FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1997
Commission file number 1-11250
GTECH Holdings Corporation
(Exact name of registrant as specified in its charter)
Delaware 05-0450121
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
55 Technology Way, West Greenwich, Rhode Island 02817
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (401) 392-1000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
At July 5, 1997 there were 42,032,420 shares of the registrant's Common Stock
outstanding.
<PAGE>
INDEX
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statement of Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBITS
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
(Unaudited)
May 31, February 22,
1997 1997
------------ ------------
(In thousands, except
share amounts)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ................................................ $ 15,139 $ 11,985
Trade accounts receivable ................................................ 97,978 110,707
Sales-type lease receivables ............................................. 11,142 15,231
Inventories .............................................................. 39,197 35,326
Deferred income taxes .................................................... 20,237 20,237
Other current assets ..................................................... 12,540 9,743
------------ ------------
TOTAL CURRENT ASSETS ................................................ 196,233 203,229
SYSTEMS, EQUIPMENT AND OTHER ASSETS RELATING TO CONTRACTS ...................... 1,155,851 1,063,651
Less: Accumulated Depreciation ................................................. (598,188) (561,350)
------------ ------------
557,663 502,301
GOODWILL, net .................................................................. 112,251 112,853
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES ....................... 62,646 56,693
OTHER ASSETS ................................................................... 81,196 81,465
------------ ------------
$ 1,009,989 $ 956,541
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings .................................................... $ 3,638 $ 1,395
Accounts payable ......................................................... 43,721 53,944
Accrued expenses ......................................................... 58,451 52,625
Advance payments from customers .......................................... 6,590 10,534
Employee compensation .................................................... 15,894 27,991
Income taxes payable ..................................................... 20,757 13,777
Current portion of long-term debt ........................................ 5,863 6,049
------------ ------------
TOTAL CURRENT LIABILITIES ........................................... 154,914 166,315
LONG-TERM DEBT, less current portion ........................................... 445,986 382,499
OTHER LIABILITIES .............................................................. 22,886 25,907
DEFERRED INCOME TAXES .......................................................... 23,687 23,687
SHAREHOLDERS' EQUITY
Preferred Stock, par value $.01 per share--20,000,000 shares authorized,
none issued .......................................................... --- ---
Common Stock, par value $.01 per share--150,000,000 shares authorized,
43,867,651 and 43,845,651 shares issued, 42,025,170 and 42,490,770
shares outstanding at May 31, 1997 and February 22, 1997, respectively 438 438
Additional paid-in capital ............................................... 170,162 169,705
Equity carryover basis adjustment ........................................ (7,008) (7,008)
Cumulative translation adjustment ........................................ 1,599 1,472
Retained earnings ........................................................ 248,061 228,741
------------ ------------
413,252 393,348
Less cost of 1,842,481 and 1,354,881 shares in treasury at May 31, 1997
and February 22, 1997, respectively .................................... (50,736) (35,215)
------------ ------------
362,516 358,133
------------ ------------
$ 1,009,989 $ 956,541
============ ============
See notes to consolidated financial statements
</TABLE>
<PAGE>
CONSOLIDATED INCOME STATEMENTS
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended (1)
--------------------------
May 31, May 25,
1997 1996
----------- -----------
(Dollars in thousands,
except per share amounts)
<S> <C> <C>
Revenues:
Services ................................................................. $ 225,930 $ 194,986
Sales of products ........................................................ 19,241 16,187
----------- -----------
245,171 211,173
Costs and expenses:
Costs of services ........................................................ 156,715 131,715
Costs of sales ........................................................... 11,328 9,154
----------- -----------
168,043 140,869
----------- -----------
Gross profit ................................................................... 77,128 70,304
Selling, general and administrative ............................................ 35,914 29,952
Research and development ...................................................... 8,175 6,630
----------- -----------
Operating income ............................................................... 33,039 33,722
Other income (expenses):
Interest income .......................................................... 1,753 550
Equity in earnings of unconsolidated affiliates .......................... 3,714 3,217
Other income ............................................................. 370 46
Interest expense ......................................................... (6,676) (6,151)
----------- -----------
Income before income taxes ..................................................... 32,200 31,384
Income taxes ................................................................... (12,880) (13,181)
----------- -----------
Net income ..................................................................... $ 19,320 $ 18,203
=========== ===========
Earnings per common share ...................................................... $ .46 $ .42
=========== ===========
Weighted average common shares outstanding ..................................... 42,078,000 43,086,000
=========== ===========
(1) Fourteen weeks in the quarter ended May 31, 1997 and 13 weeks in the quarter
ended May 25, 1996
See notes to consolidated financial statements
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY-(Unaudited)
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Common Stock Additional
------------------------ Paid-in Retained Treasury
Shares Amount Capital Other Earnings Stock Total
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at February 22, 1997 .... 43,845,651 $ 438 $ 169,705 $ (5,536) $ 228,741 $ (35,215) $ 358,133
Purchase of 487,600 shares of
common stock ................. --- --- --- --- --- (15,521) (15,521)
Common stock issued under stock
award plans .................. 22,000 --- 457 --- --- --- 457
Net income ..................... --- --- --- --- 19,320 --- 19,320
Foreign currency translation .... --- --- --- 127 --- --- 127
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at May 31, 1997 ......... 43,867,651 $ 438 $ 170,162 $ (5,409) $ 248,061 $ (50,736) $ 362,516
========== ========== ========== ========== ========== ========== ==========
See notes to consolidated financial statements
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended (1)
--------------------------
May 31, May 25,
1997 1996
----------- -----------
(Dollars in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income ..................................................................... $ 19,320 $ 18,203
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization ............................................ 48,759 39,553
Equity in earnings of unconsolidated affiliates .......................... (3,716) (3,217)
Other .................................................................... 3,764 849
Changes in operating assets and liabilities:
Trade accounts receivable ............................................. 12,765 (3,600)
Inventories ........................................................... (3,878) (3,386)
Other assets and liabilities .......................................... (15,310) 6,292
Other assets and liabilities of discontinued operations ............... (1,280) (1,907)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES ...................................... 60,424 52,787
INVESTING ACTIVITIES
Purchases of systems, equipment and other assets relating to contracts ......... (100,043) (40,843)
Purchases of property plant and equipment ...................................... (3,186) (2,714)
Cash received from affiliates .................................................. 827 ---
Investments in and advances to affiliates ...................................... (5,058) (1,385)
----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES ......................................... (107,460) (44,942)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt ....................................... 393,400 ---
Net borrowings under short-term borrowing arrangements ......................... 2,244 ---
Principal payments on long-term debt ........................................... (329,901) (8,496)
Purchases of treasury stock .................................................... (15,521) ---
Other .......................................................................... 122 349
----------- -----------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES ........................... 50,344 (8,147)
Effect of exchange rate changes on cash ........................................ (154) 126
----------- -----------
INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS ................................. 3,154 (176)
Cash and cash equivalents at beginning of period ............................... 11,985 8,519
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD...................................... $ 15,139 $ 8,343
=========== ===========
(1) Fourteen weeks in the quarter ended May 31, 1997 and 13 weeks in the quarter
ended May 25, 1996
See notes to consolidated financial statements
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of GTECH Holdings
Corporation (the "Company"), the parent of GTECH Corporation ("GTECH"), have
been prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended May 31, 1997 are
not necessarily indicative of the results that may be expected for the full 1998
fiscal year ending February 28, 1998. The balance sheet at February 22, 1997 has
been derived from the audited financial statements at that date. For further
information refer to the consolidated financial statements and footnotes thereto
included in GTECH Holdings Corporation's fiscal 1997 Annual Report on Form 10-K.
The Company operates on a 52 to 53 week fiscal year ending on the last Saturday
in February. Fiscal 1998 is a 53 week year. The Company has included the extra
week in its first quarter ended May 31, 1997. Accordingly, there are fourteen
weeks in the quarter ended May 31, 1997, versus thirteen weeks in the quarter
ended May 25, 1996.
NOTE B--INVENTORIES
May 31, February 22,
1997 1997
----------- -----------
(Dollars in thousands)
Inventories consist of:
Purchased components $ 11,851 $ 11,483
Finished subassemblies 1,438 1,993
Work-in-process 16,883 16,106
Finished goods 9,025 5,744
----------- -----------
$ 39,197 $ 35,326
=========== ===========
NOTE C--LONG-TERM DEBT May 31, February 22,
1997 1997
----------- -----------
(Dollars in thousands)
Long-term debt consists of:
Revolving credit facility $ 137,000 $ 367,000
7.75% Series A Senior Notes due 2004 150,000 ---
7.87% Series B Senior Notes due 2007 150,000 ---
Other 14,849 21,548
----------- -----------
451,849 388,548
Less current maturities 5,863 6,049
----------- -----------
$ 445,986 $ 382,499
=========== ===========
The Company has an unsecured revolving credit facility of $500 million expiring
on September 15, 1999 (the "Credit Facility"). At May 31, 1997, the weighted
average interest rate for all outstanding borrowings under the Credit Facility
was 5.91%. On May 29, 1997, the Company issued in a private placement, $150
million of 7.75% Series A Senior Notes due 2004 and $150 million of 7.87% Series
B Senior Notes due 2007. Interest on each issue is payable semiannually in
arrears. The proceeds from the sale of these notes were used to pay down the
Credit Facility. On June 18, 1997, the Company amended and restated its Credit
Facility to extend the maturity date to June 2002 and to decrease the commitment
amount from $500 million to $400 million.
NOTE D--INCOME TAXES
The Company's effective income tax rate was greater than the statutory rate due
primarily to state income taxes and certain expenses that are not deductible for
income tax purposes.
<PAGE>
NOTE--E COMMITMENTS AND CONTINGENCIES
See Legal Proceedings in Part II Item 1 and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Part I, Item 2
herein.
NOTE F--EARNINGS PER COMMON SHARE
Earnings per common share are calculated by dividing net income by weighted
average common shares outstanding during the period. The exercise of outstanding
stock options would not result in a material dilution of earnings per common
share.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share", that is required to be adopted by the Company in the
fourth quarter of fiscal 1998. At that time, the Company will be required to
change the method currently used to calculate earnings per share and to restate
all prior periods presented. Under the new requirements for calculating basic
earnings per share, the dilutive effect of stock options will be excluded. Had
the provisions of Statement No. 128 been used to calculate earnings per share
for the first quarter of fiscal 1998 and 1997, earnings per share would not have
differed materially from the reported amounts.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this section and elsewhere in this report are
forward looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934. Such statements
include, without limitation, statements relating to (i) the future prospects for
and stability of the lottery industry and other businesses in which the Company
is or expects to be engaged, (ii) the future operating and financial performance
of the Company, (iii) the ability of the Company to retain existing business and
to obtain and retain new business, and (iv) the results and effects of legal
proceedings and investigations. Such forward looking statements reflect
management's assessment based on information currently available, but are not
guarantees and are subject to risks and uncertainties which could cause actual
results to differ materially from those contemplated in the forward looking
statements. These risks and uncertainties include but are not limited to those
set forth herein and in the Company's press releases and filings with the
Securities and Exchange Commission.
General
The Company has derived substantially all of its revenues from the rendering of
services and the sale or supply of computerized on-line lottery systems and
components to government-authorized lotteries. Service revenues have been
derived primarily from service contracts, that are typically of at least five
years' duration, and are generally based upon a percentage of a lottery's gross
on-line lottery sales. Theses percentages typically fall within a range of 1.5%
to 5.0%. Product sales revenues have been derived primarily from the
installation of new on-line lottery systems and sales of lottery terminals and
equipment in connection with the expansion of existing lottery systems. The size
and timing of these transactions have resulted in variability in product sales
revenues from period to period.
The Company also has taken steps to broaden its offerings of high volume
transaction processing services outside of its core business of providing
on-line lottery services. The Company's Transactive subsidiary ("Transactive")
currently provides benefits delivery systems and services on behalf of
government authorities. The Company's Dreamport subsidiary ("Dreamport") pursues
gaming opportunities other than on-line lottery. In addition, the Company's
WorldServ subsidiary ("WorldServ") provides network communications services to
private sector clientele.
The Company's business is highly regulated, and the competition to secure new
government contracts is often intense. Awards of contracts to the Company are,
from time to time, challenged by competitors. Further, there have been and
continue to be investigations of various types, including grand jury
investigations, conducted by governmental authorities into possible
improprieties and wrongdoing in connection with efforts to obtain and/or the
awarding of lottery contracts and related matters. Although the Company does not
believe that it has engaged in any wrongdoing in connection with these matters,
certain investigations that are conducted largely in secret are still underway.
Accordingly, the Company lacks sufficient information to determine with
certainty their ultimate scope and whether the government authorities will
assert claims resulting from these or other investigations that could implicate
or reflect adversely upon the Company. Because the Company's reputation for
integrity is an important factor in its business dealings with lottery and other
government agencies, if government authorities were to make an allegation of, or
if there were to be a finding of, improper conduct on the part of or
attributable to the Company in any matter, such an allegation or finding could
have a material adverse effect on the Company's business, including its ability
to retain existing contracts and to obtain new or renewal contracts. In
addition, continuing adverse publicity resulting from these investigations and
related matters could have such a material adverse effect. See "Legal
Proceedings" in Part II, Item 1 herein, Part I, Item 1 - "Factors Affecting
Future Performance - Maintenance of Business Relationships and Certain Legal
Matters" and Part I, Item 3 - "Legal Proceedings" of the Company's fiscal 1997
annual report on Form 10-K and see Note H to the Consolidated Financial
Statements in the Company's fiscal 1997 annual report on Form 10-K for further
information concerning these matters and other contingencies.
Results of Operations
The Company operates on a 52 to 53 week fiscal year ending on the last Saturday
in February. Fiscal 1998 is a 53 week year. The Company has included the extra
week in its first quarter ended May 31, 1997. Accordingly, there are fourteen
weeks in the quarter ended May 31, 1997, versus thirteen weeks in the quarter
ended May 25, 1996.
Revenues for the first quarter of fiscal 1998 were $245.2 million, representing
a $34.0 million, or 16.1%, increase over revenues of $211.2 million in the first
quarter of fiscal 1997.
<PAGE>
Service revenues in the fiscal 1998 first quarter were $225.9 million,
representing a $30.9 million, or 15.9%, increase over the $195.0 million of
service revenues in the first quarter of fiscal 1997. This increase resulted
primarily from higher revenues of $22.5 million from the Company's existing
lottery customer base and $8.2 million of service revenues from new on-line
lottery systems operated by the Company that commenced operations since the
first quarter of fiscal 1997, including service revenues from the on-line
lottery system that the Company implemented for Caixa Economica Federal
("Caixa"), Latin America's largest financial institution that runs Brazil's
National Lottery.
Product sales in the first quarter of fiscal 1998 were $19.3 million,
representing a $3.1 million, or 18.9%, increase over the $16.2 million of
product sales in the first quarter of fiscal 1997. This increase resulted
primarily from higher revenues from central lottery system and instant ticket
validation system sales in the first quarter of fiscal 1998 than in the first
quarter of fiscal 1997, partially offset by lower revenue from terminal sales.
The Company sold one new central system and one new instant ticket validation
system in both the first quarter of fiscal 1998 and 1997. The Company sold
approximately 1,100 lottery terminals in both the first quarter of fiscal 1998
and 1997.
Gross margins on service revenues were 30.6% in the fiscal 1998 first quarter
compared to 32.4% in the first quarter of fiscal 1997. This decline was due
primarily to lower margins experienced on new lottery contracts in the early
stages of lottery operations, partially offset by improved margins on certain
existing lottery contracts.
Gross margins on product sales fluctuate depending primarily on the mix, volume
and timing of product sales contracts. Gross margins on product sales were 41.1%
in the first quarter of fiscal 1998 compared to 43.4% in the first quarter of
fiscal 1997. This decline was reflective of product mix.
Selling, general and administrative expenses in the first quarter of fiscal 1998
were $35.9 million, representing a $5.9 million, or 19.9%, increase from the
$30.0 million incurred in the first quarter of fiscal 1997. This increase was
primarily attributable to higher legal costs relating in large part to
investigations and legal proceedings along with higher administrative, selling
and government relations costs that were necessary to support expanded
operations. As a percentage of revenues, selling, general and administrative
expenses were 14.6% and 14.2% during the first quarter of fiscal 1998 and 1997,
respectively.
Research and development expenses in the first quarter of fiscal 1998 were $8.2
million, representing a $1.6 million, or 23.3%, increase over research and
development expenses of $6.6 million in the first quarter of fiscal 1997. This
increase reflects increased development activity for standard software product
offerings along with new lottery game design. As a percentage of revenues,
research and development expenses were 3.3% and 3.1% during the first quarter of
fiscal 1998 and 1997, respectively.
Interest income in the first quarter of fiscal 1998 was $1.8 million, an
increase of $1.2 million over interest income of $.6 million earned during the
first quarter of fiscal 1997. This increase reflects higher dollar denominated
cash balances in Brazil to fund the on-line lottery system implementation
underway for the Caixa.
Equity in earnings of unconsolidated affiliates in the first quarter of fiscal
1998 was $3.7 million, an increase of $.5 million over the $3.2 million earned
during the first quarter of fiscal 1997. This increase was due primarily to
higher equity income from Dreamport investments.
The Company's effective income tax rate decreased from 42% in the first quarter
of fiscal 1997 to 40% in the first quarter of fiscal 1998 due principally to a
reduction in nondeductible expenditures and the restructuring of financing of
the Company's investments in Brazil. The Company's effective income tax rate was
greater than the statutory rate due primarily to state income taxes and certain
expenses that are not deductible for income tax purposes.
The Texas Lottery Commission directed its staff to prepare and circulate by July
31, 1997 a request for proposals with respect to the entire Texas Lottery
contract currently held by GTECH, as well as requests for proposals for various
portions of that contract. The Chairman of the Commission has declared that this
action is not and should not be deemed an exercise by the Texas Lottery of the
termination provision of GTECH's contract, without cause, upon 30 days prior
notice. Nevertheless, the Texas Lottery Commission has further asserted that it
has no obligation to deal with GTECH in good faith with respect to the
termination of its contract with the Company, a position with which GTECH
strongly disagrees. (See Legal Proceedings in Part II, Item 1.) Pursuant to the
amendment to GTECH's contract executed in April 1996 which extended the term of
the contract for five years, the Company is making major capital investments of
more than $20.0 million and has incurred significant related expenses. A
substantial portion of such investment, along with a substantial portion of the
Company's existing investment in its Texas lottery contract ($42.6 million at
May 31, 1997) may be required to be written off should the Company lose all or a
portion of the Texas lottery contract. The Company is pursuing all available
options to ensure that its contract, amended to extend through August 2002 and
negotiated in good faith with the Texas Lottery, is honored. In fiscal 1997,
1996 and 1995, the aggregate revenues from the State of Texas (including lottery
and electronic benefits transfer) represented 18.6%, 19.6% and 16.1%,
respectively, of the Company's consolidated revenues. No other customer
accounted for as much 10% of the Company's consolidated revenues in such
periods, although the Company's lottery contracts in a number of jurisdictions,
including California, Georgia, New York and the United Kingdom, are important
sources of revenues and earnings for the Company. Reference is also made to
Items 1 and 3 of, and Note H of Notes to Consolidated Financial Statements
included in, the Company's fiscal 1997 Annual Report on Form 10-K concerning
various legal proceedings involving the Company.
Changes in Financial Position, Liquidity and Capital Resources
During the first quarter of fiscal 1998, the Company generated $60.4 million of
cash from operations. This cash, along with $65.7 million of net borrowings was
used primarily to fund the purchase of $100.0 million of systems, equipment and
other assets relating to contracts and the repurchase of $15.5 million of the
Company' common stock.
The cost of systems, equipment and other assets relating to contracts increased
by $92.2 million from $1,063.7 million at February 22, 1997 to $1,155.9 million
at May 31, 1997. This increase reflects the installation of a portion of the new
lottery system for the Caixa and the continuing installation of new lottery
systems for lotteries in Wisconsin, Kansas, Oregon and Ohio.
Trade accounts receivable decreased by $12.7 million from $110.7 million at
February 22, 1997 to $98.0 million at May 31, 1997, due primarily to scheduled
collections of accounts receivable relating to the high level of product sales
recorded in the fourth quarter of fiscal 1997.
Accounts payable decreased by $10.2 million from $53.9 million at February 22,
1997 to $43.7 million at May 31, 1997, due primarily to the timing of payments
relating to ongoing lottery system installations.
Accrued employee compensation decreased by $12.1 million from $28.0 million at
February 22, 1997 to $15.9 million at May 31, 1997, due primarily to the payment
of fiscal 1997 management bonuses.
The Company's business is capital-intensive. Although it is not possible to
estimate precisely, due to the nature of the business, the Company currently
anticipates that the level of capital expenditures for systems, equipment and
other assets relating to contracts required during fiscal 1998 will be in a
range of $300.0 million to $350.0 million. Approximately $120.0 million of such
spending will be required to implement the on-line lottery system for the Caixa.
In addition, the Company currently anticipates that the level of capital
expenditures for property, plant and equipment in fiscal 1998 will approximate
$19.3 million. The principal sources of liquidity for the Company are expected
to be cash generated from operations and borrowings under the Company's Credit
Facility. On July 5, 1997 there was approximately $138.4 million of borrowings
outstanding and an additional $261.6 million available for borrowing under the
Credit Facility. The Company currently expects that its cash flow from
operations and available borrowings under its Credit Facility, together with
other sources of capital believed to be available, will be sufficient to permit
it to meet its anticipated working capital and ordinary capital expenditure
needs, to service its debt obligations and to permit it to fund anticipated
internal growth. On May 29, 1997 the Company issued, in a private placement,
$150 million of 7.75% Series A Senior Notes due 2004 and $150 million of 7.87%
Series B Senior Notes due 2007. The proceeds from the sale of these notes were
used to pay down the Credit Facility.
On June 18, 1997, the Company announced that it had signed a letter of intent to
acquire, NTN Communications, Inc. ("NTN") for cash consideration of
approximately $140 million. In connection with the letter of intent, the
Company loaned NTN $3.7 million in order to enable NTN to fulfill its obligation
to Symphony IWN Investment LLC. The Company currently intends to finance this
acquisition with its existing Credit Facility.
Inflation, Interest Rates and Foreign Exchange Fluctuation
The impact of inflation on the Company's operations has not been significant to
date. While the Company believes that its business is not highly sensitive to
inflation, there can be no assurance that a high rate of inflation in the future
would not have an adverse effect on the Company's operations.
The Company uses various techniques to reduce the risk associated with future
increases in interest rates on its floating rate long-term debt including
utilization of interest rate hedging instruments. In January 1996, the Company
entered into three interest rate swaps with an aggregate notional amount of
$125.0 million that provided interest rate protection over the period January
26, 1996 to April 28, 1997. The swaps effectively entitled the Company to
receive payments from the financial institutions that were counterparties to the
swaps should the three-month London Interbank Offered Rates ("LIBOR") exceed
approximately 5.05%. On April 28, 1997, the Company received approximately $.2
million in connection with the settlement of these swaps. In addition, as
discussed earlier, the Company issued seven and ten year fixed rate debt on May
29, 1997, in a private placement.
The Company attempts to manage its foreign exchange risk by securing payment
from its customers in U.S. dollars, by sharing risk with its customers, by
utilizing foreign currency borrowings, by leading and lagging receipts and
payments and by entering into foreign currency exchange contracts. In addition,
a significant portion of the costs attributable to the Company's foreign
currency revenues are incurred in the local currencies.
<PAGE>
The Company, from time to time, enters into foreign currency exchange contracts
to hedge the risk associated with certain firm sales commitments, anticipated
revenue streams and certain assets and liabilities denominated in foreign
currencies. The Company does not engage in currency speculation. Gains and
losses on contracts that hedge specific foreign currency commitments are
deferred and accounted for as part of the transaction being hedged. Contracts
used to hedge anticipated revenue streams and certain assets and liabilities are
marked to market, and the resulting transaction gain or loss is included in the
determination of net income. As of July 5, 1997, the Company had approximately
$81.7 million of outstanding foreign currency exchange contracts to purchase
foreign currencies (primarily Japanese Yen) and approximately $134.4 million of
outstanding foreign currency exchange contracts to sell foreign currencies
(primarily Japanese Yen and Pounds Sterling).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
As widely reported in the Texas media and as previously reported, the Texas
Lottery Commission is inquiring of GTECH regarding its business relationships
relating to the Texas Lottery and GTECH has cooperated with that inquiry. The
Texas Lottery is also inquiring about several other matters which could have
material negative implications with respect to GTECH's business in Texas,
including the following:
- GTECH's consulting contracts with Ben Barnes, former Lieutenant Governor
of Texas, which contracts were entered into in 1991 and were bought out
and terminated by the Company in February 1997;
- GTECH's retention in October 1992 of Michael Moeller, a friend of Nora
Linares, the then Executive Director of the Texas Lottery, as a
consultant regarding New Mexico;
- Mr. Barnes' gift in December 1992 of a $100 paperweight to then Governor
of Texas, Ann Richards; and
- Any other instances in which GTECH entertained or gave a gift to a state
official (without reimbursement).
In addition, the Texas State Auditor has issued to GTECH a Request for
Information, and, in response, GTECH has provided information and documents to
the Texas State Auditor.
As previously reported, the Texas Lottery Commission directed its staff to
prepare and circulate by July 31, 1997 a request for proposals with respect to
the entire Texas Lottery contract currently held by GTECH, as well as requests
for proposals for various portions of that contract. However, the Chairman of
the Commission has declared that this action is not and should not be deemed an
exercise by the Texas Lottery of the termination provision of GTECH's contract,
without cause, upon 30 days prior notice. The Texas Lottery Commission has
further asserted that it has no obligation to deal with GTECH in good faith with
respect to the termination of its contract with the Company, a position with
which GTECH strongly disagrees. Pursuant to the amendment to GTECH's contract
executed in April 1996 which extended the term of the contract for five years,
the Company is making major capital investments of more than $20 million and has
incurred significant related expenses (See Part I, Item 2, Management's
Discussion and Analysis of Financial Condition and Results of Operations). The
Texas Lottery contract is GTECH's largest, accounting for approximately 16% of
GTECH's total revenues in fiscal 1997 and a significant percentage of operating
income. GTECH is pursuing all available options to ensure that its contract,
amended to extend through August 2002 and negotiated in good faith with the
Texas Lottery, is honored.
As previously reported, in April 1997, Nora Linares, the former Executive
Director of the Texas Lottery Commission, filed suit against GTECH and James
Hosker, the Company's Texas Site Director (captioned Nora Alicia Linares v.
GTECH Corporation and James Hosker, et al.), in the District Court of Travis
County, Texas (261st Judicial District). Ms. Linares, who had been terminated as
Executive Director of the Texas Lottery Commission in January 1997, alleges that
GTECH, in violation of Texas State Law and its lottery contract with the State
of Texas, tortiously interfered with her employment relationship with her former
employer by, among other things, hiring Michael Moeller as a consultant, and
intentionally inflicted emotional distress upon her. Ms. Linares seeks both a
declaratory judgment setting forth the rights, duties and responsibilities which
GTECH owes to public officials such as Ms. Linares, as well as actual and
exemplary damages from GTECH. GTECH believes that this lawsuit is without merit
and is defending itself (and Mr. Hosker) vigorously. On May 2, 1997, GTECH filed
a notice of removal in the Austin Division of the United States District Court
for the Western District of Texas, seeking to have the case transferred from the
state court to the federal court, and on June 2, 1997 Ms. Linares filed a motion
to remand, opposing GTECH's attempt to transfer the case to federal court from
state court.
As previously reported, in September 1996, Jack M. Janis and Linda Janis, both
individually and on behalf of a class of persons similarly situated, filed suit
against the California State Lottery Commission, Southland Corporation and the
Company in the Supreme Court of the State of California (County of Los Angeles).
This suit alleges, in light of the June 1996 decision of the California Supreme
Court, Western Telcon, Inc. et. al. v. California State Lottery (which held that
the California State Lottery's keno game as then structured was not a lottery
game and therefore was not authorized by California lottery law), that the
defendants were unjustly enriched and were guilty of unfair business practices
and misleading advertising in connection with the sale of keno tickets from
January 1, 1992 through suspension of the keno game in June 1996. The suit seeks
restitution of all amounts realized by the defendants through the sale of keno
tickets less funds paid to public schools pursuant to relevant California law
and proceeds paid to holders of winning keno tickets, together with costs,
disbursements and prejudgment interest. The Company has responded with a
vigorous defense. In February 1997, the Court granted the Company summary
judgment but granted the plaintiffs limited leave to amend their complaint
alleging alternative theories of recovery. The plaintiffs filed an amended
complaint in March 1997. In June 1997, the Court granted the Company's motion to
strike and for summary judgment as to the amended complaint, this time without
leave to amend. The Company believes that these claims are without merit and
intends to continue to defend itself vigorously in any appeal of these
proceedings.
For information respecting certain other legal proceedings, refer to Items 1 and
3 of, and Note H to Consolidated Financial Statements included in, the Company's
fiscal 1997 Annual Report on Form 10-K and to Item 2, Management's Discussion
and Analysis of Financial Condition and Results of Operations, of this report.
Item 2. CHANGES IN SECURITIES
(c) During the quarter, 3,500 shares of the Company's unregistered common stock
vested under stock award plans. Pursuant to the terms of these plans the shares
were issued with no cash consideration to the Company. Registration of such
shares was not required because the transaction did not constitute a "sale"
under Section 2 (3) of the Securities Act of 1933 or, alternatively, the
transaction was exempt pursuant to the private offering provisions of the Act
and the rules thereunder.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - The exhibits to this report are as follows:
4.1 Amended and Restated Credit Agreement, dated as of June 18, 1997,
among GTECH, certain lenders and Bank of Montreal, Banque
Paribas, Fleet National Bank, The Bank of Nova Scotia and
BankBoston, N.A., as Co-Agents; The Bank of New York, as
Documentation Agent and NationsBank, as Administrative Agent
4.2 Note and Guarantee Agreement, dated as of May 15, 1997, among
GTECH, the Company and certain financial institutions
10.1 1994 Stock Option Plan of the Company (as amended and restated
through June 1, 1997)
10.2 1996 Non-Employee Directors' Stock Option Plan of the Company
(as amended through June 1, 1997)
11. Computations of Earnings per Share
27. Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the quarter to
which this report relates.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GTECH HOLDINGS CORPORATION
By /s/ Thomas J. Sauser
-----------------------------------------------------
Thomas J. Sauser, Senior Vice President & Chief
Financial Officer (Principal Financial Officer)
By /s/ Robert J. Plourde
-----------------------------------------------------
Robert J. Plourde, Vice President and Corporate
Controller (Principal Accounting Officer)
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
GTECH CORPORATION,
as Borrower,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
BANK OF MONTREAL,
BANQUE PARIBAS,
FLEET NATIONAL BANK,
THE BANK OF NOVA SCOTIA, and
BANKBOSTON, N.A.,
as Co-Agents
THE BANK OF NEW YORK,
as Documentation Agent,
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
June 18, 1997
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 18,
1997 (the "Agreement"), is made by and among:
GTECH CORPORATION, a Delaware corporation having its principal place
of business in West Greenwich, Rhode Island (the "Borrower");
Each lender executing and delivering a signature page hereto and each
other lender which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 11.01 hereof
(hereinafter such lenders may be referred to individually as a "Lender" or
collectively as the "Lenders");
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America
("NationsBank"), in its capacity as administrative agent for the Lenders (in
such capacity, and any successor appointed in accordance with the terms of
Section 10.09 hereof, the "Administrative Agent"); THE BANK OF NEW YORK, a New
York chartered bank ("BNY"), in its capacity as Documentation Agent for the
Lenders (in such capacity, the "Documentation Agent"); and BANK OF MONTREAL,
BANQUE PARIBAS, FLEET NATIONAL BANK, THE BANK OF NOVA SCOTIA and BANKBOSTON,
N.A., in their capacity as co-agents for the Lenders (in such capacity, the
"Co-Agents").
W I T N E S S E T H:
WHEREAS, the Borrower, each of the lenders party thereto (the "Prior
Lenders"), Bank of America Illinois, The Bank of New York, Bank of Montreal,
Banque Paribas, Fleet National Bank, The Bank of Nova Scotia and BankBoston,
N.A., formerly known as The First National Bank of Boston (the "Prior
Co-Agents") and NationsBank, National Association, formerly known as
NationsBank of North Carolina, National Association, as agent (the "Prior
Agent"), have entered into that certain Credit Agreement dated as of September
15, 1994, as amended pursuant to the terms of that certain Amendment No. 1 to
Credit Agreement dated as of May 29, 1996 (as so amended, the "Prior Credit
Agreement"), pursuant to which the Prior Lenders have made available to the
Borrower a revolving credit facility in the maximum aggregate principal amount
at any time outstanding of $500,000,000, which includes (i) a letter of credit
facility of up to $100,000,000, (ii) a swing line facility of up to
$25,000,000, and (iii) a competitive bid facility, the proceeds of such loans
have been used and are to be used for working capital and general corporate
purposes; and
WHEREAS, Bank of America Illinois has assigned all of its interest
under the Prior Credit Agreement to NationsBank, National Association, The
Bank of New York and Toronto Dominion (New York), Inc.; and
WHEREAS, the Borrower has requested that the Lenders, the Co-Agents,
the Documentation Agent and the Administrative Agent amend and restate the
Prior Credit Agreement in its entirety to, among other things, reduce the
amount of the Revolving Credit Facility thereunder and reflect certain changes
in the lenders party to the Prior Credit Agreement and the Administrative
Agent, the Documentation Agent, the Co-Agents and the Lenders are willing to
amend and restate the Prior Credit Agreement pursuant to this Agreement upon
the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders, the Co-Agents, the
Documentation Agent, and the Administrative Agent hereby agree as follows:
ARTICLE I
Definitions and Terms
Amendment and Restatement. The Borrower, the Administrative Agent,
the Documentation Agent, the Co-Agents and the Lenders hereby agree that upon
the effectiveness of this Agreement, the terms and provisions of the Prior
Credit Agreement shall be and hereby are amended and restated in their
entirety by the terms and provisions of this Agreement and the terms and
provisions of the Prior Credit Agreement, except as otherwise provided herein,
shall be superseded by this Agreement.
Notwithstanding the amendment and restatement of the Prior Credit
Agreement by this Agreement, the Borrower shall continue to be liable to the
Prior Agent and each Lender with respect to its agreements under the Prior
Credit Agreement to indemnify and hold harmless the Prior Agent and each
Lender from and against all claims, demands, liabilities, damages, losses,
costs, charges and expenses to which the Prior Agent or any Lender may be
subject arising in connection with the Prior Credit Agreement. Except as
otherwise selected by the Borrower by delivery of a Borrowing Notice prior to
the Closing Date in accordance with the terms hereof, upon the effectiveness
of this Agreement all amounts outstanding and owing by Borrower under the
Prior Credit Agreement as of the Closing Date, as determined by the Lenders,
shall constitute Loans hereunder accruing interest (a) with respect to
Eurodollar Loans under the Prior Credit Agreement, at the Eurodollar Rate
hereunder, (b) with respect to Base Rate Loans under the Prior Credit
Agreement, at the Base Rate hereunder and (c) with respect to Competitive Bid
Loans under the Prior Credit Agreement, at the Absolute Rate or the Index
Rate, as applicable, hereunder. The parties hereto agree that all Eurodollar
Rate Loans under the Prior Credit Agreement on the Closing Date shall continue
as Eurodollar Rate Loans without any compensation pursuant to Section 5.4
hereof being due to the Agent or the Lenders.
Each of the parties hereto acknowledges and agrees that all Loan
Documents (as defined in the Prior Credit Agreement), other than the Prior
Credit Agreement and the promissory notes thereunder, delivered in connection
with the Prior Credit Agreement (the "Surviving Loan Documents") remain in
full force and effect with respect to this Agreement and are deemed delivered
hereunder. All Surviving Loan Documents are hereby amended so that all
references in such documents to the Credit Agreement shall mean this
Agreement, as amended, supplemented or replaced from time to time, all
references to the Agent shall mean the Administrative Agent and all references
to the Notes shall mean the Notes hereunder.
Definitions. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Absolute Rate" means an absolute rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/10,000th of 1%)
offered by a Lender pursuant to an Absolute Rate Bid Loan Request;
"Absolute Rate Bid Loan Request" means any Competitive Bid
Quote Request requesting the Lenders to offer to make Competitive Bid
Loans at an Absolute Rate (as opposed to a rate composed of the
Applicable Index Rate plus (or minus) a margin);
"Absolute Rate Competitive Bid Loan" means any Competitive
Bid Loan bearing interest at an Absolute Rate;
"Advance" means any borrowing under (i) the Revolving Credit
Facility consisting of a Base Rate Loan or a LIBOR Loan, as the case
may be, (ii) the Swing Line consisting of Swing Line Loans or (iii)
the Competitive Bid Facility consisting of Competitive Bid Loans;
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with, the Borrower; (ii) which beneficially
owns or holds 15% or more of any class of the outstanding voting
stock (or in the case of a Person which is not a corporation, 15% or
more of the equity interest) of the Borrower; or (iii) 15% or more of
any class of the outstanding voting stock (or in the case of a Person
which is not a corporation, 15% or more of the equity interest) of
which is beneficially owned or held by the Borrower. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting stock, by contract
or otherwise;
"Applicable Commitment Percentage" means, at any time for
each Lender with respect to the Revolving Credit Facility (including
its Participations and its obligations hereunder to NationsBank to
acquire Participations), a fraction (expressed as a percentage), (A)
the numerator of which shall be the amount of such Lender's Revolving
Credit Commitment at such date of determination (which Revolving
Credit Commitment for each Lender as of the Closing Date is set forth
in Exhibit A attached hereto and incorporated herein by reference),
and (B) the denominator of which shall be the Total Revolving Credit
Commitment at such date of determination; provided that each
Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 11.01 hereof;
"Applicable Index Rate" means, in respect of any Competitive
Bid Loan requested pursuant to an Index Rate Bid Loan Request, the
LIBOR Base Rate applicable to the Interest Period for such
Competitive Bid Loan;
"Applicable Margin" means for purposes of calculating (i)
the applicable interest margin for the Interest Period for any LIBOR
Loan, (ii) the applicable rate for the issuance of Standby Letters of
Credit and (iii) the applicable rate of the Facility Fee for any date
for purposes of Section 2.12 hereof (notice of which shall be
delivered by the Administrative Agent to the Borrower and each Lender
within five (5) days of the Compliance Date (as defined below)), that
percent per annum set forth below which shall be (x) determined as of
each Determination Date based upon the computations set forth in the
compliance certificates delivered to the Administrative Agent
pursuant to Sections 7.01(a)(ii) and 7.01(b)(ii) hereof, subject to
review and approval of such computations by the Administrative Agent
which review shall be completed within five (5) days of the date of
delivery, and delivered to the Administrative Agent not later than
the time set forth in Sections 7.01(a) and 7.01(b) hereof (the
"Compliance Date") and (y) applicable to all LIBOR Loans made,
renewed or converted, Standby Letters of Credit outstanding and any
Facility Fee outstanding and due and payable, on or after the most
recent Compliance Date to occur, based upon the Borrower's
Consolidated Funded Debt Ratio and Consolidated Interest Coverage
Ratio as of the most recent Determination Date, as specified below:
<TABLE>
<CAPTION>
LIBOR and
Consolidated Letter of Facility
Consolidated Interest Credit Fee
Funded Coverage Applicable Applicable
Debt Ratio Ratio Margin Margin
--------------- -------------------- -------- ---------------------- ----------------- -----------------
--------------- -------------------- -------- ---------------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Tier I Equal to or Equal to or .1500% .1000%
less than and greater than
.50 to 1.00 15.00 to 1.00
--------------- -------------------- -------- ---------------------- ----------------- -----------------
--------------- -------------------- -------- ---------------------- ----------------- -----------------
Tier II Greater than Less than .2000% .1125%
.50 to 1.00 and 15.00 to 1.00 but
but less than or greater than or
equal to equal to 12.00 to
1.00 to 1.00 1.00
--------------- -------------------- -------- ---------------------- ----------------- -----------------
--------------- -------------------- -------- ---------------------- ----------------- -----------------
Tier III Greater than Less than .2500% .1250%
1.00 to 1.00 and 12.00 to 1.00 but
but less than or greater than or
equal to equal to 9.00 to 1.00
2.00 to 1.00
--------------- -------------------- -------- ---------------------- ----------------- -----------------
--------------- -------------------- -------- ---------------------- ----------------- -----------------
Tier IV Greater than Less than .3375% .1875%
2.00 to 1.00 and 9.00 to 1.00 but
but less than or greater than or
equal to equal to 7.00 to 1.00
2.25 to 1.00
--------------- -------------------- -------- ---------------------- ----------------- -----------------
--------------- -------------------- -------- ---------------------- ----------------- -----------------
Tier V Greater than Less than .4000% .2250%
2.25 to 1.00 and 7.00 to 1.00
--------------- -------------------- -------- ---------------------- ----------------- -----------------
</TABLE>
it being understood that failure to satisfy either of the two
financial ratios specified in any Tier will result in the applicable
Tier being the highest numeric Tier in which either such financial
ratio is satisfied; provided, however, that from the Closing Date to
the date the above-referenced compliance certificates are delivered
to the Administrative Agent and the applicable Tier is determinable
by the Administrative Agent, the Applicable Margin shall be as set
forth in Tier III above;
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit
executed by the Borrower from time to time and delivered to
NationsBank to support the issuance of Letters of Credit;
"Assignment and Acceptance" means an Assignment and
Acceptance substantially in the form of Exhibit B attached hereto and
incorporated herein by reference (with blanks appropriately filled
in) delivered to the Administrative Agent in connection with an
assignment of a Lender's interest under this Agreement pursuant to
Section 11.01 hereof;
"Attributable Debt" means, as to any particular lease
relating to a Sale and Leaseback Transaction, the present value of
all Lease Rentals required to be paid by the Borrower or any Material
Subsidiary under such lease during the remaining term thereof
(determined in accordance with generally accepted financial practice
using a discount factor equal to the interest rate implicit in such
lease);
"Authorized Representative" means any of the Chairman,
Co-Chairmen, Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, Vice President and Treasurer, Vice President and
Controller, and Assistant Treasurer of the Borrower or any other
person expressly designated by the Chief Financial Officer or the
Treasurer of the Borrower as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit C and incorporated herein by reference;
"Base Rate" means, for any Base Rate Loan, the greater of
(i) the Prime Rate or (ii) the Federal Funds Effective Rate plus
one-half of one percent (.5%), each change in such Base Rate to be
effective as of the effective date of any change in the Prime Rate or
the Federal Funds Effective Rate giving rise thereto;
"Base Rate Loan" means any Loan for which the rate of
interest is determined by reference to the Base Rate;
"Bid Rate Auction" means any solicitation of Competitive Bid
Quotes setting forth Absolute Rates or Index Rates pursuant to
Section 2.03 hereof;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with an Advance under the
Revolving Credit Facility or the Swing Line, in the form attached
hereto as Exhibit D and incorporated herein by reference;
"Business Day" means any day which is not a Saturday, Sunday
or a day on which banks in the State of New York or State of North
Carolina are authorized or obligated by law, executive order or
governmental decree to be closed;
"Camelot" means Camelot Group PLC, a consortium of companies
formed to operate the United Kingdom lottery, of which the Borrower
is a member;
"Capital Leases" means all leases which have been or should
be capitalized in accordance with Generally Accepted Accounting
Principles including Statement No. 13 of the Financial Accounting
Standards Board and any successor thereof applied on a Consistent
Basis;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders, the Documentation Agent and
the Administrative Agent and on which the conditions set forth in
Section 5.01 hereof have been satisfied;
"Code" means the Internal Revenue Code of 1986, as amended,
any successor provision or provisions and any regulations promulgated
thereunder;
"Commercial Letter of Credit" means an irrevocable
documentary letter of credit issued hereunder for the account of the
Borrower; provided that the expiry date of a Commercial Letter of
Credit shall not be later than twelve (12) months subsequent to the
date of issuance thereof and in no event later than the Revolving
Credit Termination Date;
"Common Stock" means the common stock, par value $.01 per
share, of the Borrower;
"Competitive Bid Borrowing" has the meaning assigned to such
term in Section 2.03 hereof;
"Competitive Bid Facility" means the facility described in
Section 2.03 hereof providing for Competitive Bid Loans to the
Borrower;
"Competitive Bid Loan Commitment" means the aggregate amount
which a Lender has offered to loan to the Borrower pursuant to a
Competitive Bid Quote by such Lender not to exceed in the aggregate
an amount equal to the Revolving Credit Facility less all Revolving
Credit Outstandings;
"Competitive Bid Loans" means the Loans bearing interest at
an Absolute Rate or Index Rate provided for in Section 2.03 hereof;
"Competitive Bid Notes" means, collectively, the promissory
notes of the Borrower with respect to Competitive Bid Loans provided
for by Section 2.03 hereof executed and delivered in the form
attached hereto as Exhibit E and incorporated herein by reference,
with appropriate insertions as to amounts, dates and names of
Lenders, and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be amended,
modified or supplemented and in effect from time to time;
"Competitive Bid Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of the Borrower
on all Competitive Bid Loans then outstanding;
"Competitive Bid Quote" means an offer in accordance with
Section 2.03 hereof by a Lender to make a Competitive Bid Loan with
an Absolute Rate or an Index Rate, in the form of Exhibit J and
incorporated herein by reference;
"Competitive Bid Quote Request" means either an Absolute
Rate Bid Loan Request or an Index Rate Bid Loan Request in accordance
with Section 2.03 hereof by the Borrower for Competitive Bid
Borrowings, in the form of Exhibit I attached hereto and incorporated
herein by reference;
"Compliance Date" has the meaning assigned to such term in
the definition of "Applicable Margin" in this Section 1.01;
"Confidential Information" means with respect to each Lender
all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender
by or on behalf of the Borrower pursuant to this Agreement.
