detract from
the value of a property or asset to, or materially impair its use in the
business of, the Borrower or such Subsidiary.
7.16. LIMITATION ON OTHER RESTRICTIONS ON AMENDMENT OF THE
LOAN DOCUMENTS, ETC. The Borrower shall not, and shall not permit any Subsidiary
of the Borrower to, enter into, become or remain subject to any agreement or
instrument to which the Borrower or such Subsidiary is a party or by which any
of them or any of their respective properties (now owned or hereafter acquired)
may be subject or bound that would prohibit or require the consent of any Person
to any amendment, modification or supplement to any of the Loan Documents,
except: (a) the Loan Documents, (b) provisions in the Term Loan Agreement no
more restrictive than those in the Term Loan Agreement as constituted on the
Closing Date, and (c) provisions in the Revolving Credit Agreement no more
restrictive than those in the Revolving Credit Agreement as constituted on the
Closing Date.
7.17. LIMITATION ON CERTAIN BENEFIT LIABIITIES. The Borrower
shall not, and shall not permit any Subsidiary of the Borrower or any Controlled
Group Member to, become subject to Primark Group Benefits Exposures in excess of
$5,000,000 in the aggregate for all such Persons. As used herein, the term
"Primark Group Benefits Exposures" shall mean the sum of the maximum potential
liabilities (direct, contingent or other) of the Borrower and its Subsidiaries
and the Controlled Group Members in connection with the following: (a)
withdrawal liability (within the meaning of Section 4201 of ERISA) from any
Multiemployer Plan, whether or not such liability has yet been triggered as a
result of a withdrawal; (b) contributions due and unpaid with respect to a
Multiemployer Plan; (c) the "amount of unfunded benefit liabilities" (within the
meaning of Section 4001(a)(18) of ERISA) under any Plan, whether or not such
liability has yet been triggered as a result of a termination of such Plan; (d)
excise taxes assessed in connection with all of the above or otherwise in
connection with any Plan;
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(e) Postretirement Benefit Obligations of the Borrower, any Subsidiary of the
Borrower or any Controlled Group Member; and (f) any other liability (contingent
or other) in connection with a Plan or Multiemployer Plan which represent a
material risk that it may result in a Lien attaching to assets of the Borrower
or any Subsidiary of the Borrower, without regard to any minimum amount required
by Law to cause such Lien to attach.
7.18. FISCAL YEAR. The Borrower shall maintain a fiscal year
beginning on each January 1 and ending on the following December 31, divided
into fiscal quarters ending on the last day of each March, June, September and
December.
7.19. CERTAIN COVENANTS RELATING TO THE TWN(UK) ENTITIES.
(a) CERTAIN GENERAL COVENANTS. The Borrower shall comply, and
shall cause each TWN(UK) Entity to comply, with each of the covenants set forth
in Sections 6.01(i), 6.01(k), 6.03, 6.04 (but only in respect of each TWN(UK)
Entity organized as a Corporation), 6.05, 6.06, 6.07, 6.08 and 6.10 as if such
TWN(UK) Entity were a Subsidiary of the Borrower.
(b) INDEBTEDNESS. The Borrower shall not permit any TWN(UK)
Entity to at any time create, incur, assume or permit to exist any Indebtedness,
or agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except (i) Indebtedness for borrowed money not in excess of
$3,500,000 (or its equivalent in pounds sterling) in aggregate principal amount
at any time outstanding, and (ii) current accounts payable on normal trade terms
to trade creditors arising out of purchases of goods or services in the ordinary
course of business.
(c) GUARANTIES, INDEMNIES, ETC. The Borrower shall not permit
any TWN(UK) Entity to be or become subject to or bound by any Guaranty
Equivalent, or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except: (i) contingent liabilities arising from the
endorsement of negotiable or other instruments for deposit or collection or
similar transactions in the ordinary course of business, (ii) indemnities of the
liabilities of its partners, officers, directors, officers and employees in
their capacities as such as permitted by Law, (iii) usual and customary
indemnities with respect to liabilities (other than Indebtedness) in connection
with a disposition of stock or assets by such TWN(UK) Entity, (iv) obligations
as general partner of a partnership the partners of which are all TWN(UK)
Entities, and (v) indemnities of the Borrower to surety bond issuers or insurers
with respect to surety bonds or insurance policies procured by the Borrower in
the ordinary course of its business.
7.20. [Reserved]
ARTICLE VIII
DEFAULTS
8.01. EVENTS OF DEFAULT. An "Event of Default" shall mean
the occurrence or existence of one or more of the following events or conditions
(for any reason, whether voluntary, involuntary or effected or required by Law):
(a) The Borrower shall fail to pay when due principal of any Letter of
Credit Reimbursement Obligation, or make when due any required cash
collateralization of outstanding Letters of Credit.
(b) The Borrower shall fail to pay when due interest on any Letter of
Credit Reimbursement Obligation, any fees, indemnity or expenses, or any
other amount due hereunder or under any other Loan Document, and such
failure shall have continued for a period of five Business Days.
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(c) Any representation or warranty made or deemed made by the Borrower
in or pursuant to or in connection with any Loan Document or any
transaction contemplated hereby or thereby, or any statement made by the
Borrower, any Subsidiary of the Borrower or any Worldscope Entity in any
financial statement, certificate, report, exhibit or document furnished by
the Borrower, any Subsidiary of the Borrower or any Worldscope Entity to
the Collateral Agent or any Lender Party pursuant to or in connection with
any Loan Document or any transaction contemplated hereby or thereby, shall
prove to have been false or misleading in any material respect as of the
time when made or deemed made (including by omission of material
information necessary to make such representation, warranty or statement
not misleading).
(d) The Borrower shall default in the performance or observance of any
covenant contained in Article VII hereof or any of the covenants contained
in Sections 3.13, 6.01(j)(i), 6.11, 6.12, 6.14, 6.15 or 6.16 hereof, or in
Sections 4.02, 4.07 or 4.09 of the Borrower Security Agreement.
(e) The Borrower shall default in the performance or observance of any
other covenant, agreement or duty under this Agreement or any other Loan
Document and (i) in the case of a default under Section 6.01 hereof (other
than as referred to in Sections 6.01(j)(i) hereof) such default shall have
continued for a period of 10 days and (ii) in the case of any other default
such default shall have continued for a period of 30 days.
(f) (i) The Borrower or any Subsidiary of the Borrower or any
Worldscope Entity shall default in any payment of any amount in respect of
any Cross-Default Triggering Obligation beyond any period of grace with
respect thereto or, if any amount payable in respect of any Cross-Default
Triggering Obligation is payable on demand, shall fail to pay such amount
when demanded, or (ii) the Borrower or any Subsidiary of the Borrower or
any Worldscope Entity shall default in the observance of any covenant, term
or condition of any agreement or instrument by which any Cross-Default
Triggering Obligation is created, secured or evidenced, if the effect of
such default referred to in this clause (ii) is to cause, or to permit the
holder or holders of any Cross-Default Triggering Obligation (or a trustee
or agent on behalf of such holder or holders) to cause, all or part of such
Cross-Default Triggering Obligation to become due before its otherwise
stated maturity (by way of acceleration, mandatory prepayment or
otherwise), or, in the case of an interest rate or currency swap, cap,
collar, floor, future, forward or similar transaction, to terminate before
its otherwise scheduled termination. As used in this Agreement,
"Cross-Default Triggering Obligation" shall mean
(A) any obligation under or in connection with any of the other
Credit Facilities, any Swap Agreement, the Senior Notes, the Senior
Note Indenture, or the Existing Preferred Stock,
(B) any obligation, as principal or as guarantor or other surety,
in respect of the TIMCO Bond Order, the TIMCO Lease, any reimbursement
agreement relating to the TIMCO Bonds Letter of Credit, or any other
obligation referred to in Section 7.03(k) hereof,
(C) any obligation (or set of related obligations), as principal
or as guarantor or other surety, in respect of Indebtedness in excess
of $2,500,000 (or the equivalent thereof in one or more foreign
currencies) in aggregate amount, and
(D) any obligation (or set of related obligations, including all
obligations under a master agreement), as principal or as guarantor or
other surety, in respect of any interest rate or curency swap, cap,
collar, floor, future, forward or similar transactions relating
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to a principal or notional principal amount in excess of $2,500,000
(or the equivalent thereof in one or more foreign currencies) in
aggregate amount.
(g) One or more judgments for the payment of money shall have been
entered against the Borrower, any Subsidiary of the Borrower or any Worldscope
Entity, which judgment or judgments exceed $1,000,000 in the aggregate, and such
judgment or judgments shall have remained undischarged and unstayed for a period
of 30 consecutive days.
(h) Any Governmental Action now or hereafter made by or with any
Governmental Authority in connection with any Loan Document is not obtained or
shall have ceased to be in full force and effect or shall have been modified or
amended or shall have been held to be illegal or invalid, and such event or
condition has, or would be likely to have, a Material Adverse Effect.
(i) Any Shared Security Document shall cease to be in full force and
effect; or any Lien created or purported to be created in any Shared Collateral
pursuant to any Shared Security Document shall fail to be a valid, enforceable
and perfected Lien in favor of the Collateral Agent for the benefit of the
Secured Parties securing the Obligations, prior to all other Liens except
Permitted Liens.
(j) Any Loan Document or term or provision thereof shall cease to be in
full force and effect (except in accordance with the express terms of such Loan
Document), or the Borrower or any other party to any Loan Document shall, or
shall purport to, terminate (except in accordance with the terms of such Loan
Document), repudiate, declare voidable or void or otherwise contest, any Loan
Document or term or provision thereof or any obligation or liability of the
Borrower or such other party thereunder.
(k) Any one or more Pension-Related Events referred to in subsection
(b) or (e) of the definition of "Pension-Related Event" shall have occurred; or
any one or more other Pension-Related Events shall have occurred which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(1) The Borrower shall make, or shall be required by the terms of the
Senior Note Indenture to make or to offer to make, any purchase of Senior Notes
under Sections 4.12 or 4.13 of the Senior Note Indenture; or the Borrower or any
of its Subsidiaries otherwise shall make or offer to make any payment on account
of principal of, or any purchase, redemption, retirement, defeasance or
acquisition of, any of the Senior Notes (except for principal payment in
accordance with the terms thereof at the scheduled maturity thereof); or an
Event of Default shall occur as described in Section 7.06(c) hereof.
(m) Any Person or group (as such term is used in Sections 13 and 14 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations thereunder) shall have become the direct or indirect
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of
35% or more of any class of voting securities of the Borrower; or any Person
shall have been elected or shall have become a director of the Borrower who was
not nominated and recommended for such position or elected to such position by a
majority of the then-incumbent Board of Directors of the Borrower; or a "Change
in Control" (as defined in the Senior Note Indenture as constituted on June 29,
1995) shall have occurred (without regard to any subsequent amendment,
modification or supplement to, or termination or expiration of, the Senior Note
Indenture).
(n) A Control-Related Event shall have occurred, and the Required
Lenders shall have determined in good faith that such Control-Related Event has
or would be likely to have a
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Material Adverse Effect (by reason of suspension, withdrawal or impairment of
any security clearance of the Borrower or any of its Subsidiaries, or impairment
of the business relationship between the Borrower and its Subsidiaries, on the
one hand, and the U.S. Government and its agencies and departments, on the other
hand). "Control-Related Event" shall mean that any Person or group (as such term
is used in Sections 13 and 14 of the Exchange Act, and the rules and regulations
thereunder) shall have become the direct or indirect beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 5% or more of any
class of voting securities of the Borrower (except for any such Person or group
existing on the June 29, 1995, to the extent of the voting securities then owned
by them).
(o) A proceeding shall have been instituted in respect of the Borrower
or any Significant Subsidiary of the Borrower (and for this purpose, (x) each
Subsidiary of the Borrower which is subject to an event or condition described
in this Section 8.01(o) or in Section 8.01(p) hereof shall be deemed a
Significant Subsidiary if, collectively, together with their respective
Subsidiaries, treated as a single entity, they would constitute a Significant
Subsidiary, and (y) for purposes of the foregoing clause (x) each Worldscope
Entity shall be considered a Wholly Owned Subsidiary of the Borrowed
(i) seeking to have an order for relief entered in respect of
such Person, or seeking a declaration or entailing a finding that such
Person is insolvent or a similar declaration or finding, or seeking
dissolution, Winding-up, administration, charter revocation or
forfeiture, liquidation, reorganization, arrangement, adjustment,
composition or other similar relief with respect to such Person, its
assets or its debts under any Law relating to bankruptcy, insolvency,
relief of debtors or protection of creditors, termination of legal
entities or any other similar Law now or hereafter in effect, or
(ii) seeking appointment of a receiver, administrative
receiver, trustee, liquidator, assignee, sequestrator or other
custodian for such Person or for all or any substantial part of its
property
and such proceeding shall result in the entry, making or grant of any such order
for relief, declaration, finding, relief or appointment, or such proceeding
shall remain undismissed and unstayed for a period of 30 consecutive days.
(p) The Borrower or any Significant Subsidiary of the Borrower (and for
this purpose, (x) each Subsidiary of the Borrower which is subject to an event
or condition described in Section 8.01(o) hereof or in this Section 8.01(p)
shall be deemed a Significant Subsidiary if, collectively, together with their
respective Subsidiaries, treated as a single entity, they would constitute a
Significant Subsidiary, and (y) for purposes of the foregoing clause (x), each
Worldscope Entity shall be considered a Wholly Owned Subsidiary of the Borrowed
shall not be Solvent; shall fail to pay, become unable to pay, or state that it
is or will be unable to pay, its debts as they become due; shall voluntarily
suspend transaction of its business; shall make a general assignment for the
benefit of creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 8.01(o)(i) hereof, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such order for relief, declaration, finding or relief described
therein; shall institute (or fail to controvert in a timely and appropriate
manner) a proceeding described in Section 8.01(o)(ii) hereof, or (whether or not
any such proceeding has been instituted) shall consent to or acquiesce in any
such appointment or to the taking of possession by any such custodian of all or
any substantial part of its or his property; shall dissolve, Wind-up, go into
administration or revoke or forfeit its articles of incorporation (or other
constituent documents); or shall take any action in furtherance of any of the
foregoing.
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8.02. CONSEQUENCES OF AN EVENT OF DEFAULT.
(a) GENERAL. If an Event of Default specified in subsections
(a) through (n) of Section 8.01 hereof shall have occurred and be continuing or
exist, or if an Event of Default specified in subsections (o) or (p) of Section
8.01 hereof shall have occurred and be continuing or exist with respect to a
Person other than the Borrower, then, in addition to all other rights and
remedies which the Collateral Agent or any Lender Party may have hereunder or
under any other Loan Document, at law, in equity or otherwise, the Issuing Bank
shall be under no further obligation to issue Letters of Credit, and the Agent
may, and upon the written request of the Required Lenders shall, by notice to
the Borrower, from time to time do any or all of the following: (i) declare the
Letter of Credit Commitment terminated, whereupon the Letter of Credit
Commitment will terminate and any fees hereunder shall be due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby waived, and an action therefor shall immediately accrue; (ii) declare
all Letter of Credit Reimbursement Obligations and all other Loan Obligations to
be immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby waived, and an action therefor shall
immediately accrue, and (iii) require the Borrower to immediately cash
collateralize all outstanding, Letters of Credit in accordance with Section 3.07
hereof.
(b) BANKRUPTCY AND CERTAIN OTHER EVENTS. If an Event of
Default specified in subsection (o) or (p) of Section 8.01 hereof shall have
occurred and be continuing or exist with respect to the Borrower, then, in
addition to all other rights and remedies which the Collateral Agent or any
Lender Party may have hereunder or under any other Loan Document, at law, in
equity or otherwise, (i) the Letter of Credit Commitment shall automatically
terminate and the Issuing Bank will be under no further obligation to issue
Letters of Credit, (ii) all Letter of Credit Reimbursement Obligations and all
other Loan Obligations shall become immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue, and (iii) the Borrower
shall immediately cash collateralize all outstanding Letters of Credit in
accordance with Section 3.07 hereof.
8.03. APPLICATION OF PROCEEDS. Subject to Section 3.07 hereof,
after the occurrence of an Event of Default and the occurrence of either
acceleration of the Letter of Credit Reimbursement Obligations or a requirement
that the Borrower cash collateralize all outstanding Letters of Credit, any
distributions made on account of Loan Obligations under the Collateral Agency
Agreement and all other payments received on account of Loan Obligations shall
be applied by the Agent to payment of the Loan Obligations in the following
order:
First, to payment of that portion of the Loan Obligations
constituting fees, indemnities and other amounts due to the Agent in
its capacity as such;
Second, to payment of that portion of the Loan Obligations
constituting fees, indemnities and other amounts due to the Issuing
Bank in its capacity as such, other than principal of and interest on
Letter of Credit Reimbursement Obligations and accrued and unpaid
Letter of Credit Fees, to the Issuing Bank;
Third, to payment of that portion of the Loan Obligations
constituting accrued and unpaid interest on Letter of Credit
Unreimbursed Draws, and accrued and unpaid Letter of Credit Fees,
ratably amongst the Lenders and the Issuing Bank in proportion to the
respective amounts described in this clause "Third" due to them;
Fourth, to payment of that portion of the Loan Obligations
constituting Letter of Credit Unreimbursed Draws, to the Issuing Bank;
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Fifth, to payment of all other Loan Obligations, ratably
amongst the Lender Parties in proportion to the respective amounts
described in this clause "Fifth" due to them; and
Finally, the balance, if any, after all of the Loan
Obligations have been indefeasibly paid in full in cash, the Letter of
Credit Commitment shall have terminated and all Letters of Credit shall
have terminated, to the Borrower or as otherwise required by law.
ARTICLE IX
THE AGENT
9.01. APPOINTMENT. Each Lender Party hereby irrevocably
appoints Mellon Bank, N.A. to act as Agent for the Lender Parties under this
Agreement and the other Loan Documents. Each Lender Party hereby irrevocably
authorizes the Agent to take such action on behalf of the Lender Parties under
the provisions of this Agreement and the other Loan Documents, and to exercise
such powers and to perform such duties, as are expressly delegated to or
required of the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as
Agent on behalf of the Lender Parties on the terms and conditions set forth in
this Agreement and the other Loan Documents, subject to its right to resign as
provided herein. Each Lender Party hereby irrevocably authorizes the Agent to
execute and deliver each of the Loan Documents and to accept delivery of such of
the other Loan Documents as may not require execution by the Agent. Without
limiting the generality of the foregoing, each Lender Party hereby irrevocably
authorizes the Agent to execute and deliver the Collateral Agency Agreement on
behalf of such Lender Party. Each Lender Party hereby agrees that the rights and
remedies granted to the Agent under the Loan Documents shall be exercised
exclusively by the Agent, and that no Lender Party shall have any right
individually to exercise any such right or remedy, except to the extent, if any,
expressly provided herein or therein.
9.02. GENERAL NATURE OF AGENT'S DUTIES.
(a) NO IMPLIED DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Agent shall be read into this Agreement or any Loan Document or shall
otherwise exist.
(b) NOT A FIDUCIARY. The duties and responsibilities of the
Agent under this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Agent shall not have a fiduciary relationship
in respect of any Lender Party.
(c) AGENT OF LENDER PARTIES. The Agent is and shall be solely
the agent of the Lender Parties. The Agent does not assume, and shall not at any
time be deemed to have, any relationship of agency or trust with or for, or any
other duty or responsibility to, the Borrower or any Person other than the
Lender Parties. The provisions of this Article IX are for the benefit of the
Lender Parties (and the other Persons named in Section 9.07 hereof), and the
Borrower shall not have any rights under any of the provisions of this Article
IX.
(d) NO OBLIGATION TO TAKE ACTION. The Agent shall be under no
obligation to take any action hereunder or under any other Loan Document if the
Agent believes in good faith that taking such action may conflict with any Law
or any provision of this Agreement or any other Loan Document, or may require
the Agent to qualify to do business in any jurisdiction where it is not then so
qualified.
9.03. EXERCISE OF POWERS. Subject to the other provisions of
this Agreement and the other Loan Documents, the Agent shall take any action of
the type specified in this Agreement or any
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other Loan Document as being within the Agent's rights, powers or discretion in
accordance with directions from the Required Lenders (or, to the extent this
Agreement or such Loan Document expressly requires the direction or consent of
some other Person or set of Persons, then instead in accordance with the
directions of such other Person or set of Persons). In the absence of such
directions, the Agent shall have the authority (but under no circumstances shall
be obligated), in its sole discretion, to take any such action, except to the
extent this Agreement or such Loan Document expressly requires the direction or
consent of the Required Lenders (or some other Person or set of Persons), in
which case the Agent shall not take such action absent such direction or
consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on all the Lender Parties. The Agent shall not have any
liability to any Person as a result of (x) the Agent acting or refraining from
acting in accordance with the directions of the Required Lenders (or other
applicable Person or set of Persons), (y) the Agent refraining from acting in
the absence of instructions to act from the Required Lenders (or other
applicable Person or set of Persons), whether or not the Agent has discretionary
power to take such action, or (z) the Agent taking discretionary action it is
authorized to take under this Section (subject, in the case of this clause (z),
to the provisions of Section 9.04(a) hereof).
9.04. GENERAL EXCULPATORY PROVISIONS.
(a) GENERAL. The Agent shall not be liable for any action
taken or omitted to be taken by it under or in connection with this Agreement or
any other Loan Document, unless caused by its own gross negligence or willful
misconduct.
(b) AGENT NOT RESPONSIBLE FOR LOAN DOCUMENTS, ETC. The Agent
shall not be responsible for (i) the execution, delivery, effectiveness,
enforceability, genuineness, validity or adequacy of this Agreement or any other
Loan Document, (ii) any recital, representation, warranty, document,
certificate, report or statement in, provided for in, or received under or in
connection with, this Agreement or any other Loan Document, (iii) any failure of
the Borrower, any Lender or Issuing Bank to perform any of their respective
obligations under this Agreement or any other Loan Document, (iv) the existence,
validity, enforceability, perfection, recordation, priority, adequacy or value,
now or hereafter, of any Lien or other direct or indirect security afforded or
purported to be afforded by any of the Loan Documents or otherwise from time to
time, or (v) caring for, protecting, insuring, or paying any taxes, charges or
assessments with respect to any collateral.
(c) NO DUTY OF INQUIRY. The Agent shall not be under any
obligation to ascertain, inquire or give any notice relating to (i) the
performance or observance of any of the terms or conditions of this Agreement or
any other Loan Document on the part of the Borrower, (ii) the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any other Person, or (iii) except to the extent set forth in Section 9.05(0
hereof, the existence of any Event of Default or Potential Default.
(d) NOTICES. The Agent shall not be under any obligation,
either initially or on a continuing basis, to provide any Lender Party with any
notices, reports or information of any nature, whether in its possession
presently or hereafter, except for such notices, reports and other information
expressly required by this Agreement or any other Loan Document to be furnished
by the Agent to such Lender Party.
9.05. ADMINISTRATION BY THE AGENT.
(a) RELIANCE ON NOTICES. The Agent may rely upon any notice or
other communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties, and the Agent
shall
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not have any duty to verify the identity or authority of any Person giving such
notice or other communication.
(b) CONSULTATION. The Agent may consult with legal counsel
(including, without limitation, in-house counsel for the Agent or in-house or
other counsel for the Borrower), independent public accountants and any other
experts selected by it from time to time, and the Agent 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.
(c) RELIANCE ON CERTIFICATES, ETC. The Agent may conclusively
rely upon the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Agent in accordance
with the requirements of this Agreement or any other Loan Document. Whenever the
Agent shall deem it necessary or desirable that a matter be proved or
established with respect to the Borrower or any Lender Party, such matter may be
established by a certificate of the Borrower or such Lender Party, as the case
may be, and the Agent may conclusively rely upon such certificate (unless other
evidence with respect to such matter is specifically prescribed in this
Agreement or another Loan Document).
(d) INDEMNITY. The Agent may fail or refuse to take any action
unless it shall be indemnified to its satisfaction from time to time against any
and all amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of taking
or continuing to take any such action.
(e) PERFORMANCE THROUGH AGENTS. The Agent may perform any of
its duties under this Agreement or any other Loan Document by or through agents
or attorneys-in-fact. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
(f) NOTICE OF DEFAULT. The Agent shall not be deemed to have
any knowledge or notice of the occurrence of any Event of Default or Potential
Default unless the Agent has received notice from a Lender Party or the Borrower
referring to this Agreement, describing such Event of Default or Potential
Default, and stating that such notice is a "notice of default." If the Agent
receives such a notice, the Agent shall give prompt notice thereof to each
Lender.
9.06. LENDERS NOT RELYING ON AGENT OR OTHER LENDERS. Each
Lender Party hereby acknowledges as follows: (a) Neither the Agent nor any other
Lender Party has made any representations or warranties to it, and no act taken
hereafter by the Agent or any other Lender Party shall be deemed to constitute
any representation or warranty by the Agent or such other Lender Party to it.
(b) It has, independently and without reliance upon the Agent or any other
Lender Party, and based upon such documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement and the other Loan Documents. (c) It will, independently and
without reliance upon the Agent or any other Lender Party, and based upon such
documents and information as it shall deem appropriate at the time, make its own
decisions to take or not take action under or in connection with this Agreement
and the other Loan Documents.