"Confidential Information" does not include, without limitation,
information which: (a)is in the public domain; (b)is known to such
Lender at the time of such disclosure; (c)is subsequently received
by such Lender in good faith from a third party who is not known to
such Lender to be bound by a confidentiality agreement with the
Borrower or known to such Lender to be otherwise prohibited from
transmitting the information to such Lender by a contractual, legal
or fiduciary obligation; (d)is independently generated by such
Lender; (e) is approved for release or disclosure by the Borrower in
a separate writing; or (f) constitutes financial statements delivered
to the Agent or a Lender under Section 7.01 that are otherwise
publicly available;
"Consolidated Assets" means, as of any date of
determination, the total assets of the Parent, the Borrower and its
Material Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Parent as of such time prepared in
accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and surplus
of Material Subsidiaries;
"Consistent Basis" in reference to the application of
Generally Accepted Accounting Principles means the accounting
principles observed in the period referred to are comparable in all
material respects to those applied in the preparation of the audited
financial statements of the Borrower referred to in Section
6.01(e)(i) hereof;
"Consolidated Capital Expenditures" means, with respect to
the Borrower and its Consolidated Subsidiaries, for any period,
expenditures or costs for fixed or capital assets made by the
Borrower and its Consolidated Subsidiaries during such period which
in accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis are characterized as capital expenditures;
"Consolidated EBDAIT" means, with respect to the Borrower
and its Subsidiaries for any period of computation thereof, the sum
of, without duplication, (i) Consolidated Net Income excluding any
extraordinary gains or losses, plus (ii)Consolidated Interest
Expense, plus (iii) taxes on income, plus (iv) amortization,
depreciation and all other non-cash expense items, all determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis;
"Consolidated Funded Debt Ratio" means, with respect to the
Borrower and its Subsidiaries for the Four Quarter Period ending
immediately prior to the date of computation thereof, the ratio of
Consolidated Funded Indebtedness at such date to Consolidated EBDAIT
for such Four Quarter Period;
"Consolidated Funded Indebtedness" means, with respect to
the Borrower and its Subsidiaries at any time as of which the amount
thereof is to be determined, the sum of (i) Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries, (ii) all direct
guaranties of non-consolidated Indebtedness of any Person other than
Consolidated Subsidiaries and (iii) the face amount of all
outstanding letters of credit issued for the account of the Borrower
or any of its Subsidiaries and all obligations (to the extent not
duplicative) arising under such letters of credit, all determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis; provided, however, that
there shall be excluded from the calculation of Consolidated Funded
Indebtedness guaranties by the Borrower or any of its Subsidiaries of
non-consolidated Indebtedness of another Person up to an aggregate
principal amount of $5,000,000 and all Indebtedness consisting of
Capital Lease obligations incurred in connection with off-balance
sheet sale and leaseback transactions;
"Consolidated Interest Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for the Four-Quarter Period
ending immediately prior to the date of computation thereof, the
ratio of Consolidated EBDAIT during such Four-Quarter Period to
Consolidated Interest Expense during such Four-Quarter Period;
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the cash interest expense of the
Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis;
"Consolidated Net Income" means, for any period of
computation thereof, the net income of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a Consistent
Basis;
"Consolidated Shareholders' Equity" means, at any time as of
which the amount thereof is to be determined, shareholders' equity of
the Parent, the Borrower and its Subsidiaries as determined in
accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis;
"Consolidated Subsidiary" means any Subsidiary of the
Borrower whose financial information and operations are required to
be consolidated in the financial statements of the Borrower pursuant
to Generally Accepted Accounting Principles;
"Consolidated Subsidiary Debt" means, without duplication,
that portion of Consolidated Funded Indebtedness incurred by any
Consolidated Subsidiary;
"Consolidated Total Assets" means, at any time, the sum of
all items which would be classified as assets on a consolidated
balance sheet of the Borrower and its Subsidiaries in accordance with
Generally Accepted Accounting Principals applied on a Consistent
Basis;
"Consolidated Total Profits Before Tax" means, for any
period, the total profits before extraordinary gains and losses and
before Federal, state, local and foreign income or similar taxes of
the Borrower and its Subsidiaries for such period, as determined in
accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis;
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring
thereof, would be required) to be included in the consolidated
financial statements (including footnotes) of such Person in
accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis, including Statement No.5 of the Financial
Accounting Standards Board, and any obligation of such Person
guaranteeing any Indebtedness, dividend or other obligation of any
other Person (the "primary obligor") in any manner, whether directly
or indirectly, including obligations of such Person however incurred:
(i) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(ii) to advance or supply funds in any manner
(A) for the purchase or payment of such Indebtedness or
other obligation, or (B) to maintain a minimum working
capital, net worth or other balance sheet condition or any
income statement condition of the primary obligor;
(iii) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any
property or assets of such Person to secure payment of such
Indebtedness or other obligation;
(iv) to lease property or to purchase
securities or other property or services primarily for the
purpose of assuring the owner or holder of such Indebtedness
or obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(v) otherwise to assure the owner of such
Indebtedness or such obligation of the primary obligor
against loss in respect thereof;
"Core Business" of the Borrower or any of its Subsidiaries
means (a) the sale, lease, delivery, installation, operation and/or
maintenance by the Borrower or any of its Subsidiaries of computers,
computer terminals and/or related hardware and software pertaining to
the operation of lotteries and/or similar games of chance and/or
pari-mutuel installations (including, without limitation, lotteries
(on-line, off-line, passive ticket, instant ticket, break-open ticket
and video), bingo, race tracks, jai alai, legalized bookmaking,
off-track betting, casino, keno and sports betting facilities),
(b) any type of government or state benefits processing or
eligibility, (c) any type of commercial processing, including debit
and credit transactions, (d) any type of communications services
similar to that provided in (a) through (c) above and (e) any
hardware or software utilized in any of the business described in (a)
through (d) above whether by sale, lease, license or service in
either government or commercial enterprises worldwide;
"Default" means any event or condition which, with the
giving or receipt of notice or lapse of time or both, would
constitute an Event of Default;
"Determination Date" means the last day of each fiscal
quarterly period of the Borrower;
"Dollars" and the symbol "$" means dollars constituting
legal tender for the payment of public and private debts in the
United States;
"Eligible Securities" means all investment grade securities
as determined by the rating system of either S&P or Moody's, other
securities not subject to either such rating system which are of
comparable investment grade risk profile and any other class of
securities previously approved in writing by the Required Lenders;
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of
conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without
limitation, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Resource Conservation
and Recovery Act, as amended; the Toxic Substances Control Act, as
amended; the Clean Air Act, as amended; the Clean Water Act, as
amended; together with all regulations promulgated thereunder, and
any other "Superfund" or "Superlien" law;
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974, as amended, and the regulations thereunder, all
as the same shall be in effect at such date;
"ERISA Affiliate" means any entity which would be aggregated
at any relevant time with the Borrower pursuant to Section 414(b),
(c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.
"Event of Default" means any of the occurrences set forth as
such in Section 9.01 hereof;
"Federal Funds Effective Rate" for any day, as used herein,
means the rate per annum (rounded upward to the nearest 1/100 of 1%)
announced by the Federal Reserve Bank of New York (or any successor)
on such day 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, if such Federal Reserve Bank (or its
successor) does not announce such rate on any day, the "Federal Funds
Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced;
"Fee Letter" means that certain fee letter dated as of
September 15, 1994 between the Borrower and the Administrative Agent;
"Fiscal Quarter" means the quarterly period of the Borrower
ending on the last Saturday in each May, August, November and
February of any Fiscal Year;
"Fiscal Year" means the annual period of the Borrower ending
on the last Saturday of each February;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any pension,
retirement, healthcare, death, disability or other employee benefit
plan;
"Four-Quarter Period" means a period of four full
consecutive Fiscal Quarters, taken together as one accounting period;
"Generally Accepted Accounting Principles" means those
principles of accounting set forth in pronouncements of the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants or which have other substantial authoritative
support and are applicable in the circumstances as of the date of a
report, as such principles are from time to time supplemented and
amended, subject to compliance at all times with Section 1.02 hereof;
"Governmental Authority" means any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign nation, state, province
or other governmental instrumentality;
"Guarantors" means, collectively, (i) the Parent, (ii) each
Material Domestic Subsidiary existing on the Closing Date and (iii)
any other Person who shall become a Material Domestic Subsidiary
after the Closing Date and shall execute and deliver to the
Administrative Agent a Guaranty as provided in Section 7.19 hereof;
"Guaranty" means each Guaranty Agreement, including the
Parent Guaranty, of a Guarantor (whether now existing or hereafter
delivered in accordance with Section 7.19 hereof individually or
jointly and severally with other Guarantors) in favor of the
Administrative Agent guaranteeing in whole or in part the payment of
Obligations, substantially in the form of Exhibit M attached hereto
and incorporated herein by reference, as the same may be amended,
modified or supplemented;
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law;
"Indebtedness" of a Person means, without duplication, (i)
all Indebtedness for Money Borrowed, (ii) all obligations of such
Person arising under acceptance facilities, (iii) the undrawn face
amount of, and unpaid reimbursement obligations in respect of, all
letters of credit issued for the account of such Person, (iv) all
obligations of such Person upon which interest charges are actually
paid, (v) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by
such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all executory
obligations of such Person in respect of Rate Hedging Obligations and
(vii) all Contingent Obligations in respect of Indebtedness set forth
in clauses (i) through (vi) above of Persons other than the Borrower
or any Subsidiary; "Indebtedness" shall not include, however, any
intercompany indebtedness of the Borrower and its Subsidiaries;
"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation, all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money (including, but
not limited to, conditional sales or similar title retention
agreements);
"Index Rate" means an interest rate equal to the Applicable
Index Rate plus (or minus) a margin;
"Index Rate Bid Loan Request" means any Competitive Bid
Quote Request requesting the Lenders to offer to make Competitive Bid
Loans at an Index Rate;
"Index Rate Competitive Bid Loan" means any Competitive Bid
Loan bearing interest at an Index Rate;
"Interest Period" (a)for each LIBOR Loan means a period
commencing on the date such LIBOR Loan is made or converted and each
subsequent period commencing on the last day of the immediately
preceding Interest Period for such LIBOR Loan, and ending, at the
Borrower's option, on the date one, two, three, six or twelve months
thereafter (to the extent a twelve month Interest Period is available
to the Required Lenders' customers generally) as notified to the
Administrative Agent by the appropriate Authorized Representative
three (3) LIBOR Business Days prior to the beginning of such Interest
Period; provided that,
(i) if the Borrower fails to notify the
Administrative Agent of the length of an Interest Period
three (3) LIBOR Business Days prior to the first day of such
Interest Period, the Loan for which such Interest Period was
to be determined shall be deemed to be a Base Rate Loan;
(ii) if an Interest Period for a LIBOR Loan
would end on a day which is not a LIBOR Business Day such
Interest Period shall be extended to the next succeeding
LIBOR Business Day (unless such extension would cause the
applicable Interest Period to end in the succeeding calendar
month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day);
(iii) any Interest Period which begins on the
last LIBOR Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last LIBOR Business Day of a calendar month; and
(iv) no Interest Period shall extend past the
Revolving Credit Termination Date, and there shall not be
more than twenty (20) Interest Periods outstanding at any
one time for all Revolving Credit Loans and Competitive Bid
Loans combined; and
(b) for each Competitive Bid Loan means the period
commencing on the date of such borrowing and ending on such date as
may be mutually agreed upon by the Borrower and the Lender or Lenders
making the Advance or Advances, as the case may be, comprising such
Competitive Bid Loan; provided that:
(i) no Interest Period for an Absolute Rate
Competitive Bid Loan shall be for a period of less than
seven days or greater than 360 days;
(ii) each Interest Period for an Index Rate
Competitive Bid Loan shall begin on the date such Loan is
made and end on a date one, two, three, six or twelve months
thereafter, as agreed upon by the Borrower and the Lender or
Lenders making such Index Rate Competitive Bid Loan;
(iii) if an Interest Period for an Index Rate
Competitive Bid Loan would end on a day which is not a LIBOR
Business Day such Interest Period shall be extended to the
next succeeding LIBOR Business Day (unless such extension
would cause the applicable Interest Period to end in the
succeeding calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day);
(iv) any Interest Period for an Index Rate
Competitive Bid Loan which begins on the last LIBOR Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month; and
(v) no Interest Period shall extend past the
Revolving Credit Termination Date and there shall not be
more than twenty (20) Interest Periods outstanding at any
one time for all Revolving Credit Loans and Competitive Bid
Loans combined;
"Interest Rate Selection Notice" means the written
confirmation delivered by an Authorized Representative of telephonic
notice in connection with the selection or conversion of interest
rates as to outstanding Revolving Credit Loans, in the form attached
hereto as Exhibit H and incorporated herein by reference;
"Investment Commitment" means, with respect to any
investment, loan or advance, the amount initially advanced, invested
or disbursed less an amount equal to the sum of (i) repayments of
such advances, including all interest income therefrom, (ii)
dividends and other distributions received from such Person paid or
made on securities issued solely in consideration of such investment,
(iii) net gains on sales or other dispositions of capital stock,
securities or assets of such Person purchased with such investment,
and (iv) all other net profits or other amounts net of expenses
realized from such investment or advance and all other net returns on
Consolidated Capital Expenditures, provided that the aggregate amount
of all such repayments, dividends, net gains, profits and other
amounts so deducted with respect to each such investment, advance or
Capital Expenditure shall not exceed the initial principal amount of
such investment, advance or Capital Expenditure;
"Lease Rentals" means, for any period, the sum of the rental
and other obligations required to be paid by the lessee under any
lease, excluding any amounts required to be paid by the lessee
(whether or not designated as rental or additional rental) on account
of maintenance and repairs, insurance, taxes and similar charges;
"Lending Office" means, as to each Lender, the Lending
Office of such Lender designated on the signature pages hereof or in
an Assignment and Acceptance or such other office of such Lender (or
of an affiliate of such Lender) as such Lender may from time to time
specify to an Authorized Representative and the Administrative Agent
as the office by which its Loans are to be made and maintained;
"Letter of Credit" means any Standby Letter of Credit or
Commercial Letter of Credit issued by NationsBank for the account of
the Borrower in favor of a Person as described in Article III hereof;
"Letter of Credit Commitment" means with respect to each
Lender, the obligation of such Lender to acquire Participations up
to an aggregate stated amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Letter of
Credit Commitment as the same may be increased or decreased from time
to time pursuant to this Agreement;
"Letter of Credit Facility" means the facility described in
Article III hereof providing for the issuance by NationsBank for the
account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of
Credit Commitment;
"Letter of Credit Outstandings" means all undrawn amounts of
Letters of Credit plus Reimbursement Obligations;
"LIBOR Base Rate" means for any LIBOR Loan or a Competitive
Bid Loan bearing interest at the Index Rate, in respect of the
Interest Period specified (or deemed specified) in the Borrowing
Notice or in the Interest Rate Selection Notice for such LIBOR Loan
or in the Index Rate Bid Loan Request for such Competitive Bid Loan,
the rate (which shall be the same for each day of such Interest
Period) for deposits in Dollars for a period comparable to the
Interest Period for such LIBOR Loan which appears on the Dow Jones
Telerate Service page 3750 (or such other page as may replace that
page on that service or such other service as may be designated as
the information vendor by the Administrative Agent, any new
information vendor to be subject to the consent of the Borrower which
consent will not be unreasonably withheld or delayed) at
approximately 11:00 A.M. Charlotte, North Carolina time two (2) LIBOR
Business Days prior to the commencement of the applicable Interest
Period; provided that if such rate does not appear on such page and
is otherwise unavailable, the rate shall be determined by the
Administrative Agent in good faith in accordance with its usual
procedures for its customers generally;
"LIBOR Business Day" means a Business Day on which the
relevant international financial markets are open for the transaction
of the business contemplated by this Agreement in London, England,
New York, New York and Charlotte, North Carolina;
"LIBOR Loan" means a Revolving Credit Loan for which the
rate of interest is determined by reference to the LIBOR Rate;
"LIBOR Rate" means, for the Interest Period for any LIBOR
Loan, the rate of interest per annum determined pursuant to the
following formula:
LIBOR LIBOR Base Rate Applicable
= ________________________ +
Rate 1 - Reserve Requirement Margin
"Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than the owner of
the property, whether such interest is based on the common law,
statute or contract, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of
this Agreement, the Borrower and its Subsidiaries shall be deemed to
be the owners of any property which either of them have acquired or
hold subject to a conditional sale agreement, financing lease, or
other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes;
"Loan" or "Loans" means any of the Revolving Credit Loans or
Swing Line Loans or Competitive Bid Loans;
"Loan Documents" means this Agreement, the Notes, each
Guaranty, Applications and Agreements for Letters of Credit, the
Reaffirmation Agreement and all other instruments and documents
heretofore or hereafter executed or delivered to and in favor of any
Lender or the Administrative Agent in connection with the Loans or
the Letters of Credit made, issued or created under this Agreement as
the same may be amended, modified or supplemented from time to time;
"Material Adverse Effect" means a material adverse effect on
(a) the business, properties, operations or condition, financial or
otherwise, of the Parent or Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower or any Guarantor to perform
its obligations under any of the Loan Documents to which it is a
party or (c) the validity or enforceability of any of the Loan
Documents;
"Material Domestic Subsidiary" means each Material
Subsidiary which is organized and existing under the laws of one of
the states of the United States of America;
"Material Subsidiary" means (i) any direct or indirect
Subsidiary which has total assets equal to or greater than 5% of
Consolidated Total Assets (calculated at any time as of the then most
recent fiscal year end) or has profits before tax equal to or greater
than 5% of Consolidated Total Profits Before Tax (calculated at any
time as of the then most recent fiscal year end), (ii)Transactive
Corporation, a Delaware corporation and (iii) the Passive Investment
Company, if and when created or acquired; provided, however, that any
Material Subsidiary under clauses (i) or (ii) above shall cease to be
a Material Subsidiary and shall be released from its obligation to
provide a Guaranty if it or substantially all of its assets are sold
or conveyed in a transaction otherwise permitted under this Agreement;
"Moody's" means Moody's Investor Service, a Delaware
corporation;
"Multi-employer Plan" means an employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Subsidiary is an "employer" as described in Section 4001(b) of
ERISA, which is also a multi-employer plan as defined in Section
4001(a)(3) of ERISA;
"Note Agreement" means that certain Note and Guaranty
Agreement dated as of May 15, 1997 by and among the Borrower, the
Parent and the note purchasers thereunder, as in effect on the
Closing Date, pursuant to which the Borrower has issued the Private
Placement Debt;
"Notes" means, collectively, the Revolving Credit Notes, the
Swing Line Note and the Competitive Bid Notes;
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i)the principal and
interest on the Loans as evidenced by the Notes, (ii)the
Reimbursement Obligations, (iii) all liabilities of Borrower to any
Lender which arise under a Swap Agreement, and (iv) the payment and
performance of all other obligations, liabilities and Indebtedness of
the Borrower to the Lenders, the Documentation Agent or the
Administrative Agent hereunder, under any one or more of the other
Loan Documents or with respect to the Loans;
"Outstandings" means, at any time of determination, the sum
of the Revolving Credit Outstandings, Letter of Credit Outstandings,
Swing Line Outstandings and Competitive Bid Outstandings;
"Parent" means GTECH Holdings Corporation, a Delaware
corporation and owner of all of the Common Stock;
"Parent Guaranty" means that certain Guaranty Agreement of
the Parent dated as of the date hereof in favor of the Administrative
Agent and guaranteeing payment of the Obligations;
"Participation" means, with respect to any Lender (other
than NationsBank), the extension of credit represented by the
participation of such Lender hereunder in the liability of
NationsBank in respect of a Swing Line Loan made or Letter of Credit
issued by NationsBank in accordance with the terms hereof;
"Passive Investment Company" means a single wholly owned
Subsidiary of the Borrower whose function and activity shall be
restricted solely to (a) the purchase of all or a portion of the
Borrower's accounts receivable, (b) the purchase of all or a portion
of the intellectual property of the Borrower upon the condition that
such intellectual property be licensed back to the Borrower and (c)
the lending of money to and management of investments of the Borrower
and its Subsidiaries;
"PBGC" means the Pension Benefit Guaranty Corporation and
any successor thereto;
"Person" means an individual, partnership, corporation,
trust, unincorporated organization, limited liability company,
association, joint venture or a government or agency or political
subdivision thereof;
"Prime Rate" means the rate of interest per annum announced
publicly by NationsBank as its prime rate from time to time. The
Prime Rate is not necessarily the best or the lowest rate of interest
offered by NationsBank;
"Priority Debt" means the sum (without duplication) of (i)
the aggregate unpaid principal amount of Indebtedness of the Borrower
and any Material Subsidiary secured by Liens (other than Liens
permitted by Section 8.06(a), (b), (c), (d), (e), (g), (h), (i) and
(j) hereof), plus (ii) all outstanding Attributable Debt of the
Borrower and any Material Subsidiary (other than Attributable Debt
with respect to any Sale and Leaseback Transaction permitted by
Section 8.15(a) or (b) hereof) plus (iii) the aggregate unpaid
principal amount of all Indebtedness of all Material Subsidiaries
(other than Indebtedness of the Borrower or Indebtedness of any
Subsidiary permitted hereunder and permitted under Section 10.8(a)
through (d) of the Note Agreement);
"Principal Office" means the office of the Administrative
Agent at NationsBank, National Association, NationsBank Plaza, 6th
Floor, NC 1002-06-19, Charlotte, North Carolina 28255, Attention:
Agency Services, or such other office and address as the
Administrative Agent may from time to time designate;
"Private Placement Debt" means Indebtedness of up to an
aggregate principal amount of $300,000,000 evidenced by certain 7.75%
Series A Senior Guaranteed Notes due 2004 and 7.87% Series B Senior
Guaranteed Notes due 2007 issued by the Borrower pursuant to the Note
Agreement;
"Quotation Date" shall have the meaning assigned to such
term in Section 2.03(c)(iv) hereof;
"Racimec" means Racimec Informatic Brasileira S.A., a
Brazilian company presently engaged in the marketing and servicing of
lotteries;
"Rate Hedging Obligations" means any and all obligations of
the Borrower, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing;
"Reaffirmation Agreement" means the Reaffirmation Agreement
executed by each of the existing Guarantors as of the date hereof
ratifying and consenting to the amendments to the Prior Credit
Agreement made herein and reaffirming the guaranties issued in
connection with the Prior Credit Agreement;
"Regulation D" means Regulation D of the Board as the same
may be amended or supplemented from time to time;
"Regulatory Change" means any change in, or the adoption or
making of new, United States Federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after the date hereof
of any interpretations, directives or requests applying to a class of
banks, which includes any of the Lenders, under any United States
Federal or state or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof
or compliance by any Lender with any request or directive, whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful;
"Reimbursement Obligation" means at any time, the obligation
of the Borrower with respect to any Letter of Credit to reimburse
NationsBank and the Lenders to the extent of their respective
Participations (including by the receipt by NationsBank of proceeds
of Loans pursuant to Section 3.02 hereof) for amounts theretofore
paid by NationsBank pursuant to a drawing under such Letter of Credit;
"Replacement Bank" means (i) any Lender or Lenders selected
by the Borrower or (ii) one or a group of banks or other financial
institutions selected by the Borrower and acceptable to and approved
by the Administrative Agent and the Required Lenders in their
reasonable discretion, any of which shall replace any then existing
Lender or Lenders pursuant to Section 2.13 or 4.07 hereof and have a
Revolving Credit Commitment equal in amount to the Revolving Credit
Commitment of the replaced Lender or Lenders;
"Required Lenders" means, as of any date, Lenders on such
date having Credit Exposures (as defined below) aggregating at least
51% of the aggregate Credit Exposures of all the Lenders on such
date. For purposes of the preceding sentence, the amount of the
"Credit Exposure" of each Lender shall (i) at all times prior to the
Reduction Date (as defined below) be equal to its Revolving Credit
Commitment plus the amount of such Lender's Applicable Commitment
Percentage of Swing Line Loans and Letter of Credit Outstandings;
provided that, if any Lender shall have failed to pay to NationsBank
upon demand its Applicable Commitment Percentage of any Swing Line
Loan or drawing under any Letter of Credit resulting in an
outstanding Reimbursement Obligation, such Lender's Credit Exposure
attributable to such Swing Line Loans or Letter of Credit
Outstandings or both shall be deemed to be held by NationsBank for
purposes of this definition and (ii) on and after the Reduction Date
be equal to the amount of Competitive Bid Loans owing to such Lender;
"Reduction Date" means the date on which the Revolving Credit
Commitment of all of the Lenders and the obligations of NationsBank
to make Swing Line Loans and issue Letters of Credit shall have
terminated and all Revolving Credit Outstandings, all Swing Line
Outstandings and all Letter of Credit Outstandings shall have been
paid in full;
"Reserve Requirement" means, for any LIBOR Loan, the maximum
aggregate rate at which reserves (including, without limitation, any
marginal, supplemental or emergency reserves) are required to be
maintained with respect thereto under Regulation D by the member
banks of the Federal Reserve System with respect to Dollar funding in
the London interbank market. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the LIBOR Base Rate is to be
determined or (ii) any category of extensions of credit or other
assets which include LIBOR Loans;
"Revolving Credit Commitment" means with respect to each
Lender, the obligation of such Lender to make Revolving Credit Loans
to the Borrower and to purchase Participations up to an aggregate
principal amount at any one time outstanding equal to the amount set
forth opposite such Lender's name on Exhibit A hereto as the same may
be increased or decreased from time to time pursuant to this
Agreement; provided, however, that amounts advanced by any Lender as
Competitive Bid Loans shall not reduce such Lender's Revolving Credit
Commitment or modify its obligation to make its Applicable Commitment
Percentage of Advances under the Revolving Credit Facility;
"Revolving Credit Facility" means the facility described in
Section 2.01 hereof providing for Loans to the Borrower by the
Lenders in an aggregate principal amount equal to (i) the Total
Revolving Credit Commitment, less (ii) the aggregate principal amount
of Swing Line Outstandings and Letter of Credit Outstandings and
Competitive Bid Outstandings;
"Revolving Credit Loan" means a Loan made pursuant to the
Revolving Credit Facility (but specifically excludes all Swing Line
Loans) pursuant to Section 2.01 hereof;
"Revolving Credit Notes" means, collectively, the promissory
notes of the Borrower evidencing Revolving Credit Loans executed and
delivered to the Lenders as provided in Section 2.08(a) hereof
substantially in the form attached hereto as Exhibit F and
incorporated herein by reference, with appropriate insertions as to
amounts, dates and names of Lenders, as the same shall be amended,
modified or supplemented and in effect from time to time;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of the Borrower
on all Revolving Credit Loans then outstanding;
"Revolving Credit Termination Date" means the earliest to
occur of (i) the fifth anniversary of the Closing Date, or (ii) the
date of termination of Lenders' obligations pursuant to Section 9.01
hereof upon the occurrence of an Event of Default, or (iii) such date
as the Borrower may voluntarily and permanently terminate the
Revolving Credit Facility and the Competitive Bid Facility by payment
in full of all Obligations (including the discharge of all
Obligations of NationsBank and the Lenders with respect to Letters of
Credit and Participations) pursuant to Section 2.09 hereof;
"Sale and Leaseback Transaction" means a transaction or
series of transactions pursuant to which the Borrower or any Material
Subsidiary shall sell or transfer to any Person any property, whether
now owned or hereafter acquired, and, as part of the same transaction
or series of transactions, the Borrower or any Material Subsidiary
shall lease as lessee, or similarly acquire the right to possession
or use of, such property for a period in excess of three years;
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill;
"Single Employer Plan" means any employee pension benefit
plan covered by Title IV of ERISA and in respect of which the
Borrower or any Subsidiary is an "employer" as described in Section
4001(b) of ERISA, which is not a Multi-employer Plan;
"Solvent" means, when used with respect to any Person, that
at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted;
"Standby Letter of Credit" means an irrevocable Standby
Letter of Credit issued hereunder for the account of the Borrower or
any Subsidiary, provided that the expiry date of such Standby Letter
of Credit shall not be later than the Revolving Credit Termination
Date;
"Subsidiary" means (i)any corporation or other entity in
which more than 50% of its outstanding stock having ordinary voting
power is owned directly or indirectly by the Borrower and/or by one
or more of the Borrower's Subsidiaries at or after the Closing Date
or (ii) any joint venture whose financial information and operations
are required to be consolidated in the financial statements of the
Borrower in accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis;
"Swap Agreement" means one or more agreements with respect
to Indebtedness evidenced by the Notes between the Borrower and any
Person, on terms mutually acceptable to Borrower and such Person,
which agreements create Rate Hedging Obligations;
"Swing Line" means the revolving line of credit established
by NationsBank in favor of the Borrower pursuant to Section 2.02
hereof;
"Swing Line Rate" means the rate of interest established
pursuant to the Fee Letter;
"Swing Line Loans" means Loans made by NationsBank to
Borrower pursuant to Section 2.02 hereof;
"Swing Line Note" means the promissory note of the Borrower
evidencing Swing Line Loans executed and delivered to NationsBank
substantially in the form attached hereto as Exhibit G and
incorporated herein by reference, as the same shall be amended,
modified or supplemented and in effect from time to time;
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of Borrower on
all Swing Line Loans then outstanding;
"Total Letter of Credit Commitment" means an amount equal to
$100,000,000; and
"Total Revolving Credit Commitment" means an amount equal to
$400,000,000, as reduced from time to time in accordance with Section
2.09 hereof.
Accounting Terms. All accounting terms not specifically defined
herein shall have the meanings assigned to such terms and shall be interpreted
in accordance with Generally Accepted Accounting Principles as in effect on
the date of the audited financial statements of the Borrower referred to in
Section 6.01(f)(i) hereof and applied on a Consistent Basis.
Terms Consistent. All of the terms defined in this Agreement shall
have such defined meanings when used in any of the Loan Documents unless the
context shall require otherwise. All references to the Borrower, the
Administrative Agent and any Lender shall be deemed to include any successor
or permitted assign of any thereof. All plural references and definitions
shall have a corresponding meaning in the singular, and all singular
references and definitions shall have a corresponding meaning in the plural.
ARTICLE II
The Loans
2.01 Revolving Credit Loans
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make and continue Advances under
the Revolving Credit Facility to the Borrower, from time to time on a pro rata
basis as to the total borrowing requested by the Borrower on any day
determined by its Applicable Commitment Percentage of the Total Revolving
Credit Commitment up to but not exceeding the Revolving Credit Commitment of
such Lender; provided, however, that the Lenders will not be required and
shall have no obligation to make any Advance (i) so long as a Default or an
Event of Default has occurred and is continuing or (ii) if the Administrative
Agent has accelerated the maturity of the Revolving Credit Notes as a result
of an Event of Default; provided further, however, that immediately after
giving effect to each such Advance, the principal amount of Outstandings shall
not exceed the Total Revolving Credit Commitment. Within such limits, the
Borrower may borrow, repay (without premium or penalty) and reborrow
hereunder, on a Business Day in the case of a Base Rate Loan and on a LIBOR
Business Day in the case of a LIBOR Loan, from the Closing Date until, but (as
to borrowings and reborrowings) not including, the Revolving Credit
Termination Date.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, the aggregate unpaid principal amount of the Outstandings shall
not exceed at any time an amount equal to the Total Revolving Credit
Commitment. Each Revolving Credit Loan made, converted or continued, unless
made in accordance with Section 2.01(c)(iv) or 3.02(c) hereof, shall be in a
principal amount of at least $5,000,000, and, if greater than $5,000,000, an
integral multiple of $100,000.
(c) Advances and Rate Selection.
(i) The appropriate Authorized Representative shall give the
Administrative Agent (A) irrevocable telephonic notice of each LIBOR Loan,
whether representing an additional Advance hereunder or the conversion of
borrowings hereunder from Base Rate Loans to LIBOR Loans or the election of a
subsequent Interest Period for any LIBOR Loan, prior to 11:30 A.M., Charlotte,
North Carolina time at least three (3) LIBOR Business Days prior to the day
such Advance is to be made or such Loan is to be converted or continued; and
(B) irrevocable telephonic notice of each Base Rate Loan representing an
additional Advance hereunder or the conversion of borrowings hereunder from
LIBOR Loans to Base Rate Loans prior to 11:30 A.M. Charlotte, North Carolina
time on the day such Advance is to be made or such Loan is to be converted.
Each such notice, which shall be effective upon receipt by the Administrative
Agent, shall specify the amount of the Advance, the type (Base Rate or LIBOR)
of Loan, the date of the Advance and, if a LIBOR Loan, the Interest Period to
be used in the computation of interest. An Authorized Representative shall
provide the Administrative Agent written confirmation of each such telephonic
notice on the same day by telefacsimile transmission in the form of a
Borrowing Notice for additional Advances, or in the form of an Interest Rate
Selection Notice for the selection or conversion of interest rates for
outstanding Revolving Credit Loans, in each case with appropriate insertions,
but failure to provide such confirmation shall not affect the validity of such
telephonic notice. The Borrower shall have the option to elect the duration
of subsequent Interest Periods and to convert the Loans (other than Swing Line
Loans) in accordance with Section 2.11 hereof. If the Administrative Agent
does not receive a notice of election of duration of an Interest Period or to
convert by the time prescribed hereby and by Section 2.11 hereof, the Borrower
shall be deemed to have elected to convert to or continue such Loan as a Base
Rate Loan until the Borrower otherwise notifies the Administrative Agent in
accordance herewith and with Section 2.11 hereof.
(ii) Notice of receipt of each Borrowing Notice and Interest Rate
Selection Notice shall be provided by the Administrative Agent to each Lender
with reasonable promptness, but not later than 1:00 P.M., Charlotte, North
Carolina time on the same day as Administrative Agent's receipt of such
notice. The Administrative Agent shall provide each Lender written
confirmation of such telephonic notice by telefacsimile transmission but
failure to provide such notice shall not affect the validity of such
telephonic notice.
(iii) Not later than 2:30 P.M., Charlotte, North Carolina time on
the date specified for each Advance of a Revolving Credit Loan, each Lender
shall, pursuant to the terms and subject to the conditions of this Agreement,
make the amount of the Revolving Credit Loan or Loans to be made by it on such
day available to the Administrative Agent, by depositing or transferring the
proceeds thereof in immediately available funds at the Principal Office. The
amount so received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by delivery of
the proceeds thereof to an account designated by the Borrower in the
applicable Borrowing Notice by an Authorized Representative.
(iv) Notwithstanding the foregoing, if a drawing is made under
any Letter of Credit prior to the Revolving Credit Termination Date, notice of
such drawing and resulting Reimbursement Obligation shall be provided promptly
by NationsBank to the Administrative Agent and the Administrative Agent shall
provide notice to each Lender by telephone. If such notice to the Lenders of
a drawing under any Letter of Credit is given by the Administrative Agent at
or before 12:00 noon Charlotte, North Carolina time on any Business Day, the
Borrower shall be deemed to have requested, and each Lender shall, pursuant to
the conditions of this Agreement, make a Base Rate Loan under the Revolving
Credit Facility in the amount of such Lender's Applicable Commitment
Percentage of such Reimbursement Obligation and shall pay such amount to the
Administrative Agent for the account of NationsBank at the Principal Office in
Dollars and in immediately available funds before 2:30 P.M. Charlotte, North
Carolina time on the same Business Day. If notice to the Lenders is given by
the Administrative Agent after 12:00 noon Charlotte, North Carolina time on
any Business Day, the Borrower shall be deemed to have requested, and each
Lender shall, pursuant to the terms and subject to the conditions of this
Agreement, make a Base Rate Loan under the Revolving Credit Facility in the
amount of such Lender's Applicable Commitment Percentage of such Reimbursement
Obligation and shall pay such amount to the Administrative Agent for the
account of NationsBank at the Principal Office in Dollars and in immediately
available funds before 12:00 noon Charlotte, North Carolina time on the next
following Business Day. Such Base Rate Loan shall continue unless and until
the Borrower converts such Base Rate Loan in accordance with the terms of
Section 2.11 hereof.
2.02 Swing Line Loans.
(a) Notwithstanding any other provision of this
Agreement to the contrary, NationsBank shall make available Swing
Line Loans to the Borrower prior to the Revolving Credit Termination
Date. NationsBank shall not make any Swing Line Loan pursuant hereto
(i) if the Borrower is not in compliance with all the conditions to
the making of Revolving Credit Loans set forth in this Agreement,
(ii) if after giving effect to such Swing Line Loan, the Swing Line
Outstandings would exceed $25,000,000, or (iii) if after giving
effect to such Swing Line Loan, the sum of all Outstandings would
exceed the Total Revolving Credit Commitment.
(b) Each provision of Section 2.01(c) hereof applicable
to Base Rate Loans shall be applicable in all respects to each Swing
Line Loan. Each Borrowing Notice submitted to the Administrative
Agent with respect to Swing Line Loans shall specify, in addition to
the items required by Section 2.01(c)(i) hereof, that such Advance is
a Swing Line Loan and the applicable Swing Line Rate. All Advances
made pursuant to this Section 2.02 shall bear interest at the
applicable Swing Line Rate.
(c) All Advances made by NationsBank under the Swing
Line pursuant to this Section 2.02 outstanding on any day shall be in
the minimum principal amount of $500,000 and any integral multiple of
$100,000 in excess thereof.
(d) The Borrower and each Lender acknowledge that all
Swing Line Loans are to be made solely by NationsBank to the Borrower
but that such Lender shall share the risk of loss with respect to
such Advances by purchasing from NationsBank a Participation in such
Swing Line Loan in an amount equal to such Lender's Applicable
Commitment Percentage of such Swing Line Loan. Upon demand made by
NationsBank, each Lender shall, according to such Lender's Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to
NationsBank its purchase price therefor in an amount equal to its
Participation therein. Any advance made by a Lender pursuant to
demand of NationsBank of the purchase price of its Participation
shall be deemed a Base Rate Loan under the Revolving Credit Facility
unless the Borrower converts such Base Rate Loan in accordance with
Section 2.11 hereof. The obligation of each Lender to so provide its
purchase price to NationsBank shall be absolute and unconditional and
shall not be affected by the occurrence of an Event of Default or any
other occurrence or event.
(e) Borrower at its option may request an Advance as a
Revolving Credit Loan pursuant to Section 2.01(a) hereof in an amount
sufficient to repay any or all Swing Line Loans on any date and the
Administrative Agent shall upon the receipt of such Advance, provide
to NationsBank the amount necessary to repay such Swing Line Loan or
Loans (which NationsBank shall then apply to such repayment) and
credit any balance of such Revolving Credit Loan in immediately
available funds to an account designated by the Borrower. The
proceeds of such Advances shall be paid to NationsBank for
application to the Swing Line Outstandings and the Participations
therein purchased by the Lenders pursuant to Section 2.02(d) above,
and the Lenders shall then be deemed to have made Revolving Credit
Loans in the amount of such Advances. The Swing Line shall continue
in effect until the earlier of (i) occurrence and continuation of a
Default or Event of Default, or (ii) the Revolving Credit Termination
Date. The Swing Line shall be reinstated at the time any Default or
Event of Default is cured, provided that the Revolving Credit
Termination Date has not occurred.
2.03 Competitive Bid Loans
(a) In addition to Revolving Credit Loans, at any time
prior to the Revolving Credit Termination Date during which the conditions set
forth in Section 2.03(b) below are satisfied, the Borrower may, as set forth
in this Section 2.03, request the Lenders to make offers to make Competitive
Bid Loans to the Borrower in Dollars. The Lenders may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers, in the manner set forth in this Section
2.03. The making of a Competitive Bid Loan by any Lender shall not reduce
such Lender's Revolving Credit Commitment except as calculated based upon the
Total Revolving Credit Commitment as reduced by such Competitive Bid Loan.
Competitive Bid Outstandings, together with the sum of all other Outstandings,
shall not exceed the Total Revolving Credit Commitment at any time.
(b) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Administrative Agent (which shall
promptly notify the Lenders) either an Index Rate Bid Loan Request to be
received no later than 11:00 a.m. Charlotte, North Carolina time three (3)
LIBOR Business Days prior to the date of borrowing proposed therein or an
Absolute Rate Bid Loan Request to be received no later than 11:00 a.m.
Charlotte, North Carolina time one (1) Business Day prior to the date of
borrowing proposed therein (or such other time and date as the Borrower and
the Administrative Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers to make Competitive Bid Loans for up
to four (4) different Interest Periods in a single notice (a "Competitive Bid
Borrowing"). Each such Competitive Bid Quote Request shall be substantially
in the form of Exhibit I attached hereto and incorporated herein by reference
and shall specify as to each Competitive Bid Borrowing:
(i) the proposed date of such Competitive Bid
Borrowing, which shall be a Business Day in the case of an
Absolute Rate Bid Loan Request or a LIBOR Business Day in
the case of an Index Rate Bid Loan Request;
(ii) the aggregate amount of such Competitive
Bid Borrowing, which shall be at least $5,000,000 (or in
integral multiples of $100,000 in excess thereof) but shall
not cause the limits specified in Section 2.03(a) hereof to
be violated;
(iii) the duration of the Interest Period or
Interest Periods applicable thereto (which may be not less
than 7 nor more than 360 days with respect to an Absolute
Rate Competitive Bid Loan and which must be one, two, three,
six or twelve months with respect to an Index Rate
Competitive Bid Loan); and
(iv) the date on which the Competitive Bid
Quotes are to be submitted if it is before the proposed date
of borrowing (the date on which such Competitive Bid Quotes
are to be submitted is called the "Quotation Date").
(c) (i) Each Lender may submit one or more
Competitive Bid Quotes, each containing an offer to make a Competitive Bid
Loan in response to any Competitive Bid Quote Request; provided that, if the
Borrower's request under Section 2.03(b) hereof specified more than one
Interest Period, such Lender may make a single submission containing one or
more Competitive Bid Quotes for each such Interest Period. Each Competitive
Bid Quote must be submitted to the Administrative Agent not later than 10:00
a.m. Charlotte, North Carolina time on the Quotation Date (or such other time
and date as the Borrower and the Administrative Agent, with the consent of the
Required Lenders, may agree) provided that any Competitive Bid Quote may be
submitted by NationsBank only if NationsBank notifies the Borrower of the
terms of the offer contained therein not later than 9:45 a.m. Charlotte, North
Carolina time on the Quotation Date. Subject to Articles IV, V and IX hereof,
any Competitive Bid Quote so made shall be irrevocable except with the consent
of the Administrative Agent given on the instructions of the Borrower.
(d) Each Competitive Bid Quote shall be substantially
in the form of Exhibit J attached hereto and incorporated herein by reference
and shall specify:
(i) the proposed date of borrowing and the
Interest Periods applicable to all or each portion thereof;
(ii) the principal amount of the Competitive
Bid Loan for which each such offer is being made, which
principal amount shall be at least $1,000,000 (or in
integral multiples of $100,000 in excess thereof); provided
that the aggregate principal amount of all Competitive Bid
Loans for which a Lender submits Competitive Bid Quotes may
not exceed the principal amount of the Competitive Bid
Borrowing for a particular Interest Period for which offers
were requested;
(iii) the rate of interest offered for each such
Competitive Bid Loan; and
(iv) the identity of the quoting Lender.
Unless otherwise agreed by the Administrative Agent and the Borrower, no
Competitive Bid Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth in the
applicable Competitive Bid Quote Request. Any subsequent Competitive Bid
Quote submitted by a Lender that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Lender with respect to
the same Competitive Bid Quote Request shall be disregarded by the
Administrative Agent unless such subsequent Competitive Bid Quote is submitted
solely to correct a manifest error in such former Competitive Bid Quote.
(e) The Administrative Agent shall as promptly as
practicable after the Competitive Bid Quote is submitted (but in any event not
later than 10:30 a.m. Charlotte, North Carolina time on the Quotation Date),
notify the Borrower in writing by facsimile of the terms of any Competitive
Bid Quote submitted by a Lender that is in accordance with Section 2.03(c)
hereof. The Administrative Agent's notice to the Borrower shall specify (i)
the aggregate principal amount of the Competitive Bid Borrowing for which
Competitive Bid Quotes have been received and (ii) the respective principal
amount and interest rate so offered by each Lender (identifying the Lender
that made each Competitive Bid Quote). As promptly as possible, the
Administrative Agent shall forward to the Borrower copies of each Competitive
Bid Quote submitted to the Administrative Agent.
(f) Not later than 11:00 a.m. Charlotte, North Carolina
time on the Quotation Date (or such other time and date as the Borrower and
the Administrative Agent, with the consent of the Required Lenders, may
agree), the Borrower shall notify the Administrative Agent of its acceptance
or nonacceptance of the Competitive Bid Quotes so notified to it pursuant to
Section 2.03(e) hereof (and the failure of the Borrower to give such notice by
such time shall constitute nonacceptance) and the Administrative Agent shall
promptly notify each affected Lender. In the case of acceptance, such notice
shall specify the aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept a Competitive Bid Quote for
the entire principal amount of the Competitive Bid Loan so offered or any
portion thereof. The Borrower's acceptance of Competitive Bid Quotes is
further subject to the following conditions:
(i) the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable
amount set forth in the related Competitive Bid Quote
Request;
(ii) the aggregate principal amount of each
Competitive Bid Borrowing shall be at least $5,000,000 (or
in integral multiples of $100,000 in excess thereof) but
shall not cause the limits specified in Section 2.03(a)
hereof to be violated;
(iii) except as provided below, acceptance of
Competitive Bid Quotes may be made only in ascending order
of interest rates beginning with the lowest rate so offered;
and
(iv) the Borrower may not accept any
Competitive Bid Quotes where the Administrative Agent has
correctly advised the Borrower that such Competitive Bid
Quote fails to comply with Section 2.03(d) hereof or
otherwise fails to comply with the requirements of this
Agreement (including, without limitation, Section 2.03(a)
hereof).
(g) If Competitive Bid Quotes are made by two or more
Lenders with the same Absolute Rate or Index Rate, as applicable, for a
greater aggregate principal amount than the amount in respect of which
Competitive Bid Quotes are permitted to be accepted for the related Interest
Period after the acceptance of all Competitive Bid Quotes, if any, of all
lower Absolute Rates or Index Rates, as applicable, offered by any Lender for
such related Interest Period, the principal amount of Competitive Bid Loans in
respect of which such Competitive Bid Quotes are accepted shall be allocated
by the Borrower among such Lenders as nearly as possible (in amounts of at
least $1,000,000 or in integral multiples of $100,000 in excess thereof) in
proportion to the aggregate principal amount of such Competitive Bid Quotes.
Determinations by the Borrower of the amounts of Competitive Bid Loans and the
lowest bid as provided in Section 2.03(f)(iii) hereof shall be conclusive in
the absence of manifest error.
(h) Any Lender whose offer to make any Competitive Bid
Loan has been accepted shall, not later than 1:00 p.m. Charlotte, North
Carolina time on the date specified for the making of such Loan, make the
amount of such Loan available to the Administrative Agent at the Principal
Office in Dollars and in immediately available funds, for account of the
Borrower. The amount so received by the Administrative Agent shall, subject
to the terms and conditions of this Agreement, be made available to the
Borrower on such date by depositing the same, in Dollars and in immediately
available funds, in an account specified by the Borrower.