9.07. INDEMNIFICATION OF AGENT BY LENDERS. Each Lender hereby
agrees to reimburse and indemnify the Agent and its directors, officers,
employees and agents (to the extent not reimbursed by the Borrower and without
limitation of the obligations of the Borrower to do so), Pro Rata, from and
against any and all amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any
kind or nature (including, without limitation, the fees and disbursements of
counsel for the Agent or such other Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent
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or such other Person shall be designated a party thereto) that may at any time
be imposed on, incurred by or asserted against the Agent or such other Person as
a result of, or arising out of, or in any way related to or by reason of, this
Agreement, any other Loan Document, any transaction from time to time
contemplated hereby or thereby, or any transaction financed in whole or in part
or directly or indirectly with the proceeds of any Letter of Credit; PROVIDED,
that no Lender shall be liable for any portion of such amounts, losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements resulting from the gross negligence or
willful misconduct of the Agent or such other Person, as finally determined by a
court of competent jurisdiction.
9.08. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to the
Loan Obligations owing to it, the Agent shall have the same rights and powers
under this Agreement and each other Loan Document as any other Lender and may
exercise the same as though it were not the Agent, and the terms "Lender,"
"Issuing Bank," and like terms shall include the Agent in its individual
capacity as such. The Agent and its affiliates may, without liability to
account, make loans to, accept deposits from, acquire debt or equity interests
in, enter into interest rate or currency hedging transactions with, act as
trustee under indentures of, and engage in any other business or transaction
with, the Borrower or any stockholder, subsidiary or affiliate of the Borrower,
as though the Agent were not the Agent hereunder.
9.09. [RESERVED]
9.10. SUCCESSOR AGENT. The Agent may resign at any time by
giving 45 days' prior written notice thereof to the Lenders and the Borrower.
The Agent may be removed by the Required Lenders at any time by giving 10 days'
prior written notice thereof to the Agent, the other Lenders and the Borrower.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
and consented to, and shall have accepted such appointment, within 30 days after
such notice of resignation or removal, then the retiring Agent may (but shall
not be required to) appoint a successor Agent. Each successor Agent shall be a
commercial bank or trust company organized under the laws of the United States
of America or any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance by a successor Agent of its appointment
as Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the properties, rights, powers, privileges and duties of the
former Agent in its capacity as such, without further act, deed or conveyance.
Upon the effective date of resignation or removal of a retiring Agent, such
Agent shall be discharged from its duties as such under this Agreement and the
other Loan Documents, but the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted by it while it was Agent under this
Agreement. If and so long as no successor Agent shall have been appointed, then
any notice or other communication required or permitted to be given by the Agent
shall be sufficiently given if given by the Required Lenders, all notices or
other communications required or permitted to be given to the Agent shall be
given to each Lender, and all payments to be made to the Agent shall be made
directly to the Borrower or Lender Party for whose account such payment is made.
9.11. CALCULATIONS. The Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good faith.
If such calculation, apportionment or distribution is subsequently determined to
have been made in error, the sole recourse of any Lender Party to whom payment
was due but not made shall be to recover from the other Lender Parties any
payment in excess of the amount to which they are determined to be entitled or,
if the amount due was not paid by the Borrower, to recover such amount from the
Borrower.
9.12. [Reserved]
9.13. [Reserved]
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9.14. [Reserved]
ARTICLE X
MISCELLANEOUS
10.01. HOLIDAYS. Except as otherwise expressly provided herein
or therein, whenever any payment or action to be made or taken hereunder or
under any other Loan Document shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or action.
10.02. RECORDS. The unpaid Letter of Credit Reimbursement
Obligations, the unpaid interest accrued thereon, and the interest rate or rates
applicable thereto shall at all times be ascertained from the records of the
Issuing Bank, which shall be conclusive absent manifest error.
10.03. AMENDMENTS AND WAIVERS. The Agent and the Borrower may
from time to time amend, modify or supplement the provisions of this Agreement
or any other Loan Document (other than the Shared Security Documents) for the
purpose of amending, adding to, or waiving any provisions, releasing any
collateral, or changing in any manner the rights and duties of the Borrower or
any Lender Party. Any such amendment, modification or supplement made by the
Borrower and the Agent in accordance with the provisions of this Section 10.03
shall be binding upon the Borrower and each Lender Party. The Agent shall enter
into such amendments, modifications or supplements from time to time as directed
by the Required Lenders, and only as so directed, PROVIDED, that no such
amendment, modification or supplement may be made which will:
(a) Increase the Commitment Percentage of any Lender over the
amount thereof then in effect without the written consent of each
Lender, or extend the Letter of Credit Final Expiration Date without
the written consent of each Lender;
(b) Reduce the rate of interest or extend the time for payment of
interest borne by any Letter of Credit Reimbursement Obligation (other
than as a result of waiving the applicability of any increase in
interest rates applicable to overdue amounts), or extend the time for
payment of or reduce the amount of any Letter of Credit Fee, without
the written consent of each Lender affected thereby;
(c) Change the definition of "Required Lenders" or amend this
Section 10.03, without the written consent of each Lender;
(d) Amend or waive any of the provisions of Article IX, or impose
additional duties upon the Agent, or otherwise affect the rights,
interests or obligations of the Agent, without the written consent of
the Agent;
(e) Release all or a major portion of the Shared Collateral
(other than in accordance with the provisions of the Loan Documents),
or subordinate the priority of the Liens in favor of the Collateral
Agent to Liens in favor of another Person with respect to all or a
major portion of the Shared Collateral (other than in accordance with
the provisions of the Loan Documents), without the written consent of
each Lender;
(f) Alter the priority of distributions set forth in Section 8.03
hereof, without the written consent of each Lender affected thereby;
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(g) Amend or waive any of the provisions of Article III, or
impose additional duties upon the Issuing Bank or otherwise affect the
rights, interests or obligations of the Issuing Bank, without the
written consent of the Issuing Bank; or
(h) Reduce any Letter of Credit Unreimbursed Draw, or extend the
time for repayment by the Borrower of any Letter of Credit
Unreimbursed Draw, without the written consent of each Lender;
and PROVIDED FURTHER, that Transfer Supplements may be entered into in the
manner provided in Section 10.14 hereof. Any such amendment, modification or
supplement must be in writing, manually signed by or on behalf of the Borrower
and the Lender Party which is party thereto, and shall be effective only to the
extent set forth in such writing. Any Event of Default or Potential Default
waived or consented to in any such amendment, modification or supplement shall
be deemed to be cured and not continuing to the extent and for the period set
forth in such waiver or consent, but no such waiver or consent shall extend to
any other or subsequent Event of Default or Potential Default or impair any
right consequent thereto. Shared Security Documents may be amended, modified and
supplemented from time to time in accordance with the terms thereof and of the
Collateral Agency Agreement, and any such amendment, modification or supplement
so made shall be binding upon the Borrower and each Lender Party (and to the
extent that any consent, direction or other action is required by the Agent in
connection therewith, the provisions of the third sentence of this Section 10.03
shall apply to the Agent in giving such consent or direction or taking such
action).
10.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of
dealing and no delay or failure of the Collateral Agent or any Lender Party in
exercising any right, power or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the
Collateral Agent and the Lender Parties under this Agreement and any other Loan
Document are cumulative and not exclusive of any rights or remedies which any of
them would otherwise have hereunder or thereunder, at law, in equity or
otherwise.
10.05. NOTICES.
(a) GENERAL. Except to the extent otherwise expressly
permitted hereunder or thereunder, all notices, requests, demands, directions
and other communications (collectively "notices") to the Borrower or any Lender
Party under this Agreement or any Loan Document shall be in writing (including
telexes and facsimile transmission) and shall be sent by first-class mail, or by
nationally-recognized overnight courier, or by telex or facsimile transmission
(with confirmation in writing mailed first-class or sent by such an overnight
courier), or by personal delivery. All notices shall be sent to the applicable
party at the address stated on the signature pages hereof or in accordance with
the last unrevoked written direction from such party to the other parties
hereto, in all cases with postage or other charges prepaid. Any such properly
given notice to any Lender Party shall be effective when received. Any such
properly given notice to the Borrower shall be effective on the earliest to
occur of receipt, telephone confirmation of receipt of telex or facsimile
transmission, one Business Day after delivery to a nationally-recognized
overnight courier, or three Business Days after deposit in the mail.
(b) COPIES TO AGENT. Any Lender giving any notice to the
Borrower or any other party to a Loan Document shall simultaneously send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lenders of
the receipt by it of any such notice.
(c) RELIANCE. Each Lender Party may rely on any notice
(whether or not such notice is made in a manner permitted or required by this
Agreement or any Loan Document) purportedly made
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by or on behalf of the Borrower, and no Lender Party shall have any duty to
verify the identity or authority of any Person giving such notice.
10.06. EXPENSES; TAXES; INDEMNITY.
(a) EXPENSES. The Borrower agrees to pay or cause to be paid
and to save each Lender Party harmless against liability for the payment of all
reasonable out-of-pocket costs and expenses (including but not limited to
reasonable fees and expenses of outside counsel, including local counsel,
auditors, and all other professional, accounting, evaluation and consulting
costs) incurred by any Lender Party from time to time arising from or relating
to (i) in the case of the Agent, the negotiation, preparation, execution,
delivery, administration and performance of this Agreement and the other Loan
Documents, (ii) in the case of the Agent, any requested amendments,
modifications, supplements, waivers or consents (whether or not ultimately
entered into or granted) to this Agreement or any Loan Document, and (iii) in
the case of each Lender Party, the enforcement or preservation of rights under
this Agreement or any Lean Document (including but not limited to any such costs
or expenses arising from or relating to (A) the creation, perfection or
protection of any Lien on any collateral, (B) the protection, collection, lease,
sale, taking possession of, preservation of, or realization on, any collateral,
including without limitation advances for taxes, filing fees and the like, (C)
collection or enforcement of any amount owing hereunder or thereunder by any
Lender Party, and (D) any litigation, proceeding, dispute, work-out,
restructuring or rescheduling related in any way to this Agreement or the Loan
Documents).
(b) TAXES. The Borrower hereby agrees to pay all stamp,
document, transfer, recording, filing, registration, search, sales and excise
fees and taxes and all similar impositions now or hereafter determined by any
Lender Party to be payable in connection with this Agreement or any other Loan
Documents or any other documents, instruments or transactions pursuant to or in
connection herewith or therewith, and the Borrower agrees to save each Lender
Party harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such fees, taxes or impositions.
(c) INDEMNITY. The Borrower hereby agrees to reimburse and
indemnify the Lender Parties, their respective affiliates, and the directors,
officers, employees, attorneys and agents of each of the foregoing (the "Lender
Indemnified Parties"), and each of them, and to hold each of them harmless from
and against, any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of outside counsel for such Lender Indemnified Party in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Lender Indemnified Party shall be designated a
party thereto) that may at any time be imposed on, asserted against or incurred
by such Lender Indemnified Party as a result of, or arising out of, or in any
way related to or by reason of this Agreement or any other Loan Document, any
transaction from time to time contemplated hereby or thereby, or any transaction
financed or secured in whole or in part, directly or indirectly, by any Letter
of Credit or the proceeds thereof (and without in any way limiting the
generality of the foregoing, including any grant of any Lien on collateral or
any exercise by the Collateral Agent or any Lender Party of any of its rights or
remedies under this Agreement or any other Loan Document); but excluding any
portion of such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements resulting from the
gross negligence or willful misconduct of such Lender Indemnified Party, as
finally determined by a court of competent jurisdiction. If and to the extent
that the foregoing obligations of the Borrower under this Section 10.06(c), or
any other indemnification obligation of the Borrower hereunder or under any
other Loan Document, are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.
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10.07. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
10.08. PRIOR UNDERSTANDINGS. This Agreement and the other
Loan Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto and thereto
relating to the transactions provided for herein and therein.
10.09. DURATION; SURVIVAL. All representations and warranties
of the Borrower contained herein or in any other Loan Document or made in
connection herewith or therewith shall survive the making of, and shall not be
waived by the execution and delivery, of this Agreement or any other Loan
Document, any investigation by or knowledge of any Lender Party, the issuance of
any Letter of Credit or any other event or condition whatever. All covenants and
agreements of the Borrower contained herein or in any other Loan Document shall
continue in full force and effect from and after the date hereof until the
Letter of Credit Commitment shall have terminated, all Letters of Credit have
expired or have been terminated, and all Loan Obligations (other than Contingent
Indemnification Obligations) have been indefeasibly paid in full in cash.
Without limitation, all obligations of the Borrower hereunder or under any other
Loan Document to make payments to or indemnify any Lender Party or Lender
Indemnified Party (including but not limited to obligations arising under
Sections 3.16, 3.17, 10.06 and 10.16 hereof) shall survive the payment in full
of all other Loan Obligations, termination of the Borrower's right to borrow
hereunder, and all other events and conditions whatever. In addition, all
obligations of each Lender to make payments to or indemnify the Agent or the
Issuing Bank and Persons related to the Agent or the Issuing Bank (including but
not limited to obligations arising under Sections 3.08(c) and 9.07 hereof) shall
survive the payment in full by the Borrower of all Loan Obligations, termination
of the Borrower's right to borrow hereunder, and all other events and conditions
whatever.
10.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
10.11. LIMITATION ON PAYMENTS. The parties hereto intend to
conform to all applicable Laws in effect from time to time limiting the maximum
rate of interest that may be charged or collected. Accordingly, notwithstanding
any other provision hereof or of any other Loan Document, the Borrower shall not
be required to make any payment to or for the account of any Lender, and each
Lender shall refund any payment made by the Borrower, to the extent that such
requirement or such failure to refund would violate or conflict with nonwaivable
provisions of applicable Laws limiting the maximum amount of interest which may
be charged or collected by such Lender.
10.12. SET-OFF. The Borrower hereby agrees that if any Loan
Obligation of the Borrower shall be due and payable (by acceleration or
otherwise), each Lender Party shall have the right, without notice to the
Borrower, to set-off against and to appropriate and apply to such Loan
Obligation any obligation of any nature owing to the Borrower by such Lender
Party, including but not limited to all deposits (whether time or demand,
general or special, provisionally credited or finally credited, whether or not
evidenced by a certificate of deposit) now or hereafter maintained by the
Borrower with such Lender Party. Such right shall be absolute and unconditional
in all circumstances and, without limitation, shall exist whether or not such
Lender Party or any other Person shall have given notice or made any demand to
the Borrower or any other Person, whether such obligation owed to the Borrower
is contingent, absolute, matured or unmatured (it being agreed that such Lender
Party may deem such obligation to be then due and payable at the time of such
setoff), and regardless of the existence or adequacy of any collateral, guaranty
or any other security, right or remedy available to any
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Lender Party or any other Person. The Borrower hereby agrees that, to the
fullest extent permitted by law, any Participant and any branch, subsidiary or
affiliate of any Lender Party or any Participant shall have the same rights of
set-off as a Lender as provided in this Section 10.12 (regardless of whether
such Participant, branch, subsidiary or affiliate would otherwise be deemed in
privity with or a direct creditor of the Borrower). The rights provided by this
Section 10.12 are in addition to all other rights of set-off and banker's lien
and all other rights and remedies which any Lender Party (or any such
Participant, branch, subsidiary or affiliate) may otherwise have under this
Agreement, any other Loan Document, at law or in equity, or otherwise, and
nothing in this Agreement or any Loan Document shall be deemed a waiver or
prohibition of or restriction on the rights of set-off or bankers' lien of any
such Person.
10.13. SHARING OF COLLECTIONS. Subject to Section 2.06 of the
Collateral Agency Agreement, the Lenders hereby agree among themselves that if
any Lender shall receive (by voluntary payment, realization upon security,
set-off or from any other source) any amount on account of any Loan Obligation
contemplated by this Agreement or the other Loan Documents to be made by the
Borrower ratably to all Lenders in greater proportion than any such amount
received by any other Lender, then the Lender receiving such proportionately
greater payment shall notify each other Lender and the Agent of such receipt,
and equitable adjustment will be made in the manner stated in this Section so
that, in effect, all such excess amounts will be shared ratably among all of the
Lenders. The Lender receiving such excess amount shall purchase (which it shall
be deemed to have done simultaneously upon the receipt of such excess amount)
for cash from the other Lenders a participation in the applicable Loan
Obligations owed to such other Lenders in such amount as shall result in a
ratable sharing by all Lenders of such excess amount (and to such extent the
receiving Lender shall be a Participant). If all or any portion of such excess
amount is thereafter recovered from the Lender making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by Law
to be paid by the Lender making such purchase. The Borrower hereby consents to
and confirms the foregoing arrangements. Each Participant shall be bound by this
Section as fully as if it were a Lender hereunder.
10.14. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGMNENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lender Parties, and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights hereunder without the prior written consent of all
the Lenders and the Agent, and any purported assignment without such consent
shall be void, and except that, to the fullest extent permitted by law, a Lender
may not voluntarily assign or transfer any of its rights hereunder except in
accordance with the other provisions of this Section 10.14, and any other
purported voluntary assignment or transfer shall be void; PROVIDED, that this
Agreement shall inure to the benefit of successors of Lenders by operation of
law or resulting from an involuntary assignment or transfer (including but not
limited to receivers, conservators, trustees and like Persons, and successors by
merger or consolidation).
(b) PARTICIPATIONS. Any Lender may, in the ordinary course of
its business and in accordance with applicable Law, at any time sell
participations to one or more commercial banks or other Persons (each a
"Participant") in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents; PROVIDED, that
(i) any such Lender's obligations under this Agreement and the
other Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
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(iii) the parties hereto shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
and
(iv) such Participant shall, by accepting such Participation, be
bound by the provisions of Section 10.13 hereof, and
(v) if such Participant is not already a Participant or a Lender,
and if such Participation gives such Participant any voting rights
(other than on matters described in clauses (a) through (h),
inclusive, of Section 10.03 hereof), such Participation shall be
subject to consent of the Agent, the Issuing Bank and the Borrower
pursuant to clause (i) of Section 10.14(c) hereof as if such
Participation were an assignment described therein.
The Borrower agrees that any such Participant shall be entitled to the benefits
of Sections 3.16, 3.17, 10.06 and 10.12 hereof with respect to its participation
from time to time; PROVIDED, that no such Participant shall be entitled to
receive any greater amount pursuant to such Sections than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred to such Participant had no such transfer occurred.
(c) ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable Law, at any time assign all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents to any Lender or to one or more additional commercial banks or other
financial institutions (each a "Purchasing Lender"); PROVIDED, that
(i) any such assignment to a Purchasing Lender shall be made only
with the consent of the Agent and the Issuing Bank (which each of them
may grant or withhold in their absolute discretion) and of the
Borrower (which consent may not be unreasonably withheld or delayed);
(ii) if a Lender makes such an assignment of less than all of its
then remaining rights and obligations under this Agreement and the
other Loan Documents, such transferor Lender shall retain, after such
assignment, a minimum Commitment Percentage of 50%, and such
assignment shall be in a minimum Commitment Percentage of 50%,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of the Commitment Percentage of the transferor
Lender, and of all of the transferor Lender's related rights and
obligations under this Agreement and the other Loan Documents,
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit B to this Agreement,
duly completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Lender and the Purchasing
Lender shall execute and deliver to the Agent a duly completed Transfer
Supplement (including the consents required by clause (i) of the preceding
sentence) with respect to such assignment, and a processing and recording fee of
$3,500; and, upon receipt thereof, the Agent shall accept such Transfer
Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant to such
Transfer Supplement, the Agent shall record such acceptance in the Register.
Upon such execution, delivery, acceptance and recording, from and after the
close of business at the Agent's Office on the Transfer Effective Date specified
in such Transfer Supplement
(x) the Purchasing Lender shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Lender hereunder, and
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(y) the transferor Lender thereunder shall be released from its
obligations under this Agreement to the extent so transferred (and, in
the case of an Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party to this
Agreement) from and after the Transfer Effective Date.
Accrued interest and accrued fees shall be paid to the Purchasing Lender at the
same time or times provided in this Agreement.
(d) REGISTER. The Agent shall maintain at its office a copy of
each Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment
Percentages of, each Lender from time to time. The entries in the Register shall
be conclusive absent manifest error and the Borrower and each Lender Party may
treat each person whose name is recorded in the Register as a Lender hereunder
for all purposes of the Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) FINANCIAL AND OTHER INFORMATION. Subject to Section
10.14(g) hereof, the Borrower authorizes the Agent and each Lender to disclose
to any Participant or Purchasing Lender, or prospective Participant or
Purchasing Lender, any and all financial and other information delivered to,
received by, or otherwise in the possession of, such Person from time to time
relating to the Borrower, its Subsidiaries and affiliates or the matters
contemplated by the Loan Documents. At the request of any Lender, the Borrower,
at the Borrower's expense, shall provide to each prospective transferee the
conformed copies of documents referred to in Section 4 of the form of Transfer
Supplement.
(f) [Reserved]
(g) CONFIDENTIALITY. Each Lender Party agrees to take
reasonable precautions to maintain the confidentiality of information designated
in writing as confidential and provided to it by the Borrower or any Subsidiary
in connection with this Agreement; provided, however, that any Lender Party may
disclose such information (i) at the request of any bank regulatory authority or
other Governmental Authority or in connection with an examination of such Lender
Party by any such Governmental Authority, (ii) pursuant to subpoena or other
court process, (iii) to the extent such Lender Party is required (or believes in
good faith that it is required) to do so in accordance with any applicable Law,
(iv) to such Lender Party's independent auditors and other professional
advisors, (v) in connection with the enforcement of any of its rights under or
in connection with any Loan Document, (vi) to any other Lender Party, and (vii)
to any actual or potential Participant or Purchasing Lender, or to any other
actual or potential creditor of or participant in a credit to the Borrower or
any of its Subsidiaries or Affiliates, so long as, in the case of this clause
(vii), such Person agrees to comply with the provisions of this Section
10.14(g).
(h) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender may at any
time assign all or any portion of its rights under this Agreement, to a Federal
Reserve Bank. No such assignment shall relieve the transferor Lender from any of
its obligations hereunder.
10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; LIMITATION OF LIABILITY.
(a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES.
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(b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING
IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY
LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER
FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER PARTY
TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION OVER THE BORROWER;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR NOTICES DESCRIBED IN SECTION 10. 05 HEREOF, AND CONSENTS AND
AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND
EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW);
AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(c) LIMITATION QF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY
LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER PARTY OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF
ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY
OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT
TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS
OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST
IN ITS FAVOR.
10.16. WITHHOLDING TAXES, ETC.
(a) INDEMNITY. Without limiting the generality of any other
provision of this Agreement or any other Loan Document, the Borrower hereby
agrees to reimburse and indemnify the Lender Indemnified Parties, and each of
them, and to hold each of them harmless from and against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, (x) the fees and disbursements of outside
counsel for such Lender Indemnified Party in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Lender Indenmified Party shall be designated a party thereto, and (y) any
present or future taxes, levies, imposts, deductions, charges or withholdings,
and any liability arising therefrom or with respect thereto, including without
limitation penalties, interest and expenses) that may at any time be imposed on,
asserted against or incurred by such Lender Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, payments by the
Issuing Bank on any Letter of Credit or the obligation of the Issuing Bank to
make any such payments.
(b) WITHHOLDING TAX FORMS, ETC. Without limiting the
generality of Section 10.16(a), the Borrower assumes full responsibility for
assuring that payments on any Letter of Credit, and the
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obligation of the Issuing Bank to make such payments, comply with all present
and future Laws relating to taxation, including all withholding obligations
under such Laws. Without limiting the generality of the foregoing, the Borrower
shall (i) procure from each of the initial beneficiaries of the Letters of
Credit (who will also be the initial holders of the ICV Notes) U.S. Internal
Revenue Service Forms 1001 and W-8 demonstrating exemption from United States
withholding taxes with respect to payments under the ICV Notes, and provide
copies of such forms to the Issuing Bank, and (ii) use its best efforts to
procure from any successor beneficiaries of any Letter of Credit from time to
time such forms (and any other or successor forms prescribed by applicable Law
from time to time relating to potential withholding obligations with respect to
payments under the ICV Notes) demonstrating exemption from United States
withholding taxes with respect to payments under the ICV Notes, and provide
copies of the such forms to the Issuing Bank.
10.17. DEFEASANCE OF CERTAIN COVENANTS. In the event that any
of the events described in clause (i) or (ii) of Section 3.13 hereof shall
occur, and the Borrower prepays the Letter of Credit Unreimbursed Draws in full
and provides cash collateral for all outstanding Letters of Credit in accordance
with Section 3.07 hereof, then, notwithstanding any other provision of this
Agreement to the contrary, from and after the date the foregoing conditions are
satisfied and so long as Section 4.15 of the Senior Note Indenture shall be in
force, the Dereased Covenants shall not restrict any Subsidiary of the Borrower
from taking any action referred to in clause (a), (b), (c) or (d) of Section
4.15 of the Senior Note Indenture, to the extent that application of the
Dereased Covenants to restrict such action would violate Section 4.15 of the
Senior Note Indenture. As used herein, "Defeased Covenants" shall mean the
covenants set forth in Article VII hereof, other than Section 7.01 hereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
PRIMARK CORPORATION
By /s/ STEPHEN H. CURRAN
---------------------------------
Name: Stephen H. Curran
Title: Senior Vice President
Address for Notices:
Primark Corporation
1000 Winter Street, Suite 4300N
Waltham, MA 02154
Attn: Stephen H. Curran,
Senior Vice President and Chief Financial Officer
Telephone: 617-487-2140
Facsimile: 617-890-6129
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MELLON BANK, N.A.,
individually and as Agent
By /s/ R. JANE WESTRICH
---------------------------------
R. Jane Westrich
Vice President
Commitment Percentage: 100 %
Address for Notices:
Mellon Bank, N.A.