(i) The parties hereto agree that each Competitive Bid
Loan (as defined in the Prior Credit Agreement) advanced by a Lender under the
Prior Credit Agreement and described on Schedule 2.03(i) hereto shall be
deemed to be as of the Closing Date a Competitive Bid Loan hereunder and
evidenced by such Lender's Competitive Bid Note.
2.04 Payment of Interest.(a)The Borrower shall pay interest to the
Administrative Agent at the Principal Office for the account of each Lender on
the outstanding and unpaid principal amount of each Loan made by such Lender
for the period commencing on the date of such Loan until such Loan shall be
due (i) in the case of each Revolving Credit Loan, at the LIBOR Rate or the
Base Rate, as elected or deemed elected by the Borrower or otherwise
applicable to such Loan as herein provided, (ii) in the case of each Swing
Line Loan, at the Swing Line Rate; and (iii)in the case of each Competitive
Bid Loan, at the applicable Absolute Rate or Index Rate, as applicable;
provided, however, that if any amount shall not be paid when due (at maturity,
by acceleration or otherwise), all amounts outstanding hereunder shall bear
interest thereafter, payable on demand, (A) in the case of a LIBOR Loan, at a
rate of interest per annum which shall be two percent (2%) plus the LIBOR Rate
for such LIBOR Loan until the end of the Interest Period during which such
payment was due, and thereafter at a rate of interest per annum which shall be
two percent (2%) plus the Base Rate, (B) in the case of a Base Rate Loan or
Swing Line Loan, at a rate of interest per annum which shall be two percent
(2%) plus the Base Rate, and (C) in the case of a Competitive Bid Loan, at a
rate of interest per annum which shall be two percent (2%) plus the Absolute
Rate or Index Rate, as applicable, for such Competitive Bid Loan until the end
of the Interest Period during which such payment was due, and thereafter at a
rate of interest per annum which shall be two percent (2%) plus the Base Rate,
or (in each case) the maximum rate permitted by applicable law, whichever is
lower, from the date such amount was due and payable until the date such
amount is paid in full.
(b) Interest on the outstanding principal balance of each Loan
shall be computed on the basis of a year of 360 days with respect to LIBOR
Loans and all Competitive Bid Loans and 365 days with respect to Swing Line
Loans and Base Rate Loans and calculated for the actual number of days
elapsed. Interest on each Loan shall be paid (i)quarterly in arrears on the
last Business Day of each September, December, March or June commencing June
1997, on each Base Rate Loan, Absolute Rate Competitive Bid Loan and Swing
Line Loan, (ii)on the last day of the applicable Interest Period for each
LIBOR Loan and Competitive Bid Loan and, for any LIBOR Loan or Competitive Bid
Loan having any Interest Period extending beyond three (3) months or ninety
(90) days, as applicable, also on the date occurring every three (3) months or
ninety (90) days after the commencement of such Interest Period, and (iii)
upon payment in full of the principal amount of such Loan.
2.05 Payment of Principal.The principal amount of all Revolving Credit
Outstandings and all Swing Line Outstandings shall be due and payable to the
Administrative Agent for the benefit of each Lender in full on the Revolving
Credit Termination Date, or earlier as herein expressly provided. The
principal amount of each Competitive Bid Loan shall be due and payable to the
Lender making such Competitive Bid Loan in full on the last day of the
Interest Period therefor, or earlier as herein expressly provided. The
principal amount of Base Rate Loans and Swing Line Loans may be prepaid in
whole or in part at any time. The principal amount of LIBOR Loans and
Competitive Bid Loans may only be prepaid at the end of the applicable
Interest Period, unless the Borrower shall pay to the Administrative Agent for
the account of the Lenders the amount, if any, required under Section 4.04
hereof. In the event that at any time Outstandings exceed the Total Revolving
Credit Commitment, a principal amount of the Revolving Credit Outstandings
equal to or greater than such excess shall be due and payable immediately.
All prepayments made by the Borrower shall be in the amount of $5,000,000 or
such greater amount which is an integral multiple of $100,000, or such other
amount as necessary to comply with this Section 2.05 or with Section 2.09
hereof.
2.06 Non-Conforming Payments. (a) Each payment of principal (including
any prepayment) and payment of interest shall be made to the Administrative
Agent at the Principal Office, for the account of each Lender's applicable
Lending Office, in Dollars and in immediately available funds before 2:00 P.M.
Charlotte, North Carolina time on the date such payment is due. The
Administrative Agent may, but shall not be obligated to, debit the amount of
any such payment which is not made by such time to any ordinary deposit
account, if any, of the Borrower with the Administrative Agent. The Borrower
shall give the Administrative Agent prior telephonic notice of any payment of
principal, such notice to be given by not later than 11:00 a.m. Charlotte,
North Carolina time, on the date of such payment.
(b) The Administrative Agent shall deem any payment by or on
behalf of the Borrower hereunder that is not made both (i)in Dollars and in
immediately available funds and (ii)prior to 2:00 P.M. Charlotte, North
Carolina time on the date payment is due to be a non-conforming payment,
absent manifest error. Any such payment shall not be deemed to be received by
the Administrative Agent until the time such funds become available funds.
Any non-conforming payment may constitute or become a Default or Event of
Default. The Administrative Agent shall give prompt notice to an Authorized
Representative and each of the Lenders (confirmed in writing) if any payment
is non-conforming. Interest shall continue to accrue on any principal as to
which a non-conforming payment is made until such funds become available funds
(but in no event less than the period from the date of such payment to the
next succeeding Business Day) at the respective rates of interest per annum
specified in Section 2.04(a) hereof in respect of late payments of interest,
from the date such amount was due and payable until the date such amount is
paid in full.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided
otherwise under clause (i)(B) under the definition of "Interest Period;"
provided that interest shall continue to accrue during the period of any such
extension.
2.07 Notes.(b) Revolving Credit Loans made by each Lender shall be
evidenced by, and be repayable with interest in accordance with the terms of,
the Revolving Credit Note payable to the order of such Lender in the amount of
its Applicable Commitment Percentage of the Total Revolving Credit Commitment,
which Revolving Credit Note shall be dated the Closing Date or such later date
pursuant to an Assignment and Acceptance and shall be duly completed, executed
and delivered by the Borrower.
(c) Swing Line Loans made by NationsBank shall be evidenced by,
and be repayable with interest in accordance with the terms of, the Swing Line
Note dated the Closing Date and duly executed and delivered by the Borrower.
(d) Competitive Bid Loans made by any Lender shall be evidenced
by, and be repayable with interest in accordance with the terms of, the
Competitive Bid Note payable to the order of such Lender and duly completed,
executed and delivered by the Borrower.
2.08 Pro Rata Payments. Except as otherwise provided herein, (a)each
payment and prepayment of principal and interest on the Revolving Credit Loans
and the fees described in Section 2.12 hereof shall be made to the
Administrative Agent for the account of the Lenders in the aggregate amount
payable to the Lenders pro rata based on their Applicable Commitment
Percentages, (b) each payment of principal of and interest on the Swing Line
Loans shall be made to the Administrative Agent for the account of
NationsBank, (c) each payment of principal and interest on the Competitive Bid
Loans shall be made to the Administrative Agent for the account of the
respective Lender making such Competitive Bid Loan. All payments to be made
by the Borrower hereunder, shall be made without set-off or counterclaim. The
Administrative Agent will promptly distribute such payments received to the
Lenders as provided for herein.
2.09 Reductions; Cancellation. The Borrower shall have the right from
time to time (but not more frequently than once during each calendar month)
upon not less than ten (10) Business Days written notice from an Authorized
Representative to the Administrative Agent to reduce the Total Revolving
Credit Commitment. The Administrative Agent shall give each Lender, within
one (1) Business Day, telephonic notice (confirmed in writing) of such
reduction. Each such reduction shall be in the amount of $10,000,000 or such
greater amount which is in an integral multiple of $1,000,000, and shall
permanently reduce the Total Revolving Credit Commitment and the Revolving
Credit Commitment of each Lender pro rata. No such reduction shall be
permitted that results in the payment of any LIBOR Loan other than on the last
day of the Interest Period of such Loan unless such prepayment is accompanied
by amounts due, if any, under Section 4.04 hereof. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the
principal amount of the Revolving Credit Outstandings to the extent that the
Outstandings exceed the Total Revolving Credit Commitment after giving effect
to such reduction, together with accrued and unpaid interest on the amounts
prepaid. A reduction of the Total Revolving Credit Commitment to zero and
payment of all Obligations hereunder (including the discharge of all
obligations of NationsBank and the Lenders with respect to the Letters of
Credit and Participations and Competitive Bid Loans) shall be deemed a
cancellation and termination of this Agreement.
2.10 Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower shall be
reduced by the aggregate amount of all Outstandings.
2.11 Conversions and Elections of Subsequent Interest Periods.
Provided that no Default or Event of Default shall have occurred and be
continuing and subject to the limitations set forth below and in Sections
4.01(b), 4.02 and 4.03 hereof, the Borrower may:
(a) on two (2) Business Days' notice to the Administrative Agent
on or before 10:30 A.M. Charlotte, North Carolina time on any Business Day
convert all or a part of LIBOR Loans to Base Rate Loans on the last day of the
Interest Period for such LIBOR Loans; and
(b) on three (3) LIBOR Business Days' notice to the
Administrative Agent on or before 10:30 A.M. Charlotte, North Carolina time:
(i) elect a subsequent Interest Period for all or a
portion of LIBOR Loans to begin on the last day of the current
Interest Period for such LIBOR Loans; or
(ii) convert Base Rate Loans to LIBOR Loans on any LIBOR
Business Day.
No Swing Line Loan may be converted into any other type of Loan and
none of such other types of Loans may be converted into Swing Line Loans.
Notice of any such elections or conversions shall specify the
effective date of such election or conversion and, with respect to LIBOR
Loans, the Interest Period to be applicable to the Loan as continued or
converted. Each election and conversion pursuant to this Section 2.11 shall
be subject to the limitations on LIBOR Loans set forth in the definition of
"Interest Period" herein and in Sections 2.01(a), (b) and (c) and Article IV
hereof. All such continuations or conversions of Loans shall be effected pro
rata based on the Applicable Commitment Percentages of the Lenders.
2.12 Facility Fee
(b) For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees
to pay to the Administrative Agent, for the pro rata benefit of the
Lenders based on their Applicable Commitment Percentages of the
Revolving Credit Facility, a facility fee (the "Facility Fee") equal
to the product of the Applicable Margin for calculating the Facility
Fee multiplied by the average daily amount of the Total Revolving
Credit Commitment.
(c) Such payments of Facility Fees provided for in this
Section 2.12 shall be due in arrears on the last Business Day of each
September, December, March and June beginning June 1997 to and on the
Revolving Credit Termination Date. Notwithstanding the foregoing, so
long as any Lender fails to make available in accordance with the
terms of this Agreement any portion of its Revolving Credit
Commitment when requested, such Lender shall not be entitled to
receive payment of its pro rata share of such fee during the period
of its failure. Each fee shall be calculated on the basis of a year
of 360 days for the actual number of days elapsed.
2.13 Deficiency Advances.
No Lender shall be responsible for any default
of any other Lender in respect of such other Lender's obligation to make any
Loan hereunder nor shall the Revolving Credit Commitment of any Lender
hereunder be increased as a result of such default of any other Lender.
Without limiting the generality of the foregoing, in the event any Lender
shall fail to advance funds to the Borrower as herein provided, NationsBank
may in its discretion, but shall not be obligated to, advance under the
applicable Note in its favor as a Lender all or any portion of such amount or
amounts (each, a "deficiency advance") and shall thereafter be entitled to
payments of principal and interest on such deficiency advance in the same
manner and at the same interest rate or rates to which such other Lender would
have been entitled had it made such advance under its applicable Note;
provided that, upon payment to NationsBank from such other Lender of the
entire outstanding amount of each such deficiency advance, together with
accrued and unpaid interest thereon, from the most recent date or dates
interest was paid to NationsBank by the Borrower on each Loan comprising the
deficiency advance at the interest rate per annum for overnight borrowing by
NationsBank from a Federal Reserve Bank, then such payment shall be credited
against the applicable Note of NationsBank in full payment of such deficiency
advance and the Borrower shall be deemed to have borrowed the amount of such
deficiency advance from such other Lender as of the most recent date or dates,
as the case may be, upon which any payments of interest were made by the
Borrower thereon. In the event any Lender shall fail to advance funds to the
Borrower as herein provided and such failure shall continue for a period in
excess of ten (10) Business Days, then, notwithstanding the provisions of
Section 2.09 hereof, the Borrower may terminate such Lender's Revolving Credit
Commitment by repaying in full the amount of all principal and interest due
such Lender under such Lender's Notes and all other amounts due hereunder and
providing for a Replacement Bank.
2.14 Use of Proceeds.
The proceeds of the Loans made pursuant to the
Revolving Credit Facility, the Competitive Bid Facility and the Swing Line
hereunder shall be used by the Borrower for working capital and general
corporate needs of the Borrower and its Subsidiaries, including prepaying the
Existing Credit Facility.
2.15 Additional Fees.
In addition to any fees described above, the
Borrower agrees to pay to the Administrative Agent and NationsBank such other
fees as may be agreed to in a separate writing or writings.
ARTICLE III
Letters of Credit
3.01 Letters of Credit. NationsBank agrees, subject to the terms and
conditions of this Agreement, upon request and for the account of Borrower or
any Subsidiary, to issue from time to time Letters of Credit upon delivery to
NationsBank of an Application and Agreement for Letter of Credit in form and
content reasonably acceptable to NationsBank; provided, that the Letter of
Credit Outstandings shall not exceed the Total Letter of Credit Commitment.
No Letter of Credit shall be issued by NationsBank with an expiry date or
payment date occurring subsequent to the fifth Business Day preceding the
Revolving Credit Termination Date. NationsBank shall not issue any Letter of
Credit if immediately after giving effect thereto, the Outstandings would
exceed the Total Revolving Credit Commitment. Any request for the issuance of
a Letter of Credit shall be deemed a representation and warranty by the
Borrower to NationsBank and the Lenders that all the representations and
warranties set forth in Article VI hereof and in the other Loan Documents
(other than those expressly stated to refer to a particular date) are true and
correct as of the date hereof except that the representations and warranties
set forth in Sections 6.01(d) and (e) hereof shall be deemed to include and
take into account any merger or consolidation permitted under Section 8.09
hereof and the reference to the financial statement in Section 6.01(f)(i)
hereof are to those financial statements most recently delivered pursuant to
Section 7.01.
3.02 Reimbursement.
(a) The Borrower hereby unconditionally agrees
immediately to pay to NationsBank on demand at the Principal Office all
amounts required to pay all drafts drawn or purporting to be drawn under the
Letters of Credit and all reasonable expenses incurred by NationsBank in
connection with the Letters of Credit and in any event and without demand to
place in possession of NationsBank (which shall include Advances under the
Revolving Credit Facility) sufficient funds to pay all debts and liabilities
arising under any Letter of Credit; provided that to the extent permitted by
Section 2.01(c)(iv) hereof, such amounts shall be paid pursuant to Advances
under the Revolving Credit Facility. The Borrower's obligations to pay
NationsBank under this Section 3.02, and NationsBank's right to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including without limitation the unavailability of
any Advance under the Revolving Credit Facility. NationsBank agrees to give
the Borrower prompt written notice of any request for a draw under a Letter of
Credit. In the event an Advance is not available under the Revolving Credit
Facility, NationsBank may charge any account the Borrower may have with it for
any and all amounts NationsBank pays under a Letter of Credit, plus charges
and reasonable expenses as from time to time agreed to by NationsBank and the
Borrower. The Borrower agrees to pay NationsBank interest on any amounts not
paid when due hereunder on demand at the Base Rate plus two percent (2%), or
the maximum rate permitted by applicable law, whichever is lower, from the
date such amount was due and payable to the date such amount is paid in full.
(b) In accordance with the provisions of Section
2.01(c) hereof, NationsBank shall notify the Administrative Agent (and shall
also notify the Borrower) of any drawing under any Letter of Credit as
promptly as practicable following the receipt by NationsBank of such drawing.
(c) Each Lender (other than NationsBank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of NationsBank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay NationsBank under Section
3.02(a) hereof, each Lender (other than NationsBank) thereby shall, as
hereinafter described, absolutely, unconditionally and irrevocably assume, and
shall be unconditionally obligated to pay to NationsBank, its Applicable
Commitment Percentage of the liability of NationsBank under such Letter of
Credit.
(i) Prior to the Revolving Credit Termination
Date, each Lender (other than NationsBank) shall, subject to
the terms and conditions of Article II hereof, make a Base
Rate Loan to the Borrower by paying to the Administrative
Agent for the account of NationsBank at the Principal Office
in Dollars and in immediately available funds, an amount
equal to its Applicable Commitment Percentage of any
Reimbursement Obligation, all as described in and pursuant
to Section 2.01(c) hereof.
(ii) With respect to drawings under any of the
Letters of Credit for which a Revolving Credit Loan is not
made as set forth in clause (i) above, each Lender (other
than NationsBank), upon receipt from the Administrative
Agent of notice of a drawing in the manner described in
Section 2.01(c) hereof, shall promptly pay to the
Administrative Agent for the account of NationsBank, prior
to the applicable time set forth in Section 2.01(c) hereof,
its Applicable Commitment Percentage of such drawing.
Simultaneously with the making of each such payment by a
Lender to the Administrative Agent for the account of
NationsBank, such Lender shall, automatically and without
any further action on the part of NationsBank or such
Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting
interest) in the related Reimbursement Obligation of the
Borrower. The Reimbursement Obligations of the Borrower
shall be immediately due and payable by Revolving Credit
Loans made in accordance with Section 2.01(c) hereof or
otherwise.
(iii) Each Lender's obligation to make payment
to the Administrative Agent for the account of NationsBank
pursuant to this Section 3.02(c), and the right of
NationsBank to receive the same, shall be made without any
offset, abatement, withholding or reduction whatsoever. If
any Lender is obligated to pay but does not pay amounts to
the Administrative Agent for the account of NationsBank in
full upon such request as required by this Section 3.02(c),
such Lender shall, on demand, pay to the Administrative
Agent for the account of NationsBank interest on the unpaid
amount for each day during the period commencing on the date
of notice given to such Lender pursuant to Section 2.01(c)
hereof until such Lender pays such amount to the
Administrative Agent for the account of NationsBank in full
at the interest rate per annum for overnight borrowing by
NationsBank from a Federal Reserve Bank.
(iv) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth
in clause (ii) above, then at any time payment is received
by NationsBank as issuer of the applicable Letter of Credit
from the Borrower of such Reimbursement Obligation, in whole
or in part, NationsBank shall pay to each Lender an amount
equal to its Applicable Commitment Percentage of such
payment from the Borrower.
(d) Promptly following the end of each calendar
quarter, NationsBank shall deliver to the Administrative Agent, and the
Administrative Agent shall deliver to each Lender, a notice describing the
aggregate undrawn amount of all Letters of Credit at the end of such quarter.
Upon the request of any Lender from time to time, NationsBank shall deliver to
the Administrative Agent, and the Administrative Agent shall deliver to such
Lender at such Lender's expense, any other information reasonably requested by
such Lender with respect to Letter of Credit Outstandings.
(e) The issuance by NationsBank of each Letter of
Credit shall, in addition to the conditions precedent set forth in Sections
5.01 and 5.02 hereof, be subject to the conditions that such Letter of Credit
be in such form and contain such terms as shall be reasonably satisfactory to
NationsBank consistent with the then current practices and procedures of
NationsBank with respect to similar letters of credit, and the Borrower shall
have executed and delivered such other instruments and agreements relating to
such Letter of Credit as NationsBank shall have reasonably requested
consistent with such practices and procedures. All Letters of Credit shall be
issued pursuant to and subject to the Uniform Customs and Practice for
Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No.500 and all subsequent amendments and revisions thereto.
(f) The Borrower agrees that NationsBank may, in its
sole discretion, accept or pay, as complying with the terms of any Letter of
Credit, any drafts or other documents otherwise in order which may be signed
or issued by an administrator, executor, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver,
attorney in fact or other legal representative of a party who is authorized
under such Letter of Credit to draw or issue any drafts or other documents.
NationsBank will use reasonable care in accordance with its established
procedures for its customers generally to determine that a legal
representative is authorized to sign a Letter of Credit for a party.
(g) Without duplication of Section 10.07 hereof, the
Borrower hereby agrees to defend, indemnify and hold harmless NationsBank,
each other Lender and the Administrative Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which
NationsBank, such other Lender or the Administrative Agent may incur (or which
may be claimed against NationsBank, such other Lender or the Administrative
Agent) by any Person by reason of or in connection with the issuance or
transfer of or payment or failure to pay under any Letter of Credit; provided
that the Borrower shall not be required to indemnify NationsBank, any other
Lender or the Administrative Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused
by the willful misconduct or gross negligence of the party to be indemnified.
The provisions of this Section 3.02(g) shall survive repayment of the
Obligations, the occurrence of the Revolving Credit Termination Date, and
expiration or termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in
Section 3.02(g) above, the obligation of the Borrower to immediately reimburse
NationsBank for drawings made under Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and such Letters of Credit and the related
Applications and Agreements for Letters of Credit, under the following
circumstances:
(i) any lack of validity or enforceability of
any Letter of Credit, the obligation supported by any Letter
of Credit or any other agreement or instrument relating
thereto (collectively, the "Related Documents");
(ii) any amendment or waiver of or any consent
to or departure from all or any of the Related Documents;
(iii) the existence of any claim, setoff,
defense or other rights which the Borrower may have at any
time against any beneficiary or any transferee of a Letter
of Credit (or any Persons for whom any such beneficiary or
any such transferee may be acting), Administrative Agent,
Lenders or any other Person, whether in connection with the
Loan Documents, the Related Documents or any unrelated
transaction;
(iv) any breach of contract or other dispute
between the Borrower and any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom
such beneficiary or any such transferee may be acting),
Administrative Agent, Lenders or any other Person;
(v) any draft, statement or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by Administrative Agent, with or without notice to
or approval by the Borrower in respect of any of Borrower's
Obligations under this Agreement; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
3.03 Letter of Credit Fee.
The Borrower agrees to pay to the
Administrative Agent, for the pro rata benefit of the Lenders based on their
Applicable Commitment Percentages, quarterly in arrears on the last Business
Day of each September, December, March and June, beginning June 1997, a fee
per annum equal to (i) for each Standby Letter of Credit, the product of the
average daily amount available to be drawn on such Standby Letter of Credit
during such Fiscal Quarter multiplied by the Applicable Margin with respect
thereto and (ii) for each Commercial Letter of Credit, the greater of (A)
$75.00 and (B) the product of the stated amount of such Commercial Letter of
Credit Outstanding during any portion of such Fiscal Quarter multiplied by
one-tenth of one percent (1/10%). Such fees shall be calculated on the basis
of a year of 360 days for the actual number of days during which such Letters
of Credit are outstanding.
3.04 Other Fees.
The Borrower shall pay to NationsBank such
administrative fees and other fees, if any, in connection with the Letters of
Credit in such amounts and at such times as NationsBank and the Borrower shall
agree from time to time.
ARTICLE IV
Yield Protection and Illegality
4.01 Additional Costs. (a) The Borrower shall promptly pay to the
Administrative Agent for the account of a Lender from time to time, without
duplication, such amounts as such Lender may determine to be necessary to
compensate it for any costs incurred by such Lender which it determines are
attributable to its making or maintaining any Loan or its obligation to make
any Loans, or the issuance or maintenance by NationsBank of or any other
Lender's Participation in any Letter of Credit issued hereunder, or any
reduction in any amount receivable by such Lender under or in respect of this
Agreement, the Notes or the Letters of Credit in respect of any of such Loans
or such obligation or the Letters of Credit, including reductions in the rate
of return on a Lender's capital (such increases in costs and reductions in
amounts receivable and returns being herein called "Additional Costs"), in all
cases resulting solely from any Regulatory Change which: (i)changes the basis
of taxation of any amounts payable to such Lender under this Agreement or the
Notes in respect of any of such Loans or Letters of Credit (other than taxes
imposed on or measured by the income, revenues or assets of any Lender unless
such taxes arise solely by virtue of the activities of the Lending Office of
such Lender pursuant to or in respect of this Agreement or any of the other
Loan Documents); or (ii)imposes or modifies any reserve, special deposit, or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, such Lender (other than any such
reserve, deposit or requirement reflected in the LIBOR Rate computed in
accordance with the definition of such term set forth in Section 1.01 hereof);
or (iii) has or would have the effect of reducing the rate of return on
capital of such Lender to a level below that which such Lender could have
achieved but for such Regulatory Change (taking into consideration such
Lender's policies, or policies of the parent corporation of such Lender, with
respect to capital adequacy); or (iv)imposes any other condition having a
financially adverse effect on the Administrative Agent or such Lender under
this Agreement or adversely affecting the Notes or the issuance or maintenance
of, or any Lender's Participation in, the Letters of Credit (or any of such
extensions of credit or liabilities). Each Lender will notify an Authorized
Representative and the Administrative Agent of any event occurring after the
Closing Date which would entitle it to compensation pursuant to this Section
4.01(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation.
(b) Without limiting the effect of the foregoing provisions of
this Section 4.01, in the event that, by reason of any Regulatory Change, any
Lender either (i)incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on LIBOR Loans and Index Rate Competitive Bid Loans is
determined as provided in this Agreement or a category of extensions of credit
or other assets of any Lender which includes LIBOR Loans and Index Rate
Competitive Bid Loans or (ii) becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, then, if such
Lender so elects by notice to the Administrative Agent (which shall promptly
deliver such notice to the Lenders), the obligation hereunder of such Lender
to make Index Rate Competitive Bid Loans or make and continue, and to convert
Base Rate Loans into, LIBOR Loans that are the subject of such restrictions
shall be suspended until the date such Regulatory Change ceases to be in
effect and the Borrower shall, on the last day(s) of the then current Interest
Period(s) for outstanding LIBOR Loans convert such Loans into Base Rate Loans;
provided, however, that the suspension of such obligation and the conversion
of any LIBOR Loans into Base Rate Loans shall apply only to any Lender who is
affected by such restrictions and who has provided such notice to the other
Lenders, and any obligation of the other Lenders to make Index Rate
Competitive Bid Loans or make and continue, and to convert Base Rate Loans
into, LIBOR Loans shall not be affected by such restrictions. In the event
that the obligation of some, but not all, of the Lenders to make and continue,
or to convert Base Rate Loans into, LIBOR Loans is suspended, then any request
by the Borrower during the pendency of such suspension for a LIBOR Loan shall
be deemed a request for such LIBOR Loan from the Lender(s) not subject to such
suspension and for a Base Rate Loan from the Lender(s) who are subject to such
suspension, in each case in the respective amounts based on the Lenders'
respective Applicable Commitment Percentages.
(c) Determinations by any Lender for purposes of this Section
4.01 of the effect of any Regulatory Change on its costs of making or
maintaining, or being committed to make, Loans or on its Participations in
Letters of Credit or by NationsBank as issuer of any Letter of Credit of the
effect of any Regulatory Change on its costs in connection with the issuance
or maintenance of any Letter of Credit issued hereunder, or on amounts
receivable by any Lender in respect of Loans or Letters of Credit, and of the
additional amounts required to compensate such Lender in respect of any
Additional Costs, shall be made taking into account such Lender's policies, or
the policies of the parent corporation of such Lender, as to the allocation of
capital, costs and other items and shall be conclusive absent manifest error.
The Lender requesting such compensation shall furnish to an Authorized
Representative and the Administrative Agent a written explanation of the
Regulatory Change and calculations, in reasonable detail, setting forth such
Lender's determination of any such Additional Costs.
(d) The provisions of this Section 4.01 shall survive the
payment in full of the Obligations and the termination of this Agreement.
4.02 Suspension of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any LIBOR Loan or Index Rate Competitive Bid Loan for any Interest Period, the
Administrative Agent or Required Lenders determine (which determination shall
be conclusive absent manifest error) that:
(a) quotations of interest rates for the relevant
deposits referred to in the definition of LIBOR Base Rate in Section
1.01 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such LIBOR Loan or Index Rate Competitive Bid Loan as provided in
this Agreement; or
(b) the relevant rates of interest referred to in the
definition of "LIBOR Base Rate" in Section 1.01 hereof upon the basis
of which the LIBOR Rate or the Index Rate for such Interest Period is
to be determined do not adequately reflect the cost to the Lenders of
making or maintaining such LIBOR Loan or Index Rate Competitive Bid
Loan for such Interest Period;
then the Administrative Agent shall give the Lenders and an Authorized
Representative prompt notice thereof, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make such Index Rate
Competitive Bid Loans or make or continue such LIBOR Loans that are subject to
such condition, or to convert Loans into LIBOR Loans, and the Borrower shall
on the last day(s) of the then current Interest Period(s) for outstanding
LIBOR Loans convert such LIBOR Loans into Base Rate Loans. The Administrative
Agent shall give the Lenders and an Authorized Representative notice
describing any event or condition described in this Section 4.02 promptly
following the determination by the Administrative Agent that the availability
of LIBOR Loans or Index Rate Competitive Bid Loans is, or is to be, suspended
as a result thereof.
4.03 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender to honor its obligation
to make or maintain LIBOR Loans or Index Rate Competitive Bid Loans hereunder,
then such Lender shall promptly notify the Borrower thereof (with a copy to
the Administrative Agent) and such Lender's obligation to make Index Rate
Competitive Bid Loans or make or continue LIBOR Loans, or convert Base Rate
Loans into LIBOR Loans, shall be suspended until such time as such Lender may
again make and maintain LIBOR Loans or Index Rate Competitive Bid Loans, and
such Lender's outstanding LIBOR Loans and Index Rate Competitive Bid Loans
shall be converted into Base Rate Loans in accordance with Section 2.11 hereof
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a LIBOR Loan or an Index Rate Competitive Bid Loan occurs on a
day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay such amounts, if any, as may be required
pursuant to Section 4.04 hereof. In the event that the obligation of some,
but not all, of the Lenders to make or continue, or to convert Base Rate Loans
into, LIBOR Loans is suspended, then any request by the Borrower during the
pendency of such suspension for a LIBOR Loan shall be deemed a request for
such LIBOR Loan from the Lender(s) not subject to such suspension and for a
Base Rate Loan from the Lender(s) who are subject to such suspension, in each
case in the respective amounts based on the Lenders' respective Applicable
Commitment Percentages.
4.04 Compensation. The Borrower shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the determination of Lender) to compensate it for any actual loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion, as
applicable, of a LIBOR Loan or Index Rate Competitive Bid Loan on a
date other than the last day of the Interest Period for such LIBOR
Loan or Index Rate Competitive Bid Loan, including without limitation
any conversion required pursuant to this Article IV; or
(b) any failure by the Borrower to borrow a LIBOR Loan
or Index Rate Competitive Bid Loan or to convert a Base Rate Loan
into a LIBOR Loan on the date for such borrowing or conversion
specified in the relevant Borrowing Notice or Interest Rate Selection
Notice under Article II hereof;
A determination of a Lender as to the amounts payable pursuant to this Section
4.04 shall be conclusive absent manifest error. The Lender requesting
compensation under this Section 4.04 shall furnish to an Authorized
Representative and the Administrative Agent calculations in reasonable detail
setting forth such Lender's determination of the amount of such compensation
which shall be paid within thirty (30) days of the submission of such
determination.
4.05 Alternate Interest Rate. In the event any Lender suspends the
making of any LIBOR Loan pursuant to this Article IV (herein a "Restricted
Lender"), the Restricted Lender's Applicable Commitment Percentage of any
LIBOR Loan shall bear interest at the Base Rate until the Restricted Lender
once again makes available the applicable LIBOR Loan. Notwithstanding the
provisions of Section 2.04(b) hereof, interest shall be payable to the
Restricted Lender at the time and manner as paid to those Lenders making
available LIBOR Loans.
4.06 Taxes. (a) All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding (i) franchise taxes, (ii) any taxes other than withholding taxes and
taxes that would be imposed as a result of a connection between a Lender or
the Administrative Agent and the jurisdiction imposing such taxes (other than
a connection arising solely by virtue of the activities of the Lending Office
of such Lender or the Administrative Agent pursuant to or in respect of this
Agreement or any other Loan Document) and (iii) any taxes imposed on or
measured by any Lender's assets, net income, receipts or branch profits (such
non-excluded items being collectively called "Taxes"). In the event that any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrower shall (upon thirty (30) days' prior notice, such
notice to include reasonable documentation of any amounts due):
(A) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(B) promptly forward to the Administrative Agent an
official receipt or other documentation satisfactory to the
Administrative Agent evidencing such payment to such authority; and
(C) pay to the Administrative Agent for the account of
the Lenders such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no such
withholding or deduction been required.
(b) Prior to the date that any Lender or participant organized
under the laws of a jurisdiction outside the United States becomes a party
hereto, such Person shall deliver to the Borrower and the Administrative Agent
such certificates, documents or other evidence, as required by the Code,
properly completed, currently effective and duly executed by such Lender or
participant establishing that such payment is (i) not subject to United States
Federal backup withholding tax and (ii) not subject to United States Federal
withholding tax under the Code because such payment is either effectively
connected with the conduct by such Lender or participant of a trade or
business in the United States or totally exempt from United States Federal
withholding tax by reason of the application of the provisions of a treaty to
which the United States is a party or such Lender is otherwise exempt.
(c) If, after receiving reasonable prior notice, the Borrower
fails to pay any Taxes when due to the appropriate taxing authority or fails
to remit to the Administrative Agent, for the account of the respective
Lender, the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such
failure. For purposes of this Section 4.06, a distribution hereunder by the
Administrative Agent or any Lender to or for the account of any Lender shall
be deemed a payment by the Borrower.
4.07 Replacement Banks. In the event that any Lender (a) shall have its
obligation to make or continue, or convert other Loans into, LIBOR Loans
suspended pursuant to this Article IV for a period in excess of thirty (30)
days, or (b) shall request compensation for Additional Costs pursuant to
Section 4.01 hereof then, notwithstanding the provisions of Section 2.09
hereof, the Borrower may terminate such Lender's Revolving Credit Commitment
by repaying in full the amount of all principal and interest due under such
Lender's Notes and all other amounts due hereunder and providing for a
Replacement Bank.
ARTICLE V
Conditions of Effectiveness
5.01 Conditions of Effectiveness. The effectiveness of this Agreement is
subject to the conditions precedent that the Administrative Agent shall have
received on the Closing Date, in form and substance reasonably satisfactory to
the Administrative Agent and Lenders, the following:
(a) executed originals of each of this Agreement, the
Parent Guaranty and the Notes, together with all schedules and
exhibits hereto and thereto;
(b) executed originals of a Reaffirmation Agreement
from each existing Guarantor;
(c) favorable written opinions of counsel to the
Borrower and the Guarantors dated the Closing Date, addressed to the
Agent and the Lenders and reasonably satisfactory to Smith Helms
Mulliss & Moore, L.L.P., special counsel to the Agent, substantially
in the forms of Exhibits K-1 and K-2 attached hereto and incorporated
herein by reference;
(d) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee thereof)
of the Borrower, the Parent and to the extent necessary, each of the
other Guarantors certified by its secretary or assistant secretary or
other appropriate officer as of the Closing Date, appointing (in the
case of the Borrower) the initial Authorized Representative and
approving and adopting the Loan Documents to be executed by such
Person, and authorizing the execution, delivery and performance
thereof;
(e) specimen signatures of officers of the Borrower,
the Parent and each other Guarantor executing the Loan Documents on
behalf of such Person, certified by the secretary or assistant
secretary or other appropriate official of the Borrower or such
Guarantor, as applicable;
(f) the charter documents of the Borrower, the Parent
and each other Guarantor certified as of a recent date by the
Secretary of State or other appropriate Governmental Authority of its
jurisdiction of incorporation;
(g) the by-laws of the Borrower, the Parent and each
other Guarantor certified as of the Closing Date as true and correct
by the secretary or assistant secretary of the Person to whom such
by-laws relate;
(h) certificates issued as of a recent date by the
Secretary of State or other appropriate Governmental Authority of its
jurisdiction of incorporation as to the due existence and good
standing of the Borrower, the Parent and each other Guarantor therein;
(i) all applicable fees payable by the Borrower on the
Closing Date;
(j) with respect to the Borrower and each Guarantor,
appropriate certificates of qualification to do business, good
standing and, where appropriate, authority to conduct business under
assumed name, issued as of a recent date by the Secretary of State or
other appropriate Governmental Authority of each jurisdiction in
which the failure to be qualified to do business or authorized so to
conduct business could result in a Material Adverse Effect;
(k) a certificate of an Authorized Representative of
the Borrower certifying as to the continuing effectiveness of all
policies of insurance required hereunder;
(l) a certificate of the Assistant Treasurer of the
Borrower in the form of Exhibit L hereto certifying compliance with
certain financial covenants hereunder; and
(m) such other documents, instruments, certificates and
opinions as the Administrative Agent may reasonably request on or
prior to the Closing Date in connection with the consummation of the
transactions contemplated hereby.
5.02 Conditions of Advances. The obligations of the Lenders to make any
Advances or incur Participations in Letters of Credit, and NationsBank to make
Swing Line Loans and to issue Letters of Credit hereunder, on or subsequent to
the Closing Date are subject to the satisfaction of the following conditions:
(a) the Administrative Agent shall have received a
notice of such borrowing or request as required by Article II hereof
and the Lenders have received notice of receipt of such notice of
borrowing or request pursuant to Section 2.01(c)(ii) hereof;
(b) the representations and warranties of the Borrower
and each Guarantor set forth in Article VI hereof and in each of the
other Loan Documents shall be true and correct on and as of the date
of such Advance or issuance of such Letters of Credit, as the case
may be, with the same effect as though such representations and
warranties had been made on and as of such date, except (i) to the
extent that such representations and warranties expressly relate to
an earlier date, (ii) that the representations and warranties set
forth in Sections 6.01(d) and (e) hereof shall be deemed to include
and take into account any merger or consolidation permitted under
Section 8.08 hereof, and (iii) that the financial statements referred
to in Section 6.01(e)(i) hereof shall be deemed to be those financial
statements most recently delivered to the Administrative Agent and
the Lenders pursuant to Section 7.01 hereof;
(c) in the case of the issuance of a Letter of Credit,
Borrower shall have executed and delivered to NationsBank an
Application and Agreement for Letter of Credit in form and content
reasonably acceptable to NationsBank together with such other
instruments and documents as it shall reasonably request;
(d) at the time of each such Advance, Swing Line Loan
or issuance of each Letter of Credit, as the case may be, no Default
or Event of Default shall have occurred and be continuing;
(e) immediately after giving effect to a Swing Line
Loan, the aggregate Swing Line Outstandings shall not exceed
$25,000,000;
(f) immediately after issuing any Letter of Credit, the
aggregate Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment; and
(g) immediately after giving effect to any Loan or
Letter of Credit (i) the sum of the Revolving Credit Outstandings,
Swing Line Outstandings, Letter of Credit Outstandings and
Competitive Bid Outstandings shall not exceed the Total Revolving
Credit Commitment, and (ii) each Lender's Applicable Commitment
Percentage of Revolving Credit Loans and Participations shall not
exceed its Revolving Credit Commitment.
ARTICLE VI
Representations and Warranties
6.01 Representations and Warranties
The Borrower represents and warrants
with respect to itself and to its Subsidiaries (which representations and
warranties shall survive the delivery of the documents mentioned herein and
the making of Loans and issuance of Letters of Credit), that:
(a) Organization and Authority.
(i) the Borrower, the Parent and each Material
Subsidiary is a corporation duly organized and validly
existing under the laws of the jurisdiction of its
incorporation or creation;
(ii) the Borrower, the Parent and each Material
Subsidiary (A) has the requisite power and authority to own
its properties and assets and to carry on its business as
now being conducted and as contemplated in the Loan
Documents, and (B) is qualified to do business and in good
standing in every jurisdiction in which failure to be so
qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect;
(iii) the Borrower has the power and authority
to execute, deliver and perform this Agreement and the
Notes, and to borrow and request issuance of Letters of
Credit hereunder, and to execute, deliver and perform each
of the other Loan Documents to which it is a party;
(iv) each Guarantor has the power and authority
to execute, deliver and perform the Guaranty and the other
Loan Documents to which it is a party; and
(v) when executed and delivered, each of the
Loan Documents to which Borrower or any Guarantor is a party
will be the legal, valid and binding obligation or
agreement, as the case may be, of Borrower or such
Guarantor, enforceable against Borrower or such Guarantor in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the
effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding
at law or in equity);
(b) Loan Documents. The execution, delivery and
performance by the Borrower and each Guarantor of each of the Loan
Documents to which the Borrower or a Guarantor is a party:
(i) have been duly authorized by all requisite
corporate action (including any required shareholder
approval) of the Borrower or the Guarantor signatory thereto
required for the lawful execution, delivery and performance
thereof;
(ii) do not violate in a manner that would
reasonably be likely to have a Material Adverse Effect any
provisions of (1)any applicable law, rule or regulation,
(2) any order of any court or other agency of government
binding on the Borrower or any Guarantor, or their
respective properties, or (3) the charter documents,
documents of organization or governance or by-laws of
Borrower or any Guarantor;
(iii) will not be in conflict with, result in a
breach of or constitute an event of default, or an event
which, with notice or lapse of time, or both, would
constitute an event of default in a manner that would
reasonably be likely to have a Material Adverse Effect,
under any indenture, agreement or other instrument to which
Borrower or any Guarantor is a party, or by which the
properties or assets of Borrower or any Guarantor are bound;
and
(iv) will not result in the creation or
imposition of any material Lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of
Borrower or any Guarantor except any Liens in favor of the
Administrative Agent and the Lenders created by the Loan
Documents;
(c) Solvency. Borrower and each Guarantor are Solvent
after giving effect to the transactions contemplated by this
Agreement and the other Loan Documents;
(d) Material Subsidiaries and Stockholders. Borrower
has no Material Subsidiaries other than those Persons listed as
Material Subsidiaries in Schedule 6.01(d) hereto which schedule sets
forth the correct name and jurisdiction of organization of each
Material Subsidiary and the percentage of shares of each class of
capital stock or similar equity interest of each Material Subsidiary
owned by the Borrower; the outstanding shares or other equity
interests of each Material Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable; and Borrower
owns beneficially and of record all the issued and outstanding shares
of capital stock or equity interests of each Material Subsidiary,
free and clear of any Lien;
(e) Financial Condition.
(i) The Borrower has heretofore furnished to
each Lender audited consolidated balance sheets of the
Parent, the Borrower and its Subsidiaries as at February 22,
1997 and the notes thereto and the related consolidated
statements of operations, cash flows, and stockholders'
equity for the Fiscal Year then ended as examined and
certified by Ernst & Young. Except as set forth therein,
such financial statements (including the notes thereto)
present fairly the financial condition and results of
operations of the Parent, the Borrower and its Subsidiaries
as of the end of and for such Fiscal Year, all in conformity
with Generally Accepted Accounting Principles applied on a
Consistent Basis;
(ii) Since February 22, 1997, there have not
occurred any events having a Material Adverse Effect and the
businesses, properties and operations of the Parent, the
Borrower and its Subsidiaries, considered as a whole, have
not been materially adversely affected as a result of any
fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God;
(iii) Set forth on Schedule 6.01(e) is a
complete and correct list of all outstanding Indebtedness of
the Parent and the Borrower and its Subsidiaries as of the
Closing Date. Neither the Parent, the Borrower nor any
Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or
interest on any Indebtedness of the Parent, the Borrower or
such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Parent, the Borrower or
any Subsidiary the outstanding principal amount of which
exceeds $25,000,000 that would permit (or that with notice
or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable
before its stated maturity or before its regularly scheduled
dates of payment;
(f) Title to Properties. The Borrower and its Material
Subsidiaries have title to all their respective material owned real
and personal properties, subject to no transfer restrictions or Liens
of any kind, except (i) for the transfer restrictions and Liens
described in Schedule 6.01(f) hereto, (ii) for Liens permitted under
Section 8.05 hereof and (iii) where a failure to have such title
would not reasonably be likely to have a Material Adverse Effect.
All material leases that the Borrower is a party to as lessee are (as
against the Borrower and, to the best knowledge of the Borrower, as
against the lessor thereunder) valid and subsisting and are in full
force and effect in all material respects;
(g) Taxes. The Borrower and its Subsidiaries have
filed or caused to be filed or caused to be properly extended all
Federal, state, local and foreign tax returns which are required to
be filed by them and except for taxes and assessments being contested
in good faith by appropriate proceedings diligently conducted and
against which reserves satisfactory to the Borrower's independent
certified public accountants have been established, have paid or
caused to be paid all material taxes as shown on said returns or on
any assessment received by them, to the extent that such taxes have
become and remain due and before they have become delinquent. The
Federal income tax liability of the Borrower and its Subsidiaries has
been determined by the Internal Revenue Service and paid for all
Fiscal Years up to and including the Fiscal Year ended February 24,
1996;
(h) Other Agreements. Neither the Borrower nor any
Material Subsidiary is
(i) a party to any judgment, order, decree,
agreement or instrument or subject to restrictions which
could reasonably be expected to have a Material Adverse
Effect; or
(ii) other than as set forth in Schedule
6.01(h) hereto, in default in the performance, observance or
fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which
the Borrower or any Subsidiary is a party, which default
has, or if not remedied within any applicable grace period
could reasonably be expected to have, a Material Adverse
Effect;
(i) Litigation. Except as set forth in the Parent's or
any Subsidiary's most recent Annual Report on Form 10-K delivered
pursuant to Section 7.01(d) hereof, there is no action, suit or
proceeding at law or in equity or by or before any governmental
instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or
any Subsidiary or affecting the Borrower or any Subsidiary or any
properties or rights of the Borrower or any Subsidiary, which could
reasonably be expected to have a Material Adverse Effect or
questioning the validity or enforceability of, or the ability of
Borrower to perform under, the Loan Documents;
(j) Margin Stock. Neither the Borrower nor any
Subsidiary owns any "margin stock" as such term is defined in
Regulation U, as amended (12 C.F.R. Part 221), of the Board. The
proceeds of the borrowings made pursuant to Article II hereof will be
used by the Borrower and its Subsidiaries only for the purposes set
forth in Section 2.14 hereof. None of the Letters of Credit or such
proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred
to purchase or carry margin stock or for any other purpose which
might constitute any of the Loans under this Agreement a "purpose
credit" within the meaning of said Regulation U or Regulation X (12
C.F.R. Part 224) of the Board. Neither the Borrower nor any agent
acting in its behalf has taken or will take any action which might
cause this Agreement or any of the documents or instruments delivered
pursuant hereto to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended, or the Securities
Act of 1933, as amended, or any state securities laws, in each case
as in effect on the date hereof;
(k) Investment Company. Neither the Borrower nor any
Subsidiary is (i) an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. S80a-1, et seq.) or (ii) subject to
regulation under the Public Utility Holding Company Act of 1935, as
amended, the Interstate Commerce Act, as amended, or the Federal
Power Act, as amended. The Letters of Credit and application of the
proceeds of the Loans and repayment thereof by the Borrower and the
performance by the Borrower of the transactions contemplated by this
Agreement will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission
thereunder, in each case as in effect on the date hereof;
(l) No Untrue Statement. Neither this Agreement nor
any other Loan Document or certificate or document executed and
delivered by or on behalf of the Borrower or any Guarantor in
accordance with or pursuant to any Loan Document knowingly contains
any misrepresentation or untrue statement of material fact or omits
to state a material fact necessary, in light of the circumstances
under which such representation or statement was made, in order to
make any such representation or statement contained herein or therein
not misleading in any material respect;
(m) No Consents, Etc. Neither the respective
businesses or properties of the Parent, the Borrower or any of its
Subsidiaries, nor any relationship between the Parent, the Borrower
and any of its Subsidiaries and any other Person, nor any
circumstance in connection with the execution, delivery and
performance of the Loan Documents and the transactions contemplated
hereby is such as to require a consent, approval or authorization of,
or filing, registration or qualification with, any Governmental
Authority or other authority or any other Person on the part of the
Parent, the Borrower or any of its Subsidiaries as a condition to the
execution, delivery and performance of, or consummation of the
transactions contemplated by, this Agreement or the other Loan
Documents or if so, such consent, approval, authorization, filing,
registration or qualification has been obtained or effected, as the
case may be;
(n) Licenses, Etc. The Borrower, the Parent and each
Subsidiary own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that are material to the business,
operations, affairs, financial condition, assets or properties of the
Parent or the Borrower or its Subsidiaries taken as a whole, without
known conflict with the rights of others, except for those conflicts
that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect;
(o) Benefit Plans.