Trade Banking Operations
Three Mellon Bank Center,
Room 2329
Pittsburgh, PA 15259-0110
Attn: Standby Letter of Credit
Unit
Telephone: 412-234-9495
Facsimile: 412-234-2733
With copies to:
Mellon Bank, N.A.
Loan Administration
Three Mellon Bank Center
Room 153-2332
Pittsburgh, PA 15259-0003
Attn: Terpsie Katsafanas
Telephone: 412-234-4769
Facsimile: 412-236-2028
and to:
Mellon Bank, N.A.
One Boston Place, 6th Floor
Boston, MA 02108
Attn: R. Jane Westrich, Vice President
Telephone: 617-722-7969
Facsimile: 617-722-3516
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ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS; CONSTRUCTION
1.01. CERTAIN DEFINITIONS. In addition to other words and terms
defined elsewhere in this Agreement, as used in this Agreement the following
words and terms defined have the meanings given them below, unless the context
of this Agreement otherwise clearly requires.
"Advance" shall mean any loan, advance or other extension of
credit, direct or indirect.
"Affected Lender" shall have the meaning set forth in Section
3.09(e) hereof.
"Affiliate" of a Person shall mean any Person which directly or
indirectly controls, or is controlled by, or is under common control
with, such Person. For purposes of the preceding sentence, "control"
of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, by
contract or otherwise, and in any case shall include, without
limitation, (a) being a director or officer (or a Person having powers
analogous to those of a corporate director or officer) of such Person,
or of a Person that directly or indirectly controls such Person, (b)
having direct or indirect ownership (beneficially or of record) of, or
direct or indirect power to vote, 30% or more of the outstanding
Shares of Capital Stock of any class of such Person having ordinary
voting power for the election of directors (or in the case of a Person
that is not a Corporation, 30% or more of any class of equity interest
having voting or control power analogous to corporate common stock),
and (b) being a general partner of such Person, or of a Person having
direct or indirect control over a general partner of such Person.
"Applicable Margin" shall have the meaning set forth in Section
3.09(b) hereof.
"Assured Obligation" shall have the meaning given that term in
the definition of "Guaranty Equivalent."
"Base Rate" for any day shall mean the greater of (a) the Prime
Rate for such day or (b) 0.50% plus the Federal Funds Effective Rate
for such day, such interest rate to change automatically from time to
time effective as of the effective date of each change in the Prime
Rate or the Federal Funds Effective Rate.
"Base Rate Option" shall have the meaning set forth in Section
3.09(a) hereof.
"Base Rate Portion" of any part of the Letter of Credit
Unreimbursed Draws shall mean at any time the portion, including the
whole, of such part of the Letter of Credit Unreimbursed Draws bearing
interest at such time (i) under the Base Rate Option or (ii) in
accordance with Section 3.15(c)(ii) hereof. If no part of the Letter
of Credit Unreimbursed Draws is specified, "Base Rate Portion" shall
refer to all Letter of Credit Unreimbursed Draws outstanding at such
time.
"Borrower Security Agreement" shall mean the Security Agreement
dated as of June 29, 1995 between the Borrower and the Collateral
Agent, as amended, modified or supplemented from time to time.
"Broker-Dealer" shall mean a Person who is, or is registered as,
a broker, dealer, municipal securities dealer, government securities
broker or government securities dealer under
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the Securities Exchange Act of 1934, as amended, or under any state
securities law, or who has a comparable status under any securities
law of any other Governmental Authority.
"Business Day" shall mean any day other than a Saturday, Sunday,
public holiday under the laws of the Commonwealth of Pennsylvania or
other day on which banking institutions are authorized or obligated to
close in the city in which is located the Agent's Office.
"Capital Expenditures" of any Person shall mean, for any period,
all expenditures (whether paid in cash or accrued as liabilities
during such period) of such Person during such period which would be
classified as capital expenditures in accordance with GAAP (including,
without limitation, expenditures for maintenance and repairs which are
capitalized, and Capitalized Leases to the extent an asset is recorded
in connection therewith in accordance with GAAP).
"Capitalized Lease" shall mean at any time any lease which is, or
is required under GAAP to be, capitalized on the balance sheet of the
lessee at such time, and "Capitalized Lease Obligation" of any Person
at any time shall mean the aggregate amount which is, or is required
under GAAP to be, reported as a liability on the balance sheet of such
Person at such time as lessee under a Capitalized Lease.
"Capitalized Software" of any Person shall mean, for any period,
all expenditures (whether paid in cash or accrued as liabilities
during such period) of such Person which would be classified as
capitalized software in accordance with GAAP.
"Cash Equivalent Investments" shall have the meaning given that
term in the Collateral Agency Agreement.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute
of similar import, and regulations thereunder, in each case as in
effect from time to time.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be
amended from time to time.
"Closing Date" shall have the meaning given that term in Section
3.01(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, and regulations thereunder,
in each case as in effect from time to time. References to sections of
the Code shall be construed also to refer to any successor sections.
"Collateral Agency Agreement" shall mean the Collateral Agency
Agreement dated as of June 29, 1995 between the Borrower, certain
"Revolving Credit Parties," by Mellon Bank, N.A., as Revolving Credit
Agent, certain "Term Loan Parties," by Mellon Bank, N.A., as Term Loan
Agent, and Mellon Bank, N.A., as Collateral Agent, as amended,
modified or supplemented from time to time.
"Collateral Agent" shall have the meaning given that term in the
Collateral Agency Agreement.
"Commitment Percentage" of a Lender at any time shall mean the
Commitment Percentage for such Lender set forth below its name on the
signature page hereof, subject to transfer to another Lender as
provided in Section 10.14 hereof.
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"Consolidated Cash Interest Expense" for any period shall mean
the total cash interest expense payable by the Borrower and its
Subsidiaries (other than PSLC) for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA" for any period shall mean the sum of (a)
Consolidated Net Income for such period, (b) Consolidated Interest
Expense for such period, (c) Consolidated Income Tax Expense for such
period, (d) depreciation expense of the Borrower and its Subsidiaries
(other than PSLC) for such period, and (e) amortization expense of the
Borrower and its Subsidiaries (other than PSLC) for such period, minus
the sum of (x) extraordinary gains (but not any losses) to the extent
included in determining such Consolidated Net Income, (y) equity
earnings (but not any losses) of Affiliates of the Borrower to the
extent included in determining Consolidated Net Income for such
period, and (z) noncash gains or losses arising from foreign currency
transactions to the extent included in determining Consolidated Net
Income for such period, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA Less Capital Expenditures" for any period
shall mean Consolidated EBITDA for such period, minus the sum of
Capital Expenditures of the Borrower and its Subsidiaries (other than
PSLC) for such period and, without duplication of amounts included in
Capital Expenditures, Capitalized Software of the Borrower and its
Subsidiaries (other than PSLC) for such period, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" for any period shall
mean the ratio of the Consolidated EBITDA Less Capital Expenditures
for such period to the Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the sum of
(a) Consolidated Cash Interest Expense for such period, (b) principal
payments made by the Borrower and its Subsidiaries (other than PSLC)
during such period with respect to any outstanding Indebtedness
(excluding (i) payments of Indebtedness under the Revolving Credit
Agreement, (ii) prepayments made at the option of the Borrower of
Indebtedness under the Term Loan Agreement, to the extent the amounts
so prepaid are not otherwise due during such period, and (iii)
payments of the Senior Notes at the scheduled maturity thereof), (c)
the amount of Stock Payments made by the Borrower and its Subsidiaries
(other than PSLC) during such period (excluding (i) Stock Payments
made to the Borrower or its Subsidiaries (other than PSLC), (ii) Stock
Payments made solely in Shares of Capital Stock (or warrants, options
or rights therefor) of the Borrower, and (iii) Stock Payments
constituting Designated Share Repurchases) all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Funded Debt Ratio" for any period shall mean the
ratio of Consolidated Funded Indebtedness as of the last day of such
period to Consolidated EBITDA Less Capital Expenditures for such
period.
"Consolidated Funded Debt Ratio (Adjusted)" for any period shall
mean the following ratio: (a) the amount, not less than zero,
determined as of the last day of such period, equal to (i)
Consolidated Funded Indebtedness, minus (ii) the amount, not less than
zero, equal to (A) the amount of cash and Cash Equivalent Investments
owned by the Borrower and its Subsidiaries (other than PSLC), valued
at the lower of cost or market, minus (B) $8,000,000, divided by (b)
Consolidated EBITDA Less Capital Expenditures for such period.
"Consolidated Funded Indebtedness" at any time shall mean
Indebtedness (including the current portion thereof) of the Borrower
and its Subsidiaries (other than PSLC) which as of such date would be
classified in whole or in part as a long-term liability in accordance
with GAAP,
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and in any event includes (a) Indebtedness under the Credit Facilities
and the Senior Notes, (b) any Indebtedness of the Borrower and its
Subsidiaries (other than PSLC) having a final maturity later than one
year after the date of incurrence of such Indebtedness, (c) any
Indebtedness, regardless of its term, of the Borrower and its
Subsidiaries (other than PSLC) which is renewable or extendable by the
obligor to a date later than one year after the date of incurfence of
such Indebtedness, and (d) Indebtedness of TIMCO described in Section
7.03(k) hereof; provided, that the Existing Preferred Stock shall not
constitute Consolidated Funded Indebtedness.
"Consolidated Income Tax Expense" for any period shall mean the
charges against income of the Borrower and its Subsidiaries (other
than PSLC) for foreign, federal, state and local income taxes for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA Less Capital Expenditures for such
period to Consolidated Cash Interest Expense for such period.
"Consolidated Interest Expense" for any period shall mean the
total interest expense of the Borrower and its Subsidiaries (other
than PSLC) for such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Leverage Ratio" at any time shall mean the ratio of
aggregate liabilities of the Borrower and its Subsidiaries (other than
PSLC), determined on a consolidated basis in accordance with GAAP, to
Consolidated Net Worth at such time.
"Consolidated Net Income" for any period shall mean the net
earnings (or loss) after taxes of the Borrower and its Subsidiaries
(other than PSLC) for such period, determined on a consolidated basis
in accordance with GAAP; provided, that there shall be deducted
therefrom (a) the income (but not any deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or
consolidated with or is otherwise acquired by or combined with the
Borrower or any Subsidiary in a business combination accounted for as
a pooling of interests, including, in the case of a successor to the
Borrower or any Subsidiary by consolidation or merger or transfer of
assets, any earnings of the successor Corporation prior to such
consolidation, merger or transfer of assets, (b) income (but not any
loss) accounted for by the Borrower on the equity method resulting
from an ownership interest in any Person, but the deduction for such
equity income shall be reversed to the extent that during such period
an amount not in excess of such income has been actually received by
the Borrower or such Subsidiary in the form of cash dividends or
similar cash distributions, (c) the undistributed earnings of any
Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is restricted (whether
such restriction arises by operation of Law, by agreement, by its
certificate or articles of incorporation or by-laws (or other
constituent documents), or otherwise), (d) any gain arising from the
acquisition of any securities, or the extinguishmerit, under GAAP, of
any Indebtedness, of the Borrower or any Subsidiary, and (e) income
(but not any loss) from discontinued operations of the Borrower or any
Subsidiary.
"Consolidated Net Worth" at any time shall mean the total amount
of common stockholders' equity and preferred stock of the Borrower and
its consolidated Subsidiaries at such time, determined on a
consolidated basis in accordance with GAAP; provided, that each item
of the following types shall be deducted, to the extent such item is
positive and is otherwise included therein: (a) any write-ups or other
revaluation after June 29, 1995 in the book value of any asset owned
by the Borrower or any of its consolidated Subsidiaries (other than
write-ups resulting from the acquisition of assets of a business made
within one year after such acquisition
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and accounted for by purchase accounting, and write-ups resulting from
the valuation in the ordinary course of business of investment
securities and inventory at the lower of cost or market), (b) all
investments in and loans and Advances to (i) PSLC, (ii) the TWN(UK)
Entities and Primark Economics, (iii) unconsolidated Subsidiaries of
the Borrower, (iv) Subsidiaries of the Borrower that are not Wholly
Owned Subsidiaries of the Borrower (whether or not consolidated), and
(v) Persons that are not Subsidiaries of the Borrower (other than Cash
Equivalent Investments), (c) treasury stock, (d) assets attributable
to interests held by Persons other than the Borrower and its
Subsidiaries (other than PSLC) that are Wholly Owned Subsidiaries of
the Borrower, (e) Disqualified Capital Stock of the Borrower or of any
Subsidiary of the Borrower (other than Existing Preferred Stock), (f)
the amount, if positive, equal to the aggregate stockholders' equity
of PSLC and Subsidiaries of the Borrower that are not Wholly Owned
Subsidiaries of the Borrower, and (g) the amount, whether positive or
negative, of foreign currency translation adjustments to stockholders'
equity of the Borrower and its Subsidiaries (other than PSLC), all of
the foregoing as determined in accordance with GAAP.
"Contingent Indemnification Obligations" shall have the meaning
given that term in the Collateral Agency Agreement.