(i) None of the employee benefit plans
maintained at any time by the Borrower or any ERISA
Affiliate or the trusts created thereunder has engaged in a
prohibited transaction or violated any Foreign Benefit Law
which could subject any such employee benefit plan or trust
to a material tax or penalty on prohibited transactions
imposed under Code Section 4975 or ERISA or under any
Foreign Benefit Law;
(ii) None of the employee benefit plans
maintained at any time by the Borrower or any ERISA Affiliate
which are employee pension benefit plans and which are
subject to Title IV of ERISA or any Foreign Benefit Law or
the trusts created thereunder has been terminated so as to
result in a material liability of the Borrower under ERISA
or under any Foreign Benefit Law nor has any such employee
benefit plan of the Borrower or any ERISA Affiliate incurred
any material liability to the PBGC established pursuant to
ERISA or any other Person exercising similar duties and
functions under any Foreign Benefit Law, other than for
required insurance premiums which have been paid or are not
yet due and payable; neither the Borrower nor any ERISA
Affiliate has withdrawn from or caused a partial withdrawal
to occur with respect to any Multi-employer Plan resulting
in any assessed and unpaid withdrawal liability; the
Borrower and its ERISA Affiliates have made or provided for
all contributions to all such employee pension benefit plans
which they maintain and which are required as of the end of
the most recent fiscal year under each such plan; neither
the Borrower nor any Subsidiary has incurred any accumulated
funding deficiency with respect to any such plan, whether or
not waived; nor has there been any reportable event, or
other event or condition, which presents a material risk of
termination of any such employee benefit plan by such PBGC
or any other Person exercising similar duties and functions
under any Foreign Benefit Law;
(iii) The present value of all vested accrued
benefits under the employee pension benefit plans which are
subject to Title IV of ERISA or any Foreign Benefit Law,
maintained by the Borrower or any ERISA Affiliate, did not,
as of the most recent valuation date for each such plan,
exceed the then current value of the assets of such employee
benefit plans allocable to such benefits;
(iv) The consummation of the Loans and the
issuance of the Letters of Credit provided for in Article II
and Article III hereof will not involve any prohibited
transaction under ERISA or any Foreign Benefit Law which is
not subject to a statutory or administrative exemption;
(v) To the best of the Borrower's knowledge,
each employee pension benefit plan subject to Title IV of
ERISA or any Foreign Benefit Law, maintained by the Borrower
or any ERISA Affiliate, has been administered in accordance
with its terms in all material respects and is in compliance
in all material respects with all applicable requirements of
ERISA and other applicable laws, regulations and rules and
any applicable Foreign Benefit Law;
(vi) There has been no withdrawal liability
incurred and unpaid with respect to any Multi-employer Plan
to which the Borrower or any ERISA Affiliate is or was a
contributor;
(vii) As used in this Agreement, the terms
"employee benefit plan," "employee pension benefit plan,"
"accumulated funding deficiency," "reportable event," and
"accrued benefits" shall have the respective meanings
assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Code
Section 4975 and ERISA; and
(viii) Neither the Borrower nor any ERISA
Affiliate has any liability not disclosed on any of the
financial statements referred to in Section 6.01(e)(i)
hereof or furnished to the Lenders pursuant to Section 7.01
hereof, contingent or otherwise, under any plan or program
or the equivalent for unfunded post-retirement benefits,
including pension, medical and death benefits, which
liability could reasonably be expected to have a Material
Adverse Effect;
(p) No Default. As of the date hereof, to the
knowledge of each Authorized Representative, there does not exist any
Default or Event of Default;
(q) Hazardous Materials. The Borrower and each
Subsidiary is in compliance in all material respects with all
applicable Environmental Laws and neither the Borrower nor any
Subsidiary has been notified of any action, suit, proceeding or
investigation which calls into question compliance by the Borrower or
any Subsidiary with any Environmental Laws or which seeks to suspend,
revoke or terminate any license, permit or approval necessary for the
generation, handling, storage, treatment or disposal of any Hazardous
Material any of which would reasonably be likely to have a Material
Adverse Effect;
(r) RICO. Neither the Borrower nor any Material
Subsidiary is engaged in or has engaged in any course of conduct that
could reasonably be expected to subject any of their respective
properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law,
civil or criminal, or other similar laws;
(s) Employment Matters. Except as disclosed in the
Parent's or any Subsidiary's most recent Annual Report on Form 10-K
delivered pursuant to Section 7.01(d) hereof, the Borrower and all
Subsidiaries are in compliance in all material respects with all
applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to
wages, hours, occupational safety and taxation the noncompliance with
which could reasonably be expected to have a Material Adverse Effect
and there is neither pending nor, to the knowledge of the Borrower,
threatened any litigation, administrative proceeding or investigation
in respect of such matters, an adverse ruling or determination in
which could reasonably be expected to have a Material Adverse Effect;
and
(t) Foreign Assets Control Regulations, etc. Neither
the Indebtedness incurred by the Borrower hereunder nor the
Borrower's use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
ARTICLE VII
Affirmative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Required Lenders shall otherwise consent in writing, the Borrower will:
7.01 Financial Reports, Etc. (a) as soon as practical and in any event
within 95 days after the end of each Fiscal Year of the Parent, deliver or
cause to be delivered to the Administrative Agent and each Lender (i) the
consolidated balance sheets of the Parent, the Borrower and its Subsidiaries,
in each case with the notes thereto, and the related consolidated statements
of operations, cash flow, and shareholders' equity and the respective notes
thereto for and as of the end of such Fiscal Year, setting forth comparative
financial statements for and as of the end of the preceding Fiscal Year, all
prepared in accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis and containing opinions of Ernst & Young, or other such
independent certified public accountants of similar stature, which are
unqualified and without exception not reasonably acceptable to the Required
Lenders; and (ii) a certificate of an Authorized Representative as to the
existence of any Default or Event of Default and demonstrating compliance with
Sections 8.01, 8.02, 8.03 and 8.04(ii) hereof, which certificate shall be in
the form attached hereto as Exhibit L and incorporated herein by reference;
(b) as soon as practical and in any event within 50 days after
the end of each Fiscal Quarter (other than the last Fiscal Quarter in any
Fiscal Year) deliver to the Administrative Agent and each Lender (i)the
consolidated balance sheets of the Parent, the Borrower and its Subsidiaries,
as of the end of such Fiscal Quarter, the related consolidated statements of
operations and shareholders' equity for such Fiscal Quarter and statements of
cash flow for the period from the beginning of the current Fiscal Year through
the end of such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding periods from the preceding Fiscal Year
accompanied by a certificate of an Authorized Representative to the effect
that such financial statements present fairly the financial position of the
Parent, the Borrower and its Subsidiaries as of the end of such reporting
period and the results of their operations and the changes in their financial
position for such reporting period, in conformity with the standards set forth
in Section 6.01(e)(i) hereof with respect to interim financials, and (ii)a
certificate of an Authorized Representative as to the existence of any Default
or Event of Default and containing computations for such quarter comparable to
that required pursuant to Section 7.01(a)(ii) hereof;
(c) together with each delivery of the financial statements
required by Section 7.01(a)(i) hereof, deliver to the Administrative Agent and
each Lender a letter from the Borrower's accountants specified in Section
7.01(a)(i) hereof stating that, in performing the audit necessary to render an
opinion on the financial statements delivered under Section 7.01(a)(i) hereof,
they obtained no knowledge of any Default or Event of Default by the Borrower
in the fulfillment of the terms and provisions of this Agreement insofar as
they relate to financial matters (which at the date of such statement remains
uncured); and if the accountants have obtained knowledge of such Default or
Event of Default, a statement specifying the nature and period of existence
thereof;
(d) promptly upon their becoming available to the Borrower,
deliver to the Administrative Agent a copy of (i)all regular or special
reports or effective registration statements which the Parent, the Borrower or
any Subsidiary shall file with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange and (ii) any proxy statement
distributed by the Parent, its shareholders or bondholders or the financial
community in general, all such reports and statements to be delivered without
exhibits unless otherwise reasonably requested by the Administrative Agent; and
(e) promptly, from time to time, deliver or cause to be
delivered to the Administrative Agent such other information regarding
Borrower's and each Subsidiary's operations, business affairs, assets,
properties and financial condition as the Administrative Agent may reasonably
request. The Administrative Agent and the Lenders are hereby authorized to
deliver a copy of any such financial information delivered hereunder to the
Lenders (or the parent of any Lender or a wholly-owned subsidiary of the
parent of any Lender) or to the Administrative Agent, to any regulatory
authority having jurisdiction over any of the Lenders pursuant to any written
request therefor, or, subject to Section 11.01(g) hereof, to any other Person
who shall acquire or consider the acquisition of a participation interest in
or assignment of any Loan or Letter of Credit permitted by this Agreement or
as otherwise permitted pursuant to Section 11.17 hereof.
7.02 Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition (ordinary wear and tear
excepted) and make all needed repairs, replacements and renewals as are
necessary to conduct its business in accordance with customary business
practices.
7.03 Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and all
material rights and franchises, trade names, trademarks and permits, except to
the extent terminated or conveyed in connection with a transaction permitted
under Section 8.08 or 8.14 hereof, and maintain its license or qualification
to do business as a foreign corporation and good standing in each jurisdiction
in which its ownership or lease of property or the nature of its business
makes such license or qualification necessary and where the failure to be so
licensed or qualified would be reasonably likely to have a Material Adverse
Effect.
7.04 Regulations and Taxes. File all income tax or similar returns
required to be filed in any jurisdiction and comply with all statutes and
governmental regulations and pay all taxes, assessments, governmental charges,
claims for labor, supplies, rent and any other obligation before they become
delinquent which, if unpaid, might become a Lien against any of its properties
except any of the foregoing being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves have been
established in conformity with Generally Accepted Accounting Principles.
7.05 Insurance. (a) Keep all of its insurable properties adequately
insured at all times and maintain general public liability insurance at all
times with responsible insurance carriers against loss or damage by fire and
other hazards as are customarily insured against by similar businesses owning
such properties similarly situated, and (b) maintain insurance under all
applicable workers' compensation laws (or in the alternative, maintain
required reserves if self-insured for workers' compensation purposes), all on
such terms and in such amounts as are customary for similarly situated
entities of established reputation engaged in the same or similar lines of
business. The Borrower shall use its best efforts to ensure that each of the
policies of insurance described in this Section 7.05 providing material
coverage and policy limits to the Borrower and its Subsidiaries on a
consolidated basis will provide that the insurer shall give the Administrative
Agent not less than thirty (30) days' prior written notice before any such
policy shall terminate, lapse, be cancelled or be materially amended.
7.06 True Books; Right of Inspection (a) Keep true books of record
and account in which full, true and correct entries shall be made of all of
its dealings and transactions in accordance with customary business practices,
and set up on its books such reserves as may be required by Generally Accepted
Accounting Principles with respect to doubtful accounts and all taxes,
assessments, charges, levies and claims and with respect to its business in
general, and include such reserves in interim as well as year-end financial
statements; and (b) permit any Person designated by the Administrative Agent,
at the Administrative Agent's expense (unless a Default or Event or Default
shall exist, then at the Borrower's expense), to visit and inspect any of the
properties, corporate books and financial reports of the Parent, the Borrower
or any of its Subsidiaries, and to discuss its or their affairs, finances and
accounts with its or their principal officers and independent certified public
accountants, all at such reasonable times and as often as the Administrative
Agent may reasonably request.
7.07 Pay Indebtedness to Lenders and Perform Other Covenants. Make full
and timely payment of the principal of and interest on the Notes and all other
Obligations, whether now existing or hereafter arising.
7.08 Observe all Laws. Conform to and duly observe all laws, rules and
regulations and all other valid requirements of any Governmental Authority
with respect to the conduct of its business and obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its properties or the conduct of
its business, to the extent that non-compliance with such requirements or
failure to obtain or maintain such governmental authorizations could not
reasonably be expected to have a Material Adverse Effect.
7.09 Covenants Extending to Material Subsidiaries.
Cause each of its Material Subsidiaries to do with respect to itself, its
business and its assets, each of the things required of the Borrower in
Sections 7.02 through 7.08 hereof, inclusive.
7.10 Officer's Knowledge of Default. Upon any Authorized
Representative obtaining knowledge of any Default or Event of Default or any
default under any other material obligation of the Borrower or any
Subsidiary which would
have a Material Adverse Effect, promptly deliver to the Administrative Agent
written notice thereof, the period of existence thereof, and what action the
Borrower proposes to take with respect thereto.
7.11 Suits or Other Proceedings.
Upon any Authorized Representative
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary or otherwise questioning the validity
or enforceability of, or the ability of the Borrower to enter into or perform
under, the Loan Documents, or any attachment, levy, execution or other process
being instituted against any assets of the Borrower or any Subsidiary, in an
aggregate stated amount greater than $25,000,000 not otherwise covered by
insurance, promptly deliver to the Administrative Agent written notice thereof
stating the nature and status of such litigation, dispute, proceeding, levy,
execution or other process.
7.12 Notice of Discharge of Hazardous Material or Environmental Complaint.
Promptly provide to the Administrative Agent true, accurate and
complete copies of any and all notices, complaints, orders, directives,
claims, or citations received by the Borrower or any Subsidiary relating to
any material (a) violation or alleged violation by the Borrower or any
Subsidiary of any applicable Environmental Laws; (b) release or threatened
release by the Borrower or any Subsidiary of any Hazardous Material, except
where occurring legally; or (c) liability or alleged liability of the Borrower
or any Subsidiary for the costs of cleaning up, removing, remediating or
responding to a release of Hazardous Materials.
7.13 Environmental Compliance. If the Borrower or any Subsidiary shall
receive notice from any Governmental Authority that the Borrower or any
Subsidiary has violated any applicable Environmental Laws which could
reasonably be likely to have a Material Adverse Effect, promptly deliver a
copy of such notice to the Administrative Agent and use its reasonable best
efforts to remove or remedy, or cause the applicable Subsidiary to remove or
remedy, such violation within a reasonable time.
7.14 Indemnification. Defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective officers,
directors, employees and agents, from and against any and all claims, losses,
liabilities, damages and expenses (including, without limitation, cleanup
costs and reasonable attorneys' fees) arising directly or indirectly from, out
of or by reason of the handling, storage, treatment, emission or disposal of
any Hazardous Material by or in respect of the Borrower or any Subsidiary or
property owned or leased or operated by the Borrower or any Subsidiary.
Notwithstanding anything in this Article VII to the contrary, the provisions
of this Section 7.14 shall survive repayment of the Obligations, occurrence
of the Revolving Credit Termination Date and expiration or termination of this
Agreement.
7.15 Further Assurances. At the Borrower's cost and expense, upon request
of the Administrative Agent, duly execute and deliver or cause to be duly
executed and delivered, to the Administrative Agent such further instruments,
documents, certificates, agreements and financing and continuation statements,
and do and cause to be done such further acts, that may be reasonably
necessary or advisable in the reasonable opinion of the Administrative Agent
to carry out more effectively the provisions and purposes of this Agreement
and the other Loan Documents.
7.16 Benefit Plans. Comply in all material respects with all requirements
of ERISA and any Foreign Benefit Law applicable to it and furnish to the
Administrative Agent as soon as practicable and in any event (a) within thirty
(30) days after the Borrower knows or has reason to know that any reportable
event or other event under any Foreign Benefit Law with respect to any
employee benefit plan maintained by the Borrower or any ERISA Affiliate which
could give rise to termination or the imposition of any material tax or
penalty has occurred, written statement of an Authorized Representative
describing in reasonable detail such reportable event or such other event and
any action which the Borrower or applicable ERISA Affiliate proposes to take
with respect thereto, together with a copy of any notice of such reportable
event given to the PBGC or to any other applicable Person exercising similar
duties and functions under any Foreign Benefit Law or a statement that said
notice, if required, will be filed with the annual report of the United States
Department of Labor with respect to such plan if such filing has been
authorized, (b) promptly after receipt thereof, a copy of any notice that the
Borrower or any ERISA Affiliate may receive from the PBGC or from any other
Person exercising similar duties and functions under any Foreign Benefit Law
relating to the intention of the PBGC or any such Person to terminate any
employee benefit plan or plans of the Borrower or any ERISA Affiliate or to
appoint a trustee to administer any such plan, and (c) within 10 days after a
filing with the PBGC pursuant to Section 412(n) of the Code or with any Person
pursuant to any Foreign Benefit Law of a notice of failure to make a required
installment or other payment with respect to a plan, a certificate of an
Authorized Representative setting forth details as to such failure and the
action that the Borrower or its affected ERISA Affiliate, as applicable,
proposes to take with respect thereto, together with a copy of such notice
given to the PBGC or to such Person.
7.17 Intellectual Property. Continue at all times to preserve, protect
and maintain free from Liens (other than Liens permitted under Section 8.05
hereof) its material patents, copyrights, licenses, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights,
trade secrets and know-how necessary or useful in the conduct of its
operations.
7.18 Use of Proceeds. Use the proceeds of the Loans solely for the
purposes specified in Section 2.14 hereof.
7.19 New Subsidiaries. Promptly, but no later than twenty-one (21) days
after (a) the acquisition or creation of any Subsidiary which would have been
a Material Domestic Subsidiary if included in the Borrower's consolidated
financial statements for the fiscal year then most recently ended, or (b)any
previously existing Person becomes a Material Domestic Subsidiary as reflected
in the then most recent financial statements delivered pursuant to Section
7.01 hereof, cause to be delivered to the Administrative Agent for the benefit
of the Lenders each of the following:
(i) a Guaranty executed by such Material Domestic
Subsidiary, with appropriate insertions of identifying information
and such other changes to which the Administrative Agent may consent
in its discretion;
(ii) an opinion of in-house counsel of the Borrower
dated as of the date of delivery of the Guaranty provided in the
foregoing clause (i) and addressed to the Administrative Agent and
the Lenders, reasonably acceptable to the Administrative Agent and
substantially in the form of the opinions of counsel delivered
pursuant to Section 5.01 hereof with respect to each Guarantor and
Guaranty on the Closing Date;
(iii) current copies of the charter or other
organizational documents and any bylaws of such Material Domestic
Subsidiary, minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors, or appropriate
committees thereof (and, if required by such charter or other
organizational documents or bylaws or by applicable laws, of the
shareholders), of such Subsidiary authorizing the actions and the
execution and delivery of documents described in clause (i) of this
Section 7.19 and evidence satisfactory to the Administrative Agent
(confirmation of the receipt of which will be provided by the
Administrative Agent to the Lenders) that such Material Domestic
Subsidiary is Solvent as of such date and after giving effect to the
Guaranty.
ARTICLE VIII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Required Lenders shall otherwise consent in writing, the Borrower will not,
nor will it permit any Material Subsidiary or the Parent to:
8.01 Consolidated Funded Debt Ratio.
Consolidated Funded Debt Ratio. Permit at any time the Consolidated
Funded Debt Ratio to be greater than 2.95 to 1.00.
8.02 Consolidated Interest Coverage Ratio.
Permit at any time the
Consolidated Interest Coverage Ratio to be less than 5.00 to 1.00.
8.03 Consolidated Shareholders' Equity.
Permit at any time Consolidated
Shareholders' Equity to be less than (a) $268,000,000 during the current
Fiscal Year and (b) during each Fiscal Year thereafter, beginning with the
Fiscal Year commencing March 1, 1998, an amount equal to the sum of (i) the
amount of Consolidated Shareholders' Equity required under this Section 8.03
for the immediately preceding Fiscal Year plus (ii) fifty percent (50%) of
Consolidated Net Income during the immediately preceding Fiscal Year;
provided, however, in no event shall the Consolidated Shareholders' Equity
requirement be decreased as a result of a net loss of the Borrower and its
Subsidiaries (i.e., negative Consolidated Net Income) for any Fiscal Year.
Any increase calculated pursuant hereto shall be determined based upon
financial statements delivered in accordance with Section 7.01(a) hereof;
provided, however such increase shall be deemed effective as of the first day
of the Fiscal Year in which such financial statements are delivered.
8.04 Indebtedness. Permit any Subsidiary to incur, create, assume or
permit to exist any Indebtedness, howsoever evidenced, except for
(a) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course
of business; and
(b) Consolidated Subsidiary Debt not in excess of the
lesser of (A) 25% of Consolidated EBDAIT for the Four Quarter Period
ended on the most recent Determination Date and (B) $75,000,000.
8.05 Guaranties. Incur, create or assume any guaranties of
non-consolidated Indebtedness in an aggregate principal amount in excess of
$50,000,000.
8.06 Liens. Incur, create or permit to exist any pledge, Lien, charge or
other encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by the Borrower or any of its
Subsidiaries, including without limitation any capital stock of the Borrower
or any of its Subsidiaries, other than
(a) Liens existing as of the date hereof and as set
forth in Schedule 6.01(f) hereto;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
Generally Accepted Accounting Principles;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
or created in the ordinary course of business and for amounts not yet
due or which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with Generally Accepted Accounting Principles;
(d) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure
the performance of tenders, bids, leases, contracts (other than for
the repayment of Indebtedness), statutory obligations and other
similar obligations or arising as a result of progress payments under
government contracts;
(e) easements (including, without limitation,
reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations, encroachments,
variations and zoning and other restrictions, charges or encumbrances
(whether or not recorded), which do not interfere materially with the
ordinary conduct of the business of the Borrower or any Material
Subsidiary and which do not materially detract from the value of the
property to which they attach or materially impair the use thereof to
the Borrower or any Material Subsidiary;
(f) Liens on assets of the Borrower or any of its
Subsidiaries and on the capital stock of any of its Subsidiaries,
provided the aggregate fair market value (as reasonably determined by
the Borrower) of all assets and such capital stock subject to such
pledges shall not exceed $50,000,000;
(g) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), contracts with respect to
the Core Business, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, and
rights of usufruct and similar rights to continued use and possession
of lottery equipment or other property in favor of lottery
authorities, in each case incurred in the ordinary course of business;
(h) Liens securing Indebtedness of the Borrower and its
Subsidiaries incurred to finance the acquisition of fixed or capital
assets, including any items of equipment acquired after the date
hereof, and refinancings thereof, provided that (i) such Liens shall
attach concurrently with or within 30 days of the acquisition of such
fixed or capital assets or items of equipment, (ii) such Liens do not
at any time encumber any property other than the property financed by
such Indebtedness, (iii) the amount of Indebtedness secured thereby
is not increased and (iv) the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 100% of the original
purchase price of such property at the time it was acquired;
(i) Liens arising as a result of the use of commercial
letters of credit to finance the purchase price of goods in the
ordinary course of business in transactions not otherwise prohibited
hereunder in favor of the bank issuing such commercial letter of
credit and attaching only on such goods so financed; and
(j) Liens arising out of judgments or awards in respect
of which the Parent, the Borrower or any of its Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review and in
respect of which it shall have secured a subsisting stay of execution
pending such appeal or proceedings for review, provided that it shall
have set aside on its books adequate reserves, to the extent required
by Generally Accepted Accounting Principles applied on a Consistent
Basis, with respect to such judgment or award.
8.07 Investments; Acquisitions. Purchase, own, invest in or otherwise
acquire, directly or indirectly, any stock or other securities or all or
substantially all of the assets of, or make or permit to exist any interest
whatsoever in, any other Person or permit to exist any loans or advances to,
or Capital Expenditures with respect to, any Person, except that Borrower and
its Subsidiaries may maintain investments or invest in
(a) Eligible Securities;
(b) other securities for which the aggregate purchase
price or initial investment for all such securities does not exceed
$10,000,000;
(c) investments existing as of the date hereof and
either disclosed on the financial statements of the Parent, the
Borrower and its Subsidiaries referred to in Section 6.01(e) hereof
or individually and in the aggregate not required to be disclosed in
such financial statements or the notes thereto;
(d) accounts receivable arising and trade credit
granted in the ordinary course of business and any securities
received in satisfaction or partial satisfaction thereof in
connection with accounts of financially troubled Persons to the
extent reasonably necessary in order to prevent or limit loss;
(e) key man life insurance with respect to its
executive officers;
(f) investments in, advances to or Capital Expenditures
with respect to any Person other than those Persons described in
clauses (a), (b), (c), (d), (e), (g), (h), (i), (j) and (k) hereof
in an aggregate Investment Commitment at any time not to exceed
$150,000,000; provided that no single or series of related
investments, advances or Capital Expenditures permitted under this
Section 8.07(f) shall exceed at any time an Investment Commitment of
$75,000,000;
(g) investments in Consolidated Subsidiaries engaged in
the Core Business and loans or advances by the Passive Investment
Company to the Borrower or any Guarantor in connection with the Core
Business;
(h) loans and advances to officers, directors and
employees of the Borrower or its Subsidiaries for travel,
entertainment and relocation expenses and other business purposes,
all in the ordinary course of business;
(i) investments of the Borrower under any agreement
creating Rate Hedging Obligations;
(j) investments representing stock or obligations
issued to the Parent, the Borrower or any of its Subsidiaries in
settlement of claims against any other Person by reason of a
composition or readjustment of debt or a reorganization of any debtor
of the Parent or such Subsidiary; and
(k) other loans, advances and investments in an
aggregate principal amount at any time outstanding not to exceed
$5,000,000.
8.08 Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to consolidate with or merge into
it, provided, however, (i) any Subsidiary may merge or transfer all or
substantially all of its assets into or consolidate with the Borrower or any
wholly-owned Subsidiary, (ii) any Person may merge with the Borrower if the
Borrower shall be the survivor thereof and such merger shall not cause, create
or result in the occurrence of any Default or Event of Default and (iii) no
Material Domestic Subsidiary may consolidate with or merge into any Subsidiary
unless such Material Domestic Subsidiary is the survivor of such consolidation
or merger or the Subsidiary is also a Material Domestic Subsidiary and (iv) in
any case hereunder, no Event of Default shall exist after giving effect to
such merger or consolidation.
8.09 Transactions with Affiliates. Enter into any transaction after the
Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate (other than a Guarantor), except (a) that such Persons may
render services to the Borrower or its Subsidiaries for compensation at the
same rates generally paid by Persons engaged in the same or similar businesses
for the same or similar services and (b)in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries and upon fair and reasonable terms no less favorable to the
Borrower (or any Subsidiary) than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
8.10 Benefit Plans. With respect to all employee pension benefit plans
maintained by the Borrower or any ERISA Affiliate:
(a) terminate any of such employee pension benefit
plans so as to incur any liability to the PBGC established pursuant
to ERISA or to any other Person exercising similar duties and
functions under any Foreign Benefit Law where such termination would
be reasonably likely to have or would have a Material Adverse Effect;
(b) engage in any prohibited transaction involving any
of such employee pension benefit plans or any trust created
thereunder which would subject the Borrower or an ERISA Affiliate to
a tax or penalty or other liability on prohibited transactions
imposed under Code Section 4975 or ERISA or under any Foreign Benefit
Law;
(c) fail to pay to any such employee pension benefit
plan any contribution which it is obligated to pay under the terms of
such plan;
(d) allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such employee
pension benefit plan;
(e) allow or suffer to exist any occurrence of a
reportable event or any other event or condition, which presents a
material risk of termination by the PBGC, or to any other Person
exercising similar duties and functions under any Foreign Benefit
Law, of any such employee pension benefit plan that is a Single
Employer Plan, which termination could result in any liability to the
PBGC or under any Foreign Benefit Law; or
(f) incur any withdrawal liability with respect to any
Multi-employer Plan which would be reasonably likely to have or would
have a Material Adverse Effect.
8.11 Fiscal Year. Change its Fiscal Year.
8.12 Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with (a) the merger or
consolidation of Material Subsidiaries into each other or into the Borrower as
permitted pursuant to Section 8.08 hereof and (b) the declaration of
bankruptcy, liquidation and dissolution of Subsidiaries which are not Material
Subsidiaries.
8.13 Dividends, Redemptions and Other Payments.
If (a) any Default or
Event of Default shall exist under Sections 8.01, 8.02 or 8.03 hereof or a
Default or Event of Default under any such section would be created by the
declaration or payment of cash dividends or any other payment or distribution
of cash on account of its capital stock or the purchase, redemption or other
retirement of its capital stock, or (b) an Event of Default has occurred and
is continuing, declare or pay any cash dividends or make any other payment or
distribution of cash on any shares of stock of any class of the Borrower, now
or hereafter outstanding, or purchase, redeem or otherwise retire any such
shares in consideration of cash or apply or set apart any of their assets
therefor or make any other distribution (by redemption of capital or
otherwise) in respect of any such shares in consideration of cash, or agree to
do any of the foregoing.
8.14 Disposition of Assets. The Borrower will not, and will not permit
any Guarantor to, directly or indirectly, sell, lease, transfer or otherwise
dispose of (collectively a "Disposition") any of its properties or assets
unless, after giving effect to such proposed Disposition, the aggregate net
book value of all assets that were the subject of a Disposition during the
twelve calendar months immediately preceding the date of such proposed
Disposition (the "Disposition Date") does not exceed 15% of Consolidated
Assets as at the end of the quarterly fiscal period of the Borrower ended
immediately prior to the Disposition Date. Any Disposition of shares of stock
of any Subsidiary shall, for purposes of this Section, be valued at an amount
that bears the same proportion to the book value of the total assets of such
Subsidiary as the number of such shares bears to the total number of issued
and outstanding shares of stock of such Subsidiary. Notwithstanding the
foregoing, the following Dispositions shall not be taken into account under
this Section 8.14:
(a) any Disposition of inventory, equipment, fixtures,
supplies or materials made in the ordinary course of business at fair
value;
(b) any Disposition to the Parent or to a wholly-owned
Material Subsidiary; and
(c) any Disposition the net proceeds of which are
applied within 180 days of the related Disposition Date to (x) the
repayment of Consolidated Funded Indebtedness (and any associated
premium) of the Borrower or such Guarantor or (y) the acquisition of
assets (other than current assets) to be used in the ordinary course
of business of the Borrower or such Guarantor.
8.15 Sale and Leaseback Transactions.
The Borrower will not, and will not permit any Material
Subsidiary to, enter into any Sale and Leaseback Transaction as lessee
unless:
(a) such Sale and Leaseback Transaction is between such
Material Subsidiary and the Borrower or the Parent, between such
Material Subsidiary and any wholly-owned Material Subsidiary or
between the Borrower or the Parent and any wholly-owned Material
Subsidiary;
(b) the proceeds received by the Borrower or such
Material Subsidiary from such Sale and Leaseback Transaction as
lessee are applied within 180 days of the date of such transaction to
(x) the prepayment of Consolidated Funded Indebtedness (and any
associated premium) of the Borrower or such Material Subsidiary or
(y) the acquisition of assets (other than current assets) to be used
in the ordinary course of business of the Borrower or such Material
Subsidiary, as the case may be; or
(c) at the time of entering into such Sale and
Leaseback Transaction and immediately after giving effect thereto,
Priority Debt shall not exceed 15% of Consolidated Assets.
ARTICLE IX
Events of Default and Acceleration
9.01 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), that is to say:
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or Reimbursement Obligation,
when and as the same shall be due and payable whether pursuant to any
provision of Article II or Article III hereof, at maturity, by
acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan and such amount remains
unpaid for five (5) or more days or of any fees or other amounts
payable to the Lenders, the Administrative Agent or NationsBank under
the Loan Documents on the date on which the same shall be due and
payable and such amounts remain unpaid for thirty (30) or more days;
or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 7.10, 7.11, 7.18 or
Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.06, 8.07, 8.08, 8.12, 8.13,
8.14 or 8.15 hereof; or
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement, any Guaranty or the Notes
(other than as described in clause (a), (b) or (c) above) and such
default shall continue (i)for thirty (30) or more days after receipt
of notice of such default by an Authorized Representative from the
Administrative Agent or (ii)for forty-five (45) days after an
Authorized Representative becomes aware of such default, or if such
default is of a type that cannot be cured within thirty (30) days or
forty-five (45) days, as applicable (but reasonably can be cured
within ninety (90) days), and the Parent, the Borrower or any of its
Subsidiaries is diligently and in good faith attempting to cure such
default, such default shall continue unremedied for a period of
ninety (90) or more days after such notice or awareness, or if an
Event of Default shall occur under any of the other Loan Documents or
in any instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Administrative Agent or the Lenders
or delivered to the Administrative Agent or the Lenders in connection
with or pursuant to this Agreement or any of the Obligations, or if
any material provision of any Loan Document ceases to be in full
force and effect (other than by reason of any action by the
Administrative Agent), or if without the written consent of the
Administrative Agent, any material provision of this Agreement or any
other Loan Document shall be disaffirmed, or the validity, binding
nature or enforceability thereof shall be contested by the Borrower,
the Parent or any Guarantor, or this Agreement or any other Loan
Document shall terminate, be terminable or be terminated or become
void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or by reason of
any action by the Administrative Agent or any Lender); or
(e) if a default (whether as principal or as guarantor
or other surety) shall occur, which is not waived and as to which any
applicable grace period has expired, (i)in the payment of any
principal, interest, premium or other amounts with respect to any
Indebtedness (other than the Obligations) of the Borrower or of any
Subsidiary in an amount not less than $25,000,000 in the aggregate
outstanding, or (ii)in the performance, observance or fulfillment of
any term or covenant contained in any agreement or instrument under
or pursuant to which any such Indebtedness may have been issued,
created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, and if such default shall permit the holder of any such
Indebtedness to accelerate the maturity thereof or (iii) under the
Note Agreement or the Notes (as defined in the Note Agreement); or
(f) if any representation, warranty or other statement
of fact contained herein or any other Loan Document or in any
writing, certificate, report or statement at any time furnished to
the Administrative Agent or any Lender by or on behalf of the
Borrower or any Guarantor pursuant to or in connection with this
Agreement or the other Loan Documents, or otherwise, shall be false
or misleading in any material respect when given or made or deemed
given or made; or
(g) if the Borrower, the Parent or any Material
Subsidiary shall (i) fail to pay, admit in writing its inability to
pay or be unable to pay its debts generally as they become due, (ii)
file, or consent by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
insolvency, reorganization, bankruptcy, receivership or similar law,
domestic or foreign; make an assignment for the benefit of its
creditors; (iii) commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the
whole or any substantial part of its property; (iv) file a petition
or answer seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or
statute, Federal, state or foreign; (v) be adjudicated as insolvent
or to be liquidated or (vi) take any corporate action for the purpose
of any of the foregoing; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree ordering the dissolution, winding-up or
liquidation of, or appointing a custodian, receiver, trustee,
liquidator or conservator of, the Borrower, the Parent or any
Material Subsidiary or of the whole or any substantial part of its
properties and such order, judgment or decree continues unstayed and
in effect for a period of sixty (60) days, or approve a petition
filed against the Borrower or any Material Subsidiary seeking
reorganization or arrangement or similar relief under the Federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state or foreign country, province or other
political subdivision, which petition is not dismissed within sixty
(60) days; or if, under the provisions of any other law for the
relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of the Borrower or any Material Subsidiary
or of the whole or any substantial part of its properties, which
control is not relinquished within sixty (60) days; or if there is
commenced against the Borrower or any Material Subsidiary any
proceeding or petition seeking reorganization, arrangement or similar
relief under the Federal bankruptcy laws or any other applicable law
or statute of the United States of America or any state or foreign
country, province or other political subdivision which proceeding or
petition remains undismissed for a period of sixty (60) days; or if
the Borrower or any Material Subsidiary takes any action to indicate
its consent to or approval of any such proceeding or petition; or
(i) if (i)any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $25,000,000 is rendered against the Borrower or any
Subsidiary, or (ii)there is any attachment, injunction or execution
against any of the Borrower's or any Subsidiary's properties for any
amount in excess of $25,000,000; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged,
unbonded or undismissed for a period of sixty (60) days; or
(j) if the Borrower or any Subsidiary shall cease all
or any part of its operations and such cessation is reasonably likely
to have a Material Adverse Effect; or
(k) if (i)the Borrower or any ERISA Affiliate shall
engage in any prohibited transaction (as described in Section
8.10(ii) hereof), which is not subject to a statutory or
administrative exemption, involving any employee pension benefit plan
of the Borrower or any ERISA Affiliate, (ii)any accumulated funding
deficiency (as referred to in Section 8.10(iv) hereof), whether or
not waived, shall exist with respect to any Single Employer Plan,
(iii)a reportable event (as referred to in Section 8.10(v) hereof)
(other than a reportable event for which the statutory notice
requirement to the PBGC has been waived by regulation) shall occur
with respect to, or proceeding shall commence to have a trustee
appointed, or a trustee shall be appointed to administer or to
terminate, any Single Employer Plan, which reportable event or
institution or proceedings is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Single
Employer Plan for purposes of Title IV of ERISA, and in the case of
such a reportable event, the continuance of such reportable event
shall be unremedied for sixty (60) days after notice of such
reportable event pursuant to Section 4043(a), (c) or (d) of ERISA is
given, as the case may be, (iv)any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, and such termination
results in a material liability of the Borrower or any ERISA
Affiliate to such Single Employer Plan or the PBGC, (v)the Borrower
or any Subsidiary shall withdraw from a Multi-employer Plan for
purposes of Title IV of ERISA, and, as a result of any such
withdrawal, the Borrower or any ERISA Affiliate shall incur
withdrawal liability to such Multi-employer Plan, or (vi)any other
material event or condition shall occur or exist; and in each case in
clauses (i)through (vi)of this Section 9.01(k), such event or
condition, together with all other such events or conditions, if any,
could reasonably be expected to subject the Borrower or any ERISA
Affiliate to any material tax, penalty or other liabilities; or
(l) if the Borrower or any Subsidiary shall breach any
of the material terms or conditions of any Swap Agreement and such
breach shall continue beyond any grace period, if any, relating
thereto pursuant to its terms; or
(m) if the Parent or the Borrower shall become a party
to or the subject of any agreement, transaction or related series of
transactions pursuant to or as a result of which (i) any Person,
other than the Parent, acquires any shares of capital stock of the
Borrower or (ii) any Person or group of Persons acting in concert
acquires voting control, directly or indirectly, whether by tender
offer or in one or more negotiated block or market transactions, of
more than fifty percent (50%) of the shares of the issued and
outstanding capital stock of any class of the Parent; or
(n) if the Parent shall (i) cease to exist other than
due to a merger into the Borrower, (ii) conduct any business other
than as currently conducted in connection with its ownership of the
Common Stock, (iii) make any investment, acquisition or expenditure
other than for daily operating expenses of its business presently
conducted or (iv) incur any Indebtedness for Money Borrowed after the
Closing Date; provided, however, that the Parent may conduct
acquisitions of entities in which shares of its capital stock are all
or a portion of the consideration paid and upon the consummation of
which the acquired entity is substantially simultaneously merged or
consolidated into the Borrower or a Subsidiary in accordance with the
terms of this Agreement;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions
may be taken: (i)the Administrative Agent may, and at the
direction of the Required Lenders shall, declare any
obligation of the Lenders to make further Loans and of
NationsBank to issue Letters of Credit terminated, whereupon
the obligation of each Lender to make further Loans and of
NationsBank to issue Letters of Credit, hereunder shall
terminate immediately, and (ii)the Administrative Agent
shall at the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same,
including all interest accrued thereon and all other
Obligations of the Borrower to the Administrative Agent and
the Lenders, shall forthwith become immediately due and
payable without presentment, demand, protest, notice or
other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Advances and issue Letters of Credit hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity
of presentment, demand, protest, notice or other formality
of any kind or any action by the Administrative Agent or the
Required Lenders or notice to the Administrative Agent or
the Lenders;
(B) the Borrower shall, upon demand of the
Administrative Agent or the Required Lenders, deposit cash
with the Administrative Agent in an amount equal to the
amount of all Letter of Credit Outstandings, as collateral
security for the repayment of any future drawings or
payments under such Letters of Credit and the Borrower shall
forthwith deposit and pay such amounts and such amounts
shall be held by the Administrative Agent pursuant to the
terms of the applicable Application and Agreement for Letter
of Credit; and
(C) the Administrative Agent and the Lenders
shall have all of the rights and remedies available under
the Loan Documents or under any applicable law.
9.02 Administrative Agent to Act. In case any one or more Events of
Default shall occur and not have been waived, the Administrative Agent may,
and at the direction of the Required Lenders shall, proceed to protect and
enforce their rights or remedies either by suit in equity or by action at law,
or both, whether for the specific performance of any covenant, agreement or
other provision contained herein or in any other Loan Document, or to enforce
the payment of the Obligations or any other legal or equitable right or remedy.
9.03 Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Administrative Agent is intended to be exclusive of any other
rights or remedies contained herein or in any other Loan Document, and every
such right or remedy shall be cumulative and shall be in addition to every
other such right or remedy contained herein and therein or now or hereafter
existing at law or in equity or by statute, or otherwise.
9.04 No Waiver. No course of dealing between the Borrower and any Lender
or the Administrative Agent or any failure or delay on the part of any Lender
or the Administrative Agent in exercising any rights or remedies under any
Loan Document or otherwise available to it shall operate as a waiver of any
rights or remedies and no single or partial exercise of any rights or remedies
shall operate as a waiver or preclude the exercise of any other rights or
remedies hereunder or of the same right or remedy on a future occasion.
9.05 Allocation of Proceeds. If an Event of Default has occurred and not
been waived, and the maturity of the Notes has been accelerated pursuant to
this Article IX, all payments received by the Administrative Agent hereunder,
in respect of any principal of or interest on the Obligations or any other
amounts payable by the Borrower hereunder shall be applied by the
Administrative Agent in the following order:
(a) amounts due to NationsBank and the Lenders pursuant
to Sections 2.12, 3.02(f), 3.03, 7.14, 11.05 and 11.10 hereof;
(b) amounts due to (A) NationsBank pursuant to
Section 3.04 hereof, and (B) to NationsBank and/or the Administrative Agent
pursuant to Sections 2.12 and 2.15 hereof;
(c) payments of interest on Loans and Reimbursement
Obligations;
(d) payments of principal on Loans and Reimbursement
Obligations;
(e) payment of cash amounts to the Administrative Agent
in respect of Letter of Credit Outstandings pursuant to Section 9.01(B) hereof;
(f) payments of all other amounts due under this
Agreement, if any; and
(g) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by applicable law.
ARTICLE X
The Administrative Agent
10.01 Appointment. Each Lender (including NationsBank in its capacity as
maker of Swing Line Loans and as issuer of the Letters of Credit) hereby
irrevocably designates and appoints NationsBank as the Administrative Agent of
the Lenders under this Agreement, and each of the Lenders hereby irrevocably
authorizes NationsBank as the Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers as are expressly delegated to the
Administrative Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any of the Lenders, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the
Administrative Agent.
10.02 Attorneys-in-fact. The Administrative Agent may execute any of its
duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible to the Lenders
for the negligence, gross negligence or willful misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.03 Limitation on Liability. Neither the Administrative Agent nor any of
its officers, directors, employees, agents or attorneys-in-fact shall be
liable to the Lenders for any action lawfully taken or omitted to be taken by
it or them under or in connection with this Agreement except for its or their
own gross negligence or willful misconduct. Neither the Administrative Agent
nor any of its affiliates shall be responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by
the Borrower or any of its Subsidiaries, or any officer or representative
thereof, contained in this Agreement or in any of the other Loan Documents, or
in any certificate, report, statement or other document referred to or
provided for in or received by the Administrative Agent under or in connection
with this Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any of the other Loan
Documents, or for any failure of the Borrower to perform its obligations
thereunder, or for any recitals, statements, representations or warranties
made, or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any collateral. The Administrative Agent shall not be under
any obligation to any of the Lenders to ascertain or to inquire as to the
observance or performance of any of the terms, covenants or conditions of this
Agreement or any of the other Loan Documents on the part of the Borrower or to
inspect the properties, books or records of the Borrower or its Subsidiaries.
10.04 Reliance.Subject to the provisions hereof, the Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy or telex message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless an Assignment and
Acceptance shall have been filed with and accepted by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first receive
advice or concurrence of the Lenders or the Required Lenders as provided in
this Agreement and it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense (other than any liability or
expense resulting from the gross negligence or willful misconduct of the
Administrative Agent) which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of all of the Lenders or the Required
Lenders, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all present and
future holders of the Notes.
10.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or an
Authorized Representative referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by all of the Lenders or the
Required Lenders, as applicable; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.
10.06 No Representations. Each Lender expressly acknowledges that neither
the Administrative Agent nor any of its affiliates has made any
representations or warranties to it and that no act by the Administrative
Agent hereafter taken, including any review of the affairs of the Borrower or
any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Borrower and its Subsidiaries and made its own decision to
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and to make
such investigation as it deems necessary to inform itself as to the status and
affairs, financial or otherwise, of the Borrower and its Subsidiaries. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any of its Subsidiaries which may come into the
possession of the Administrative Agent or any of its affiliates.