"Controlled Group Member" shall mean each trade or business
(whether or not incorporated) which together with the Borrower or any
Subsidiary of the Borrower is treated as a controlled group or single
employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections
414(b), (c), (m) or (o) of the Code.
"Corporation" shall mean a corporation, limited liability company
or business trust organized under the Laws of any state of the United
States, a company limited by shares incorporated under the Laws of
England and Wales, or any similar entity orgaffized under the Laws of
any other jurisdiction, the owners of which are not by operation of
Law generally liable for the obligations of such entity.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Notional Euro-Rate Funding Office or by a Lender through
a Notional Euro-Rate Funding Office of one or more Dollar deposits in
the interbank eurodollar market at the beginning of the Euro-Rate
Funding Period corresponding to such Funding Segment having maturities
approximately equal to such Euro-Rate Funding Period and in an
aggregate amount approximately equal to such Lender's Pro Rata share
of such Funding Segment.
"Credit Facilities" shall mean the Revolving Credit Agreement,
the Term Loan Agreement and this Agreement.
"Datastream" shall mean Datastream International Limited, a
corporation incorporated under the Laws of England and Wales.
"Designated Stock Repurchases" means cash purchases from time to
time by the Borrower from the TASC Profit Sharing and Stock Ownership
Plan, not later than six months after June 27, 1996, of shares of
common stock of the Borrower of a series publicly traded and owned by
the TASC Profit Sharing and Stock Ownership Plan as of June 27, 1996,
for an aggregate purchase price not to exceed $43,000,000, provided
that no Event of Default or Potential Default shall exist on the date
of any such purchase, or immediately thereafter and after giving
effect to such purchase.
"Disclosure Group" shall mean VNU USA, Inc., VNU Marketing
Information Services, Inc., Disclosure, Incorporated, I/B/E/S
International, Inc., I/B/E/S Japan K.K., I/B/E/S Inc.,
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Disclosure International B.V., Disclosure Ltd., Disclosure GmbH,
I/B/E/S UK Ltd., Disclosure Information Services, Inc., Disclosure
International, Inc., and the other members of the "Disclosure Group"
as defined in the Stock Purchase Agreement.
"Disqualified Capital Stock" shall mean any Shares of Capital
Stock that, other than solely at the option of the issuer thereof, by
their terms (or by the terms of any security into which they are
convertible or exchangeable) are, or upon the happening of an event or
the passage of time would be, required to be redeemed or repurchased,
in whole or in part, or have, or upon the happening of an event or the
passage of time would have, a redemption or similar payment due on or
prior to the Facilities Termination Date.
"Dollar," "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Environmental Affiliate": a Person ("Y") shall be an
"Environmental Affiliate" of another Person ("X"), if X has retained
or assumed, or is otherwise liable (contingently or otherwise) for,
any liability (contingent or other) of Y with respect to any
Environmental Claim, whether such retention, assumption or liability
on the part of X arises by agreement, by Law or otherwise.
"Environmental Approvals" shall mean any Governmental Action
pursuant to or required under any Environmental Law.
"Environmental Claim" shall mean, with respect to any Person (the
"specified Person"), any action, suit, proceeding, investigation,
notice, claim, complaint, demand, request for information or other
communication (written or oral) by any other Person (including but not
limited to any Governmental Authority, citizens' group or present or
former employee of the specified Person) alleging, asserting or
claiming any actual or potential liability on the part of the
specified Person for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, fines or penalties, arising out of, based on or resulting
from (a) the presence, or release into the environment, of any
Environmental Concern Materials at any location, whether or not owned
by such Person, or (b) circumstances forming the basis of any
violation or alleged violation of any Environmental Law.
"Environmental Cleanup Site" shall mean any location which is
listed or proposed for listing on the National Priorities List, on
CERCLIS or on any similar state list of sites requiring investigation
or cleanup, or which is the subject of any pending or threatened
action, suit, proceeding or investigation related to or arising from
any alleged violation of any Environmental Law.
"Environmental Concern Materials" shall mean (a) any flammable
substance, explosive, radioactive material, hazardous material,
hazardous waste, toxic substance, solid waste, pollutant, contaminant
or any related material, raw material, substance, product or
by-product of any substance, as the foregoing terms are defined in, or
any other substance regulated by, any Environmental Law (including but
not limited to any "hazardous substance" as defined in CERCLA or any
similar state Law), (b) any toxic chemical from or related to
industrial, commercial or institutional activities, and (c) asbestos,
gasoline, diesel fuel, motor oil, waste and used oil, heating oil and
other petroleum products or compounds, polychlorinated biphenyls,
radon and urea formaldehyde.
"Environmental Law" shall mean any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or
protection of the environment, including natural resources, (b)
exposure of Persons, including but not limited to employees, to
Environmental
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Concern Materials, (c) protection of the public health or welfare from
the effects of products, by-products, wastes, emissions, discharges or
releases of Environmental Concern Materials or (d) regulation of the
manufacture, use or introduction into commerce of Environmental
Concern Materials including their manufacture, formulation, packaging,
labeling, distribution, transportation, handling, storage or disposal.
Without limitation, "Environmental Law" shall also include any
Environmental Approval and the terms and conditions thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed also to refer to
any successor sections.
"Euro-Rate" for any day, as used herein, shall mean for each
Funding Segment of the Euro-Rate Portion corresponding to a proposed
or existing Euro-Rate Funding Period the rate per annum determined by
the Agent by dividing (the resulting quotient to be rounded upward to
the nearest 1/100 of 1%) (a) the rate of interest (which shall be the
same for each day in such Euro-Rate Funding Period) determined in good
faith by the Agent in accordance with its usual procedures (which
determination shall be conclusive) to be the average of the rates per
annum for deposits in Dollars offered to major money center banks in
the London interbank market at approximately 11:00 a.m., London time,
two London Business Days prior to the first day of such Euro-Rate
Funding Period for delivery on the first day of such Euro-Rate Funding
Period in amounts comparable to such Funding Segment and having
maturities comparable to such Funding Period by (b) a number equal to
1.00 minus the Euro-Rate Reserve Percentage.
"Euro-Rate Funding Period" shall have the meaning set forth in
Section 3.09(c) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
3.09(a) hereof.
"Euro-Rate Portion" of any part of the Letter of Credit
Unreimbursed Draws shall mean at any time the portion, including the
whole, of such part of the Letter of Credit Unreimbursed Draws bearing
interest at any time under the Euro-Rate Option or at a rate
calculated by reference to the Euro-Rate under Section 3.15(c)(i)
hereof. If no part of the Letter of Credit Unreimbursed Draws is
specified, "Euro-Rate Portion" shall refer to the Euro-Rate Portion of
all Letter of Credit Unreimbursed Draws outstanding at such time.
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest
1/100 of 1%), as determined in good faith by the Agent (which
determination shall be conclusive), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) representing the maximum reserve requirement
(including, without limitation, supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities") of a member bank in such
System. The Euro-Rate shall be adjusted automatically as of the
effective date of each change in the Euro-Rate Reserve Percentage. The
Euro-Rate Option shall be calculated in accordance with the foregoing
whether or not any Lender is actually required to hold reserves in
connection with its eurocurrency funding or, if required to hold such
reserves, is required to hold reserves at the "Euro-Rate Reserve
Percentage" as herein defined.
"Event of Default" shall mean any of the Events of Default
described in Section 8.01 hereof.
"Existing Preferred Stock" shall mean shares outstanding on June
29, 1995 (not in excess of 674,943 shares) of the Borrower's Series A
Cumulative Convertible Preferred Stock,
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par value $1.00 per share, together with any additional shares of
such series issued after June 29, 1995 as payment in kind of dividends
on outstanding shares of Existing Preferred Stock in accordance with
the terms of the Existing Preferred Stock. Shares of Existing
Preferred Stock which are purchased, redeemed or otherwise acquired in
any manner by the Borrower or any of its Subsidiaries, or which are
converted into or exchanged for any other securities, shall not
thereafter constitute Existing Preferred Stock.
"Facilities Termination Date" shall mean the later to occur of
the Revolving Credit Maturity Date, the Term Loan Maturity Date and
the Letter of Credit Final Expiration Date.
"Fair Market Value" shall mean, with respect to any asset, the
sale value that would be obtained in an arm's length transaction
between an informed and willing seller under no compulsion to sell and
an informed and willing buyer.
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) determined by
the Agent (which determination shall be conclusive) to be the rate per
annum announced by the Federal Reserve Bank of New York (or any
successor) as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the
previous trading day, as computed and announced by such Federal
Reserve Bank (or any successor) in substantially the same manner as
such Federal Reserve Bank computes and announces the weighted average
it refers to as the "Federal Funds Effective Rate" as of the date of
this Agreement; provided, that if such Federal Reserve Bank (or its
successor) does not so announce such rate for such previous trading
day, the "Federal Funds Effective Rate" shall be the average rate
charged to Mellon Bank, N.A. on such previous trading day on such
transactions as determined by the Agent.
"Funding Periods" shall have the meaning set forth in Section
3.09(c) hereof.
"Funding Segment" of the Euro-Rate Portion at any time shall mean
the entire principal amount of such Portion to which at the time in
question there is applicable a particular Funding Period beginning on
a particular day and ending on a particular day. (By definition, each
such Portion is at all times composed of an integral number of
discrete Funding Segments and the sum of the principal amounts of all
Funding Segments of any such Portion at any time equals the principal
amount of such Portion at such time.)
"GAAP" shall have the meaning given that term in Section 1.03 of
this Annex A.
"Governmental Action" shall have the meaning set forth in Section
4.04 hereof.
"Governmental Authority" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Guaranty Equivalent": A Person (the "Deemed Guarantor") shall be
deemed to subject to a Guaranty Equivalent in respect of any
obligation (the "Assured Obligation") of another Person (the "Deemed
Obligor") if the Deemed Guarantor directly or indirectly guarantees,
becomes surety for, endorses, assumes, agrees to indemnify the Deemed
Obligor against, or otherwise agrees, becomes or remains liable
(contingently or otherwise) for, such Assured Obligation, in whole or
in part. Without limitation, a Guaranty Equivalent shall be deemed to
exist if a Deemed Guarantor agrees, becomes or remains liable
(contingently or otherwise), directly or indirectly, to do any of the
following: (a) to purchase or assume, or to supply funds for the
payment, purchase or satisfaction of, an Assured Obligation, (b) to
make any loan, advance, capital contribution or other investment in,
or to purchase or lease any property or
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services from, a Deemed Obligor (i) to maintain the solvency of the
Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other
financial condition, (iii) to enable the Deemed Obligor to satisfy any
Assured Obligation or to make any Stock Payment or any other payment,
or (iv) to assure the holder of such Assured Obligation against loss,
(c) to purchase or lease property or services from the Deemed Obligor
regardless of the non-delivery of or failure to furnish of such
property or services, (d) in a transaction having the characteristics
of a take-or-pay or throughput contract or as described in paragraph 6
of FASB Statement of Financial Accounting Standards No. 47, or (e) in
respect of any other transaction the effect of which is to assure the
payment or performance (or payment of damages or other remedy in the
event of nonpayment or nonperformance) in whole or in part of any
Assured Obligation.
"ICV" shall mean ICV Limited, a Corporation incorporated under
the Laws of England and Wales.
"ICV Notes" shall have the meaning given that term in Section
7.03(r) hereof.
"Indebtedness" of a Person shall mean the following: (a) all
obligations on account of money borrowed by, or credit extended to or
on behalf of, or for or on account of deposits with or advances to,
such Person; (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of such
Person for the deferred purchase price of property or services; (d)
all obligations secured by a Lien on property owned by such Person
(whether or not assumed), and all obligations of such Person under
Capitalized Leases (without regard to any limitation of the rights and
remedies of the holder of such Lien or the lessor under such
Capitalized Lease to repossession or sale of such property); (e) the
stated amount of all letters of credit issued for the account of such
Person and, without duplication, the unreimbursed amount of all drafts
drawn thereunder, and all other obligations of such Person associated
with such letters of credit or draws thereon; (f) all obligations of
such Person in respect of acceptances or similar obligations issued
for the account of such Person; (g) all obligations of such Person
under a product financing or similar arrangement described in
paragraph 8 of FASB Statement of Accounting Standards No. 49 or any
similar requirement of GAAP; (h) all obligations of such Person under
any interest rate or currency swap, cap, floor, collar, future,
forward or option agreement, or other interest rate or currency
protection agreement; and (i) the maximum fixed repurchase price of
any Disqualified Capital Stock of such Person.
"Interest Rate Hedging Agreement" shall mean an interest rate
swap, cap or collar agreement.
"Investment Account" shall have the meaning given that term in
the Borrower Security Agreement.
"Issuing Bank" shall mean Mellon Bank, N.A.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Lender" shall mean any of the Lenders listed on the signature
pages hereof, subject to the provisions of Section 10.14 hereof
pertaining to Persons becoming or ceasing to be Lenders. "Lender"
shall in any event include the Issuing Bank.