10.07 Indemnification. The Lenders, severally and not jointly, agree to
indemnify the Administrative Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting any obligations of the
Borrower or any Subsidiary so to do), including its employees, directors,
officers and agents, ratably according to the respective principal amount of
the Notes and Participations held by them (or, if no Notes or Participations
are outstanding, ratably in accordance with their respective Applicable
Commitment Percentages as then in effect) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may at any time (including, without limitation at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent, including its employees, directors, officers and agents,
in any way relating to or arising out of this Agreement or any other document
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. The agreements in this Section 10.07 shall survive the
final payment in full of the Obligations and the termination of this Agreement.
10.08 Lender. NationsBank and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower
and its Subsidiaries as though it were not the Administrative Agent
hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, NationsBank shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall, unless the
context otherwise indicates, include NationsBank in its individual capacity.
10.09 Resignation. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, prior written notice of which shall
be delivered by the Administrative Agent to the Borrower and each Lender
thirty (30) days prior to its effectiveness, then, so long as there shall not
have occurred and be continuing a Default or Event of Default, the Borrower
may appoint and the Required Lenders may approve (which approval shall not be
unreasonably withheld or delayed) a successor Administrative Agent for the
Lenders, or if a Default or Event of Default shall have occurred and be
continuing, the Required Lenders may appoint a successor Administrative Agent
for the Lenders, which successor Administrative Agent shall be (i) the
Documentation Agent or any Co-Agent hereunder (and no approvals by the
Required Lenders shall be required in the case of the Documentation Agent or a
Co-Agent) or (ii) any commercial bank organized under the laws of the United
States or any state thereof or licensed to do business in the United States or
any state thereof, having a combined surplus and capital of not less than
$250,000,000, whereupon such successor Administrative Agent shall succeed to
the rights, powers and duties of the former Administrative Agent and the
obligations of the former Administrative Agent shall be terminated and
cancelled, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement; provided,
however, that the former Administrative Agent's resignation shall not become
effective until such successor Administrative Agent has been appointed and has
succeeded of record to all right, title and interest in any collateral held by
the Administrative Agent; provided, further, that if the Required Lenders and
the Borrower cannot agree as to a successor Administrative Agent within ninety
(90) days after the effective date of such resignation, the Administrative
Agent shall appoint a successor Administrative Agent which satisfies the
criteria set forth above in this Section 10.09 for a successor Administrative
Agent and the parties hereto agree to execute whatever documents are necessary
to effect such action under this Agreement or any other document executed
pursuant to this Agreement; provided, however that in such event all
provisions of this Agreement and the other Loan Documents shall remain in full
force and effect. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article X shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
10.10 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article IV hereof) which results in its receiving more than its pro rata
share of the aggregate payments with respect to all of the Obligations (other
than any payment pursuant to Article IV hereof), then (A) such Lender shall be
deemed to have simultaneously purchased from the other Lenders a share in
their Obligations so that the amount of the Obligations held by each of the
Lenders shall be pro rata and (B) such other adjustments shall be made from
time to time as shall be equitable to insure that the Lenders share such
payments ratably; provided, however, that for purposes of this Section 10.10
the term "pro rata" shall be determined with respect to both the Revolving
Credit Commitment of each Lender and to the Total Revolving Credit Commitment
after subtraction in each case of amounts, if any, by which any such Lender
has not funded its share of the outstanding Revolving Credit Loans and
Participations, as the case may be. If all or any portion of any such excess
payment is thereafter recovered from the Lender which received the same, the
purchase provided in this Section 10.10 shall be rescinded to the extent of
such recovery, without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that each Lender so purchasing a portion of
the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
10.11 Documentation Agent and Co-Agents. The Documentation Agent
and each of the Co-Agents identified in the fourth paragraph of the first page
of this Agreement shall have no rights, duties, obligations or liabilities
hereunder with respect to being named as Documentation Agent or a Co-Agent
herein and shall have only those rights, duties, obligations and liabilities
applicable to a Lender hereunder.
10.12 Notice to Lenders. The Administrative Agent shall promptly deliver
to each Lender copies or notice of each notification, request or other
communication or document or agreement, as applicable, received by it from the
Borrower pursuant to Sections 2.03(f), 2.06(a), 2.09, 2.11, 3.02(b), 7.01(d),
7.01(e), 7.10, 7.11, 7.12, 7.13, 7.15, 7.16 and 7.19 hereof.
ARTICLE XI
Miscellaneous
11.01 Assignments and Participations.
(a) At any time after the Closing Date each Lender may, with the
prior written consent of the Administrative Agent and the Borrower, which
consents shall not be unreasonably withheld, assign to one or more financial
institutions all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or
a portion of any Note payable to its order); provided, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations (including Revolving Credit Loans,
Competitive Bid Loans and Participations) under this Agreement, (ii) for each
assignment involving the issuance and transfer of a Note, the assigning Lender
shall execute an Assignment and Acceptance and the Borrower hereby consents to
execute a replacement Note or Notes to give effect to the assignment within
five (5) days of the execution of such Assignment and Acceptance, (iii) the
minimum Revolving Credit Commitment which shall be assigned is $10,000,000
(together with which the assigning Lender's applicable portion of
Participations and the Letter of Credit Commitment shall also be assigned) or
such lesser amount constituting all of such Lender's Revolving Credit
Commitment (and applicable portion of Participations and Letter of Credit
Commitment), (iv) such assignee shall have an office located in the United
States, (v) an assignment (other than an assignment of 100% of its interest)
by NationsBank shall not include any portion of the Swing Line or obligation
to issue Letters of Credit, (vi) each assignee shall execute and deliver to
the Borrower a confidentiality agreement in the form of Exhibit N hereto,
(vii) no consent of the Borrower or Administrative Agent shall be required in
connection with any assignment by a Lender to such Lender's parent or any
wholly-owned subsidiary of such Lender's parent and (viii)the Borrower may
condition its consent to any assignment hereunder upon the Lender assigning
all of its rights and obligations hereunder. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under the other
Loan Documents have been assigned or negotiated to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and thereunder and a holder of such Notes and (y) the assignor
thereunder shall, to the extent that rights and obligations hereunder or under
the other Loan Documents have been assigned or negotiated by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from
that portion of its obligations under this Agreement and the other Loan
Documents applicable to the rights so assigned. Any Lender who makes an
assignment shall pay to the Administrative Agent a one-time administrative fee
of $3,000.00; provided further that in the event the provisions under this
Agreement for providing a Replacement Bank are implemented through an
assignment, the $3,000.00 administration fee shall be payable by the Borrower.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made under such
Assignment and Acceptance without recourse to such Lender assignor; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
Subsidiary or the performance or observance by the Borrower or any Subsidiary
of any of its obligations under any Loan Document or any other instrument or
document furnished pursuant thereto; (iii)such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
Loan Document or any other instrument or document furnished pursuant thereto;
(iv) such assigning Lender is the legal and beneficial owner of the interest
being assigned under such Assignment and Acceptance; (iv)such assignee
confirms that it has received a copy of this Agreement, together with copies
of the financial statements referred to in Section 6.01(e) hereof or most
recently delivered pursuant to Section 7.01 hereof, as the case may be, and
such other Loan Documents and other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement, the Notes and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender and a holder of such Notes.
(c) The Administrative Agent shall maintain at its address
referred to herein a copy of each Assignment and Acceptance delivered to and
accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, the Administrative Agent shall give prompt notice and
shall forward a copy thereof to Borrower.
(e) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
(f) If, pursuant to this Section 11.01, any interest in this
Agreement or any Note is transferred to any assignee Lender which is organized
under the laws of any jurisdiction other than the United States or any state
thereof, the assigning Lender shall cause such assignee Lender, concurrently
with the effectiveness of such transfer, (i) to represent to the assigning
Lender (for the benefit of the assigning Lender, the Administrative Agent and
the Borrower) that under applicable law and treaties no taxes will be required
to be withheld by the Administrative Agent, the Borrower or the assigning
Lender with respect to any payments to be made to such assignee Lender in
respect of the Loans and (ii) to furnish to the assigning Lender, the
Administrative Agent and the Borrower such certificates, documents and other
evidence as required to comply with the penultimate paragraph of Section 4.06
hereof, and the assignee Lender shall comply from time to time with all
applicable United States laws and regulations with regard to such withholding
tax exemption.
(g) Each Lender may sell participations at its expense to one or
more banks as to all or a portion of its rights and obligations under this
Agreement; provided, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) such
Lender shall remain the holder of any Notes issued to it for the purpose of
this Agreement, (iv) such participations shall be in a minimum amount of
$5,000,000 and, in the case of a participation in the Revolving Credit
Facility, shall include an allocable portion of such Lender's Participations,
(v) Borrower, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement; provided, that the participation
agreement between a Lender and its participants may provide that such Lender
will obtain the approval of such participant prior to such Lender's agreeing
to any amendment or waiver of any provisions of this Agreement which would (A)
extend the maturity of any Note, (B) reduce the interest rate hereunder, (C)
increase the Revolving Credit Commitment of the Lender granting the
participation other than as permitted by Section 2.10 hereof or (D) release
any Guarantor, and (vi) the sale of any such participations which require
Borrower to file a registration statement with the United States Securities
and Exchange Commission or under the securities regulations or laws of any
state shall not be permitted.
(h) The Borrower may not assign any rights, powers, duties or
obligations under this Agreement or the other Loan Documents without the prior
written consent of all of the Lenders.
11.02 Notices. All notices shall be in writing, except as to telephonic
notices expressly permitted or required herein, and written notices shall be
delivered by hand delivery, telefacsimile, overnight courier or certified or
registered mail. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against (except as to telephonic or telefacsimile notice) receipt
therefor or, in the case of telex, verification by return) at the address set
forth below or such other address as such party shall specify to the other
parties in writing, or if sent prepaid by certified or registered mail return
receipt requested on the third Business Day after the day on which mailed,
addressed to such party at said address:
(a) if to the Borrower:
GTECH Corporation
55 Technology Way
West Greenwich, Rhode Island 02817
Attention: Vice President and Treasurer
Telephone: (401) 392-1000
Telefacsimile: (401) 392-4940
with a copy to the General Counsel at the same
address:
Telefacsimile: (401) 392-0391
(b) if to the Administrative Agent:
NationsBank, National Association
NationsBank Plaza, NC 1002-06-19
6th Floor
Charlotte, North Carolina 28255
Attention: Angela H. Berry, Agency Services
Telephone: (704) 386-8958
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, National Association
Corporate Banking
767 Fifth Avenue, 5th Floor
New York, New York 10153-0083
Attention: Patricia G. McCormack
Telephone: (212) 407-5373
Telefacsimile: (212) 751-6909
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance.
11.03 Setoff. The Borrower agrees that the Administrative Agent and each
Lender shall have a lien for all the Obligations of the Borrower upon all
deposits or deposit accounts, of any kind, or any interest in any deposits or
deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or
assigned to the Administrative Agent or such Lender or otherwise in the
possession or control of the Administrative Agent or such Lender (other than
for safekeeping) for any purpose for the account or benefit of the Borrower
and including any balance of any deposit account or of any credit of the
Borrower with the Administrative Agent or such Lender, whether now existing or
hereafter established, hereby authorizing the Administrative Agent and each
Lender at any time or times with or without prior notice to apply such
balances or any part thereof to such of the Obligations of the Borrower to the
Lenders then past due and in such amounts as they may elect, and whether or
not any collateral or the responsibility of other Persons primarily,
secondarily or otherwise liable may be deemed adequate. For the purposes of
this paragraph, all remittances and property shall be deemed to be in the
possession of the Administrative Agent or such Lender as soon as the same may
be put in transit to it by mail or carrier or by other bailee.
11.04 Survival. All covenants, agreements, representations and warranties
made herein shall survive the making by the Lenders of the Loans and the
expiration of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of the Obligations remain outstanding or any Lender has
any commitment hereunder. Whenever in this Agreement, any of the parties
hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants, provisions
and agreements by or on behalf of the Borrower which are contained in this
Agreement, the Notes and the other Loan Documents shall inure to the benefit
of the successors and permitted assigns of the Lenders or any of them.
11.05 Expenses. The Borrower agrees (a) except as otherwise agreed in
writing, to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and reasonable expenses incurred in connection with the
preparation, negotiation and execution of this Agreement or any of the other
Loan Documents and the consummation of the transactions contemplated hereby
and thereby, and all such costs and expenses in connection with any amendment,
supplement or modification to this Agreement or any other Loan Document, all
disbursements of counsel to the Administrative Agent, all reasonable due
diligence expenses and syndication expenses, including, without limitation,
travel expenses of the Administrative Agent and its counsel in connection with
due diligence and syndication member meetings and copying and binding expenses
for syndication members, (b)to pay or reimburse the Administrative Agent and
the Lenders for all their reasonable costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement and
the other Loan Documents, including without limitation, the reasonable fees
and disbursements of their counsel and any payments in indemnification or
otherwise payable by the Lenders to the Administrative Agent pursuant to the
Loan Documents provided, that in the event the Administrative Agent or the
Lenders are unsuccessful in their efforts to preserve or enforce their rights,
they shall not be entitled to be reimbursed for the fees and expenses of their
counsel incurred in such efforts, and (c)to pay, and indemnify and hold
harmless the Administrative Agent and the Lenders from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any failure on the part of the Borrower to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of this Agreement or any other Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement or any other Loan Documents. All of the foregoing
costs, liabilities and expenses will be paid by the Borrower to the
Administrative Agent except to the extent such cost, liability or expense is
(i) found in a judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party claiming
reimbursement or indemnification, (ii) incurred or suffered in connection with
legal proceedings commenced against Administrative Agent or any Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such,
or (iii) incurred or suffered in connection with legal proceedings commenced
against or disputes between Administrative Agent or any Lender by
Administrative Agent or any Lender, unless such proceedings or disputes relate
directly to Borrower or Borrower's actions in connection with this Agreement
and are commenced against an indemnified party solely as a result of
Administrative Agent's capacity as administrative or Administrative Agent
hereunder.
11.06 Amendments; Waivers. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lenders to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Borrower and the Administrative Agent, but only upon having received the
written consent of the Required Lenders, and the same shall then be effective
only for the period and on the conditions and for the specific instances and
purposes specified in such writing; provided, however, that, no such
amendment, modification or waiver
(i) which, whether by amendment or waiver of a Default
or an Event of Default, changes, extends or waives any provision of
Section 10.10 hereof or this Section 11.06, decreases the amount of
or extends the due date of any scheduled installment of or decreases
the rate of interest or the amount of any fee payable on or in
connection with any Obligation, changes the definition of Required
Lenders, permits an assignment by Borrower of its Obligations
hereunder, reduces the required consent of Lenders provided
hereunder, extends the Revolving Credit Termination Date or increases
the Revolving Credit Commitment or the Letter of Credit Commitment of
any Lender, waives any condition to the making of any Loan, releases
any Guarantor or waives a Default or Event of Default under Section
9.01(g) or (h) hereof shall be effective unless in writing and signed
by each of the Lenders; or
(ii) which affects the rights, privileges, immunities or
indemnities of the Administrative Agent shall be effective unless in
writing and signed by the Administrative Agent.
No notice to or demand on the Borrower in any case shall entitle the Borrower
to any other or further notice or demand in similar or other circumstances,
except as otherwise expressly provided herein. No delay or omission on any
Lender's or the Administrative Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option
or of any Default or Event of Default. No partial exercise by the
Administrative Agent or the Lenders of any rights or remedies hereunder shall
operate as a waiver of any other rights or remedies that may also be available
hereunder.
11.07 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
11.08 Termination. The termination of this Agreement shall not affect any
rights of the Borrower, the Lenders or the Administrative Agent or any
obligation of the Borrower, the Lenders or the Administrative Agent, arising
prior to the effective date of such termination, and the provisions hereof
shall continue to be fully operative until all transactions entered into or
rights created or obligations incurred prior to such termination have been
fully disposed of, concluded or liquidated and the Obligations arising prior
to or after such termination have been irrevocably and finally paid in full.
The rights granted to the Administrative Agent for the benefit of the Lenders
hereunder and under the other Loan Documents shall continue in full force and
effect, notwithstanding the termination of this Agreement, until all of the
Obligations have been paid in full after the termination hereof or the
Borrower has furnished the Lenders and the Administrative Agent with an
indemnification satisfactory to the Administrative Agent and each Lender with
respect thereto. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until payment in
full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment pursuant to the Loan Documents of
all or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to pay, and shall indemnify and hold harmless
such Lender for, the amount of such payment surrendered until such Lender
shall have been finally and irrevocably paid in full. The provisions of the
foregoing sentence shall be and remain effective notwithstanding any contrary
action which may have been taken by the Lenders in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to the
Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
11.09 Governing Law. All documents executed pursuant to the transactions
contemplated herein, including, without limitation, this Agreement and each of
the other Loan Documents shall be deemed to be contracts made under, and for
all purposes shall be construed in accordance with, the internal laws and
judicial decisions of the State of New York. The Borrower hereby submits to
the jurisdiction and venue of the state and federal courts of New York for the
purposes of resolving disputes hereunder or for the purposes of collection.
11.10 Indemnification. (a) In consideration of the execution and delivery
of this Agreement by the Administrative Agent and each Lender and the
extension of the Letter of Credit Commitments and the Revolving Credit
Commitments, the Borrower hereby indemnifies, exonerates and holds free and
harmless the Administrative Agent and each Lender and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages and expenses incurred in connection
therewith whatsoever with respect to or arising out of the execution,
delivery, enforcement and performance of this Agreement, the Notes, or the
Guaranties (irrespective of whether any such Indemnified Party is a party to
the action for which indemnification hereunder is sought), including
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities") incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Loan or supported by any Letter of Credit, except to the extent (a) any such
Indemnified Liabilities arose for the account of a particular Indemnified
Party by reason of the gross negligence or willful misconduct of such
Indemnified Party, (b) such Indemnified Liability is (i) incurred or suffered
in connection with legal proceedings commenced against such Indemnified Party
by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such, or (ii) incurred or suffered in connection with legal proceedings
commenced against or disputes between any Indemnified Party by any other
Indemnified Party, unless such proceedings or disputes relate directly to
Borrower or Borrower's actions in connection with this Agreement and are
commenced against an Indemnified Party solely as a result of any other
Indemnified Party's capacity as administrative or syndication agent
hereunder. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(b) If a claim is to be made by a party entitled to
indemnification under this Section 11.10 or Section 7.14 hereof against the
Borrower, the applicable Indemnified Party shall give written notice to the
Borrower promptly after such Indemnified Party receives actual notice of any
claim, action, suit, loss, cost, liability, damage or expense incurred or
instituted for which the indemnification is sought. If requested by the
Borrower in writing, and so long as no Default or Event of Default shall have
occurred and be continuing, such Indemnified Party shall contest at the
expense of the Borrower the validity, applicability and/or amount of such
suit, action, or cause of action to the extent such contest may be conducted
in good faith on legally supportable grounds. If any lawsuit or enforcement
action is filed against any Indemnified Party, written notice thereof shall be
given to the Borrower as soon as practicable (and in any event within 20 days
after the service of the citation or summons). Notwithstanding the foregoing,
the failure so to notify the Borrower as provided in this section will relieve
the Borrower from liability hereunder only if and to the extent that such
failure results in the forfeiture by the Borrower of any substantive rights or
defenses. The applicable Indemnified Party shall control the defense and
investigation of such lawsuit or action and shall employ and engage counsel of
its own choice to handle and defend the same, at the Borrower's cost, risk and
expense; provided, however, that the Borrower may, at its own cost participate
in the investigation, trial and defense of such lawsuit or action and any
appeal arising therefrom. If the Borrower has acknowledged to any Indemnified
Party its obligation to indemnify hereunder, such Indemnified Party, so long
as no Default or Event of Default shall have occurred and be continuing, shall
not settle such lawsuit or enforcement action without the prior written
consent of the Borrower and, if the Borrower has not so acknowledged its
obligation, such Indemnified Party shall not settle such lawsuit or
enforcement action without giving twenty (20) days' prior written notice of
such settlement and its terms to the Borrower. The provisions of this Section
11.10 shall survive the final payment in full of the Obligations and the
termination of this Agreement.
11.11 Headings and References. The headings of the Articles and Sections
of this Agreement are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of this
Agreement. Words such as "hereof", "hereunder", "herein" and words of similar
import shall refer to this Agreement in its entirety and not to any particular
Section or provisions hereof, unless so expressly specified. As used herein,
the singular shall include the plural, and the masculine shall include the
feminine or a neutral gender, and vice versa, whenever the context requires.
11.12 Severability. If any provision of this Agreement or the other Loan
Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and
binding on the parties hereto.
11.13 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto, together with the other Loan Documents, constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all previous proposals, negotiations, representations,
commitments and other communications between or among the parties, both oral
and written, with respect thereto.
11.14 Agreement Controls. In the event that any term of any of the Loan
Documents other than this Agreement conflicts with any term of this Agreement,
the terms and provisions of this Agreement shall control.
11.15 Usury Savings Clause. Notwithstanding any other provision herein,
the aggregate interest rate charged under any of the Notes, including all
charges or fees in connection therewith deemed in the nature of interest under
New York law, shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest
Lawful Rate, the outstanding amount of the Loans made hereunder shall bear
interest at the Highest Lawful Rate until the total amount of interest due
hereunder equals the amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect. In addition, if and when the Loans made hereunder are repaid in
full the total interest due hereunder (taking into account the limitation
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Administrative Agent an amount equal to the
difference between the amount of interest paid and the amount of interest
which would have been paid if the Highest Lawful Rate had at all times been in
effect. Notwithstanding the foregoing, it is the intention of the Lenders and
the Borrower to conform strictly to any applicable usury laws. Accordingly,
if any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be canceled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made
hereunder or be refunded to the Borrower. As used in this paragraph, the term
"Highest Lawful Rate" means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be
in effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow.
11.16 Waiver of Jury Trial. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
11.17 Confidentiality. (a) Except as necessary to exercise its rights or
perform its obligations under this Agreement or as permitted pursuant to this
Section 11.17 or Section 7.01(e) hereof, each Lender (including, for purposes
of this Section 11.17, any participant thereof) shall never use or duplicate
any Confidential Information and shall keep confidential and shall not
disclose any Confidential Information unless the Borrower has, in its sole
discretion, previously and expressly consented to such disclosure in writing.
A Lender may disclose such Confidential Information to (i)those directors,
officers, employees, agents, accountants and attorneys of such Lender whose
knowledge is necessary to such Lender's performance hereunder provided that
all such persons shall be advised of their obligations to protect the
Borrower's interests, which obligations shall be identical to those of such
Lender under this Agreement; (ii)examiners or regulatory agencies having
supervisory or examination authority over such Lender in accordance with
customary banking practices; and (iii)any Person pursuant to the order of any
Governmental Authority or as otherwise required by law.
(b) Upon the expiration or earlier termination of this
Agreement, or the cessation of any Lender's status as a party hereto or a
participant of a party hereto, the Lender(s) shall promptly deliver to the
Borrower all records or other information in any media containing or embodying
Confidential Information which were delivered or made available to the Lenders
in connection herewith, including any copies thereof, and to the extent such
records or information is not returned, shall certify that such information
has been destroyed; provided, however, that each Lender may retain
Confidential Information required to be retained by any order of any
Governmental Authority or otherwise required by law.
(c) This Section 11.17 shall indefinitely survive the expiration
or earlier termination of this Agreement, or the cessation of any Lender's
status as a party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be made, executed and delivered by their duly authorized officers as of the
day and year first above written.
GTECH CORPORATION
By:
Title: Chief Financial Officer
NATIONSBANK, NATIONAL
ASSOCIATION, as
Administrative Agent for
the Lenders
By:
Title: Senior Vice President
THE BANK OF NEW YORK, as
Documentation
Agent for the Lenders
By:
Title:
<PAGE>
NATIONSBANK, NATIONAL
ASSOCIATION
By:
Title:
Lending Office:
NationsBank, National
Association
Independence Center
NC1 001-15-04
Charlotte, North Carolina
28255
Attention: Dana
Weir
Agency
Services
Telephone: (704)
388-3917
Telefacsimile: (704)
386-9923
Wire Transfer
Instructions:
NationsBank, National
Association
ABA# 053000196
Reference: GTECH
Corporation
Account No.: 13662122506
Attention:
Commercial Loan
Operations
THE BANK OF NEW YORK
By:
Title: Assistant Vice
President
Lending Office:
1 Wall Street, 22 Floor
New York, New York 10286
Attention: G. Andrew
Keith
Telephone:
(212)
635-6864
Telefacsimile: (212)
635-6999
With a copy to:
1 Wall Street, 22 Floor
New York, New York 10286
Attention: Terry Blackburn
Telephone:
(212)
635-6787
Telefacsimile: (212)
635-6397/6426
Wire Transfer
Instructions:
The Bank of New York
ABA# 021000018
Reference: GTECH
Account No.: GLA/111556
Attention: Lorna Alleyne
BANK OF MONTREAL
By:
Title: Director
Lending Office:
Bank of Montreal
430 Park Avenue, 14th
Floor
New York, New York 10023
Attention: Lisa Megeaski
Telephone:
(212)
605-1441
Telefacsimile: (212)
605-1454
With a copy to:
Bank of Montreal
430 Park Avenue, 8th Floor
New York, New York 10023
Attention: John Moncavage
Telephone:
(212)
605-1681
Telefacsimile: (212)
605-1618
Wire Transfer
Instructions:
Harris Trust & Savings
Bank
115 South LaSalle
Chicago, Illinois 60603
ABA# 071000288
Reference: Bank of
Montreal, Chicago
Account No.: 1248566
BANQUE PARIBAS
By:
Title: Assistant Vice
President
By:
Title: Vice President
Lending Office:
787 Seventh Avenue
New York, New York 10019
Attention: Terri Knuth
Telephone:
(212)
841-2229
Telefacsimile: (212)
841-2217
With a copy to:
787 Seventh Avenue
New York, New York 10019
Attention: Roseann Burke
Telephone:
(212)
841-2091
Telefacsimile: (212)
841-2333
Wire Transfer
Instructions:
Bankers Trust New York
________________________________
ABA# 021-001-033
Reference: G Tech
Corporation
Account No.:
04-202-195/Banque
Paribas NY
Attention: Loan Servicing
Dept.
FLEET NATIONAL BANK
By:
Title: Vice President
Lending Office:
111 Westminster Street
Providence, Rhode Island
02903
Attention: John D. Webb
Telephone:
(401)
278-6486
Telefacsimile: (401)
278-5726
With a copy to:
Hinckley Allen & Snyder
1500 Fleet Center
Providence, Rhode Island
02903
Attention: Joe Curran,
Esq.
Telephone:
(401)
274-2000
Telefacsimile: (401)
277-9600
Wire Transfer
Instructions:
Fleet National Bank
ABA# 011500010
Reference: GTECH
Attention: Grace Bento,
Ext. 3447
THE BANK OF NOVA SCOTIA
By:
Title:
Lending Office:
Boston Branch
101 Federal Street
Boston, Massachusetts
02110
Attention: Michael R.
Bradley
Telephone:
(617)
737-6312
Telefacsimile: (617)
951-2177
With a copy to:
Funding Office
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Ms. Dana Hall
Telephone:
(404)
877-1553
Telefacsimile: (404)
888-8998
Wire Transfer
Instructions:
The Bank of Nova Scotia
New York Agency
ABA# 0260-0253-2
Reference: GTECH
Account No.: BNS-Boston
#6091137
BANKBOSTON, N.A.
By:
Title:
Lending Office:
BankBoston, N.A.
100 Federal Street
01-15-02
Boston, Massachusetts
02110
Attention: Carol A. Lovell
Telephone:
(617)
434-1475
Telefacsimile: (617)
434-0637
With a copy to:
BankBoston, N.A.
100 Federal Street
01-15-02
Boston, Massachusetts
02110
Attention: Nancy E. Bolton
Telephone:
(617)
434-3431
Telefacsimile: (617)
434-0637
Wire Transfer
Instructions:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts
02110
ABA# 011-000-390
Reference: GTECH Corp.
Account No.: Angela
Moore, Commercial
Attention: Loan Services
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:
Title:
Lending Office:
Bank of Tokyo-Mitsubishi
Trust Company
1251 Avenue of the
Americas
New York, New York
10116-3138
Attention: Loan
Operations Dept.
Telephone:
(201)
413-8570
Telefacsimile: (201)
413-8225
With a copy to:
Bank of Tokyo-Mitsubishi
Trust Company
125 Summer Street, Suite
1170
Boston, Massachusetts
02110
Attention: Patrick D.
Bonebrake
Telephone:
(617)
330-7437
Telefacsimile: (617)
330-7422
Wire Transfer
Instructions:
Bank of Tokyo-Mitsubishi
Trust Company
New York, New York
ABA# 026-009687
Reference: GTECH
Account No.: 97770477
Attention: Loan
Operations Dept.
CREDIT LYONNAIS NEW YORK
BRANCH
By:
Title:
Lending Office:
Credit Lyonnais
1301 Avenue of the
Americas
10th Floor
New York, New York 10019
Attention: Heidi Rosen
Telephone:
(212)
261-7241
Telefacsimile: (212)
459-3179
Wire Transfer
Instructions:
Credit Lyonnais New York
Branch
F/D Credit Lyonnais*
ABA# 026-008-073
Reference: GTECH
Account No.: N/A
Attention: Loan Servicing
MELLON BANK, N.A.
By:
Title: First Vice
President
Lending Office:
One Boston Place, 6th
Floor
Boston, Massachusetts
02108
Attention: Steve Wagner
Telephone:
(617)
722-7064
Telefacsimile: (617)
722-3516
Wire Transfer
Instructions:
Mellon Bank Pittsburgh,
P.A.
ABA# 0430061
Account No.: 990873800
Reference: GTECH
Corporation
Attention:______________________
COMMERZBANK AG, NEW YORK
BRANCH
By:
Title:
Lending Office:
Telephone:
Telefacsimile:
Wire Transfer
Instructions:
ABA#
Account No.:
Reference:
Attention:
<PAGE>
EXHIBIT A
Revolving Credit Commitments
Lender Revolving Credit Commitment
NationsBank, N.A. $65,600,000
The Bank of New York $48,000,000
Bank of Montreal $38,400,000
Banque Paribas $38,400,000
Fleet National Bank $38,400,000
The Bank of Nova Scotia $38,400,000
BankBoston, N.A. $38,400,000
Bank of Tokyo-Mitsubishi Trust Company $28,000,000
Credit Lyonnais $28,000,000
Mellon Bank, N.A. $19,200,000
Commerzbank AG, New York Branch $19,200,000
Total Revolving Credit Commitment $400,000,000
<PAGE>
EXHIBIT B
Form of Assignment and Acceptance
DATED , 19
Reference is made to the Amended and Restated Credit Agreement dated
as of June 18, 1997 (as amended or supplemented and in effect from time to
time, the "Agreement") among GTECH Corporation (the "Borrower"), the Lenders
(as defined in the Agreement), the Documentation Agent (as defined in the
Agreement), the Co-Agents (as defined in the Agreement) and NationsBank,
National Association, as Administrative Agent for the Lenders ("Administrative
Agent"). Unless otherwise defined herein, terms defined in the Agreement are
used herein with the same meanings.
________________________ (the "Assignor") and ____________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
WITHOUT RECOURSE, and the Assignee hereby purchases and assumes from the
Assignor, a _______%(specify percentage in not less than 9 decimal points)
interest in and to all of the Assignor's rights and
obligations under the Agreement and the other Loan Documents as of the
Effective Date (as defined below), including, without limitation, such
percentage interest in the Loans owing to, and Participations held by, the
Assignor on the Effective Date, and the Notes held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the
date hereof, the aggregate outstanding principal amounts of the Loans owing to
it (without giving effect to assignments thereof which have not yet become
effective) are as follows: $_____________ of Revolving Credit Loans and
$_________ of Competitive Bid Loans; the aggregate principal amount of Letters
of Credit in which it is deemed to have a Participation under the Agreement is
$________; and the aggregate principal amount of Swing Line Loans in which it
is deemed to have a Participation under the Agreement is $_________; (ii)
represents and warrants that it is the legal and beneficial owner of the
interests being assigned by it hereunder and that such interests are free and
clear of any adverse claim; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any of the
other Loan Documents or any other instrument or document furnished pursuant
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant thereto; (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Guarantor or the performance or
observance by the Borrower or any Guarantor of any of its obligations under
the Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant thereto and (v) attaches the Notes referred to in
paragraph 1 above (other than any Competitive Bid Note) and requests that the
Administrative Agent exchange such Notes for (or issue an additional Note with
respect to any Competitive Bid Loan) (A) new Revolving Credit Notes dated
_____________, 19__ as follows: a Revolving Credit Note in the principal
amount of $________________ payable to the order of the Assignor, and a
Revolving Credit Note in the principal amount of $________________ payable to
the order of the Assignee; and (B) new Competitive Bid Notes dated ________,
19__ as follows: a Competitive Bid Note payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of
the Agreement, together with copies of the financial statements referred to in
Section 6.01(e) and delivered pursuant to Section 7.01 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Agreement; (iii) appoints and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Agreement are required to be performed by it as a Lender; and (v)
specifies as its address for notices the office set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall
be _____________________________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance and the consent thereto by the
Borrower, it will be delivered to the Administrative Agent for acceptance and
recording by the Administrative Agent.
5. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Lender thereunder and under the other Loan Documents and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Agreement and the
other Loan Documents.
6. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments under the
Agreement and Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest, commitment fees and
letter of credit fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement and the Notes for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By:
Name:
Title:
Notice Address:
After the Effective Date:
Outstanding Revolving Credit Loans:$________________
Outstanding Competitive Bid Loans: $________________
Outstanding Participation in
Letters of Credit Outstanding:$___________________
Outstanding Participations in
Swing Line Loans: $________________
[NAME OF ASSIGNEE]
By:
Name:
Title:
Notice Address/Lending Office
Wire transfer Instructions:
After the Effective Date:
Outstanding Revolving Credit Loans:$______________
Outstanding Competitive Bid Loans: $________________
Outstanding Participation in
Letters of Credit Outstanding:$________________
Outstanding Participations in
Swing Line Loans:$________________
Accepted this ____ day of _______, 19___
NATIONSBANK, NATIONAL
ASSOCIATION, as Administrative
Agent
By:
Name:
Title:
Consented to:
GTECH CORPORATION
By:
Name:
Title:
<PAGE>
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Amended and Restated Credit Agreement
dated as of June 18, 1997 (as amended or supplemented and in effect from time
to time, the "Agreement") among GTECH Corporation (the "Borrower"), the
Lenders (as defined in the Agreement), the Documentation Agent (as defined in
the Agreement), the Co-Agents (as defined in the Agreement) and NationsBank,
National Association, as Administrative Agent for the Lenders ("Administrative
Agent"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the Loan
Documents, and hereby represents and warrants that (i) set forth opposite each
such individual's name is a true and correct statement of such individual's
office (to which such individual has been duly elected or appointed), a
genuine specimen signature of such individual and an address for the giving of
notice, and (ii) each such individual has been duly authorized by the Borrower
to act as Authorized Representative under the Loan Documents:
Name and Address Office Specimen Signature
The Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the Loan
Documents, and hereby represents and warrants that (i) set forth opposite each
such individual's name is a true and correct statement of such individual's
office (to which such individual has been duly elected or appointed), and (ii)
each such individual has been duly authorized by the Borrower to act as
Authorized Representative under the Loan Documents for the limited purposes of
giving telephone instructions with respect to rates and Interest Periods.
Name and Address Office
Borrower hereby revokes (effective upon receipt hereof by the Administrative
Agent) the prior appointment of ________________ as an Authorized
Representative.
This the ___ day of __________________, 19__.
GTECH CORPORATION
By:
Name:
Title:
<PAGE>
EXHIBIT D
Form of Borrowing Notice--Revolving Credit Loans
and Swing Line Loans
To: NationsBank, National Association,
as Administrative Agent
Independence Center
Charlotte, North Carolina 28255
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
Attention: Dana Weir, Agency Services
Reference is hereby made to the Amended and Restated Credit Agreement
dated as of June 18, 1997 (as amended or supplemented and in effect from time
to time, the "Agreement") among GTECH Corporation (the "Borrower"), the
Lenders (as defined in the Agreement), the Documentation Agent (as defined in
the Agreement), the Co-Agents (as defined in the Agreement) and NationsBank,
National Association, as Administrative Agent for the Lenders ("Administrative
Agent"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby confirms
its prior notice of borrowing given to the Administrative Agent by telephone
at __________ __.m. on ____________, 19__ to the effect that Revolving Credit
Loans or Swing Line Loans of the type and amount set forth below be made on
the date indicated:
Type of Loan Interest Aggregate
Date of Interest
(check one) Period(1) Amount(2)
Loan(3) Rate(4)
Base
Rate Loan
LIBOR Loan
Swing Line
Loan
(1) For any LIBOR Loan only, one, two, three, six or (to the extent
available) twelve months.
(2) Must be $5,000,000 or an integral multiple of $100,000 in excess
thereof for Revolving Credit Loans; must be $500,000 or an integral
multiple of $100,000 in excess thereof for Swing Line Loans.
(3) At least three (3) LIBOR Business Days later if a LIBOR Loan; may be
same Business Day in case of a Base Rate Loan or Swing Line Loans.
(4) For Swing Line Loans only, the Swing Line Rate.
The Borrower hereby requests that the proceeds of Revolving Credit
Loans or Swing Line Loans described in this Borrowing Notice be made available
to the Borrower as follows: [insert transmittal instructions].
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in
Article VI of the Agreement and in the other Loan Documents (other than those
expressly stated to refer to a particular date) are true and correct as of the
date hereof except that the representations and warranties set forth in
Section 6.01(d) and (e) of the Agreement shall be deemed to include and take
into account any merger or consolidation permitted under Section 8.09 of the
Agreement and the reference to the financial statements in Section 6.01(f)(i)
of the Agreement are to those financial statements most recently delivered to
you pursuant to Section 7.01 of the Agreement; and
3. After giving effect to Loans requested hereby, (i) the
Outstandings will not exceed the Total Revolving Credit Commitment and (ii)
Swing Line Outstandings will not exceed $25,000,000.
GTECH CORPORATION
BY:_________________________
Authorized Representative
<PAGE>
EXHIBIT E
Form of Competitive Bid Note
PROMISSORY NOTE
(Competitive Bid)
Charlotte, North Carolina
__________, 1997
FOR VALUE RECEIVED, GTECH CORPORATION, a Delaware corporation having
its principal place of business located in West Greenwich, Rhode Island (the
"Borrower"), hereby promises to pay to the order of
___________________________________ (insert name of Lender) (the "Lender"),
in its individual
capacity, at the office of NationsBank, National Association, as
Administrative Agent for the Lender (the "Administrative Agent"), located at
Independence Center, 15th Floor, Charlotte, North Carolina 28255 (or at such
other place as the Administrative Agent may designate) at the times set forth
in the Amended and Restated Credit Agreement dated of even date herewith among
the Borrower, the financial institutions party thereto (collectively, the
"Lenders"), the Documentation Agent (as defined therein), the Co-Agents (as
defined therein) and the Administrative Agent (as amended and supplemented and
in effect from time to time, the "Credit Agreement"; all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement), in lawful money of the United States of America and in
immediately available funds, the aggregate unpaid principal amount of all
Competitive Bid Loans made by the Lender to the Borrower, on the dates and in
the principal amounts set forth in the Lender's related Competitive Bid Quote
and accepted by the Borrower, and to pay interest on the unpaid principal
amount of each such Competitive Bid Loan, at such office, in like money and
funds, for the period commencing on the date of such Competitive Bid Loan
until such Competitive Bid Loan shall be paid in full, at the rates per annum
and on the dates set forth in the Lender's related Competitive Bid Quote and
accepted by the Borrower.
The date, amount, interest rate and maturity date of each Competitive
Bid Loan made by the Lender to the Borrower, and each payment made on account
of the principal thereof, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the Competitive Bid
Loans made by the Lender.
This Note is one of the Competitive Bid Notes referred to in the
Credit Agreement and is issued in replacement of and not as payment for those
certain competitive bid notes issued by the Borrower in connection with the
Prior Credit Agreement. This Note is issued pursuant to and entitled to the
benefits and security of the Credit Agreement to which reference is hereby
made for a more complete statement of the terms and conditions upon which the
Competitive Bid Loans evidenced hereby were made or are made and are to be
repaid. This Note is subject to certain restrictions on transfer or
assignment as provided in the Credit Agreement. Payment of all amounts due
under this Note is guaranteed by each Guarantor pursuant to the Guaranties.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of
Competitive Bid Loans upon the terms and conditions specified therein.
If payment of all sums due hereunder is accelerated under the terms
of the Credit Agreement or under the terms of the other Loan Documents
executed in connection with the Credit Agreement, the then remaining principal
amount and accrued but unpaid interest shall bear interest which shall be
payable on demand at the rates per annum set forth in Article II of the Credit
Agreement, or the maximum rate permitted under applicable law, if lower, until
such principal and interest have been paid in full. Further, in the event of
such acceleration, this Note, and all other indebtedness of the Borrower to
the Lender shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees,
and interest thereon at the rates set forth above.
Interest hereunder shall be computed on the basis of a 360 day year
for the actual number of days in the interest period.
Except as permitted by Section 11.01 of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law the benefits of
all provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issues against any other of
them and returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof to
hold as security for this Note any collateral deposited by any of said Persons
as security. Presentment, protest, notice of protest, notice of dishonor,
diligence and each other formality are hereby waived by all parties bound
hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
GTECH CORPORATION
ATTEST: By:
Name:
By:____________________________
Title:
__________ Secretary
[SEAL]
SCHEDULE OF COMPETITIVE BID LOANS
This Note evidences Competitive Bid Loans made under the
within-described Credit Agreement to the Borrower, on the dates, in the
principal amounts, of the types, bearing interest at the rates and maturing on
the dates set forth below, subject to the payments and prepayments of
principal set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Date Principal Type Interest Maturity Amount Unpaid Notation
of Amount of Rate Date of Paid or Principal Made By
Loan of Loan Loan Prepaid Amount
Loan
</TABLE>
<PAGE>
EXHIBIT F
Form of Revolving Credit Note
PROMISSORY NOTE
(Revolving Credit)
_____________________1 Charlotte, North Carolina
__________, 1997
FOR VALUE RECEIVED, GTECH CORPORATION, a Delaware corporation having
its principal place of business located in West Greenwich, Rhode Island (the
"Borrower"), hereby promises to pay to the order of
___________________________________2 (the "Lender"), in its individual
capacity, at the office of NationsBank, National Association, as
Administrative Agent for the Lender (the "Administrative Agent"), located at
NationsBank, N.A. Plaza, 101 South Tryon Street, Charlotte, North Carolina
28255 (or at such other place as the Administrative Agent may designate) at
the times set forth in the Amended and Restated Credit Agreement dated of even
date herewith among the Borrower, the financial institutions party thereto
(collectively, the "Lenders"), the Documentation Agent (as defined therein),
the Co-Agents (as defined therein) and the Administrative Agent (as amended
and supplemented and in effect from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
[__________________________________]3 DOLLARS ($__________)1 or, if less than
such principal amount, the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Lender to the Borrower pursuant to the Credit
Agreement, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
provided in Article II of the Credit Agreement. All or any portion of the
principal amount of Revolving Credit Loans may be prepaid as provided in the
Credit Agreement.
_______________________________
1 Insert Lender's Revolving Credit Commitment in arabic numerals.
2 Insert name of Lender in capital letters.
3 Insert Lender's Revolving Credit Commitment in words.
This Note is one of the Revolving Credit Notes in the aggregate
principal amount of $400,000,000 referred to in the Credit Agreement and is
issued in replacement of and not as payment for those certain revolving credit
notes issued by the Borrower in connection with the Prior Credit Agreement.
This Note is issued pursuant to and entitled to the benefits and security of
the Credit Agreement to which reference is hereby made for a more complete
statement of the terms and conditions upon which the Loans evidenced hereby
were or are made and are to be repaid. This Note is subject to certain
restrictions on transfer or assignment as provided in the Credit Agreement.
Payment of all amounts due under this Note is guaranteed by each Guarantor
pursuant to the Guaranties.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of
Revolving Credit Loans upon the terms and conditions specified therein.
If payment of all sums due hereunder is accelerated under the terms
of the Credit Agreement or under the terms of the other Loan Documents
executed in connection with the Credit Agreement, the then remaining principal
amount and accrued but unpaid interest shall bear interest which shall be
payable on demand at the rates per annum set forth in Article II of the Credit
Agreement, or the maximum rate permitted under applicable law, if lower, until
such principal and interest have been paid in full. Further, in the event of
such acceleration, this Note, and all other indebtedness of the Borrower to
the Lender shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees,
and interest thereon at the rates set forth above.
Except as permitted by Section 11.01 of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law the benefits of
all provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issues against any other of
them and returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof to
hold as security for this Note any collateral deposited by any of said Persons
as security. Presentment, protest, notice of protest, notice of dishonor,
diligence and each other formality are hereby waived by all parties bound
hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
GTECH CORPORATION
ATTEST:
By:
Secretary
Title:
[SEAL]
<PAGE>
EXHIBIT G
Form of Swing Line Note
PROMISSORY NOTE
(Swing Line)
$25,000,000 Charlotte, North Carolina
__________, 1997
FOR VALUE RECEIVED, GTECH CORPORATION, a Delaware corporation having
its principal place of business located in West Greenwich, Rhode Island (the
"Borrower"), hereby promises to pay to the order of NATIONSBANK, NATIONAL
ASSOCIATION, (the "Lender"), in its individual capacity, at the office of
NationsBank, National Association, as Administrative Agent for the Lender (the
"Administrative Agent"), located at NationsBank Corporate Center, 100 North
Tryon Street, Charlotte, North Carolina 28255 (or at such other place as the
Administrative Agent may designate) at the times set forth in the Amended and
Restated Credit Agreement dated of even date herewith among the Borrower, the
financial institutions party thereto (collectively, the "Lenders"), the
Documentation Agent (as defined therein), the Co-Agents (as defined therein)
and the Administrative Agent (as amended and supplemented and in effect from
time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of TWENTY FIVE MILLION AND NO/100
DOLLARS ($25,000,000) or, if less than such principal amount, the aggregate
unpaid principal amount of all Swing Line Loans made by the Lender to the
Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office,
on the dates and at the rates provided in Article II of the Credit Agreement.
All or any portion of the principal amount of Swing Line Loans may be prepaid
as provided in the Credit Agreement.
This Note is the Swing Line Note referred to in the Credit Agreement
and is issued in replacement of and not as payment for the swing line note
issued by the Borrower in connection with the Prior Credit Agreement. This
Note is issued pursuant to and entitled to the benefits and security of the
Credit Agreement to which reference is hereby made for a more complete
statement of the terms and conditions upon which the Loans evidenced hereby
were or are made and are to be repaid. This Note is subject to certain
restrictions on transfer or assignment as provided in the Credit Agreement.