"Lender Indemnified Parties" shall have the meaning given that
term in Section 10.06(c) hereof.
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"Lender Parties" shall mean the Lenders, the Issuing Bank and the
Agent.
"Letter of Credit" shall mean any letter of credit outstanding
under this Agreement from time to time (and is synonymous with the
term "ICV LOC" defined in the Collateral Agency Agreement).
"Letter of Credit Collateral Account" shall mean the "ICV LOC
Collateral Account" as defined in the Collateral Agency Agreement.
"Letter of Credit Commitment" shall have the meaning given that
term in Section 3.01(a) hereof.
"Letter of Credit Commitment Termination Date" shall have the
meaning given that term in Section 3.01(a) hereof.
"Letter of Credit Exposure" mean the "ICV LOC Exposure" as
defined in the Collateral Agency Agreement.
"Letter of Credit Facing Fee" shall have the meaning given that
term in Section 3.01(e) hereof.
"Letter of Credit Fee" shall have the meaning given that term in
Section 3.01(d) hereof.
"Letter of Credit Fee Rate" shall have the meaning given that
term in Section 3.01(d) hereof.
"Letter of Credit Final Expiration Date" shall have the meaning
given that term in section 3.01(b) hereof.
"Letter of Credit Participating Interest" shall have the meaning
given that term in Section 3.03(a) hereof.
"Letter of Credit Reimbursement Obligation" with respect to a
Letter of Credit means the obligation of the Borrower to reimburse the
Issuing Bank for Letter of Credit Unreimbursed Draws, together with
interest thereon.
"Letter of Credit Undrawn Availability" shall mean the "ICV LOC
Undrawn Availability" as defined in the Collateral Agency Agreement.
"Letter of Credit Unreimbursed Draws" shall mean "ICV LOC
Unreimbursed Draws" as defined in the Collateral Agency Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement
of any nature whatsoever, including but not limited to any conditional
sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Loan Documents" shall mean this Agreement, the Transfer
Supplements, the Letters of Credit and the Shared Security Documents.
"Loan Obligations" shall mean the "ICV Credit Obligations" as
defined in the Collateral Agency Agreement.
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"London Business Day" shall mean a day for dealing in deposits in
Dollars by and among banks in the London interbank market and which is
a Business Day.
"Material Adverse Effect" shall mean: (a) a material adverse
effect on the business, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) a material adverse effect on the ability of the Borrower to
perform or comply with any of the terms and conditions of any Loan
Document, or (c) an adverse effect on the legality, validity, binding
effect, enforceability or admissibility into evidence of any Loan
Document, or the ability of the Collateral Agent or any Lender Party
to enforce any rights or remedies under or in connection with any Loan
Document.
"Multiemployer Plan" shall mean any employee benefit plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the Borrower, any Subsidiary of the Borrower or any
other Controlled Group Member has or had an obligation to contribute.
"Notional Euro-Rate Funding Office" shall have the meaning given
to that term in Section 3.18(a) hereof.
"Obligations" shall have the meaning given that term in the
Collateral Agency Agreement.
"Office," when used in connection with the Agent, shall mean its
office located at One Mellon Bank Center, Pittsburgh, Pennsylvania
15258, or at such other office or offices of the Agent or any branch,
subsidiary or affxliate thereof as may be designated in writing from
time to time by the Agent to the Borrower.
"Option" shall mean the Base Rate Option or the Euro-Rate Option.
"Participants" shall have the meaning set forth in Section
10.14(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established
under Title IV of ERISA or any other governmental agency, department
or instrumentality succeeding to the functions of said corporation.
"Pension-Related Event" shall mean any of the following events or
conditions:
(a) Any action is taken by any Person (i) to terminate, or
which would result in the termination of, a Plan pursuant to the
distress termination provisions of Section 4041(c) of ERISA or
(ii) to have a trustee appointed for a Plan pursuant to Section
4042 of ERISA;
(b) PBGC notifies any Person of its determination that an
event described in Section 4042 of ERISA has occurred with
respect to a Plan, that a Plan should be terminated, or that a
trustee should be appointed for a Plan;
(c) Any Reportable Event occurs with respect to a Plan;
(d) Any action (other than becoming obligated to contribute
to a Multiemployer Plan) occurs or is taken which could result in
the Borrower, any Subsidiary of the Borrower or any Controlled
Group Member becoming subject to liability for a complete or
partial withdrawal by any Person from a Multiemployer Plan
(including, without limitation, seller liability incurred under
Section 4204(a)(2) of ERISA), or the Borrower,
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any Subsidiary of the Borrower or any Controlled Group Member
receives from any Multiemployer Plan a notice or demand for
payment on account of any such alleged or asserted liability;
(e) (i) There occurs any failure to meet the minimum funding
standard under Section 302 of ERISA or Section 412 of the Code
with respect to a Plan, or any tax return is filed showing any
tax payable under Section 4971(a) of the Code with respect to any
such failure, or the Borrower, any Subsidiary of the Borrower or
any Controlled Group Member receives a notice of deficiency from
the Internal Revenue Service with respect to any alleged or
asserted such failure, (ii) any request is made by any Person for
a variance from the minimum funding standard, or an extension of
the period for amortizing unfunded liabilities, with respect to a
Plan, or (iii) the Borrower, any Subsidiary of the Borrower or
any Controlled Group Member fails to pay the PBGC premium with
respect to a Plan when due and it remains unpaid for more than 30
days thereafter; or
(f) There occurs any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code
involving a Plan.
"Permitted Liens" shall have the meaning given that term in
Section 7.02 hereof.
"Permitted Mergers" shall have the meaning given that term in
Section 7.08 hereof.
"Person" shall mean an individual, Corporation, partnership,
trust, limited liability company, unincorporated association, joint
venture, joint-stock company, Governmental Authority or any other
entity.
"Plan" shall mean (a) any employee pension benefit plan within
the meaning of Section 3(2) of ERISA covered by Title IV of ERISA by
reason of Section 4021 of ERISA, of which the Borrower, any Subsidiary
of the Borrower or any Controlled Group Member is or has been within
the preceding five years a "contributing sponsor" within the meaning
of Section 4001(a)(13) of ERISA, or which is or has been within the
preceding five years maintained for employees of the Borrower, any
Subsidiary of the Borrower or any Controlled Group Member and (b) any
employee pension benefit plan within the meaning of Section 3(2) of
ERISA which is subject to Title I of ERISA by reason of Section 4 of
ERISA and is subject to the minimum funding requirements of Section
302 of ERISA or Section 412 of the Code, of which the Borrower, any
Subsidiary of the Borrower or any Controlled Group Member is or has
been within the preceding five years an employer liable for
contributions within the meaning of Section 302(c)(11) of ERISA or
Section 412(c)(11) of the Code, or which is or has been within the
preceding five years maintained for employees of the Borrower, any
Subsidiary of the Borrower or any Controlled Group Member.
"Portion" shall mean the Prime Rate Portion or the Euro-Rate
Portion.
"Postretirement Benefits" of a Person shall mean any benefits,
other than retirement income, provided by such Person to retired
employees, or to their spouses, dependents or beneficiaries,
including, without limitation, group medical insurance or benefits,
or group life insurance or death benefits.
"Postretirement Benefit Obligation" of a Person shall mean that
portion of the actuarial present value of all Postretirement Benefits
expected to be provided by such Person which is attributable to
employees' service rendered to the date of determination (assuming
that such liability accrues ratably over an employee's working life to
the earlier of his date of retirement
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or the date on which the employee would first become eligible for full
benefits), reduced by the fair market value as of the date of
determination of any assets which are segregated from the assets of
such Person and which have been restricted so that they cannot be used
for any purpose other than to provide Postretirement Benefits or to
defray related expenses.
"Potential Default" shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the
Lenders, or any combination of the foregoing, would constitute an
Event of Default.
"Primark Economics" shall mean Primark Decision Economics, Inc.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime
rate, such rate to change automatically effective as of the
effectiveness of each announced change in such prime rate.
"Pro Rata" shall mean from or to each Lender in proportion to
such Lender's applicable Commitment Percentage.
"PSLC" shall mean Primark Storage Leasing Corporation, a Michigan
Corporation.
"Purchasing Lender" shall have the meaning set forth in Section
10.14(c) hereof.
"Register" shall have the meaning set forth in Section 10.14(d)
hereof.
"Regular Monthly Payment Date" shall mean the last Business Day
of each month after the Closing Date.
"Reimbursement Target Date" shall have the meaning given that
term in Section 3.04(a) hereof.
"Regular Quarterly Payment Date" shall mean the last Business Day
of each September, December, March and June after the Closing Date.
"Reportable Event" means (i) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by
a substantial employer from a Plan to which more than one employer
contributes, as referred to in Section 4063(b) Of ERISA, (iii) a
cessation of operations at a facility causing more than twenty percent
(20%) of Plan participants to be separated from employment, as
referred to in Section 4062(e) of ERISA, or (iv) a failure to make a
required installment or other payment with respect to a Plan when due
in accordance with Section 412 of the Code or Section 302 of ERISA
which causes the total unpaid balance of missed installments and
payments (including unpaid interest) to exceed $250,000.
"Required Lenders" shall mean Lenders holding in the aggregate
51% of the Commitment Percentages.
"Responsible Officer" of a Person shall mean its Chairman of the
Board, President, Chief Financial Officer or Treasurer.
"Revolving Credit Agreement" shall mean the Revolving Credit
Agreement dated as of June 29, 1995 by and among the Borrower, the
lenders parties thereto from time to time, the issuing banks referred
to therein, Mellon Bank, N.A. and The First National Bank of Boston,
as Co-Agents, and Mellon Bank, N.A., as Agent, as the same may be
amended, modified, supplemented, renewed or refinanced from time to
time in accordance with this Agreement.
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"Revolving Credit Maturity Date" shall mean the final scheduled
maturity of Indebtedness under the Revolving Credit Agreement.
"Secured Parties" shall have the meaning given that term in the
Collateral Agency Agreement.
"Senior Note Indenture" shall mean the Indenture dated as of
October 18, 1993 between the Borrower and The First National Bank of
Boston, as Trustee, relating to the Senior Notes, as constituted on
June 29, 1995.
"Senior Notes" shall mean the Borrower's 8 3/4% Senior Notes Due
2000.
"Shared Collateral" shall have the meaning given that term in the
Collateral Agency Agreement.
"Shared Collateral Account" shall have the meaning given that
term in the Collateral Agency Agreement.
"Shared Security Documents" shall have the meaning given that
term in the Collateral Agency Agreement.
"Shares of Capital Stock" shall mean shares of capital stock of,
membership interest in, beneficial interest in, or similar ownership
interest in, a Corporation organized under the Laws of any state of
the United States or any other jurisdiction, including, without
limitation, in the ease of Corporations incorporated under the Laws of
England and Wales, equity share capital, ordinary shares and loan
stock.
"Significant Subsidiary" of Borrower shall mean any Subsidiary of
the Borrower (a) which is TASC, Datastream, Disclosure, Incorporated,
or a Subsidiary of any of the foregoing, (b) which, together with its
Subsidiaries, has assets (determined on a consolidated basis) greater
than or equal to 5% of the total assets of the Borrower and its
Subsidiaries (determined on a consolidated basis) as of the end of the
most recently completed fiscal year for which financial information is
available, or (c) which, together with its Subsidiaries, has revenues
(determined on a consolidated basis) greater than or equal to 5% of
the total revenues of the Borrower and its Subsidiaries (determined on
a consolidated basis) for the most recent four fiscal quarters for
which financial information is available.
"Solvent" means:
(a) with respect to any Person organized under the Laws of
any state of the United States or subject to the U.S. Bankruptcy
Code of 1978, as amended, the Uniform Fraudulent Conveyance Act
as enacted by any state, the Uniform Fraudulent Transfer Act as
enacted by any state or any other applicable U.S. Law pertaining
to fraudulent conveyances, fraudulent transfers or preferences at
any time, that at such time (i) the sum of the debts and
liabilities (including, without limitation, contingent
liabilities) of such Person is not greater than all of the assets
of such Person at a fair valuation, (ii) the present fair salable
value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii)
such Person has not incurred, will not incur, does not intend to
incur, and does not believe that it will incur, debts or
liabilities (including, without limitation, contingent
liabilities) beyond such person's ability to pay as such debts
and liabilities mature, (iv) such Person is not engaged in, and
is not about to engage in, a business or a transaction for which
such person's property constitutes or would
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constitute unreasonably small capital (as such term is used in
any Law referred to in the following clause (v)), and (v) such
Person is not otherwise insolvent as defined in, or otherwise in
a condition which could in any circumstances then or subsequently
render any transfer, conveyance, obligation or act then made,
incurred or performed by it avoidable or fraudulent pursuant to,
any Law that may be applicable to such Person pertaining to
bankruptcy, insolvency or creditors' rights (including but not
limited to the Bankruptcy Code of 1978, as amended, and, to the
extent applicable to such Person, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act, or any other
applicable Law pertaining to fraudulent conveyances or fraudulent
transfers or preferences);
(b) With respect to any Person organized under the Laws of
England and Wales or subject to any English insolvency law at any
time, that at such time such Person is not insolvent, or unable
to pay its debts and is not deemed by an English court to be
unable to pay its debts within the meaning of Section 123 of the
United Kingdom Insolvency Act of 1986; and
(c) With respect to any other Person, that at such time such
Person is not insolvent or unable to pay its debts as they come
due as contemplated by any applicable insolvency, bankruptcy or
similar Law.