Payment of all amounts due under this Note is guaranteed by each Guarantor
pursuant to the Guaranties.
If payment of all sums due hereunder is accelerated under the terms
of the Credit Agreement or under the terms of the other Loan Documents
executed in connection with the Credit Agreement, the then remaining principal
amount and accrued but unpaid interest shall bear interest which shall be
payable on demand at the rates per annum set forth in Article II of the Credit
Agreement, or the maximum rate permitted under applicable law, if lower, until
such principal and interest have been paid in full. Further, in the event of
such acceleration, this Note, and all other indebtedness of the Borrower to
the Lender shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees,
and interest thereon at the rates set forth above.
Interest hereunder shall be computed on the basis of a 365 day year
for the actual number of days in the interest period.
Except as permitted by Section 11.01 of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law the benefits of
all provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issues against any other of
them and returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof to
hold as security for this Note any collateral deposited by any of said Persons
as security. Presentment, protest, notice of protest, notice of dishonor,
diligence and each other formality are hereby waived by all parties bound
hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
GTECH CORPORATION
ATTEST:
By:
Secretary Title:
[SEAL]
<PAGE>
EXHIBIT H
Interest Rate Selection Notice
To: NationsBank, National Association,
as Administrative Agent
Independence Center
Charlotte, North Carolina 28255
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
Attention: Dana Weir, Agency Services
Reference is hereby made to the Amended and Restated Credit Agreement
dated as of June 18, 1997 (as amended or supplemented and in effect from time
to time, the "Credit Agreement") among GTECH Corporation (the "Borrower"), the
Lenders (as defined in the Credit Agreement), the Documentation Agent (as
defined in the Credit Agreement), the Co-Agents (as defined in the Credit
Agreement) and NationsBank, National Association, as Administrative Agent for
the Lenders ("Administrative Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Credit
Agreement.
The Borrower through its Authorized Representative hereby confirms
its prior notice of a selection of a type of Loan and Interest Period given to
the Administrative Agent by telephone at __________ __.m. on
_________________, 199__ to the following effect in respect of [check as
applicable] Revolving Credit Loans:
Type of Loan Interest Effective
(Check One) Period (1) Amount(2) Date (3)
LIBOR Loan _____
BASE
RATE Loan _____
(1) For any LIBOR Loan one, two, three, six or (to the extent
available) twelve months.
(2) Must be $5,000,000 or an integral multiple of $100,000 in
excess thereof.
(3) At least three (3) LIBOR Business Days after date of
telephonic notice if a LIBOR Loan; may be same Business Day
in case of a Base Rate Loan.
This the _____ day of ______________, 199__.
GTECH CORPORATION
By:
Authorized Representative
<PAGE>
EXHIBIT I
Form of Competitive Bid Quote Request
[Date]
To: NationsBank, National Association, as
Administrative Agent
Attention: Dana Weir, Agency Services
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
Re: [Absolute Rate] [Index Rate] Bid Loan Request
Pursuant to Section 2.03 of the Amended and Restated Credit Agreement
dated as of June 18, 1997 (as amended or supplemented and in effect from time
to time, the "Credit Agreement" among GTECH Corporation, the lenders named
therein, the Documentation Agent (as defined in the Credit Agreement), the
Co-Agents (as defined in the Credit Agreement) and NationsBank, National
Association, as Administrative Agent, we hereby give notice that we request
Competitive Bid Quotes for the following proposed Competitive Bid Loan(s)
bearing interest at an [Absolute Rate] [Index Rate] :
Borrowing Quotation Interest
Date Date 1 Amount 2 Period 3
Terms used herein have the meanings assigned to them in the Credit
Agreement.
GTECH Corporation
By:
Title: Vice President and Treasurer
_________________________________________
1 For use if an Absolute Rate or Index Rate is requested to be
submitted before the borrowing date.
2 Each amount must be $5,000,000 or an integral multiple of $100,000
in excess thereof.
3 A period of not less than 7 days nor more than 360 days after the
making of such Competitive Bid Loan and ending on a Business Day with respect
to Absolute Rate Bid Loan Requests or a period of one, two, three, six or (to
the extent available) twelve months after the making of such Competitive Bid
Loan and ending on a LIBOR Business Day with respect to Index Rate Bid Loan
Requests.
<PAGE>
EXHIBIT J
Form of Competitive Bid Quote
To: NationsBank, National Association, as Administrative Agent
Attention: Dana Weir, Agency Services
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
Re: Competitive Bid Quote to GTECH Corporation (the "Borrower")
The Competitive Bid Quote is given in accordance with Section 2.03 of
the Amended and Restated Credit Agreement dated as of June 18, 1997 (as
amended or supplemented and in effect from time to time, the "Credit
Agreement") among GTECH Corporation, the lenders named therein, the
Documentation Agent (as defined in the Credit Agreement), the Co-Agents (as
defined in the Credit Agreement) and NationsBank, National Association, as
Administrative Agent. Terms defined in the Credit Agreement are used herein
as defined therein.
In response to the Borrower's request dated ______________, 199__, we
hereby make the following Competitive Bid Quote(s) on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Competitive Bid Loan(s) in
the following principal amount(s), for the following Interest
Period(s) and at the following rate(s):
Borrowing Quotation Interest
Date Date 1 Amount2 Period 3 Rate4
______________________________
1 As specified in the related Competitive Bid Quote Request
2 The principal amount bid for each Interest Period may not exceed
the principal amount requested. Bids must be made for at least $1,000,000 or
an integral multiple of $100,000 in excess thereof.
3 A period of not less than 7 days nor more than 360 days after the
making of such Competitive Bid Loan and ending on a Business Day with respect
to Absolute Rate Competitive Bid Quotes or a period of one, two, three, six or
(to the extent available) twelve months after the making of such Competitive
Bid Loan and ending on a LIBOR Business Day with respect to Index Rate
Competitive Bid Quotes, as specified in the related Competitive Bid Quote
Request.
4 Specify rate of interest or margin.
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate(s) us to make the Competitive Bid Loan(s) for
which any offer(s) (is/are) accepted, in whole or in part.
Dated: ______________, 199_
Very truly yours,
[NAME OF LENDER]
By:
Authorized Officer
<PAGE>
EXHIBIT K-1
Form of Opinion of Counsel to the
Borrower and Counsel to the Guarantors
[Stationery of Counsel for Borrower and Guarantor]
__________, 1997
Each of the Lenders party to the
Credit Agreement referenced below and
NationsBank, National Association, as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Re: $400,000,000 Revolving Credit, Swing Line, Competitive Bid and Letter
of Credit Facilities to GTECH Corporation
Ladies and Gentlemen:
We have acted as counsel to GTECH Corporation (the "Company"), GTECH
Holdings Corporation (the "Parent") and the other Guarantors in connection
with each of the revolving credit facility, swing line facility, competitive
bid facility and letter of credit facility (collectively, the "Credit
Facilities") being made available by you to the Company on this date in the
maximum aggregate principal amount at any time outstanding of $400,000,000
pursuant to the Amended and Restated Credit Agreement of even date herewith
between you, the Documentation Agent (as defined therein), the Co-Agents (as
defined therein) and the Company (the "Credit Agreement").
We have been requested by the Company to deliver this opinion to each
of the Lenders party to the Credit Agreement and NationsBank, National
Association, as Administrative Agent, in accordance with the condition set
forth in Section 5.01(c) of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
We have also acted as counsel to the Parent and each Material
Domestic Subsidiary in connection with the Guaranties of even date herewith
between the Administrative Agent and the Parent or each Material Domestic
Subsidiary, as applicable (the "Guaranty Agreements").
Each of the Lenders party to the
Credit Agreement referenced below and
NationsBank, National Association, as Administrative Agent
__________________, 1997
As such counsel, we have reviewed the following documents:
1. the Credit Agreement;
2. each Revolving Credit Note;
3. each Competitive Bid Note;
4. the Swing Line Note;
5. the Reaffirmation Agreement; and
6 the Guaranty Agreements.
All the foregoing documents are collectively referred to hereinafter as the
"Loan Documents"; and the Credit Agreement and the Notes are collectively
referred to hereinafter as the "Company Loan Documents."
For purposes of the opinions expressed below, we have assumed that
all natural persons executing the Loan Documents have legal capacity to do so;
all signatures other than those of the Company and each Material Domestic
Subsidiary on all documents submitted to us are genuine; all documents
submitted to us as originals are authentic; and all documents submitted to us
as certified copies or photocopies conform to the original documents, which
themselves are authentic.
In addition, for purposes of giving this opinion, we have examined
corporate records of the Company, the Parent and each Material Domestic
Subsidiary, certificates of public officials, certificates of appropriate
officials of the Company, the Parent and each Material Domestic Subsidiary and
such other documents or made such inquiries as we have deemed appropriate.
Based upon and subject to the foregoing, it is our opinion that:
1. The Company has full corporate power and authority to own
its assets and conduct the businesses in which it is now engaged, and the
Company has full corporate power and authority to enter into each of the
Company Loan Documents and to perform its obligations thereunder.
2. The Parent and each Material Domestic Subsidiary has full
corporate power and authority to own its assets and conduct the businesses in
which it is now engaged, and the Parent and each Material Domestic Subsidiary
has full corporate power and authority to enter into its respective Guaranty
Agreement and to perform its obligations thereunder.
3. Each of the Company Loan Documents has been duly authorized
by the Board of Directors of the Company, executed and delivered by the
Company, and constitutes the legal, valid and binding obligation, agreement,
instrument or conveyance, as the case may be, of the Company, enforceable
against the Company in accordance with its respective terms, except (i)as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization and other similar laws relating to or affecting creditors'
rights generally and (ii)as the enforceability of the remedial provisions
thereof may be limited by general equitable principles; provided, however, the
application of such equitable principles or limitations of law does not, in
our opinion, materially interfere with the practical realization of the
benefits intended to be conferred under the Company Loan Documents.
4. Each of the Guaranty Agreements has been duly authorized by
the Board of Directors of the Parent or each Material Domestic Subsidiary, as
applicable, executed and delivered by the Parent or each Material Domestic
Subsidiary, as applicable, and constitutes the legal, valid and binding
obligation and agreement of the Parent and each Material Domestic Subsidiary,
enforceable against the Parent and each Material Domestic Subsidiary in
accordance with its respective terms, except (i)as the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting creditors' rights generally and (ii)as
the enforceability of the remedial provisions thereof may be limited by
general equitable principles; provided, however, the application of such
equitable principles or limitations of law does not, in our opinion,
materially interfere with the practical realization of the benefits intended
to be conferred under each of the Guaranty Agreements.
5. Neither the execution or delivery of, nor performance by the
Company, the Parent or any Material Domestic Subsidiary of its respective
obligations under the Loan Documents to which it is a party, (a) does or will
conflict with, violate or constitute a breach of the charter or bylaws of the
Company, the Parent or of any Material Domestic Subsidiary, or (b) requires
the prior consent of, notice to or filing with any court or governmental
authority, or (c) does or will result in the creation or imposition of any
lien, pledge, charge or encumbrance of any nature upon or with respect to any
of the properties, real or personal, of the Company, the Parent or any
Material Domestic Subsidiary.
6. None of the transactions contemplated by the Credit
Agreement, including, without limitation, the use of the Letters of Credit or
the proceeds of any Advance made to the Company, will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, any
regulation issued pursuant thereto, or Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, and to the best of our knowledge the
Company does not own or intend to purchase or carry any "margin securities" as
defined in said regulations.
We are not expressing any opinion as to any matter relating to any
jurisdiction other than the laws of the State of New York, the General
Corporation Law of the State of Delaware and the United States of America and
we assume no responsibility as to the applicability of the laws of any other
jurisdiction as to the subject transaction or the effect of such laws thereon.
Our opinions contained herein are rendered only as of the date hereof
and we undertake no obligation to update our opinions after the date hereof.
Our opinions contained herein are rendered solely for your
information in connection with the Loan Documents and the Credit Facilities
and may not be relied upon in any manner by any other person, entity or
agency, or by you for any other purpose. Without our prior written consent
our opinions herein shall not be quoted or otherwise included, summarized or
referred to in any publication or document, in whole or in part, for any
purposes whatsoever, or furnished to any other person, entity or agency,
except (i) as may be required by you by applicable law or regulation or
request of regulatory agencies to which you are subject, (ii) pursuant to any
legal process to which you are subject or in connection with any legal
proceeding with respect to the Loan Documents and (iii) to a successor,
assignee or other transferee permitted under the Loan Documents.
Very truly yours,
<PAGE>
EXHIBIT K-2
Form of Opinion of Borrower's In-House Counsel
__________, 1997
Each of the Lenders party to the
Credit Agreement referenced below and
NationsBank, National Association, as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Re: $400,000,000 Revolving Credit, Swing Line, Competitive Bid and Letter
of Credit Facilities to GTECH Corporation
Ladies and Gentlemen:
I am the general counsel for GTECH Corporation (the "Company") and
have acted in such capacity in connection with each of the revolving credit
facility, swing line facility, competitive bid facility and letter of credit
facility (collectively, the "Credit Facilities") being made available by you
to the Company on this date in the maximum aggregate principal amount at any
time outstanding of $400,000,000 pursuant to the Amended and Restated Credit
Agreement of even date herewith between you and the Company (the "Credit
Agreement").
I have been requested by the Company to deliver this opinion to each
of the Lenders party to the Credit Agreement and NationsBank, National
Association, as Administrative Agent, in accordance with the condition set
forth in Section 5.01(b) of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
I have also acted as general counsel to each Material Domestic
Subsidiary in connection with the Guaranties of even date herewith between the
Administrative Agent and each Material Domestic Subsidiary (the "Guaranty
Agreements").
As such general counsel, I have reviewed the following documents:
1. the Credit Agreement;
2. each Revolving Credit Note;
Each of the Lenders party to the
Credit Agreement referenced below and
NationsBank, National Association, as Administrative Agent
__________________, 1997
3. each Competitive Bid Note;
4. the Swing Line Note;
5. the Reaffirmation Agreement; and
6 the Guaranty Agreements.
All the foregoing documents are collectively referred to hereinafter as the
"Loan Documents"; and the Credit Agreement and the Notes are collectively
referred to hereinafter as the "Company Loan Documents."
For purposes of the opinions expressed below, I have assumed that all
natural persons executing the Loan Documents have legal capacity to do so; all
signatures other than those of the Company and each Material Domestic
Subsidiary on all documents submitted to me or my staff are genuine; all
documents submitted to me or my staff as originals are authentic; and all
documents submitted to me or my staff as certified copies or photocopies
conform to the original documents, which themselves are authentic.
In addition, for purposes of giving this opinion, I have examined
corporate records of the Company and each Material Domestic Subsidiary,
certificates of public officials, certificates of appropriate officials of the
Company and each Material Domestic Subsidiary and such other documents or made
such inquiries as I or they have deemed appropriate.
Based upon and subject to the foregoing, it is my opinion that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to transact business as a foreign corporation and is in good
standing in all other jurisdictions in which the nature of its business
requires such qualification and where the failure to be so qualified or in
good standing would have a Material Adverse Effect.
2. Each Material Domestic Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and is duly qualified to transact business as
a foreign corporation and is in good standing in all other jurisdictions in
which the nature of its business requires such qualification and where the
failure to be so qualified or in good standing would have a Material Adverse
Effect.
3. Neither the execution or delivery of, nor performance by the
Company or any Material Domestic Subsidiary of its respective obligations
under, the Loan Documents, (a) does or will conflict with, violate or
constitute a breach of (i) any laws, rules or regulations applicable to the
Company or to any Material Domestic Subsidiary, or (ii) any contract,
agreement, indenture, lease, instrument, other document, judgment, writ,
determination, order or decree to which the Company or any Material Domestic
Subsidiary is a party or by which the Company or any Material Domestic
Subsidiary or any of its or their respective properties is bound, or (b)
requires the prior consent of, notice to or filing with any court or
governmental authority, or (c) does or will result in the creation or
imposition of any lien, pledge, charge or encumbrance of any nature upon or
with respect to any of the properties, real or personal, of the Company or any
Material Domestic Subsidiary.
4. There is no pending or, to the best of my knowledge,
threatened, action, suit, investigation or proceeding, nor is there any basis
therefor, before or by any court, or governmental department, commission,
board, bureau, instrumentality, agency or arbitral authority an adverse result
in which would have a material adverse effect on the property, business,
prospects, profits or conditions (financial or otherwise) of the Company or
any Material Domestic Subsidiary, including, without limitation, any action,
suit, investigation, or proceeding under any environmental or labor law.
5. Neither the Company nor any Material Domestic Subsidiary is
subject to any charter, bylaw or other corporate restrictions nor, to the best
of my knowledge, is the Company or any Material Domestic Subsidiary party to
or bound by any contract or agreement which (i) materially and adversely
affects its business, properties or condition (financial or otherwise), or
(ii) restricts, limits, or prohibits payment of any Obligation or Guarantied
Obligation (as defined in the Guaranty Agreements) or performance of its
obligations pursuant to the terms of the Loan Documents.
I am not admitted to practice in any jurisdiction other than the
State of California and the District of Columbia. I have made such
examination of the Delaware General Corporation Law ("DGCL") as I have deemed
appropriate for the purposes of this opinion, but I have not made an
independent review of the laws of any state. I am not expressing any opinion
as to any matter relating to any jurisdiction other than the DGCL and the laws
of United States of America and I assume no responsibility as to the
applicability of the laws of any other jurisdiction as to the subject
transaction or the effect of such laws thereon.
The opinions contained herein are rendered only as of the date hereof
and I undertake no obligation to update my opinions after the date hereof.
The opinions contained herein are rendered solely for your
information in connection with the Loan Documents and the Credit Facilities
and may not be relied upon in any manner by any other person, entity or
agency, or by you for any other purpose. Without my prior written consent the
opinions herein shall not be quoted or otherwise included, summarized or
referred to in any publication or document, in whole or in part, for any
purposes whatsoever, or furnished to any other person, entity or agency,
except as may be required by you by applicable law or regulation or request of
regulatory agencies to which you are subject.
Very truly yours,
<PAGE>
EXHIBIT L
Compliance Certificate
To: NationsBank, National Association,
as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
Attention: Dana Weir, Agency Services
Reference is hereby made to the Amended and Restated Credit Agreement
dated as of June 18, 1997 (as amended or modified and in effect from time to
time, the "Credit Agreement") among GTECH Corporation (the "Borrower"), the
Lenders (as defined in the Credit Agreement), the Documentation Agent (as
defined in the Credit Agreement), the Co-Agents (as defined in the Credit
Agreement) and NationsBank, National Association, as Administrative Agent for
the Lenders ("Administrative Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Credit
Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ [insert Determination
Date] as follows:
1. Calculations:
A. Compliance with Section 8.01. Consolidated
Funded Debt Ratio
1. Consolidated EBDAIT:
(i) Consolidated Net Income
(excluding any extraordinary
gains or losses), plus $__________
(ii) Consolidated Interest Expense, plus $__________
(iii) Taxes on income, plus $__________
(iv) Amortization and Depreciation, plus $__________
(v) all other non-cash expense items $__________
Total $__________
2. Consolidated Funded Indebtedness: $__________
3. Ratio of A.2. to A.1. ____ to 1.00
Required: Not greater than 2.95 to 1.00
B. Compliance with Section 8.02. Consolidated
Interest Coverage Ratio
1. Consolidated Interest
Expense $__________
2. Consolidated EBDAIT for Four
Quarter Period (as calculated in
A.1. above): $__________
3. Ratio of B.2 to B.1 ____ to 1.00
Required: Not less than 5.00 to 1.00
C. Compliance with Section 8.03. Consolidated
Net Worth
1. Consolidated Shareholders' Equity for preceding
Fiscal Year $__________
2. Consolidated Net Income for preceding Fiscal Year $__________
(enter 0.00 if a negative figure)
3. C.2. x .50 $__________
4. C.3. + Consolidated Net Worth requirement for $__________
preceding Fiscal Year ($__________)
Required: C.1 must be equal to or greater than C.4
D. Compliance with Section 8.04(b).
Consolidated Subsidiary Debt
1. Consolidated Subsidiary Debt $__________
2. Consolidated EBDAIT for the Four
Quarter Period ended on the most
recent Determination Date
(as calculated in A.1. above): $__________
3. D.2. x .25 $__________
Required: D.1. must not be greater than
the lesser of D.3. and $75,000,000
2. No Default
A. To the best knowledge of the undersigned,
since __________ (the date of the last similar
certification), (a) Borrower has not defaulted in any
material respect in the keeping, observance, performance or
fulfillment of any covenant or condition of the Loan
Documents; and (b) no Default or Event of Default has
occurred.
B. If a Default or Event of Default has
occurred since __________ (the date of the last similar
certification), the Borrower proposes to take the following
action with respect to such Default or Event of Default:
(Note, if no Default or Event of
Default has occurred, insert "Not
Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 7.01 of the
Credit Agreement.
The undersigned Authorized Representative hereby certifies that the
information set forth above is true, correct and complete as of the date
hereof.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day
of __________, 19___.
Authorized Representative
for GTECH Corporation
<PAGE>
EXHIBIT M
Form of Subsidiary Guaranty
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY, dated as of _______________, 199__ (this
"Guaranty"), is made by and between _________________________, a
_________________________ corporation (the "Guarantor"), and NATIONSBANK,
NATIONAL ASSOCIATION, as Administrative Agent for the lenders referred to
below (the "Administrative Agent"). All capitalized terms used but not
defined herein shall have the respective meaning assigned thereto in the
Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, GTECH Corporation, a Delaware corporation (the "Borrower"),
the financial institutions from time to time party thereto (the "Lenders"),
the Documentation Agent (as defined therein), the Co-Agents (as defined
therein) and the Administrative Agent have entered into an Amended and
Restated Credit Agreement dated as of ______________ ___, 1997 (as at any
time amended, modified or supplemented, the "Credit Agreement"); and
WHEREAS, the Guarantor is a Material Domestic Subsidiary and will
receive direct and indirect material benefit as a result of the extensions of
credit being made to the Borrower pursuant to the Credit Agreement; and
WHEREAS, pursuant to the terms of the Credit Agreement the Guarantor
is required to deliver this Guaranty in order to obtain the commitment of the
Lenders to extend credit thereunder, and the Lenders are unwilling to enter
into the Credit Agreement and extend credit to the Borrower unless the
Guarantor enters into this Guaranty;
NOW, THEREFORE, in consideration of the premises, the Guarantor
hereby agrees as follows:
2. Guaranty. The Guarantor does hereby absolutely and
unconditionally, for the benefit of the Administrative Agent and the Lenders
(collectively, the "Beneficiaries"), guarantee the full and timely payment
when due, whether by acceleration or otherwise, (including amounts which, but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code or any successor statute, would become due) of:
A. All indebtedness, obligations and liabilities
(direct, by way of guaranty or otherwise) of the Borrower, now or
hereafter existing, under or in connection with the Credit Agreement,
any other Loan Document and any other instrument evidencing any of
the foregoing, and whether of principal, interest (including interest
which, but for the filing of a petition in bankruptcy with respect to
the Borrower, would accrue), fees, expenses or otherwise; and
B. all other indebtedness, obligations and liabilities
of the Borrower under written financing arrangements stated by the
Guarantor and the Administrative Agent to be guaranteed hereby;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, amended,
extended, renewed, replaced, refinanced or restructured, whether or not from
time to time decreased or extinguished and later increased, created or
incurred (all indebtedness, obligations and liabilities of the Borrower
described in this Section 1 are collectively referred to as the "Guarantied
Obligations"); provided, however, that the liability of the Guarantor with
respect to the Guarantied Obligations shall not exceed at any time the Maximum
Amount (as hereinafter defined). The "Maximum Amount" means 95% of (a) the
fair salable value of the assets of such Guarantor as of the date hereof minus
(b) the total liabilities of the Guarantor (including contingent liabilities,
but excluding liabilities of the Guarantor under this Guaranty and the other
Loan Documents executed by the Guarantor) as of the date hereof; provided
further, however, that if the calculation of the Maximum Amount in the manner
provided above as of the date payment is required of the Guarantor pursuant to
this Guaranty would result in a greater positive number, then the Maximum
Amount shall be deemed to be such greater positive number.
3. Guaranty Of Payment. This is a guaranty of payment and not
merely of collection. In the event of any default in payment or otherwise on
any of the Guarantied Obligations, the Guarantor will pay on demand all or any
portion of the Guarantied Obligations due or thereafter becoming due, whether
by acceleration or otherwise, without offset of any kind whatsoever, without
any Beneficiary first being required to make demand upon the Borrower or
pursue any of its rights against the Borrower, or against any other Person,
including other guarantors (whether or not party to this Guaranty); and
without being required to liquidate or to realize on any collateral security.
In any right of action accruing to any Beneficiary, such Beneficiary may elect
to proceed against (a)the Guarantor together with the Borrower or any other
guarantor in respect of such Guarantied Obligation; (b)the Guarantor and the
Borrower or such other guarantor individually in separate actions; or (c)the
Guarantor only without having first commenced any action against the Borrower
or such other guarantor.
4. Right to Deal with Guarantied Obligations. Any Beneficiary,
without notice to or consent of Guarantor, may do any one or more of the
following, all without impairing the liability of the Guarantor hereunder:
deal with any Guarantied Obligations and any collateral security therefor in
such manner as it may deem advisable and renew, amend or extend the Guarantied
Obligations, the Loan Documents or any part thereof; accept partial payment,
or settle, release, compound, or compromise the same; demand additional
collateral security therefor, and substitute or release the same; and
compromise or settle with or release and discharge from liability any other
guarantor of any Guarantied Obligation, or any other Person liable to such
Beneficiary for all or any portion of the obligations of any obligor in
respect of any Guarantied Obligation.
5. Waiver of Subrogation. The Guarantor hereby unconditionally
waives with respect to this Guaranty any right of subrogation, indemnity,
reimbursement or contribution from the Borrower and any other guarantor.
6. Other Waivers. Guarantor hereby unconditionally waives with
respect to this Guaranty: (a)notice of acceptance of this Guaranty by any
Beneficiary and any notice of the incurring by the Borrower of any Guarantied
Obligation; (b)presentment for payment, protest, notice of protest and notice
of dishonor to any party including the Borrower or the Guarantor; (c) all
other notices which the Borrower or the Guarantor may be entitled to but which
may legally be waived; (d) demand for payment as a condition of liability;
(e)any disability of the Borrower or any other obligor or obligors or defense
available to the Borrower, the Guarantor or any other obligor or obligors in
respect of any Guarantied Obligation, including absence or cessation of the
Borrower or any such other obligor's liability for any reason whatsoever;
(f)any defense or circumstances which might otherwise constitute a legal or
equitable discharge of a guarantor or surety; and (g)all rights under any
otherwise applicable law dealing with or affecting the rights of creditors of
Guarantor and inconsistent with the express provisions hereof.
7. Subordination. Until the Guarantied Obligations are paid in
full the Guarantor hereby unconditionally subordinates all present and future
debts, liabilities or obligations of the Borrower to the Guarantor to the
Guarantied Obligations, and all amounts received by the Guarantor with respect
to such debts, liabilities or obligations shall, upon the occurrence and
during the continuance of an Event of Default, be held in trust for the
benefit of, and shall be immediately paid over to, the Agent, for the benefit
of the Lenders, and to any other Persons who shall have the benefit of a
guarantee by the Guarantor of Indebtedness of the Borrower which is owing to
such Persons and which ranks at least pari passu with the Indebtedness owed to
the Lenders, ratably according to the unpaid principal amount of such
Indebtedness of the Borrower owed to the Lenders and such other Persons. The
Guarantor, at the request of the Agent, shall execute such further documents
in favor of the Agent, for the benefit of the Lenders, to further evidence and
support the purpose of this Section 6.
8. No Right of Set Off. No act of commission or omission of
any kind or at any time upon the part of the Borrower or any Beneficiary or
their respective successors or assigns in respect of any matter whatsoever
shall in any way affect or impair the rights of any Beneficiary to enforce any
right, power, or benefit under this Guaranty, and no set-off, recoupment,
claim, reduction or diminution of any obligation or any defense (legal or
equitable), counterclaim, cross claim or other claim of any kind or nature
which Guarantor has or may have against the Borrower or any Beneficiary or any
such successor or assign shall be available to or asserted by Guarantor in any
suit or action brought by any Beneficiary, or their respective successors or
assigns, to enforce any right, power or benefit under this Guaranty or as an
offset to payment hereunder.
9. Representations and Warranties. Guarantor represents and
warrants to the Beneficiaries that: (a)no other agreement, representation or
special condition exists between the Guarantor and any Beneficiary regarding
the liability of the Guarantor under this Guaranty; nor does any understanding
exist between the Guarantor and any Beneficiary that the obligations of the
Guarantor under this Guaranty are or will be other than as set out herein; and
(b)as of the date hereof, the Guarantor has no defense whatsoever to any
action or proceeding that may be brought to enforce this Guaranty.
Furthermore, the Guarantor represents, warrants and affirms to the
Beneficiaries that, to its knowledge, each of the representations and
warranties contained in the Credit Agreement and made by the Borrower with
respect to the Guarantor and its properties, affairs and financial condition,
is true and correct in all material respects.
10. No Waiver by Beneficiaries. No failure or delay on the part
of any Beneficiary in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. Failure by
any Beneficiary to insist upon strict performance hereof shall not constitute
a relinquishment of its right to demand strict performance at another time.
Receipt by any Beneficiary of any payment by any Person on any Guarantied
Obligation, with knowledge of a default in respect of any Guarantied
Obligation or of a breach of this Guaranty, or both, shall not be construed as
a waiver of the default or breach.
11. CONTINUING GUARANTY; TERMINATION. THIS GUARANTY IS A
CONTINUING GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH
TIME AS ALL GUARANTIED OBLIGATIONS SHALL HAVE BEEN INDEFEASIBLY PAID IN FULL,
ALL OUTSTANDINGS SHALL HAVE BEEN PAID IN FULL OR TERMINATED AND NO BENEFICIARY
SHALL BE UNDER ANY FURTHER OBLIGATION TO LEND OR TO ADVANCE FUNDS TO THE
ACCOUNT OF THE BORROWER, OR ISSUE LETTERS OF CREDIT, CONSTITUTING GUARANTIED
OBLIGATIONS.
12. Benefits of Agreement. This Guaranty is freely assignable
and transferable by the Beneficiaries or any of them to any permitted assignee
and transferee of any Guarantied Obligation; however, the duties and
obligations of the Guarantor may not be delegated or transferred by the
Guarantor without the prior written consent of all Beneficiaries. The rights
and privileges of the Beneficiaries shall inure to the benefit of their
respective successors and assigns, and the duties and obligations of the
Guarantors shall bind their respective successors and assigns.
13. Expenses; Indemnity. The Guarantor will upon demand pay to
each Beneficiary the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
which it may incur in connection with enforcement of this Guaranty or the
failure by the Guarantor to perform or observe any of the provisions hereof.
To the extent permitted by law, the Guarantor agrees to indemnify and hold
harmless each Beneficiary and each officer, director, employee, or agent
thereof from and against any and all claims, demands, losses, judgments and
liabilities (including liabilities for penalties) of whatsoever kind or
nature, growing out of or resulting from this Guaranty or the exercise by any
Beneficiary of any right or remedy granted to it hereunder or under the other
Loan Documents, other than such items arising out of gross negligence or
willful misconduct on the part of such Beneficiary. If and to the extent that
the obligations of the Guarantor under this Section 12 are unenforceable for
any reason, the Guarantor hereby agrees to make the maximum contribution to
the payment and satisfaction of such obligations which is permissible under
applicable law.
14. Payments in U.S. Dollars. All payments to be made by the
Guarantor pursuant to any provision hereof shall be made on the date due in
lawful money of the United States of America ("Dollars" or designated "$") and
in immediately available funds to the Administrative Agent at the Principal
Office for the account of each Beneficiary. The Administrative Agent may, by
notice to the Guarantor, designate a different address at which subsequent
payments hereunder shall be made. All payments under this Guaranty shall be
made free and clear of and without reduction by reason of all present and
future income, stamp, registration and other taxes, levies, costs, imposts,
deductions, charges, compulsory liens and withholdings whatsoever.
15. Amendments, Waivers and Consents. No amendment or waiver of
any provision of this Guaranty or consent to any departure by the Guarantor
herefrom shall in any event be effective unless the same shall be in writing
and signed by the Guarantor and the Administrative Agent, with the consent of
the Required Lenders, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no such amendment, waiver or consent shall (a)deprive
any Beneficiary of the benefits generally of this Guaranty without the written
consent of such Beneficiary, or (b)alter the provisions of this Section 14 or
of Section 11 without the written consent of all of the Beneficiaries.
16. Notices. All notices shall be in writing, except as to
telephonic notices expressly permitted or required herein, and written notices
shall be delivered by hand delivery, telefacsimile, overnight courier or
certified or registered mail. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective on the day on which
delivered to such party (against (except as to telephonic or telefacsimile
notice) receipt therefor or, in the case of telex, verification by return) at
the address set forth below or such other address as such party shall specify
to the other parties in writing, or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Guarantor:
_____________________
c/o GTECH Corporation
55 Technology Way
West Greenwich, Rhode Island 02817
Attention: Vice President and Treasurer
Telephone: (401) 392-1000
Telefacsimile: (401) 392-0454
with a copy to the General Counsel at the same
address:
Telefacsimile: (401) 392-0391
(b) if to the Administrative Agent:
NationsBank, National Association
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Attention: Dana Weir, Agency Services
Telephone: (704) 388-3917
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, National Association
Corporate Banking
767 Fifth Avenue, 5th Floor
New York, New York 10153-0083
Attention: Ms. Patricia G. McCormack
Senior Vice President
Telephone: (212) 407-5373
Telefacsimile: (212) 751-6909
(c) if to the Lenders:
At the addresses set forth on the signature pages
of the Credit Agreement and on the signature page
of each Assignment and Acceptance.
17. Interpretation; Partial Invalidity. Whenever possible each
provision of this Guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Guaranty.
18. Waiver of Immunity; Jury Trial. To the extent the Guarantor
may now or hereafter be entitled, in any jurisdiction in which judicial
proceedings may at any time be commenced with respect to this Guaranty, to
claim for itself or its revenues or properties immunity from suit, set-off,
attachment upon or prior to judgment or in aid of execution or execution of a
judgment or from any other legal process, and to the extent that in any such
jurisdiction there may be attributed to the Guarantor such an immunity
(whether or not claimed), the Guarantor hereby irrevocably agrees not to claim
and hereby irrevocably waives such immunity until the indebtedness of the
Guarantor hereunder is discharged.
Guarantor hereby waives trial by jury in connection with any action,
suit or proceeding to which any Beneficiary is a party arising under or in
respect of this Guaranty.
19. Miscellaneous; Remedies Cumulative. Unless the context of
this Guaranty otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or." The section headings
used herein are for convenience of reference only and shall not define, limit
or extend the provisions of this Guaranty. All remedies hereunder are
cumulative and are not exclusive of any other rights and remedies of the
Beneficiaries provided by law or under the Credit Agreement, the other Loan
Documents, or other applicable agreements or instruments. The extensions of
credit to the Borrower pursuant to the Credit Agreement shall be presumed
conclusively to have been made or extended, respectively, in reliance upon the
obligations of the Guarantor incurred pursuant to this Guaranty.
20. Governing Law. All documents executed pursuant to the
transactions contemplated herein, including, without limitation, this
Guaranty, shall be deemed to be contracts made under, and for all purposes
shall be construed in accordance with, the internal laws and judicial
decisions of the State of New York. The Guarantor hereby submits to the
jurisdiction and venue of the state and federal courts of New York for the
purposes of resolving disputes hereunder or for the purposes of collection.
21. Repayment or Recovery. If claim is ever made upon any
Beneficiary for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guarantied Obligations and any of the
Beneficiaries repays all or part of said amount by reason of (a)any judgment,
decree or order of any court or administrative body having jurisdiction over
such payee or any of its property, or (b)any settlement or compromise of any
such claim effected by such Beneficiary with any such claimant (including the
original obligor), then and in such event the Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon it,
notwithstanding any revocation hereof or the cancellation of any Notes or
other instrument evidencing any Guarantied Obligation or any security
therefor, and the Guarantor shall be and remain liable to the aforesaid
Beneficiary for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by such Beneficiary.
22. Set-Off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights,
Guarantor agrees that each Beneficiary shall have a lien for all the
liabilities of the Guarantor upon all deposits or deposit accounts, of any
kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to such Beneficiary or
otherwise in the possession or control of such Beneficiary (other than for
safekeeping) for any purpose for the account or benefit of the Guarantor and
including any balance of any deposit account or of any credit of the Guarantor
with such Beneficiary, whether now existing or hereafter established, and
hereby authorizes each Beneficiary, upon the occurrence and during the
continuance of an Event of Default, at any time or times with or without prior
notice to apply such balances or any part thereof to such of the liabilities
of the Guarantor to such Beneficiary then past due and in such amounts as they
may elect, and whether or not the collateral or the responsibility of other
Persons primarily, secondarily or otherwise liable may be deemed adequate.
For the purposes of this Section 21, all remittances and property shall be
deemed to be in the possession of such Beneficiary as soon as the same may be
put in transit to it by mail or carrier or by other bailee.
23. Events of Default. The following shall constitute Events of
Default ("Events of Default") under this Guaranty:
A. The occurrence and continuance of an Event of
Default as defined in the Credit Agreement; or
B. Failure by the Guarantor to perform, observe or
comply in all material respects with any term, covenant, condition or
provision contained in this Guaranty within thirty (30) days after
notice thereof by the Administrative Agent; or
C. Any warranty, representation or other written
statement made by the Guarantor herein or in any instrument furnished
by the Guarantor to any Beneficiary pursuant to this Guaranty shall
be false or misleading in any material respect on the date as of
which it is made.
24. Credit Agreement Controls. In the event that any term of
this Guaranty conflicts with any term of the Credit Agreement, then the term
of the Credit Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.
ATTEST: [GUARANTOR]
By: By:
Name:
Title: Title:
[COMPANY SEAL]
NATIONSBANK, NATIONAL
ASSOCIATION, as
Administrative Agent for
the Lenders
By:
Name:
Title:
<PAGE>
EXHIBIT N
Form of Confidentiality Agreement
THIS AGREEMENT made this _____ day of __________, by and between
GTECH CORPORATION with its principal office at 55 Technology Way, West
Greenwich, Rhode Island 02817 (GTECH CORPORATION and any affiliates and
subsidiaries are referred to hereinafter as "GTECH") and
___________________________________ with offices at
___________________________________ (referred to hereinafter as the "Potential
Transferee").
WHEREAS, GTECH creates, develops, manufacturers and markets various
goods, including without limitation computerized gaming systems and the
components thereof (hardware and software included), and services, including
without limitation implementation, modification, promotion, and maintenance of
such systems; and
WHEREAS, GTECH is a party to that certain Amended and Restated Credit
Agreement dated________________ ___, 1997, among GTECH Corporation, the
Lenders which are parties thereto (the "Lenders"), the Documentation Agent (as
defined therein), the Co-Agents (as defined therein) and NationsBank, National
Association, in its capacity as Administrative Agent for the Lenders (as
amended or supplemented and in effect from time to time, the "Credit
Agreement") (capitalized terms not otherwise defined herein shall have the
same meaning as set forth in the Credit Agreement); and
WHEREAS, the Potential Transferee is interested in exploring the
possibility of becoming a participant and/or an assignee (a "Transferee")
pursuant to Section 11.01 of the Credit Agreement (hereinafter referred to as
"Explorations"); and
WHEREAS, the Lender proposing to transfer a portion of its rights and
obligations under the Loan Documents (the "Transferor Lender") is permitted,
pursuant to Section 11.01(a) of the Credit Agreement, to disclose certain
information respecting GTECH, subject to the execution and delivery by the
Potential Transferee of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the promises
and covenants herein contained, the parties agree as follows:
1. The parties acknowledge that, as used in this Agreement, the
term "Confidential Information" means all financial
information in the Transferor Lender's possession concerning
GTECH and its affiliates which has been delivered to the
Transferor Lender by or on behalf of GTECH pursuant to the
Credit Agreement or which has been delivered to the
Transferor Lender by or on behalf of GTECH in connection
with the Transferor Lender's credit evaluations of GTECH and
its affiliates prior to becoming a party to the Credit
Agreement, and which is disclosed to the Potential
Transferee by the Transferor Lender under or in connection
with Explorations. Confidential Information does not
include, without limitation, information which is:
(a) in the public domain;
(b) already known to the Potential Transferee at the
time of such disclosure;
(c) subsequently received by the Potential Transferee
in good faith from a third party who is not known
to the Potential Transferee to be bound by a
confidentiality agreement with GTECH or known to
the Potential Transferee to be otherwise prohibited
from transmitting the information to the Potential
Transferee by a contractual, legal or fiduciary
obligation;
(d) independently generated by the Potential
Transferee; or
(e) approved for release or disclosure by GTECH in a
separate writing.
2. Except as necessary to conduct Explorations and, in the
event the Potential Transferee becomes a Transferee, as
necessary as a Lender (or a participant of a Lender under
the Credit Agreement), the Potential Transferee shall never
use or duplicate any Confidential Information and shall keep
confidential and never disclose any Confidential Information
unless GTECH has, in its sole discretion, previously and
expressly consented to such use, duplication or disclosure
in writing. The Potential Transferee may disclose such
Confidential Information to: (a) those directors, officers,
employees, agents, accountants and attorneys of the
Potential Transferee whose knowledge is necessary to conduct
the Explorations, provided that all such persons shall be
advised of their obligations to protect GTECH's interest,
which obligations shall be identical to those of the
Potential Transferee under this Agreement; (b) examiners or
regulatory agencies having supervisory or examination
authority over the Potential Transferee in accordance with
customary banking practices; and (c) any person pursuant to
the order of any Governmental Authority or as otherwise
required by law.
3. The parties acknowledge and agree that:
(a) All Confidential Information disclosed by or
belonging to GTECH is and shall remain the
exclusive and valuable property of GTECH;
(b) The Potential Transferee does not hereby obtain any
license or other interest in or to Confidential
Information or the subjects thereof; and
(c) At GTECH's request, and in any event upon the
completion of the Explorations, the Potential
Transferee shall promptly deliver to GTECH all
records or other things in any media containing or
embodying Confidential Information which were
delivered or made available to the Potential
Transferee during or in connection with
Explorations, including any copies thereof, and any
other Confidential Information retained by the
Potential Transferee will be either destroyed by
the Potential Transferee or, to the extent such
Potential Transferee shall have become a Lender (or
a participant of a Lender), held by the Potential
Transferee subject to the terms of this
Confidentiality Agreement.
4. (a) The Potential Transferee acknowledges that the
restrictions on the use, duplication and disclosure
of GTECH's Confidential Information set forth
herein are reasonable to protect GTECH's business
interests. If any provision hereof is held invalid
under any applicable rule of law such invalidity
shall not affect other provisions hereof which can
be given effect without the invalid provisions, and
to this end the provisions hereof are declared to
be severable. The above notwithstanding, any such
invalid provisions shall be construed and enforced
(to the extent possible) in accordance with the
original intent of the parties as herein expressed.
(b) This Agreement shall not be modified except in
writing signed by both parties hereto.
(c) No waiver of any provisions of the Agreement shall
be effective unless agreed to in writing by the
party against whom such waiver is sought to be
enforced. Waiver of any default or breach
hereunder shall not constitute a waiver of any
other default or breach whether similar or
otherwise.
(d) The validity, interpretation, and enforcement of
this Agreement shall be governed by the laws of the
State of New York other than any rule which might
refer such matters to the laws of any other
jurisdiction.
(e) The provisions of this Agreement shall indefinitely
survive all of the following: termination of the
Explorations, termination of the Credit Agreement
and termination of the Potential Transferee's
status as a Lender or a participant of a Lender.
(f) This Agreement shall be binding upon and inure to
the benefit of GTECH, its legal representatives and
successors; and the Potential Transferee, its legal
representatives and successors.
<PAGE>
IN WITNESS WHEREOF the parties have by their duly authorized
representatives executed this Agreement as of the date first written above.
GTECH CORPORATION Potential Transferee
By ______________________ By ___________________________
Signature Signature
Name (Print or Type) Name (Print or Type)
Title Title
Date Date
<PAGE>
Schedule 2.03(i)
GTECH Corporation
Revolving Debt Summary
Outstanding Bid Loans
As of June 18, 1997
<TABLE>
<CAPTION>
Amount Term Rate # Of Days Inception Maturity
<S> <C> <C> <C> <C> <C> <C>
Bank of Tokyo 10,000,000 14 Day Bid 5.80625 14 June 6, 1997 June 20, 1997
Fleet Bank 40,000,000 14 Day Bid 5.74000 14 June 6, 1997 June 20, 1997
Credit Lyonnais 20,000,000 14 Day Bid 5.85000 14 June 6, 1997 June 20, 1997
____________
Subtotal: $70,000,000
</TABLE>
<PAGE>
Schedule 6.01(d)
Transactive Corporation is a Delaware Corporation. Transactive Corporation is
a wholly-owned subsidiary of GTECH Corporation.
<PAGE>
Schedule 6.01(e)
GTECH Corporation
Debt Summary
5/31/97
<TABLE>
<CAPTION>
Bank S/T Outstanding Description Final Maturity
<S> <C> <C> <C>
Nations Facility 0 Term Loan 9/99
Series A Senior Notes Private Placement 2004
Series B Senior Notes Private Placement 2007
Scotia Bank de Puerto Rico 2,136,000 Term Loan 9/98
Woodchester Credit Lyonnais 1,867,511 Term Loan 12/99
Citizens Trust 0 Demand Note Demand
First Union 0 Demand Note Demand
Commerzbank Demand Note Demand
Nations Bank 698,082 Capital Lease 3/98
481,103 Capital Lease 7/98
681,024 Capital Lease 8/98
</TABLE>
<TABLE>
<CAPTION>
Bank L/T Outstanding Description Final Maturity
<S> <C> <C> <C>
Nations Facility 137,000,000 Term Loan 9/99
Series A Senior Notes 150,000,000 Private Placement 2004
Series B Senior Notes 150,000,000 Private Placement 2007
Scotia Bank de Puerto Rico 1,058,000 Term Loan 9/98
Woodchester Credit Lyonnais 3,268,151 Term Loan 12/99
Citizens Trust 1,000,000 Demand Note Demand
First Union 0 Demand Note Demand
Commerzbank 3,400,000 Demand Note Demand
Nations Bank 0 Capital Lease 3/98
83,035 Capital Lease 7/98
176,809 Capital Lease 8/98
Total: 451,849,715
</TABLE>
<PAGE>
Schedule 6.01(f)
To the extent any of the capital leases referenced in Schedule 6.01(e) are
determined to be loans with a security interest, they would be Liens.
<PAGE>
Schedule 6.01(h)
The Texas Lottery Commission ("Lottery") has notified the Borrower of its
intention to assess liquidated damages in connection with a gift made by one of
its lobbyists to the Governor of Texas, and has requested information on any
other occasion when the Borrower or its lobbyists may have provided meals or
entertainment to state officials without reimbursement. While it has not done
so, the Lottery may take the position that such actions constitute a default
under the Borrower's contract with the Lottery. In addition, the Lottery has
instructed its staff to prepare and issue, by June 30, 1997, requests for
proposal for the same goods and services currently provided by the Borrower. As
a result of this process, the Lottery may in the future attempt to terminate the
contract.
GTECH HOLDINGS CORPORATION
GTECH CORPORATION
$300,000,000
7.75% Series A Guaranteed Senior Notes due 2004
7.87% Series B Guaranteed Senior Notes due 2007
NOTE AND GUARANTEE AGREEMENT
Dated as of May 15, 1997
<PAGE>
GTECH HOLDINGS CORPORATION
GTECH CORPORATION
55 Technology Way
West Greenwich, Rhode Island 02817
7.75% Series A Guaranteed Senior Notes due 2004
7.87% Series B Guaranteed Senior Notes due 2007
As of May 15, 1997
TO THE PURCHASERS WHOSE NAMES
APPEAR IN THE ACCEPTANCE
FORM AT END HEREOF:
Ladies and Gentlemen:
GTECH CORPORATION, a Delaware corporation (the "Company"), and
GTECH HOLDINGS CORPORATION, a Delaware corporation (the "Guarantor" and,
together with the Company, the "Obligors"), agree with each of the purchasers
whose names appear in the acceptance form at the end hereof (each, a "Purchaser"
and, collectively, the "Purchasers") as follows:
1. AUTHORIZATION OF NOTES
The Company will authorize the issue and sale, in two series,
of $300,000,000 aggregate principal amount of its guaranteed senior notes, of
which $150,000,000 aggregate principal amount shall be its 7.75% Series A
Guaranteed Senior Notes due 2004 (the "Series A Notes") and $150,000,000
aggregate principal amount shall be its 7.87% Series B Guaranteed Senior Notes
due 2007 (the "Series B Notes"). As used herein, the term "Notes" includes all
notes originally issued pursuant to this Agreement and any notes issued in
substitution therefor pursuant to Section 14. The Series A Notes and the Series
B Notes shall be substantially in the respective forms set out in Exhibits 1-A
and 1-B, with such changes therefrom, if any, as may be approved by each
Purchaser and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Payment of the principal of, Make-Whole Amount (if any) and
interest on the Notes and other amounts owing hereunder shall be unconditionally
guaranteed by the Guarantor as provided in Section 13 (and each Note will have
the guarantee (the "Guarantee" and collectively, the "Guarantees") of the
Guarantor endorsed thereon in the form set out in Exhibit 1-C) and by the
Subsidiary Guarantors as provided in the Subsidiary Guarantees.
2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to each Purchaser and each Purchaser will purchase
from the Company, at the Closing provided for in Section 3, Notes of the
respective series and in the principal amount specified opposite such
Purchaser's name in Schedule A at the purchase price of 100% of the principal
amount thereof. The Purchasers' obligations hereunder are several and not joint
obligations and no Purchaser shall have any liability to any Person for the
performance or non-performance of any obligation by any other Purchaser
hereunder.
3. CLOSING
The sale and purchase of the Notes to be purchased by each
Purchaser shall occur at the offices of Milbank, Tweed, Hadley & McCloy, One
Chase Manhattan Plaza, New York, New York 10005, at 10:00 a.m., New York City
time, at a closing (the "Closing") on May 29, 1997 or on such other Business Day
thereafter on or prior to May 31, 1997 as may be agreed upon by the Obligors and
the Purchasers. At the Closing the Company will deliver to each Purchaser the
Notes to be purchased by such Purchaser in the form of a single Note for each
series to be purchased by such Purchaser (or such greater number of Notes in
denominations of at least $500,000 and integral multiples of $5,000 in excess
thereof as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser's name (or in the name of such Purchaser's
nominee), with the Guarantee of the Guarantor endorsed thereon, against delivery
by such Purchaser to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately
available funds for the account of the Company to account number 004-269486 at
RI Hospital Trust National Bank, ABA Number 011-500-337, One Hospital Trust
Plaza, Providence, Rhode Island 02903. If at the Closing the Company shall fail
to tender such Notes to any Purchaser as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
such Purchaser's satisfaction, such Purchaser shall, at such Purchaser's
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights such Purchaser may have by reason of such failure or
such nonfulfillment.
4. CONDITIONS TO CLOSING
Each Purchaser's obligation to purchase and pay for the Notes
to be sold to such Purchaser at the Closing is subject to the fulfillment to
such Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
5. Representations and Warranties
The representations and warranties of the Obligors in this
Agreement shall be correct when made and at the time of the Closing.
6. Performance; No Default
Each Obligor shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred
and be continuing.
7. Compliance Certificates
8. Officer's Certificate. Each Obligor shall have
delivered to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9
have been fulfilled.
9. Secretary's Certificate. Each Obligor and each Subsidiary
Guarantor shall have delivered to such Purchaser a certificate certifying as to
the resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of this Agreement, the Notes, the
Guarantees and the Subsidiary Guarantees, as applicable.
10. Opinions of Counsel
Such Purchaser shall have received opinions in form and
substance satisfactory to such Purchaser, dated the date of the Closing (a) from
in-house counsel for the Obligors, covering the matters set forth in Exhibit
4.4(a) and covering such other matters incident to the transactions contemplated
hereby as such Purchaser or the Purchasers' counsel may reasonably request and
(b) from Milbank, Tweed, Hadley & McCloy, the Purchasers' special New York
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as such Purchaser may reasonably request.
11. Purchase Permitted By Applicable Law, etc.
On the date of the Closing such Purchaser's purchase of Notes
shall (i) be permitted by the laws and regulations of each jurisdiction to which
such Purchaser is subject, without recourse to provisions (such as Section
1405(a)(8) of the New York Insurance Law) permitting limited investments by
insurance companies without restriction as to the character of the particular
investment, (ii) not violate any applicable law or regulation (including,
without limitation, Regulation G, T or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject such Purchaser to any tax, penalty
or liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by such Purchaser,
such Purchaser shall have received an Officer's Certificate from the Guarantor
certifying as to such matters of fact as such Purchaser may reasonably specify
to enable such Purchaser to determine whether such purchase is so permitted.
12. Sale of Other Notes
Contemporaneously with the Closing the Company shall sell to
each other Purchaser and each other Purchaser shall purchase the Notes to be
purchased by it at the Closing as specified in Schedule A.
13. Payment of Special Counsel Fees
Without limiting the provisions of Section 16.1, the Obligors
shall have paid on or before the Closing the fees, charges and disbursements of
the Purchasers' special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Obligors at least one
Business Day prior to the Closing.
14. Private Placement Number
A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
each series of the Notes.
15. Changes in Corporate Structure
Except as specified in Schedule 4.9, neither Obligor shall
have changed its jurisdiction of incorporation or been a party to any merger or
consolidation or shall have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
16. Rating
The Notes of each series shall have received a preliminary
rating of at least BBB+ from Duff & Phelps Credit Rating Co.
17. Subsidiary Guarantees
Such Purchaser shall have received a true and complete copy of
a Subsidiary Guarantee duly executed and delivered by each Subsidiary Guarantor
identified on Schedule 5.4, each such Subsidiary Guarantee shall be in full
force and effect, and the representations and warranties of the related
Subsidiary Guarantor in each such Subsidiary Guarantee shall be correct when
made and at the time of the Closing.
18. Proceedings and Documents
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and the Subsidiary Guarantees and
all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and the Purchasers' special counsel, and such
Purchaser and such special counsel shall have received all such counterpart
originals or certified or other copies of such documents as such Purchaser or
such special counsel may reasonably request.
19. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.
The Company and the Guarantor jointly and severally represent
and warrant to each Purchaser that:
20. Organization; Power and Authority
Each Obligor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each Obligor has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes (in the case of the Company) and this
Agreement and the Guarantees (in the case of the Guarantor), and to perform the
provisions hereof and thereof.
21. Authorization, etc.
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, and this Agreement and the Guarantees have
been duly authorized by all necessary corporate action on the part of the
Guarantor, and this Agreement constitutes and, upon execution and delivery
thereof, each Guarantee will constitute, a legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its terms,
except, in each case, as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
22. Disclosure
The Obligors, through their agent, Credit Suisse First Boston
Corporation, have delivered to each Purchaser a copy of a Direct Placement
Memorandum, dated April 1997 (the "Memorandum"), relating to the transactions
contemplated hereby. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings identified in Schedule
5.3 and the financial statements listed in Schedule 5.5, taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since February 22, 1997, there has
been no change in the financial condition, operations, business or properties of
either Obligor or any Subsidiary except changes that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.
23. Organization and Ownership of Shares of Subsidiaries
(a) Schedule 5.4 is (except as noted therein) a complete and
correct list of the Guarantor's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Guarantor and each other Subsidiary and whether such
Subsidiary will be on the date of the Closing a Subsidiary Guarantor.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Guarantor and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Guarantor or another Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.
24. Financial Statements
The Obligors have delivered to each Purchaser copies of the
financial statements listed on Schedule 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Guarantor and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
25. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Obligors of
this Agreement and the Notes (in the case of the Company) and the Guarantees (in
the case of the Guarantor) will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of either Obligor or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which either Obligor or any
Subsidiary is bound or by which either Obligor or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to either Obligor or any Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
either Obligor or any Subsidiary.
26. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by either Obligor of this Agreement
or the Notes (in the case of the Company) or the Guarantees (in the case of the
Guarantor).
27. Litigation; Observance of Agreements, Statutes and Orders
(a) Except as disclosed in Part I of Schedule 5.8, there are
no actions, suits or proceedings pending or, to the knowledge of either Obligor,
threatened against or affecting either Obligor or any Subsidiary or any property
of either Obligor or any Subsidiary in any court or before any arbitrator of any
kind or before or by any Governmental Authority that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed in Part II of Schedule 5.8, neither of
the Obligors nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or
is in violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
28. Taxes
The Obligors and each Subsidiary have filed all income tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments payable by them, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, except for any
taxes and assessments (i) the amount of which is not individually or in the
aggregate Material or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Guarantor or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Federal income tax
liabilities of the Obligors and each Subsidiary have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended February 24, 1996.
29. Title to Property; Leases
The Obligors and each Subsidiary have good and sufficient
title to their respective Material properties, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by either Obligor or any Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this Agreement,
except for those defects in title and Liens that, individually or in the
aggregate, would not have a Material Adverse Effect. All Material leases that
either Obligor or any Subsidiary is party to as lessee are (as against such
Obligor or Subsidiary and, to the best knowledge of the Obligors, as against the
lessor thereunder) valid and subsisting and are in full force and effect in all
material respects.
30. Licenses, Permits, etc
Except as disclosed in Schedule 5.11, the Obligors and each
Subsidiary own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that are Material, without known conflict with the rights of others,
except for those conflicts that, individually or in the aggregate, would not
have a Material Adverse Effect.
31. Compliance with ERISA
(a) The Obligors and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither of the Obligors nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or condition
has occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by either Obligor or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of either
Obligor or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the terms "current value"
and "present value" have the meaning specified in section 3 of ERISA.
(c) The Obligors and each ERISA Affiliate have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Guarantor's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106, without
regard to liabilities attributable to continuation coverage mandated by section
4980B of the Code) of the Guarantor and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes and Guarantees hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Obligors in the first
sentence of this Section 5.12(e) is made in reliance upon and subject to the
accuracy of the Purchasers' representation in Section 6.2 as to, inter alia, the
sources of the funds to be used to pay the purchase price of the Notes to be
purchased by the Purchasers.
32. Private Offering by the Obligors.
Neither the Obligors nor anyone acting on their behalf has
offered the Notes or the Guarantees or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any Person other than the Purchasers and not
more than 45 other Institutional Investors, each of which has been offered the
Notes at a private sale for investment. Neither the Obligors nor anyone acting
on their behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes or the Guarantees to the registration requirements
of Section 5 of the Securities Act.
33. Use of Proceeds; Margin Regulations
The Company will apply the proceeds of the sale of the Notes
for the repayment of existing Indebtedness and for general corporate purposes.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation G of the Board of Governors of the Federal
Reserve System (12 CFR 207), or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve either Obligor in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 5% of the value of the consolidated assets of the
Guarantor and its Subsidiaries and the Guarantor does not have any present
intention that margin stock will constitute more than 5% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation G.
34. Existing Indebtedness
Except as described therein, Part A of Schedule 5.15 sets
forth a complete and correct list of all outstanding Indebtedness of the
Guarantor and its Subsidiaries as of February 22, 1997, since which date there
has been no Material change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Indebtedness of the Guarantor or its
Subsidiaries. Neither of the Obligors nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Indebtedness of either Obligor or such Subsidiary and no event
or condition exists with respect to any Indebtedness of either Obligor or any
Subsidiary the outstanding principal amount of which exceeds $5,000,000 that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.
35. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder with
the benefit of the Guarantees of the Guarantor nor the Company's use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
36. Status under Certain Statutes
Neither of the Obligors nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.
37. Ranking
All liabilities of the Company under the Notes and of the
Guarantor under the Guarantees constitute direct, unconditional and general
obligations of such Obligor and rank in right of payment either pari passu or
senior to all other Indebtedness of such Obligor, except for such Indebtedness
which is preferred as a result of being secured (but then only to the extent of
such security).
38. Subsidiary Guarantees
The representations and warranties of each Subsidiary
Guarantor contained in the Subsidiary Guarantee of such Subsidiary Guarantor are
true and correct as of the date they are made.
39. REPRESENTATIONS OF THE PURCHASER
40. Purchase for Investment
Each Purchaser represents that such Purchaser (i) is an
"accredited investor" within the meaning of Rule 501 under the Securities Act
and (ii) is purchasing the Notes for its own account or for one or more separate
accounts maintained by it or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's or their property shall at all times be within
such Purchaser's or their control. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that neither Obligor
is required to register the Notes.
41. Source of Funds
Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by such Purchaser to pay the purchase price of the Notes to be
purchased by such Purchaser hereunder:
(a) the Source is an "insurance company general account" (as
the term is defined in PTE 95-60 (issued July 12, 1995)) in respect of
which the reserves and liabilities (as defined by the annual statement
for life insurance companies approved by the National Association of
Insurance Commissioners (the "NAIC Annual Statement")) for the general
account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee
benefit plans maintained by the same employer (or affiliate thereof as
defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities
of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such
Purchaser's state of domicile; or
(b) the Source is a separate account that is maintained solely
in connection with such Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan
(or its related trust) that has any interest in such separate account
(or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as disclosed by such
Purchaser to the Company in writing pursuant to this paragraph (c), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets that are or that are
deemed under Department of Labor regulations issued under ERISA to be
assets of any employee benefit plan, other than a plan exempt from the
coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in section 3 of ERISA.
Notwithstanding the foregoing, if any Purchaser is an
insurance company organized under the laws of a jurisdiction other than the
United States or any political subdivision thereof, such Purchaser represents
that either (i) at least one of the foregoing statements is an accurate
representation as to each Source to be used by such Purchaser to pay the
purchase price of the Notes to be purchased by such Purchaser hereunder or (ii)
in any event, the execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
42. INFORMATION AS TO THE OBLIGORS
43. Financial and Business Information
The Obligors shall deliver to each holder of Notes that is an
Institutional Investor:
44. Quarterly Statements -- within 50 days after the end of
each quarterly fiscal period in each fiscal year of the Guarantor
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
0.0.0.1. a consolidated balance sheet of the
Guarantor and its Restricted Subsidiaries as at the end of
such quarter, and
0.0.0.2. consolidated statements of income, changes
in shareholders' equity and cash flows of the Guarantor and
its Restricted Subsidiaries, for such quarter and (in the case
of the second and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer of the Guarantor as fairly presenting, in all material
respects, the financial position of the companies being reported on and
their results of operations and cash flows, subject to changes
resulting from year-end adjustments, provided that delivery within the
time period specified above of copies of the Guarantor's Quarterly
Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a) (so long as
the financial statements contained in said Report conform to the
requirements of clauses (i) and (ii) above including as to the
companies being reported upon);
0.0.0.2.1 Annual Statements -- within 95 days after the end
of each fiscal year of the Guarantor, duplicate copies of,
0.0.0.3. a consolidated balance sheet of the
Guarantor and its Restricted Subsidiaries, as at the end of
such year, and
0.0.0.4. consolidated statements of income, changes
in shareholders' equity and cash flows of the Guarantor and
its Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Guarantor's Annual Report on Form 10-K for such
fiscal year (together with the Guarantor's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section (b) (so long as the financial
statements contained in said Report conform to the requirements of
clauses (i) and (ii) above, including as to the companies being
reported upon);
0.0.0.4.1 SEC and Other Reports-- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by either Obligor or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement that shall have become effective (without
exhibits except as expressly requested by such holder and other than on
Form S-8), and each final prospectus and amendments thereto filed by
either Obligor or any Subsidiary with the Securities and Exchange
Commission;
0.0.0.4.2 Notice of Default or Event of Default -- promptly,
and in any event within five days after a Responsible Officer having
actual knowledge of the existence of any Default or Event of Default, a
written notice specifying the nature and period of existence thereof
and what action the Obligors are taking or propose to take with respect
thereto;
0.0.0.4.3 ERISA Matters -- promptly, and in any event within
five days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Guarantor or the Company or an ERISA Affiliate
proposes to take with respect thereto:
(i) with respect to any Pension Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, or
the receipt by either Obligor or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has been
taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by either Obligor or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of either Obligor or
any ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days after a Responsible Officer has actual
knowledge of receipt thereof, copies of any notice to either Obligor or
any Subsidiary from any Federal or state Governmental Authority
relating to any contract, proceeding, order, ruling, statute or other
law or regulation that would reasonably be expected to have a Material
Adverse Effect;
(g) Litigation, etc. -- promptly, and in any event within 30
days after a Responsible Officer having actual knowledge thereof, a
written notice of any legal or arbitral proceeding (or any order,
decree or judgment relating thereto) affecting either Obligor or any
Subsidiary that would reasonably be expected to have a Material Adverse
Effect; and
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of either Obligor or
any Subsidiary or relating to the ability of the Obligors to perform
their respective obligations hereunder and under the Notes and the
Guarantees as from time to time may be reasonably requested by any such
holder of Notes.
0.0.0.4.4. Officer's Certificate
Each set of financial statements delivered to a holder of
Notes pursuant to Section (a) or Section (b) shall be accompanied by a
certificate of a Senior Financial Officer of the Guarantor setting forth:
0.0.0.4.5 Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Obligors were in compliance with the requirements of Sections 10.3(k),
10.4(c), 10.5(e), 10.6, 10.7 and 10.8 during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of
the amount, ratio or percentage then in existence); and
0.0.0.4.6. Event of Default -- a statement that such officer
has reviewed the relevant terms hereof and has made, or caused to be
made, under his or her supervision, a review of the transactions and
conditions of the Guarantor and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of either
Obligor or any Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action
the Obligors shall have taken or propose to take with respect thereto.
0.0.0.4.7 Inspection
The Obligors shall permit the representatives of each holder
of Notes that is an Institutional Investor:
0.0.0.4.8 No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Obligors, to visit the principal executive office of the
Guarantor and the Company, to discuss the affairs, finances and
accounts of the Guarantor and the Company and their Subsidiaries with
the Guarantor's or the Company's officers, and, with the consent of the
Guarantor or the Company, as the case may be (which consent will not be
unreasonably withheld), to visit the other offices and properties of
the Guarantor and the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
0.0.0.4.9 Default -- if a Default or Event of Default then
exists, at the expense of the Obligors, to visit and inspect any of the
offices or properties of the Guarantor, the Company or any Subsidiary,
to examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the
Obligors authorize said accountants to discuss the affairs, finances
and accounts of the Obligors and their Subsidiaries), all at such times
and as often as may be requested.
0.0.0.4.10 PREPAYMENT OF THE NOTES
0.0.0.4.11 Maturity.
As provided therein, the entire unpaid principal amount of the
Series A Notes and Series B Notes shall be due and payable on May 15, 2004 and
May 15, 2007, respectively.
0.0.0.4.12 Optional Prepayments with Make-Whole Amount
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than 5% of the aggregate principal amount of the Notes then
outstanding in the case of a partial prepayment, at 100% of the principal amount
so prepaid, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amounts determined for the prepayment date with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date (which shall be a Business Day), the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amounts due in connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amounts as of the specified
prepayment date.
0.0.0.4.13 Allocation of Partial Prepayments
In the case of each partial prepayment of the Notes, the
Company will prepay the same percentage of the unpaid principal amount of the
Notes of each series and the principal amount of the Notes of each series to be
prepaid shall be allocated among all of the Notes of such series at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
0.0.0.4.14 Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company shall
fail to pay such principal amount when so due and payable, together with the
interest and Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
0.0.0.4.15 Purchase of Notes
Neither Obligor will nor will either Obligor permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 10 Business Days. If the holders
of more than 50% of the principal amount of the Notes then outstanding accept
such offer, the Company shall promptly notify the remaining holders of such fact
and the expiration date for the acceptance by holders of Notes of such offer
shall be extended by the number of days necessary to give each such remaining
holder at least 5 Business Days from its receipt of such notice to accept such
offer. The Company will promptly cancel all Notes acquired by either Obligor or
any such Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
0.0.0.4.16 Make-Whole Amount
The term "Make-Whole Amount" means, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 678" on the
Telerate Access Service (or such other display as may replace Page 678
on Telerate Access Service) for actively traded U.S. Treasury
securities having a maturity equal to the remaining term of such Note
as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
U.S. Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the remaining term of such Note as
of such Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the
remaining term of such Note and (2) the actively traded U.S. Treasury
security with the duration closest to and less than the remaining term
of such Note.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
0.0.0.4.17 AFFIRMATIVE COVENANTS
The Company and the Guarantor jointly and severally covenant
that so long as any of the Notes are outstanding:
0.0.0.4.18 Compliance with Law
The Obligors will and will cause each of their Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership of
their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations would not, individually or in the aggregate, have a
Material Adverse Effect.
0.0.0.4.19 Insurance
The Obligors will and will cause each of their Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
0.0.0.4.20 Maintenance of Properties
The Obligors will and will cause each of their Restricted
Subsidiaries to maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, provided that this Section shall not
prevent either Obligor or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Guarantor has concluded that
such discontinuance would not, individually or in the aggregate, have a Material
Adverse Effect.
0.0.0.4.21 Payment of Taxes
The Obligors will and will cause each of their Subsidiaries to
file all income tax or similar tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
payable by any of them, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, provided that neither of the
Obligors nor any Subsidiary need pay any such tax or assessment if (i) the
amount, applicability or validity thereof is contested by such Obligor or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
such Obligor or such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate would not have a
Material Adverse Effect.
0.0.0.4.22 Corporate Existence, etc.
Subject to Sections 10.2 and 10.8, the Obligors will at all
times preserve and keep in full force and effect their respective corporate
existences, and the Obligors will at all times preserve and keep in full force
and effect the corporate existence of each of their Restricted Subsidiaries and
all rights and franchises of the Obligors and their Restricted Subsidiaries
unless, in the good faith judgment of the Guarantor, the termination of or
failure to preserve and keep in full force and effect the corporate existence of
any Restricted Subsidiary (other than the Company), or any such right or
franchise would not, individually or in the aggregate, have a Material Adverse
Effect.
0.0.0.4.23 Ownership of the Company.
The Guarantor shall at all times own, directly or indirectly,
100% of the capital stock of the Company free and clear of any Lien.
0.0.0.4.24 Ranking
Each Obligor will ensure that, at all times, all liabilities
of such Obligor under the Notes (in the case of the Company) and the Guarantees
(in the case of the Guarantor) will rank in right of payment either pari passu
or senior to all other Indebtedness of such Obligor except for Indebtedness
which is preferred as a result of being secured (but then only to the extent of
such security).
0.0.0.4.25 Subsidiary Guarantors
(a) The Guarantor will ensure that each Subsidiary that has
outstanding a Guaranty with respect to any Indebtedness of the Company or the
Guarantor is a Subsidiary Guarantor.
(b) Upon notice by the Company to each holder of a Note, a
Subsidiary Guarantor shall cease to be a Subsidiary Guarantor and shall be
released from its obligations under its Subsidiary Guarantee if such Subsidiary
Guarantor shall not have outstanding any Guaranty with respect to any
Indebtedness of the Company or the Guarantor.
0.0.0.4.26 NEGATIVE COVENANTS
The Guarantor covenants that so long as any of the Notes are
outstanding:
0.0.0.4.27 Transactions with Affiliates
The Guarantor will not, and will not permit any Restricted
Subsidiary to, enter into directly or indirectly any Material transaction or
Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Guarantor or another Restricted
Subsidiary), except pursuant to the reasonable requirements of the Guarantor's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Guarantor or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
0.0.0.4.28 Merger, Consolidation, etc
The Guarantor will not, and will not permit any Restricted
Subsidiary to, consolidate with or merge with any other corporation or convey,
transfer or lease substantially all of its assets in a single transaction or
series of transactions to any Person unless:
0.0.0.4.29 in the case of the Guarantor or the Company, the
successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Guarantor or the Company as an
entirety, as the case may be, shall be a solvent corporation organized
and existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if the Guarantor or the
Company, as the case may be, is not such corporation, such corporation
shall have executed and delivered to each holder of any Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of (x) this Agreement and the Notes, in the case
of the Company and (y) this Agreement and the Guarantees, in the case
of the Guarantor;
0.0.0.4.30 in the case of any Restricted Subsidiary (other than
the Company), the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of such Restricted
Subsidiary as an entirety, as the case may be, shall be (i) such
Restricted Subsidiary, either Obligor or another Restricted Subsidiary
or (ii) any other Person so long as the Disposition of all of the
assets of such Restricted Subsidiary would have otherwise been
permitted by Section 10.8 (and is treated as a Disposition of the
assets of such Subsidiary for all purposes of Section 10.8); and
0.0.0.4.31 in any case, immediately after giving effect to such
transaction, (i) no Default or Event of Default shall have occurred and
be continuing and (ii) the Guarantor would be permitted by the
provisions of Section 10.6 to incur at least $1.00 of additional
Indebtedness owing to a Person other than a Restricted Subsidiary.
No such conveyance, transfer or lease of substantially all of the assets of the
Guarantor or the Company shall have the effect of releasing the Guarantor or the
Company, as the case may be, or any successor corporation that shall theretofore
have become such in the manner prescribed in this Section 10.2 from its
liability under (x) this Agreement or the Notes, in the case of the Company or
(y) this Agreement or the Guarantees, in the case of the Guarantor.
0.0.0.4.32 Liens
The Guarantor will not, and will not permit any Restricted
Subsidiary to, create, assume, incur or suffer to exist any Lien upon or with
respect to any property or assets, whether now owned or hereafter acquired, of
the Guarantor or any such Subsidiary, unless the Notes are secured equally and
ratably with any and all other obligations secured by such Lien pursuant to
documentation reasonably satisfactory to the Required Holders (including an
opinion of counsel as to the enforceability of such Lien reasonably satisfactory
to the Required Holders), excluding from the operation of this Section:
(a) Liens existing on the date hereof securing Indebtedness of
the Guarantor or any Restricted Subsidiary outstanding on the date
hereof and specified in Part B of Schedule 5.15;
(b) Liens (including Liens securing Capital Lease Obligations)
(i) existing on property at the time of the acquisition thereof by the
Guarantor or a Restricted Subsidiary or (ii) to secure Indebtedness
incurred in connection with the financing of all or a part of the
purchase price or cost of construction of property acquired by the
Guarantor or a Restricted Subsidiary after the date hereof, provided
that (x) in each case the aggregate principal amount of Indebtedness
secured by such Lien in respect of any such property shall not exceed
the lesser of the cost and the fair market value of such property and
no such Lien shall extend to or cover any other property of the
Guarantor or such Subsidiary and (y) in the case of clause (ii) such
Lien shall be created contemporaneously with, or within 180 days after,
the acquisition of such property;
(c) Liens on property of a Person at the time such Person
becomes a Restricted Subsidiary, or such Person merges into or
consolidates with the Guarantor or any Restricted Subsidiary (and not
incurred in anticipation thereof), provided that the aggregate
principal amount of Indebtedness secured by such Lien in respect of any
such property shall not exceed the fair market value of such property
and no such Lien shall extend to or cover any other property of the
Guarantor or such Subsidiary;
(d) Liens on property or assets of any Restricted Subsidiary
securing Indebtedness owing by such Subsidiary to the Guarantor or to
any Wholly-Owned Restricted Subsidiary;
(e) Liens in favor of the United States government or the
government of any State of the United States or any foreign government,
or of any political subdivision of any of the foregoing, to secure
partial, progress, advance or other payments by such government or
political subdivision pursuant to any contract or statute;
(f) Liens incurred or deposits made to secure the performance
of tenders, statutory obligations, surety bonds, bids, performance
bonds and other similar obligations, and Liens (for sums not yet due)
of carriers, warehousemen, mechanics and other similar Liens, in each
case incurred or made in the ordinary course of business and not in
connection with the incurrence of Indebtedness;
(g) Liens incidental to the normal conduct of the business of
the Guarantor or any Restricted Subsidiary or the ownership of their
properties and that are not incurred in connection with the incurrence
of Indebtedness and that do not in the aggregate materially impair the
use of such property in the operation of the business of the Guarantor
and its Subsidiaries taken as a whole, or the value of such property
for the purpose of such business;
(h) Liens created by or resulting from any litigation or legal
proceeding that is effectively stayed while the underlying claims are
being contested in good faith by appropriate proceedings and with
respect to which the Guarantor or such Subsidiary has established
adequate reserves on its books in accordance with GAAP;
(i) any extension, renewal or replacement of any Lien
described in Subsections (a) through (h) above, provided that the
principal amount (or accreted value) of Indebtedness secured thereby
immediately before giving effect to such extension, renewal or
replacement is not increased and such Lien is not extended to any other
property;
(j) Liens for taxes, assessments or governmental charges or
levies, either not yet due and payable or to the extent that nonpayment
thereof is permitted by the proviso to Section 9.4; and
(k) Liens incurred by the Guarantor or any Restricted
Subsidiary in addition to those described in Subsections (a) through
(j) above, provided that, upon the incurrence thereof and immediately
after giving effect thereto, Priority Debt shall not exceed 15% of
Consolidated Assets.
0.0.0.4.33 Sale and Leaseback Transactions
The Guarantor will not, and will not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless:
(a) such Sale and Leaseback Transaction is between such
Subsidiary and the Guarantor, between such Subsidiary and any
Wholly-Owned Restricted Subsidiary, or between the Guarantor and any
Wholly-Owned Restricted Subsidiary;
(b) the proceeds received by the Guarantor or such Subsidiary
from such Sale and Leaseback Transaction are applied within 180 days of
the date of such transaction to (x) the prepayment of Funded
Indebtedness (and any associated premium) of the Guarantor or such
Subsidiary or (y) the acquisition of assets (other than current assets)
to be used in the ordinary course of business of the Guarantor or such
Subsidiary, as the case may be; or
(c) at the time of entering into such Sale and Leaseback
Transaction and immediately after giving effect thereto, Priority Debt
shall not exceed 15% of Consolidated Assets.
0.0.0.4.34 Subsidiary Indebtedness
The Guarantor will not permit any Restricted Subsidiary (other
than the Company) to create, assume, incur, guarantee or otherwise become liable
in respect of any Indebtedness, excluding from the operation of this Section:
(a) Indebtedness outstanding on the date hereof and
specified in Part C of Schedule 5.15;
(b) Indebtedness secured by any Lien permitted by Section
10.3(b) (or any extension, renewal or replacement thereof permitted
by Section 10.3(i));
(c) Indebtedness owing to the Guarantor or to any
Wholly-Owned Restricted Subsidiary;
(d) Indebtedness of a Person outstanding at the time such
Person becomes a Restricted Subsidiary or such Person merges into or
consolidates with any Restricted Subsidiary (and not incurred in
anticipation thereof); and
(e) Indebtedness in addition to that described in Subsections
(a) through (d) above, provided that, upon the incurrence thereof and
immediately after giving effect thereto, Priority Debt shall not exceed
15% of Consolidated Assets.
For purposes of this Section 10.5, any Indebtedness of an Unrestricted
Subsidiary existing at the time such Unrestricted Subsidiary is designated as a
Restricted Subsidiary shall be deemed to have been incurred at that time.
0.0.0.4.35 Indebtedness
The Guarantor will not, and will not permit any Restricted
Subsidiary to, create, assume, incur, guarantee or otherwise become liable in
respect of any Indebtedness, unless immediately after giving effect thereto and
to the concurrent retirement of any other Indebtedness the ratio of Consolidated
Indebtedness to Consolidated EBDAIT does not exceed 3.5 to 1. For purposes of
this Section 10.6, any Indebtedness of a Person existing at the time such Person
becomes a Restricted Subsidiary shall be deemed to have been incurred at that
time.
0.0.0.4.36 Shareholders' Equity
The Guarantor will not at any time permit Consolidated
Shareholders' Equity to be less than the sum of (i) $268,000,000 plus (ii) an
amount equal to 50% of Consolidated Net Income for each completed fiscal year of
the Guarantor ending after the date hereof (but only if Consolidated Net Income
for such fiscal year is a positive number).
0.0.0.4.37 Disposition of Assets
The Guarantor will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, sell, lease, transfer or otherwise
dispose of (collectively a "Disposition") any of its properties or assets
unless, after giving effect to such proposed Disposition, the aggregate net book
value of all assets that were the subject of a Disposition during the twelve
calendar months immediately preceding the date of such proposed Disposition (the
"Disposition Date") does not exceed 15% of Consolidated Assets as at the end of
the quarterly fiscal period of the Guarantor ended immediately prior to the
Disposition Date. Any Disposition of shares of stock of any Subsidiary shall,
for purposes of this Section, be considered a sale of assets and be valued at an
amount that bears the same proportion to the total assets of such Subsidiary as
the number of such shares bears to the total number of shares of stock of such
Subsidiary. Notwithstanding the foregoing, the following Dispositions shall not
be taken into account under this Section 10.8:
(a) any Disposition of inventory, equipment, fixtures,
supplies or materials made in the ordinary course of business at fair
value;
(b) any Disposition to the Guarantor or to a Wholly-Owned
Restricted Subsidiary; and
(c) any Disposition the net proceeds of which are applied
within 180 days of the related Disposition Date to (x) the repayment of
Funded Indebtedness which by its terms is not subordinated in right of
payment to the Notes (and any associated premium) of the Guarantor or
such Restricted Subsidiary (including, without limitation and at the
sole option of the Company, the Notes pursuant to Section 8.2) or (y)
the acquisition of assets (other than current assets) to be used in the
ordinary course of business of the Guarantor or such Restricted
Subsidiary.
For purposes of this Section 10.8, any designation of a
Restricted Subsidiary to an Unrestricted Subsidiary shall be deemed to be a
Disposition of the assets of such Subsidiary at the time of such designation.
0.0.0.4.38 EVENTS OF DEFAULT
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) default shall be made in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) default shall be made in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable, or any Subsidiary Guarantor defaults in the payment of any
amount due pursuant to its Subsidiary Guarantee; or
(c) the Guarantor defaults in the performance of or
compliance with any term contained in Section 7.1(d) or
Sections 10.2, 10.4, 10.5, 10.6, or 10.8; or
(d) either Obligor defaults in the performance of or
compliance with any term contained herein (other than those referred to
in paragraphs (a), (b) and (c) of this Section 11), and (provided that,
with respect to any default arising under Section 10.1 or 10.7, such
Obligor is proceeding diligently and in good faith to remedy such
default) such default is not remedied within 30 days after the earlier
of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) an Obligor receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph (d) of Section
11); or
(e) any representation or warranty made in writing by or on
behalf of either Obligor or by any officer of either Obligor in this
Agreement, in writing by or on behalf of any Subsidiary Guarantor or by
any officer of any Subsidiary Guarantor in any Subsidiary Guarantee, or
in any writing furnished in connection with the transactions
contemplated hereby or thereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) either Obligor is in default in the payment of any
amounts due under or in the performance of or compliance with any other
term of the Credit Facility beyond any period of grace provided with
respect thereto, or (ii) the Guarantor or any Restricted Subsidiary is
in default (as principal or as guarantor or other surety) in the
payment of any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding in an aggregate principal
amount of at least $25,000,000 beyond any period of grace provided with
respect thereto, or (iii) the Guarantor or any Restricted Subsidiary is
in default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $25,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has become,
or has been declared, due and payable before its stated maturity or
before its regularly scheduled dates of payment; or
(g) the Guarantor, the Company or any Significant Subsidiary
(i) is generally not paying, or admits in writing its inability to pay,
its debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Guarantor or any Restricted Subsidiary, a custodian, receiver, trustee
or other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of
any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Guarantor or any
Restricted Subsidiary, or any such petition shall be filed against the
Guarantor or any Restricted Subsidiary and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $25,000,000 are rendered against one or more
of the Guarantor and its Restricted Subsidiaries and which judgments
are not, within 60 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(j) if (i) any Pension Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Pension Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have
instituted proceedings under ERISA section 4042 to terminate or appoint
a trustee to administer any Pension Plan or the PBGC shall have
notified either Obligor or any ERISA Affiliate that a Pension Plan may
become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Pension Plans, determined in accordance
with Title IV of ERISA, shall exceed $25,000,000, (iv) either Obligor
or any ERISA Affiliate shall have incurred or is reasonably expected to
incur any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit
plans, (v) either Obligor or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) either Obligor or any Subsidiary
establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the
liability of either Obligor or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, would
reasonably be expected to have a Material Adverse Effect; or
(k) any Guarantee shall cease to be in full force and effect
or the Guarantor or any Person acting on behalf of the Guarantor shall
contest in any manner the validity, binding nature or enforceability of
any Guarantee, or any Subsidiary Guarantee shall cease to be in full
force and effect (other than pursuant to Section 9.8(b)) or any
Subsidiary Guarantor or any Person acting on behalf thereof shall
contest in any manner the validity, binding nature or enforceability of
any Subsidiary Guarantee.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
0.0.0.4.39 REMEDIES ON DEFAULT, ETC.
0.0.0.4.40 Acceleration
(a) If an Event of Default with respect to an Obligor
described in paragraph (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, the Required Holders may at any time at their option, by notice or
notices to the Company, declare all the Notes then outstanding to be immediately
due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the applicable Make-Whole Amounts determined in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Obligors acknowledge, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Obligors (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event that
the Notes are prepaid or are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such
circumstances.
0.0.0.4.41 Other Remedies
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
0.0.0.4.42 Rescission
At any time after any Notes have been declared due and payable
pursuant to paragraph (b) or (c) of Section 12.1, the Required Holders, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Obligors have paid all overdue interest on the
Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due
and payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 18, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
0.0.0.4.43 No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Obligors under Section 16,
the Obligors will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all reasonable costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and disbursements.
0.0.0.4.44 GUARANTEE, ETC.
0.0.0.4.45 Guarantee
The Guarantor hereby guarantees to each holder of any Note or
Notes at any time outstanding (a) the prompt payment in full when due (whether
at stated maturity, by acceleration, by optional prepayment or otherwise) of the
principal of and Make-Whole Amounts (if any) and interest on the Notes
(including, without limitation, interest on any overdue principal, Make-Whole
Amount and, to the extent permitted by applicable law, on any overdue interest)
and all other amounts from time to time owing by the Company under this
Agreement and under the Notes (including, without limitation, costs and
expenses), and (b) the prompt performance and observance by the Company of all
covenants, agreements and conditions on its part to be performed and observed
hereunder, in each case strictly in accordance with the terms thereof (such
payments and other obligations being herein collectively called the "Guaranteed
Obligations"). The Guarantor hereby further agrees that if the Company shall
default in the payment or performance of any of the Guaranteed Obligations, the
Guarantor will (x) promptly pay or perform the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration, by optional
prepayment or otherwise) in accordance with the terms of such extension or
renewal and (y) pay to the holder of any Note such amounts, to the extent
lawful, as shall be sufficient to pay the reasonable costs and expenses of
collection or of otherwise enforcing any of such holder's rights under this
Agreement, including, without limitation, reasonable counsel fees.
All obligations of the Guarantor under this Section 13 shall
survive the transfer of any Note, and any obligations of the Guarantor under
this Section 13 with respect to which the underlying obligation of the Company
is expressly stated to survive payment of any Note shall also survive payment of
such Note.
0.0.0.4.46 Obligations Unconditional
(a) The obligations of the Guarantor under Section 13.1
constitute a present and continuing guaranty of payment and not collectibility
and are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Company under
this Agreement, the Notes or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 13.2 that the obligations of the Guarantor hereunder shall be absolute
and unconditional, under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantor
hereunder which shall remain absolute and unconditional as described above:
(1) any amendment or modification of any provision of this
Agreement or any of the Notes or any assignment or transfer thereof,
including without limitation the renewal or extension of the time of
payment of any of the Notes or the granting of time in respect of such
payment thereof, or of any furnishing or acceptance of security or any
additional guarantee or any release of any security or guarantee so
furnished or accepted for any of the Notes;
(2) any waiver, consent, extension, granting of time,
forbearance, indulgence or other action or inaction under or in respect
of this Agreement or the Notes, or any exercise or non-exercise of any
right, remedy or power in respect hereof or thereof;
(3) any bankruptcy, receivership, insolvency,
reorganization, arrangement, readjustment, composition, liquidation
or similar proceedings with respect to the Company or any other
Person or the properties or creditors of any of them;
(4) the occurrence of any Default or Event of Default under,
or any invalidity or any unenforceability of, or any misrepresentation,
irregularity or other defect in, this Agreement, the Notes or any other
agreement;
(5) any transfer of any assets to or from the Company,
including without limitation any transfer or purported transfer to the
Company from any Person, any invalidity, illegality of, or inability to
enforce, any such transfer or purported transfer, any consolidation or
merger of the Company with or into any Person, any change in the
ownership of any shares of capital stock of the Company, or any change
whatsoever in the objects, capital structure, constitution or business
of the Company;
(6) any default, failure or delay, willful or otherwise, on
the part of the Company or any other Person to perform or comply with,
or the impossibility or illegality of performance by the Company or any
other Person of, any term of this Agreement, the Notes or any other
agreement;
(7) any suit or other action brought by, or any judgment in
favor of, any beneficiaries or creditors of, the Company or any other
Person for any reason whatsoever, including without limitation any suit
or action in any way attacking or involving any issue, matter or thing
in respect of this Agreement, the Notes or any other agreement;
(8) any lack or limitation of status or of power,
incapacity or disability of the Company or any trustee or agent
thereof; or
(9) any other thing, event, happening, matter,
circumstance or condition whatsoever, not in any way limited to the
foregoing.
(b) The Guarantor hereby unconditionally waives diligence,
presentment, demand of payment, protest and all notices whatsoever and any
requirement that any holder of a Note exhaust any right, power or remedy against
the Company under this Agreement or the Notes or any other agreement or
instrument referred to herein or therein, or against any other Person under any
other guarantee of, or security for, any of the Guaranteed Obligations.
(c) In the event that the Guarantor shall at any time pay any
amount on account of the Guaranteed Obligations or take any other action in
performance of its obligations hereunder, the Guarantor shall not exercise any
subrogation or other rights hereunder or the Notes and the Guarantor hereby
waives all rights it may have to exercise any such subrogation or other rights,
and all other remedies that it may have against the Company, in respect of any
payment made hereunder unless and until the Guaranteed Obligations shall have
been indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of any such subrogation rights or other remedy, notwithstanding the
waiver thereof, such amount shall be received in trust for the benefit of the
holders of the Notes and shall forthwith be paid to such holders to be credited
and applied upon the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms hereof. The Guarantor agrees that its obligations
under this Section 13 shall be automatically reinstated if and to the extent
that for any reason any payment (including payment in full) by or on behalf of
the Company is rescinded or must be otherwise restored by any holder of a Note,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, all as though such amount had not been paid.
The guarantee in this Section 13 is a continuing guarantee and
shall apply to the Guaranteed Obligations whenever arising. Each default in the
payment or performance of any of the Guaranteed Obligations shall give rise to a
separate claim and cause of action hereunder, and separate claims or suits may
be made and brought, as the case may be, hereunder as each such default occurs.
0.0.0.4.47 Guarantees Endorsed on the Notes
Each Note shall have endorsed thereon a Guarantee of the
Guarantor in the form of Exhibit 1-C.
0.0.0.4.48 REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
0.0.0.4.49 Registration of Notes
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and neither Obligor shall be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
0.0.0.4.50 Transfer and Exchange of Notes
(a) No holder of a Note shall transfer such Note or any
portion thereof to a Competitor.
(b) Subject to clause (a), upon surrender of any Note at the
principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer (in a standard form)
duly executed by the registered holder of such Note or his attorney duly
authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) of the same series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1-A or 1-B,
as the case may be, and shall have the Guarantee of the Guarantor endorsed
thereon. Each such new Note shall be dated and bear interest from the date to
which interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon. The Company
may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $500,000 and integral multiples of
$5,000 in excess thereof, provided that if necessary to enable the registration
of transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
0.0.0.4.51 Replacement of Notes
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
0.0.0.4.52 in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the holder of
such Note is, or is a nominee for, an original Purchaser or another
holder of a Note with a minimum net worth of at least $10,000,000 in
excess of the outstanding principal amount of such Note, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
0.0.0.4.53 in the case of mutilation, upon surrender
and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon, and having the Guarantee of the Guarantor
endorsed thereon.
0.0.0.4.54 PAYMENTS ON NOTES
0.0.0.4.55 Place of Payment
Subject to Section 15.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in New York, New York at the principal office of The Bank of New York in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
0.0.0.4.56 Home Office Payment
So long as any Purchaser or any nominee of such Purchaser
shall be the holder of any Note, and notwithstanding anything contained in
Section 15.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser's name in Schedule A, or by such other method or at such other address
as such Purchaser shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 15.1. Prior to any sale or other disposition
of any Note held by any Purchaser or any nominee of such Purchaser, such
Purchaser will, at its election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 14.2(b). The Company will afford the benefits of this Section 15.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased by any Purchaser under this Agreement and that has made the same
agreement relating to such Note as the Purchasers have made in this Section
15.2.