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is
(a) At least one Business Day in advance in the case of
selection of, conversion to or renewal of the Base Rate Option or
prepayment of any Base Rate Portion; and
(b) At least three London Business Days in advance in the
case of selection of the Euro-Rate Option or prepayment of any
Euro-Rate Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh
time, on the last day permitted for such notice.
"Stock Payment" by any Person shall mean any dividend,
distribution or payment of any nature (whether in cash, securities, or
other property) on account of or in respect of any Shares of the
Capital Stock (or warrants, options or rights therefor) of such
Person, including but not limited to any payment on account of the
purchase, redemption, retirement, defeasance or acquisition of any
Shares of the Capital Stock (or warrants, options or rights therefor)
of such Person, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any
other agreement or instrument.
"Stock Purchase Agreement" means the Stock Purchase Agreement
between the Borrower and VNU dated as of May 26, 1995, as the same may
be amended, modified or supplemented in accordance with this
Agreement.
"Subsidiary" of a Person at any time shall mean any Corporation
of which a majority (by number of shares or number of votes) of the
outstanding Shares of Capital Stock of any class is at such time owned
directly or indirectly, beneficially or of record, by such Person or
one or more Subsidiaries of such Person, and any partnership, trust or
other Person of which a majority of any class of outstanding equity
interest is at such time owned directly or indirectly, beneficially or
of record, by such Person or one or more Subsidiaries of such Person.
For the avoidance of doubt, as used in the preceding sentence
"majority" means more than half (and not precisely half).
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"Swap Agreement" shall have the meaning given that term in the
Collateral Agency Agreement.
"TASC" shall mean TASC, Inc., a Massachusetts Corporation.
"Taxes" shall have the meaning set forth in Section 3.17 hereof.
"Term Loan Agreement" shall mean the Term Loan Agreement dated as
of June 29, 1995 by and among the Borrower, the lenders parties
thereto from time to time, Mellon Bank, N.A. and The First National
Bank of Boston, as Co-Agents, and Mellon Bank, N.A., as Agent, as the
same may be amended, modified or supplemented from time to time in
accordance with this Agreement (but not any refinancing or renewal
thereof).
"Term Loan Maturity Date" shall mean the final scheduled maturity
of Indebtedness under the Term Loan Agreement.
"TIMCO" shall mean Triad International Maintenance Corporation, a
Delaware Corporation.
"TIMCO Bond Order" means the Bond Order adopted by the Piedmont
Triad Airport Authority on October 31, 1989 with respect to the TIMCO
Bonds, as such Bond Order may be amended, supplemented or otherwise
modified from time to time in accordance with this Agreement.
"TIMCO Bonds" means the $13,800,000 original aggregate principal
amount of Special Facility Revenue Bonds (Triad International
Maintenance Corporation Project), Series 1989 issued by the Piedmont
Triad Airport Authority pursuant to the TIMCO Bond Order.
"TIMCO Bonds Letter of Credit" has the meaning given that term in
Section 7.03(k) hereof.
"TIMCO Lease" shall mean the Lease Agreement, dated as of
November 1, 1989, between the Piedmont Triad Airport Authority, as
lessor, and TIMCO, as lessee, covering certain property situate at the
Piedmont Triad International Airport in Guilford County, North
Carolina, as such Lease Agreement may be amended, supplemented or
otherwise modified from time to time in accordance with this
Agreement.
"Transfer Effective Date" shall have the meaning set forth in the
applicable Transfer Supplement.
"Transfer Supplement" shall have the meaning set forth in Section
10.14(c) hereof.
"Treasury Rate" as of any Funding Breakage Date shall mean the
rate per annum determined by the applicable Lender (which
determination shall be conclusive) to be the semiannual equivalent
yield to maturity (expressed as a semiannual equivalent and decimal
and, in the case of United States Treasury bills, converted to a bond
equivalent yield) for United States Treasury securities maturing on
the last day of the corresponding Funding Period and trading in the
secondary market in reasonable volume (or if no such securities mature
on such date, the rate determined by standard securities interpolation
methods as applied to the series of securities maturing as close as
possible to, but earlier than, such date, and the series of such
securities maturing as close as possible to, but later than, such
date).
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"TWN(UK) Entities" shall mean The Weather Network (U.K.) Ltd. and
its Subsidiaries from time to time.
"VNU" means VNU International B.V., a Netherlands corporation.
"Wholly Owned Subsidiary" of any Person means a Corporation that
is a Subsidiary of such Person as to which all of the Shares of
Capital Stock of each class (other than directors' qualifying shares
that are required under applicable law) are at such time beneficially
owned directly or indirectly by such Person (both on the basis of
outstanding shares and on a fully diluted basis).
"Wind-up" or "Winding-up" of a Person shall include the
liquidation, administration, amalgamation, reconstruction,
reorganization or dissolution of such Person and any equivalent or
analogous procedure under the laws of any jurisdiction in which such
Person is incorporated, domiciled, resident or carries on a business
or has assets.
"Worldscope Entities" shall mean Worldscope/Disclosure Partners,
a Connecticut general partnership, Worldscope/Disclosure International
Partners, an partnership organized under the laws of Ireland,
Worldscope/Disclosure Incorporated LLC, a Connecticut limited
liability company, and Worldscope/Disclosure India Pvt. Ltd., a
Corporation organized under the laws of India, and each of their
respective Subsidiaries from time to time.
1.02. CONSTRUCTION. In this Agreement and each other Loan
Document, unless the context otherwise clearly requires, references to the
plural include the singular, the singular the plural and the part the whole;
"or" has the inclusive meaning represented by the phrase "and/or;" and the terms
"property" and "assets" each includes all properties and assets of any kind or
nature, tangible or intangible, real, personal or mixed, now existing or
hereafter acquired. The words "hereof," "herein" and "hereunder" (and similar
terms) in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Loan Document. The words
"includes" and "including" (and similar terms) in this Agreement or any other
Loan Document mean "includes without limitation" and "including without
limitation," respectively (and similarly for similar terms). References in this
Agreement or any other Loan Document to "determination" (and similar terms) by
the Agent or by any Lender include good faith estimates by the Agent or by such
Lender (in the case of quantitative determinations) and good faith beliefs by
the Agent or by such Lender (in the case of qualitative determinations). No
doctrine of construction of ambiguities in agreements or instruments against the
interests of the party controlling the drafting thereof shall apply to this
Agreement or any other Loan Document. The section and other headings contained
in this Agreement and in each other Loan Document, and any tables of contents
contained herein or therein, are for reference purposes only and shall not
affect the construction or interpretation of this Agreement or such other Loan
Document in any respect. Section, subsection, annex, exhibit and schedule
references in this Agreement and in each other Loan Document are to this
Agreement or such other Loan Document, as the case may be, unless otherwise
specified. Each annex, exhibit and schedule to this Agreement or any other Loan
Document constitutes part of this Agreement or such Loan Document, as the case
may be. Each of the covenants, terms and provisions of this Agreement and the
other Loan Documents is intended to have, and shall have, independent effect,
and compliance with any particular covenant, term or provision shall not
constitute compliance with any other covenant, term or provision.
1.03. ACCOUNTING PRINCIPLES.
(a) GAAP. As used herein, "GAAP" shall mean generally accepted
accounting principles in the United States, applied on a basis consistent with
the principles used in preparing the
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Borrower's financial statements as of December 31, 1994, and for the fiscal year
then ended, as referred to in Section 4.06 hereof.
(b) ACCOUNTING AND FINANCIAL DETERMINATIONS, ETC. Except as
otherwise provided in this Agreement, all computations and determinations as to
accounting or financial matters shall be made, and all financial statements to
be delivered pusuant to this Agreement shall be prepared, in accordance with
GAAP (including prinicples of consolidation where appropriate), and all
accounting or financial terms shall have the meanings ascribed to such terms
by GAAP.
(c) CHANGES. If and to the extent that the financial statements
generally prepared by the Borrower apply accounting principles other than GAAP,
all financial statements referred to in this Agreement or any other Loan
Document shall be delivered in duplicate, one set based on the accounting
principles then generally applied by the Borrower and one set based on GAAP.
To the extent this Agreement or such other Loan Document requires financial
statements to be accompanied by an opinion of independent accountants, each
such set of financial statements shall be accompanied by such an opinion.
1.04 CERTAIN TERMINOLOGY AND PROVISIONS.
(a) This Agreement uses the defined terms "Lender," "Lender
Indemnified Parties," "Lender Parties," "Loan Documents" and "Loan
Obligations," even though extensions of credit to the Borrower hereunder take
the form of issuance of Letters of Credit only, rather than loans. Such defined
terms are used as a convenience to facilitate comparison of this Agreement
with the Revolving Credit Agreement and the Term Loan Agreement. Such defined
terms shall have the respective meanings given them in this Agreement, and the
use of such defined terms shall not be construed to imply that any loans
are contemplated under this Agreement.
(b) The parties acknowledge that this Agreement contains various
provisions relating to PSLC, even though the Borrower has, before the date
hereof, disposed of all of the Shares of Capital Stock of PSLC. Such provisions
are not surplusage. In addition, notwithstanding any other provision of this
Agreement, the Borrower shall not, directly or indirectly, acquire ownership
(beneficially or of record) of any Shares of Capital Stock of PSLC after the
date thereof.
[End of Annex A]
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<PAGE> 1
Exhibit 99.1
Jim Flanagan, (617) 487-2131
PRIMARK CORPORATION ACQUIRES LONDON BASED ICV LIMITED
LEADING PROVIDER OF REAL-TIME U.K. EQUITY INFORMATION IS LATEST TO
JOIN GROWING PRIMARK INFORMATION SERVICES ORGANIZATION
WALTHAM, MA, October 24, 1996 -- Primark Corporation (NYSE/PSE: PMK) announced
today that it has acquired ICV Limited, the leading provider of U.K. real-time
quote information and news within the United Kingdom. The purchase price
consisted of 2.2 million shares of Primark common stock plus approximately $37.3
million in cash and $8.3 million in notes.
ICV, a rapidly growing company, supplies a variety of real-time data and news
products to equity traders and investors in London and throughout the United
Kingdom. Since acquiring the London Stock Exchange "Topic" customer base in
1993, ICV has grown to the number one market position in domestic U.K. equities,
serving over 9,000 terminals. The latest ICV product-- Topic3 Trader-- provides
full electronic linkage between investment houses and the London Stock Exchange.
"The acquisition of ICV represents Primark's entry into the real-time data and
news business and gives us a good start toward building a global equities
product. At the same time, ICV will become a channel to provide all of Primark's
financial information products to equity traders," said Joseph E. Kasputys,
Primark's chairman and CEO. "Our other financial information companies can also
improve their products by offering real-time data and news with the historical
financial information and software they currently supply," he added.
Christopher Sharples and David Taylor, the chairman and CEO of ICV Limited,
respectively, will have the additional responsibility for the corresponding
posts at Datastream, also based in London. "In the U.K. alone, ICV and
Datastream have combined revenues of over $100 million annually," said Joseph E.
Kasputys. Having these two operations within Primark under an entrepreneurial
and experienced U.K. management team, enables us to effectively utilize their
capabilities to deliver integrated real-time and historical financial
information products.
<PAGE> 2
Following a transition period, Ira Herenstein, the current Datastream managing
director, will move to a new Primark position and shift his focus to the
effective positioning and marketing of Primark's financial information
capabilities in the United States. "After Primark acquired Datastream, Ira did
an outstanding job of establishing its presence in the United States," said
Kasputys. "Since the middle of last year, he has managed all of Datastream,
establishing the foundation for the new initiatives that lie ahead."
"We viewed Primark as a unique company, with many leading financial information
businesses, but with limited real-time data. Working together we can provide the
full spectrum of financial products to equity traders, analysts and investors,"
said David Taylor, ICV's chief executive officer. "ICV has successfully
integrated data, news, technology and user focused software to become the
leading firm in U.K. equity information. Primark's vision and business strategy
of combining data content and superior technology as a strategic strength seemed
to be a natural for us," he added.
Primark Corporation, headquartered in Waltham, Massachusetts, is a $600 million
global provider of information technology solutions, combining advanced software
and applications with some of the most accurate, timely and comprehensive
databases in the world. The company, through its subsidiaries, targets the
data-intensive financial, government, weather and communications/computer
information markets.
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