0.0.0.4.57 EXPENSES, ETC
0.0.0.4.58 Transaction Expenses
Whether or not the transactions contemplated hereby are
consummated, the Obligors will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel) incurred by the Purchasers and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement, the Notes or any Subsidiary
Guarantee (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending any rights against either Obligor or any Subsidiary Guarantor under
this Agreement, the Notes or any Subsidiary Guarantee, or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or any Subsidiary Guarantee, or by
reason of being a holder of any Note, and (b) the costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Guarantor, the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Obligors will pay, and will save each Purchaser and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by such Purchaser or
other holder).
0.0.0.4.59 Survival
The obligations of the Obligors under this Section 16 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, any Subsidiary Guarantee or the
Notes, and the termination of this Agreement.
0.0.0.4.60 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes, the purchase
or transfer by each Purchaser of any Note or portion thereof or interest therein
and the payment of any Note, and may be relied upon (as of when made) by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of any Purchaser or any other holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of
either Obligor pursuant to this Agreement shall be deemed representations and
warranties of such Obligor under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Obligors and supersede all prior
agreements and understandings relating to the subject matter hereof.
0.0.0.4.61 AMENDMENT AND WAIVER
0.0.0.4.62 Requirements
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Obligors and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 22, or any defined term (as it
is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 13, 18 or 21.
0.0.0.4.63 Solicitation of Holders of Notes
0.0.0.4.64 Solicitation. The Obligors will provide each holder
of the Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. The Obligors will deliver executed or true
and correct copies of each amendment, waiver or consent effected pursuant to the
provisions of this Section 18 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
0.0.0.4.65 Payment. Neither Obligor will directly or indirectly
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any holder of
Notes as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
(c) Consent in Contemplation of Transfer. Any consent made
pursuant to this Section 18 by a holder of Notes that has transferred or has
agreed to transfer its Notes to either Obligor, any Subsidiary or any Affiliate
of either Obligor and has provided or has agreed to provide such written consent
as a condition to such transfer shall be void and of no force or effect except
solely as to such holder, and any amendments effected or waivers granted or to
be effected or granted that would not have been or would not be so effected or
granted but for such consent (and the consents of all other holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such holder.
0.0.0.4.66 Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 18 applies equally to all holders of Notes and is binding upon them and
upon each future holder of any Note and upon the Obligors without regard to
whether such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between either Obligor and
the holder of any Note nor any delay in exercising any rights hereunder or under
any Note shall operate as a waiver of any rights of any holder of such Note. As
used herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
0.0.0.4.67 Notes held by Obligor, etc.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by either Obligor or any
Affiliate of either Obligor shall be deemed not to be outstanding.
0.0.0.4.68 NOTICES
All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
0.0.0.5. if to any Purchaser or its nominee, to
such Purchaser or nominee at the address specified for such
communications in Schedule A, or at such other address as such
Purchaser or nominee shall have specified to the Company in writing,
0.0.0.6. if to any other holder of any Note, to
such holder at such address as such other holder shall have specified
to the Company in writing,
0.0.0.7. if to the Company, to the Company at its
address set forth at the beginning hereof to the attention of the
Chief Financial Officer, with a copy to the General Counsel, or at
such other address as the Company shall have specified to the holder
of each Note in writing, or
0.0.0.8. if to the Guarantor, to the Guarantor at its address
set forth at the beginning hereof to the attention of the Chief
Financial Officer, with a copy to the General Counsel, or at such other
address as the Guarantor shall have specified to the holder of each
Note in writing.
Notices under this Section 19 will be deemed given only when actually received.
0.0.0.8.1 REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Obligors agree and
stipulate that, to the extent permitted by applicable law, any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by such Purchaser in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 20
shall not prohibit an Obligor or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
0.0.0.8.2 CONFIDENTIAL INFORMATION
For the purposes of this Section 21, "Confidential
Information" means information delivered to any Purchaser by or on behalf of
either Obligor or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser as being confidential information of such
Obligor or such Subsidiary, provided that such term does not include information
that (a) was publicly known or otherwise known to such Purchaser prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act
or omission by such Purchaser or any Person acting on such Purchaser's behalf,
(c) otherwise becomes known to such Purchaser other than through disclosure by
an Obligor or any Subsidiary or (d) constitutes financial statements delivered
to such Purchaser under Section 7.1 that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser, provided
that such Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser's directors, officers and employees (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser's Notes), (ii) such Purchaser's affiliates, agents, attorneys,
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information in accordance with the terms of this
Section 21, (iii) any other holder of any Note, (iv) any Institutional Investor
to which such Purchaser sells or offers to sell such Note or any part thereof or
any participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 21), (v) any Person from which such Purchaser offers to purchase any
security of an Obligor (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 21), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser's investment portfolio or
(viii) any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) subject to the next succeeding sentence, in
response to any subpoena or other legal process, (y) subject to the next
succeeding sentence, in connection with any litigation to which such Purchaser
is a party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes, this Agreement or any
Subsidiary Guarantee. If any Purchaser is required in respect of any subpoena or
other legal process or in connection with any litigation to disclose any
Confidential Information, it is agreed that, to the extent permitted by law,
such Purchaser will use its best efforts to provide the Company with prompt
notice of such requirement so that the Company may seek an appropriate
protective order. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 21 as though it were a party to this Agreement. On reasonable request by
an Obligor in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Obligors
embodying the provisions of this Section 21.
0.0.0.8.3 SUBSTITUTION OF PURCHASER
Each Purchaser shall have the right to substitute any one of
such Purchaser's Affiliates as the purchaser of the Notes that such Purchaser
has agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 22)
shall be deemed to refer to such Affiliate in lieu of such original Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such original Purchaser all of the Notes
then held by such Affiliate, upon receipt by the Company of notice of such
transfer, any reference to such Affiliate as a "Purchaser" in this Agreement
(other than in this Section 22) shall no longer be deemed to refer to such
Affiliate, but shall refer to such original Purchaser, and such original
Purchaser shall again have all the rights of an original holder of the Notes
under this Agreement.
0.0.0.8.4 MISCELLANEOUS
0.0.0.8.5 Successors and Assigns
All covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
0.0.0.8.6 Payments Due on Non-Business Days
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
0.0.0.8.7 Severability
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
0.0.0.8.8 Construction
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
0.0.0.8.9 Counterparts
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
0.0.0.8.10 Governing Law
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company and the Guarantor.
Very truly yours,
GTECH CORPORATION
By
Title:
GTECH HOLDINGS CORPORATION
By
Title:
<PAGE>
The foregoing is hereby
agreed to as of the
date thereof.
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By__________________________
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By__________________________
Title:
ALLSTATE LIFE INSURANCE COMPANY
By__________________________
Name:
By__________________________
Name:
Authorized Signatories
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
AMERICAN GENERAL LIFE
INSURANCE COMPANY
By__________________________
Title:
<PAGE>
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA
By__________________________
Title:
THE GUARDIAN INSURANCE AND
ANNUITY COMPANY, INC.
By__________________________
Title:
FORT DEARBORN LIFE INSURANCE
COMPANY
By__________________________
Title:
HARTFORD LIFE INSURANCE COMPANY
By__________________________
Title:
HARTFORD FIRE INSURANCE COMPANY
By__________________________
Title:
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY
By__________________________
Title:
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: Lincoln Investment
Management, Inc., its
Attorney-In-Fact
By__________________________
Title:
FIRST PENN-PACIFIC LIFE
INSURANCE COMPANY
By: Lincoln Investment
Management, Inc., its
Attorney-In-Fact
By__________________________
Title:
LINCOLN NATIONAL REASSURANCE
COMPANY
By: Lincoln Investment
Management, Inc., its
Attorney-In-Fact
By__________________________
Title:
<PAGE>
LINCOLN NATIONAL REINSURANCE
COMPANY (BARBADOS) LTD.
By: Lincoln Investment
Management, Inc., its
Attorney-In-Fact
By__________________________
Title:
PACIFIC MUTUAL LIFE INSURANCE
COMPANY
By__________________________
Title:
LIFE INVESTORS INSURANCE COMPANY
OF AMERICA
By__________________________
Title:
MONUMENTAL LIFE INSURANCE COMPANY
By__________________________
Title:
PFL LIFE INSURANCE COMPANY
By__________________________
Title:
<PAGE>
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By__________________________
Title:
THE EQUITABLE OF COLORADO, INC.
By__________________________
Title:
RELIASTAR BANKERS SECURITY
LIFE INSURANCE COMPANY
By__________________________
Title:
RELIASTAR LIFE INSURANCE COMPANY
By__________________________
Title:
RELIASTAR UNITED SERVICES
LIFE INSURANCE COMPANY
By__________________________
Title:
NORTHERN LIFE INSURANCE COMPANY
By__________________________
Title:
<PAGE>
WASHINGTON SQUARE ADVISORS
PRIVATE PLACEMENT TRUST FUND
By__________________________
Its: Investment Advisor and
Authorized Signatory
KEYPORT LIFE INSURANCE COMPANY
By Stein Roe & Farnham
Incorporated, as Agent
By__________________________
Senior Vice President
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By CIGNA Investments, Inc.
By__________________________
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on
behalf of one or more
separate accounts
By CIGNA Investments, Inc.
By__________________________
Name:
Title:
<PAGE>
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By CIGNA Investments, Inc.
By__________________________
Name:
Title:
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By__________________________
Title:
By__________________________
Title:
<PAGE>
AMERICAN LIFE & CASUALTY INSURANCE COMPANY
By__________________________
Title:
By__________________________
Title:
<PAGE>
INFORMATION RELATING TO PURCHASERS
Name and Address of Purchaser Series Principal Amount
THE NORTHWESTERN MUTUAL A $10,000,000
LIFE INSURANCE COMPANY B $20,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
16 Wall Street
Insurance Unit, 4th Floor
New York, NY 10005
ABA #021001033
Name: The Northwestern Mutual Life Insurance Company
Account No.: 00-000-027
with sufficient information to identify the source and application of
such funds, including the PPN of the issue.
(2) Address for all notices in respect of payment and written
confirmations of such wire transfers:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Investment Operations
Telecopy: (414) 299-5714
(3) Securities to be delivered to:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Mark C. Boyle, Law Department
Telecopy: (414) 299-7016
(4) Address for all other communications:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Securities Department
Telecopy: (414) 299-7124
(5) The Northwestern Mutual Life Insurance Company
Tax ID No. 39-0509570
<PAGE>
Name and Address of Purchaser Series Principal Amount
TEACHERS INSURANCE AND ANNUITY B $30,000,000
ASSOCIATION OF AMERICA
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
ABA No. 021000021
New York, New York
Account of: Teachers Insurance and Annuity
Association of America
Account Number: 910-2-766475
On order of: GTECH Corporation
with sufficient information to identify the source and application of
such funds as "GTECH Corporation 7.87% Series B Guaranteed Senior Notes
due 2007 (principal or interest).
(2) Address for all notices in respect of payments and written
confirmations of such wire transfers:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Attn: Securities Accounting Division
Telephone: (212) 916-4188
Telecopy: (212) 916-6955
(3) Address for all other communications:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Attn: Securities Division, Private Placements
Telephone: (212) 916-4720 (F. Haifen Tao)
(212) 490-9000 (general)
Telecopy: (212) 916-6582
(4) Teachers Insurance and Annuity Association of America Tax ID No.
13-1624203
<PAGE>
Name and Address of Purchaser Series Principal Amount
ALLSTATE LIFE INSURANCE COMPANY A $11,000,000
A $5,500,000
A $3,000,000
A $5,500,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account # 168-117-0
ORG = GTECH Corporation
OBI = DPP
with sufficient information to identify the source and application of
such funds, including the PPN preceded by "DPP", payment date, and
principal, premium or interest on the security.
(2) Address for all notices in respect of payments and written
confirmations of such wire transfers:
Allstate Insurance Company
Investment Operations - Private Placements
3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone: (847) 402- 8709
Telecopy: (847) 402-7331
(3) Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center, 500 West Madison
4th Floor, Zone 6
Chicago, IL 60661-2591
Attention: Misty Gniadek
For Allstate Life Insurance Company/
Safekeeping Account No. 846627
(4) Address for all other communications and notices:
Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-4394
Telecopy: (847) 402-3092
(5) Allstate Life Insurance Company
Tax ID No. 36-2554642
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE VARIABLE ANNUITY LIFE B $15,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
ABA #011000028
State Street Bank and Trust Company
Boston, MA 02101
Re: The Variable Annuity Life Insurance Company
AC-0125-821-9
OBI = PPN # and description of payment
Fund Number PA 54
with sufficient information to identify the source and application of
such funds, including the PPN #, interest rate, maturity date, interest
amount, principal amount and premium amount, if applicable.
(2) Address for all notices in respect of payment and all other
communications:
The Variable Annuity Life
Insurance Company and PA 54
c/o State Street Bank and Trust Company
Insurance Services Custody (AH2)
1776 Heritage Drive
North Quincy, MA 02171
Telecopy: (617) 985-4923
(3) Duplicate payment notices and all other correspondence:
The Variable Annuity Life Insurance Company
c/o American General Corporation
Attn: Investment Research Department, A37-01
P.O. Box 3247
Houston, TX 77253-3247
Overnight Mail Address:
2929 Allen Parkway
Houston, Texas 77019-2155
Telecopy: (713) 831-1366
(4) The Variable Annuity Life Insurance Company
Tax ID No. 74-1625348
<PAGE>
Name and Address of Purchaser Series Principal Amount
AMERICAN GENERAL LIFE B $10,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
ABA #011000028
State Street Bank and Trust Company
Boston, MA 02101
Re: American General Life Insurance Company
AC-0125-880-5
OBI = PPN # and description of payment
Fund Number PA 40
with sufficient information to identify the source and application of
such funds, including the PPN #, interest rate, maturity date, interest
amount, principal amount and premium amount, if applicable.
(2) Address for all notices in respect of payment and all other
communications:
American General Life
Insurance Company and PA 40
c/o State Street Bank and Trust Company
Insurance Services Custody (AH2)
1776 Heritage Drive
North Quincy, MA 02171
Telecopy: (617) 985-4923
(3) Duplicate payment notices and all other correspondence:
American General Life Insurance Company
c/o American General Corporation
Attn: Investment Research Department, A37-01
P.O. Box 3247
Houston, TX 77253-3247
Overnight Mail Address:
2929 Allen Parkway
Houston, Texas 77019-2155
Telecopy: (713) 831-1366
(4) American General Life Insurance Company
Tax ID No. 25-0598210
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE GUARDIAN LIFE INSURANCE B $5,000,000
COMPANY OF AMERICA B $5,000,000
B $5,000,000
B $5,000,000
(Note registered in the name of Cudd & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
The Chase Manhattan Bank FED ABA #021000021 CHASE/NYC/CTR/BNF A/C
900-9-000200 The Guardian A/C #G05978
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
The Guardian Life Insurance Company of America
Attn: Investment Accounting M-IA
201 Park Avenue South
New York, NY 10003
Telecopy: (212) 677-9023
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor/Receive Window
New York, NY 10081
Re: The Guardian Account #G05978
Attention: Frank Taylor (212-623-8125)
(4) Address for all other communications and notices:
The Guardian Life Insurance Company of America
201 Park Avenue South
New York, NY 10003
Attn: Raymond J. Henry
Investment Department 7B
Telecopy: (212) 777-6715
(5) Cudd & Co. Tax ID No. 13-6022143
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE GUARDIAN INSURANCE AND A $3,000,000
ANNUITY COMPANY, INC.
(Note registered in the name of Sigler & Company)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
ABA #021000021
For account #544755102
Reference #MR9228419
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
The Guardian Life Insurance Company of America
Attn: Investment Accounting MIA
201 Park Avenue South
New York, NY 10003
Telecopy: (212) 677-9023
(3) Securities to be delivered to:
Chase Manhattan Bank
Attn: Frank Taylor
4 New York Plaza
Ground Floor/Receive Window
New York, NY 10004
Re: Account # at Chase: MR9228419
(4) Address for all other communications and notices:
The Guardian Life Insurance Company of America
201 Park Avenue South
New York, NY 10003
Attn: Raymond J. Henry
Investment Department 7B
Telecopy: (212) 777-6715
Portfolio Manager: Raymond Henry (212) 598-7995
Inquires concerning confirmations:
Dorene Smith (212) 598-8234
(5) Sigler & Company Tax ID No. 13-3641527
<PAGE>
Name and Address of Purchaser Series Principal Amount
FORT DEARBORN LIFE A $2,000,000
INSURANCE COMPANY
(Note registered in the name of Var & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
First Bank Minneapolis
ABA #091000022
For further credit to First Trust Illinois
Account 1-801-21167365
Wire Clearing Account 47300098
Attn: A/C #78693302 Fort Dearborn Life
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and all other
communications:
Fort Dearborn Life Insurance Company
c/o Guardian Asset Management Corp.
Fixed Income Securities
201 Park Avenue South - 8B
New York, NY 10003
Direct inquires concerning confirmations:
Helaine Linder (212) 598-8239
(3) Securities to be delivered to:
First Trust N.A.
Attn: Physical Unit
Asset Settlement Services
Fourth Floor
180 East 5th Street
St. Paul, MN 55101
(5) Var & Co. Tax ID No.
41-6026203
<PAGE>
Name and Address of Purchaser Series Principal Amount
HARTFORD LIFE INSURANCE COMPANY A $4,000,000
B $3,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
4 New York Plaza
New York, NY 10004
Bank ABA #021000021
Chase NYC/Cust
A/C #900-9-000200 for F/C/T G 06641 - CRC
Attn: Bond Interest/Principal -
GTECH Corporation Guaranteed Senior Notes
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-3857
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor Window
New York, NY 10004
Custody Account Number: G-06641*
Account Name: Hartford Life
Insurance Company - CRC
*Account number must appear on outside of envelope enclosing physical
securities.
(4) Address for all other communications and notices:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-4906
(5) Hartford Life Insurance Company
Tax ID No. 06-0974148
<PAGE>
Name and Address of Purchaser Series Principal Amount
HARTFORD FIRE INSURANCE COMPANY A $6,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
4 New York Plaza
New York, NY 10004
Bank ABA #021000021
Chase NYC/Cust
A/C #900-9-000200 for F/C/T G 06244 - FHO
Attn: Bond Interest/Principal -
GTECH Corporation Guaranteed Senior Notes
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-3857
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor Window
New York, NY 10004
Custody Account Number: G-06244*
Account Name: Hartford Fire
Insurance Company - FHO
*Account number must appear on outside of envelope enclosing physical
securities.
(4) Address for all other communications and notices:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-4906
(5) Hartford Fire Insurance Company
Tax ID No. 06-0383750
<PAGE>
Name and Address of Purchaser Series Principal Amount
HARTFORD LIFE INSURANCE COMPANY B $6,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
4 New York Plaza
New York, NY 10004
Bank ABA #021000021
Chase NYC/Cust
A/C #900-9-000200 for F/C/T G 06612 - HVA
Attn: Bond Interest/Principal -
GTECH Corporation Guaranteed Senior Notes
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-3857
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor Window
New York, NY 10004
Custody Account Number: G-06612*
Account Name: Hartford Life
Insurance Company - HVA
*Account number must appear on outside of envelope enclosing physical
securities.
(4) Address for all other communications and notices:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-4906
(5) Hartford Life Insurance Company
Tax ID No. 06-0974148
<PAGE>
Name and Address of Purchaser Series Principal Amount
HARTFORD LIFE AND ACCIDENT B $6,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
4 New York Plaza
New York, NY 10004
Bank ABA #021000021
Chase NYC/Cust
A/C #900-9-000200 for F/C/T G 06956 - EBD
Attn: Bond Interest/Principal -
GTECH Corporation Guaranteed Senior Notes
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-3857
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza
Ground Floor Window
New York, NY 10004
Custody Account Number: G-06956*
Account Name: Hartford Life and Accident
Insurance Company - EBD
*Account number must appear on outside of envelope enclosing physical
securities.
(4) Address for all other communications and notices:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P.O. Box 1744
Hartford, CT 06114-1744
Telecopy: (860) 843-4906
(5) Hartford Life Insurance Company
Tax ID No. 06-0838648
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $4,500,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (UIN)
Custody Account Number: 98127
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $2,500,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (IAD)
Custody Account Number: 98195
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $2,500,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (IDP)
Custody Account Number: 98131
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $2,500,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (CRP)
Custody Account Number: 98231
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $5,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (IAL)
Custody Account Number: 98194
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $1,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (REO)
Custody Account Number: 98149
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE LINCOLN NATIONAL LIFE B $1,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY: ABA #021001033
Private Placement Processing
A/C #99-911-145
The Lincoln National Life Insurance Company (FRA)
Custody Account Number: 98187
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Bankers Trust Company
Attn: Private Placement Unit
P.O. Box 998; Bowling Green Station
New York, NY 10274
(3) Securities to be delivered to:
Bankers Trust Company
14 Wall Street
4th Floor, Window #44
New York, NY 10005
Attn: Lorraine Squires
Mail Stop 4049
Telephone: (212) 618-2200
(4) Address for all other communications and notices:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investments/Private Placements
(5) The Lincoln National Life Insurance Company
Tax ID No. 35-0472300
<PAGE>
Name and Address of Purchaser Series Principal Amount
FIRST PENN-PACIFIC LIFE B $4,500,000
INSURANCE COMPANY
(Note registered in the name of CUDD & CO.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
New York, NY
ABA #021000021
A/C #900-9-000200
Further Credit to A/C: G-05996 First Penn-Pacific
Life Insurance Company
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investment/Private Placements
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza, 11th Floor
New York, NY 10004
Attn: Larry Zimmer
For Account: G-05996 First Penn-Pacific Life Insurance Company
(4) CUDD & CO. Tax ID No.
23-2044248
<PAGE>
Name and Address of Purchaser Series Principal Amount
LINCOLN NATIONAL REASSURANCE B $1,000,000
COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
New York, NY
ABA #021000021
Chase NYC/CTR/BNF
A/C #900-9-000200
Further Credit to: G-06322 Lincoln National Reassurance
Company
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investment/Private Placements
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza, 11th Floor
New York, NY 10004
Attn: Larry Zimmer
For Account: G-06322 Lincoln National
Reassurance Company
(4) Lincoln National Reassurance Company
Tax ID No. 06-1067046
<PAGE>
Name and Address of Purchaser Series Principal Amount
LINCOLN NATIONAL REINSURANCE B $500,000
COMPANY (BARBADOS) LTD.
(in Trust for Magna
Insurance Company)
<PAGE>
(Note Registered in the name of Lincoln National Reinsurance Company
(Barbados) Ltd.)
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase Manhattan Bank
New York, NY
ABA #021000021
Chase NYC/CTR/BNF
A/C #900-9-000200
Further Credit to: G-06910 Lincoln National Reins Co
(Barbados) Ltd. (in Trust for Magna Ins Co)
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Fort Wayne, IN 46802
Attn: Investment/Private Placements
(3) Securities to be delivered to:
Chase Manhattan Bank
4 New York Plaza, 11th Floor
New York, NY 10004
Attn: Larry Zimmer
For Account: G-06910 Lincoln National Reins Co (Barbados) Ltd.
(in Trust for Magna Ins Co)
(4) Lincoln National
Reinsurance
Company
(Barbados) Ltd.
Tax ID No.
35-1716060
<PAGE>
Name and Address of Purchaser Series Principal Amount
PACIFIC MUTUAL LIFE A $2,000,000
INSURANCE COMPANY A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
A $2,000,000
(Notes registered in the name of Atwell & Co)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
BBK = Chase Manhattan Bank/SSTO
ABA #021000021
A/C #900-9-002206
A/C Name: Pacific Mutual General Account
Sub A/C #47363300
Regarding: Security Description & PPN
with sufficient information to identify the source and application of
such funds.
(2) Securities to be delivered to:
The Chase Manhattan Bank
4 New York Plaza
11th Floor Window
New York, NY 10004
Attn: Dave Calderon/Willie Frontis
(212) 623-8122/8119
A/C Name: Pacific Mutual General Account
A/C #89930705
(3) Atwell & Co
General Tax ID No. 95-1079000
Private Placement Tax ID
No. 13-6065575
<PAGE>
Name and Address of Purchaser Series Principal Amount
LIFE INVESTORS INSURANCE A $5,000,000
COMPANY OF AMERICA
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Citibank, N.A.
111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
Account #847658
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
AEGON USA Investment Management, Inc.
Attn: Michael Meese
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5112
(3) Address for all other communications and notices:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5335
Telecopy: (319) 369-2666
(5) Life Investors Insurance Company of America
Tax ID No. 42-0191090
<PAGE>
Name and Address of Purchaser Series Principal Amount
MONUMENTAL LIFE A $5,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Citibank, N.A.
111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
Account #847785
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
AEGON USA Investment Management, Inc.
Attn: Michael Meese
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5112
(3) Address for all other communications and notices:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5335
Telecopy: (319) 369-2666
(5) Monumental Life Insurance Company
Tax ID No. 52-0419790
<PAGE>
Name and Address of Purchaser Series Principal Amount
PFL LIFE INSURANCE COMPANY A $5,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Citibank, N.A.
111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
Account #847659
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
AEGON USA Investment Management, Inc.
Attn: Michael Meese
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5112
(3) Address for all other communications and notices:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-5335
Telecopy: (319) 369-2666
(5) PFL Life Insurance Company
Tax ID No. 39-0989781
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE EQUITABLE LIFE ASSURANCE A $12,000,000
SOCIETY OF THE UNITED STATES
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
The Chase Manhattan Bank, N.A.
1251 Avenue of the Americas
New York, NY 10020
ABA #021-00-0021
Account Name: The Equitable Life Assurance Society of
the United States
Account #037-2-409417
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment, written
confirmation of such wire transfer and all other communications and
notices:
The Equitable Life Assurance
Society of the United States
c/o Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, NY 10105
Att: Fixed Income Credit
Research Division, 38th Floor
Telephone: (212) 969-1488
Telecopy: (212) 969-1466
(3) Securities to be delivered to:
The Equitable Life Assurance
Society of the United States
1290 Avenue of the Americas, 12th Floor
New York, NY 10104
Attn: Cheryl L. Weitman
(212) 314-4141
(4) The Equitable Life
Assurance
Society of the
United States
Tax ID No.
13-5570651
<PAGE>
Name and Address of Purchaser Series Principal Amount
THE EQUITABLE OF COLORADO, INC. A $3,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
The Chase Manhattan Bank, N.A.
1251 Avenue of the Americas
New York, NY 10020
ABA #021-00-0021
Account Name: The Equitable of Colorado, Inc.
Account #037-2-406389
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment, written
confirmation of such wire transfer and all other communications and
notices:
The Equitable of Colorado, Inc.
c/o Alliance Capital Management, L.P.
135 West 50th Street, 5th Floor
New York, NY 10020
Attn: Treasury Service
(3) Securities to be delivered to:
The Equitable Life Assurance
Society of the United States
1290 Avenue of the Americas, 12th Floor
New York, NY 10104
Attn: Cheryl L. Weitman
(212) 314-4141
(4) The Equitable of Colorado, Inc.
Tax ID No. 13-3198083
<PAGE>
Name and Address of Purchaser Series Principal Amount
AMERICAN LIFE & CASUALTY A $5,000,000
INSURANCE COMPANY B $10,000,000
<PAGE>
(Notes registered in the name of SALKELD & CO.)
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust Company
New York, NY
ABA #021-001-033
DDA #00314421
FFC: American Life & Casualty Insurance Company
Account #99810
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Conseco Capital Management, Inc.
c/o American Life & Casualty Insurance Company
P.O. Box 1925
Carmel, IN 46032
Attn: Account Documentation
with a copy to:
Conseco, Inc.
c/o American Life & Casualty Insurance Company
P.O. Box 1911
Carmel, IN 46032
Attn: Investment Accounting
(3) Securities to be delivered to:
Bankers Trust Company
16 Wall Street
Fourth Floor, Window 62
FFC: American Life & Casualty Insurance Company
Account #99810
(4) American Life & Casualty Insurance Company
Tax ID No. 45-0103436
<PAGE>
Name and Address of Purchaser Series Principal Amount
RELIASTAR BANKERS SECURITY A $2,000,000
LIFE INSURANCE COMPANY
(Note registered in the name of SIGLER & CO.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
The Chase Manhattan Bank
New York, NY
A/C #544755102
F/C #1960 Dept 571 NonStandard Securities
Bank ABA #021000021
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 700
Minneapolis, MN 55401-2121
Attn: Tim Warrick
Telephone: (612) 372-5258
Telecopy: (612) 372-5368
(3) Securities to be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 700
Minneapolis, MN 55401-2121
Attn: Peggy Herbst
(4) Address for all other communications and notices:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 700
Minneapolis, MN 55401-2121
Attn: Tim Warrick
(5) SIGLER & CO. Tax ID No.
53-0242530
<PAGE>
Name and Address of Purchaser Series Principal Amount
RELIASTAR LIFE A $3,000,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
First National Bank N.A./Mpls
601 2nd Avenue South
Account #1102-4001-4461
Bank ABA #091000022
Attn: Securities Accounting
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
Telephone: (612) 372-5258
Telecopy: (612) 372-5368
(3) Securities to be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Peggy Herbst
(4) Address for all other communications and notices:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
(5) ReliaStar Life Insurance Company
Tax ID No. 41-0451140
<PAGE>
Name and Address of Purchaser Series Principal Amount
RELIASTAR UNITED SERVICES LIFE A $2,000,000
INSURANCE COMPANY
(Note registered in the name of SALKELD & CO.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bankers Trust
New York, NY
ABA #021001033
A/C #99-911-145
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
Telephone: (612) 372-5258
Telecopy: (612) 372-5368
(3) Securities to be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Peggy Herbst
(4) Address for all other communications and notices:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
(5) SALKELD & CO. Tax ID No.
53-0159267
<PAGE>
Name and Address of Purchaser Series Principal Amount
NORTHERN LIFE INSURANCE COMPANY A $3,000,000
B $2,000,000
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
First National Bank N.A./Mpls
601 2nd Avenue South
Account #1602-3237-6105
Bank ABA #091000022
Attn: Securities Accounting
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
Telephone: (612) 372-5258
Telecopy: (612) 372-5368
(3) Securities to be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Peggy Herbst
(4) Address for all other communications and notices:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Tim Warrick
(5) Northern Life Insurance Company
Tax ID No. 41-1295933
<PAGE>
Name and Address of Purchaser Series Principal Amount
WASHINGTON SQUARE ADVISERS B $3,000,000
PRIVATE PLACEMENT TRUST FUND
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Account #10604960
Bank ABA #091000022
First National Bank N.A.
601 2nd Avenue South
F/F/C First Trust Company
A/C #180121167365
ITG A/C #47300020
Attn: Washington Square Advisers Private
Placement Trust Fund
with sufficient information to identify the source and application of
such funds, including CUSIP, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Washington Square Advisers, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Frank Pintens
Telephone: (612) 342-7128
Telecopy: (612) 342-3656
(3) Securities to be delivered to:
Washington Square Advisers, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Frank Pintens
(4) Address for all other communications and notices:
Washington Square Advisers, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Frank Pintens
(5) Washington Square
Advisers Private
Placement Trust
Fund Tax ID No.
41-6424976
<PAGE>
Name and Address of Purchaser Series Principal Amount
KEYPORT LIFE INSURANCE COMPANY A $15,000,000
(Note registered in the name of Hare & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Bank of Boston/Cust
ABA #011000390
For further credit to
A/C #50757004 - Keyport
Attn: Amy Hansbury
Mail Stop 45-02-03
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment, written
confirmation of such wire transfer and all other communications and
notices:
Keyport Life Insurance Company
c/o Stein Roe & Farnham Incorporated
1 South Wacker Drive
Chicago, IL 60606
Attn: Private Placements
(3) Securities to be delivered to:
Bank of Boston
Institutional Custody Services
150 Royall Street
Canton, MA 02021
Attn: Amy Hansbury
Mail Stop 45-02-03
Reference #50757004
(4) Keyport Life Insurance Company
Tax ID No. 05-0302931
<PAGE>
Name and Address of Purchaser Series Principal Amount
CONNECTICUT GENERAL LIFE A $2,000,000
INSURANCE COMPANY A $2,000,000
A $2,000,000
(Note registered in the name of CIG & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase NYC/CTR/
BNF = CIGNA Private Placements
A/C #9009001802
ABA #021000021
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(3) Address for all other communications and notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
James R. Kuzemchak
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(5) Connecticut General Life Insurance Company
Tax ID No. 13-3574027
<PAGE>
Name and Address of Purchaser Series Principal Amount
CONNECTICUT GENERAL LIFE A $2,000,000
INSURANCE COMPANY, on
behalf of one of more
separate accounts
(Note registered in the name of CIG & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase NYC/CTR/
BNF = CIGNA Private Placements
A/C #9009001802
ABA #021000021
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(3) Address for all other communications and notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
James R. Kuzemchak
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(5) Connecticut General Life Insurance Company
Tax ID No. 13-3574027
<PAGE>
Name and Address of Purchaser Series Principal Amount
LIFE INSURANCE COMPANY A $2,000,000
OF NORTH AMERICA
(Note registered in the name of CIG & Co.)
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Chase NYC/CTR/
BNF = CIGNA Private Placements
A/C #9009001802
ABA #021000021
with sufficient information to identify the source and application of
such funds, including PPN, payment date, and principal, premium or
interest on the security.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(3) Address for all other communications and notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities S-307
James R. Kuzemchak
900 Cottage Grove Road
Hartford, CT 06152-2307
Telecopy: (860) 726-7203
(5) Life Insurance Company of North America
Tax ID No. 13-3574027
<PAGE>
Name and Address of Purchaser Series Principal Amount
PRINCIPAL MUTUAL LIFE A $5,100,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, IA 50309
ABA #073000228
Account #014752
Ref: OBI PFGSE(S)B61062
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Department,
Accounting & Treasury
Ref: Bond No. 1-B-61062
(3) Address for all other communications and notices:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Department,
Securities Division
Ref: Bond No. 1-B-61062
(5) Principal Mutual Life Insurance Company
Tax ID No. 42-0127290
<PAGE>
Name and Address of Purchaser Series Principal Amount
PRINCIPAL MUTUAL LIFE A $4,900,000
INSURANCE COMPANY
<PAGE>
(1) All payments on account of the Notes shall be made by wire transfer
of immediately available funds to:
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, IA 50309
ABA #073000228
Account #032395
Ref: OBI PFGSE(S)B61062
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment and written
confirmation of such wire transfer:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Department,
Accounting & Treasury
Ref: Bond No. 16-B-61062
(3) Address for all other communications and notices:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Department,
Securities Division
Ref: Bond No. 16-B-61062
(5) Principal Mutual Life Insurance Company
Tax ID No. 42-0127290
<PAGE>
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any
Person, any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Guarantor.
"Attributable Debt" means, as to any particular lease relating
to a Sale and Leaseback Transaction, the present value of all Lease Rentals
required to be paid by the Guarantor or any Restricted Subsidiary under such
lease during the remaining term thereof (determined in accordance with generally
accepted financial practice using a discount factor equal to the interest rate
implicit in such lease).
"Business Day" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City or Providence, Rhode
Island are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person
and a Capital Lease, the amount of the obligation of such Person as the lessee
under such Capital Lease that would, in accordance with GAAP, appear as a
liability on a balance sheet of such Person.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time.
"Company" means GTECH Corporation, a Delaware corporation, or
any successor thereto that shall have become such in the manner prescribed in
Section 10.2.
"Competitor" means each Person specified on Exhibit 3 and each
other Person who directly or indirectly competes with either Obligor or any
Subsidiary in the business of providing and/or servicing lottery systems and/or
electronic benefits transfer systems (provided that "Competitor" shall not
include any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any
<PAGE>
broker or dealer or any other similar financial institution or entity not
specified on Exhibit 3, regardless of legal form).
"Consolidated Assets" means, as of any date of determination,
the total assets of the Guarantor and its Restricted Subsidiaries which would be
shown as assets on a consolidated balance sheet of the Guarantor and its
Restricted Subsidiaries as of such time prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in
the stock and surplus of Restricted Subsidiaries.
"Consolidated EBDAIT" means, as of any date of determination,
the sum (without duplication) of (i) Consolidated Net Income (excluding any
extraordinary gains and losses) for the four fiscal quarters ending on, or most
recently prior to, such date plus (to the extent deducted in the computation of
such Consolidated Net Income) (ii) Consolidated Interest Expense for such four
fiscal quarters plus (iii) taxes on income of the Guarantor and its Restricted
Subsidiaries for such four fiscal quarters plus (iv) amortization, depreciation
and all other non-cash expense items of the Guarantor and its Restricted
Subsidiaries for such four fiscal quarters, all determined on a consolidated
basis in accordance with GAAP and on a pro forma basis in accordance with
generally accepted financial practice giving effect to any acquisition or
disposition made during the relevant computation period as if such acquisition
or disposition were made on the first day of such period.
"Consolidated Indebtedness" means, as of any date of
determination (and without duplication), all Indebtedness of the Guarantor and
its Restricted Subsidiaries outstanding on such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any
period, the interest expense of the Guarantor and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with reference to any period,
the net income (or loss) of the Guarantor and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Shareholders' Equity" means, as of any date of
determination, the total shareholders' equity of the Guarantor and its
Restricted Subsidiaries on such date, determined on a consolidated basis in
accordance with GAAP.
"Confidential Information" is defined in Section 21.
"Credit Facility" means the Credit Agreement dated as of
September 15, 1994 by and among the Company, the Lenders and Co-Agents party
thereto, and Nationsbank of North Carolina, National Association, as Agent, as
amended and in effect from time to time, or any credit facility or facilities
extending, renewing or refinancing such agreement.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"Default Rate" means with respect to any Note that rate of
interest that is the greater of (i) 2% per annum above the rate of interest
stated in clause (a) of the first paragraph of such Note or (ii) 2% over the
rate of interest publicly announced by Morgan Guaranty Trust Company of New York
in New York, New York as its "base" or "prime" rate.
"Disposition" is defined in Section 10.8.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with either Obligor
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Funded Indebtedness" means, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any instrument
or agreement relating thereto matures, or which is otherwise payable or unpaid,
one year or more from, or is directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more
(including, without limitation, under a revolving or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more) from, the date of creation thereof.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State
or other political subdivision thereof, or
(ii) any other jurisdiction in which either Obligor
or any Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of either
Obligor or any Subsidiary, or (b) any entity exercising
executive, legislative,
judicial, regulatory or administrative functions of, or pertaining
to, any such government.
"Guarantee" is defined in Section 1.
"Guarantor" means GTECH Holdings Corporation, a Delaware
corporation, or any successor thereto that shall have become such in the manner
prescribed in Section 10.2.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness
or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 14.1.
"Indebtedness" with respect to any Person means, at any
time, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all Capital Lease Obligations of such Person;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof.
"Institutional Investor" means (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 5% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Lease Rentals" means, for any period, the sum of the rental
and other obligations required to be paid by the lessee under any lease,
excluding any amounts required to be paid by the lessee (whether or not
designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes and similar charges.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Guarantor
and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or properties
of the Guarantor and its Restricted Subsidiaries taken as a whole, or (b) the
ability of the Company or the Guarantor to perform its obligations under this
Agreement or the Notes (in the case of the Company) or the Guarantees (in the
case of the Guarantor), or (c) the validity or enforceability of this Agreement,
the Notes, the Guarantees or any Subsidiary Guarantee.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Obligors" is defined in the first paragraph of this
Agreement.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company or the Guarantor, as
applicable, whose responsibilities extend to the subject matter of such
certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Pension Plan" means an "employee pension benefit plan" within
the meaning of section 3(2) of ERISA.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by either Obligor or any ERISA
Affiliate or with respect to which either Obligor or any ERISA Affiliate may
have any liability.
"Priority Debt" means the sum (without duplication) of (i) the
aggregate unpaid principal amount of Indebtedness of the Guarantor and any
Restricted Subsidiary secured by Liens (other than Liens permitted by Section
10.3(a) through (j)) plus (ii) all outstanding Attributable Debt of the
Guarantor and any Restricted Subsidiary (other than Attributable Debt with
respect to any Sale and Leaseback Transaction permitted by Section 10.4(a) or
(b)) plus (iii) the aggregate unpaid principal amount of all Indebtedness of all
Restricted Subsidiaries (other than Indebtedness of the Company or Indebtedness
permitted by Section 10.5(a) through (d)).
"Property" or "Properties" means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.
"PTE" means a Prohibited Transaction Exemption issued by the
Department of Labor.
"Purchaser" is defined in the first paragraph of this
Agreement.
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by either Obligor or any of their respective Affiliates).
"Responsible Officer" means any Senior Financial Officer and
any other officer of the Company or the Guarantor with responsibility for the
administration of the relevant portion of this Agreement.
"Restricted Subsidiary" means (i) as of the date of the
Closing, the Company, each Subsidiary Guarantor and each other Subsidiary of the
Guarantor and (ii) thereafter (x) the Company and each other Subsidiary of the
Guarantor unless the Guarantor shall have designated any such other Subsidiary
(other than any Subsidiary Guarantor) as an "Unrestricted Subsidiary" by notice
to each holder of Notes and (y) each Unrestricted Subsidiary that the Guarantor
shall have designated as a "Restricted Subsidiary" by notice to each holder of
Notes; provided, that no designation under the foregoing clause (x) or (y) shall
be effective unless, immediately after giving effect to any such designation, no
Default or Event of Default shall have occurred and be continuing and the
Guarantor would be permitted by the provisions of Section 10.6 to incur at least
$1.00 of additional Indebtedness owing to a Person other than a Restricted
Subsidiary. No Subsidiary that is an Unrestricted Subsidiary and has previously
been a Restricted Subsidiary may again be designated as a Restricted Subsidiary,
and no Subsidiary that is a Restricted Subsidiary and has previously been an
Unrestricted Subsidiary may again be designated as an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means a transaction or series
of transactions pursuant to which the Guarantor or any Restricted Subsidiary
shall sell or transfer to any Person any property, whether now owned or
hereafter acquired, and, as part of the same transaction or series of
transactions, the Guarantor or any Restricted Subsidiary shall lease as lessee,
or similarly acquire the right to possession or use of, such property for a
period in excess of three years.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Senior Financial Officer" means any of the Chief Financial
Officer, the Treasurer, the Comptroller and any Assistant Treasurer of the
Company or of the Guarantor.
"Series A Notes" is defined in Section 1.
"Series B Notes" is defined in Section 1.
"Significant Subsidiary" means at any time any Restricted
Subsidiary that would at such time constitute a "significant subsidiary" (as
such term is defined in Regulation S-X of the Securities and Exchange Commission
as in effect on the date of the Closing) of the Guarantor.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and one or more
of its Subsidiaries (unless such partnership or joint venture can and does
ordinarily take major business actions without the prior approval of such Person
or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Guarantor.
"Subsidiary Guarantee" means a guarantee of a Subsidiary
Guarantor of the obligations of the Company under this Agreement and the Notes,
substantially in the form of Exhibit 2.
"Subsidiary Guarantor" means, as of the date of the Closing,
each Subsidiary identified as such on Schedule 5.4 and, thereafter, each other
Subsidiary that enters into a Subsidiary Guarantee as required by Section
9.8(a), provided that such Subsidiary has not been released from its obligations
as provided in Section 9.8(b).
"Unrestricted Subsidiary" means any Subsidiary of the
Guarantor (other than the Company) that is designated as such pursuant to the
provisions of the definition of the term "Restricted Subsidiary".
"Wholly-Owned Restricted Subsidiary" means, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity interests
(except directors' qualifying shares) and voting interests of which are owned by
any one or more of the Guarantor and the Guarantor's other Wholly-Owned
Restricted Subsidiaries at such time.
<PAGE>
SCHEDULE 4.9
Changes in Corporate Structure
None.
<PAGE>
SCHEDULE 5.3
GTECH Holdings Corporation Form 10-K for the fiscal year ending February 22,
1997, filed with the Securities and Exchange Commission.
<PAGE>
Subsidiaries
Schedule 5.4
GTECH Holdings Corporation owns one hundred percent of the stock of GTECH
Corporation. The voting stock of all the entities set forth below is owned one
hundred percent by GTECH Corporation, either directly by GTECH Corporation or
through or in conjunction with other subsidiaries of GTECH Corporation. The
jurisdiction of each entity is set forth after its name. Transactive Corporation
is the only Subsidiary Guarantor.
Dreamport, Inc. (Delaware)
Environmental Paper Products, Inc. (RI)
GameScape, Inc. (RI)
Gaming Systems Corporation (Delaware)
Gana de Mexico S.A. de C.V.
Grand Cards Systems (Shanghai) Ltd. (China)
GRYTEK Co. Ltd. (Poland)
GTECH Argentina S.A. (Argentina)
GTECH Asia Corporation (Delaware)
GTECH Australasia Corporation (Delaware)
GTECH Canada Computer Systems Corporation (Canada)
GTECH Computer Systems Sdn Bhd (Malaysia)
GTECH Corporation (Delaware)
GTECH Corporation (Utah)
GTECH Corporation Chile, S.A. (Chile)
GTECH Czechoslovakia Corporation (Delaware)
GTECH De Mexico S.A. de C.V. (Mexico)
GTECH Eesti A.S. (Estonia)
GTECH Espana Corporation (Delaware)
GTECH Europe S.A. (Belgium)
GTECH Export Corporation (United States Virgin Islands)
GTECH Far East Pte Ltd (Singapore)
GTECH Foreign Holdings Corporation (Delaware)
GTECH Gaming Subsidiary 2 Corporation (Delaware)
GTECH Ireland Corporation (Delaware)
GTECH Italy Corporation (Delaware)
GTECH Latin America Corporation (Delaware)
GTECH LIT Corporation (Lithuania)
GTECH Lithuania Corporation (Delaware)
GTECH Management P.I. Corporation (Delaware)
GTECH Nevada Corporation (Delaware)
GTECH Northern Europe Corporation (Delaware)
GTECH Offshore Services Limited (Jersey, Channel Islands)
GTECH South Africa Corporation (Delaware)
GTECH Suffolk Corporation (Delaware)
GTECH Sweden Corporation (Delaware)
GTECH Taiwan Corporation (Delaware)
GTECH Texas Corporation (Delaware)
GTECH U.K. Limited (U.K.)
GTECH U.K. Corporation (Delaware)
GTECH Venezuela Corporation (Delaware)
GTECH Worldserv, Inc. (Delaware)
GTECH Worldserv International, Inc. (Delaware)
GTECH Worldwide Services Corporation (Delaware)
Innovative Environmental Technologies, Inc. (Delaware)
LAC Corporation (Rhode Island)
Loteria Asociada S.A. (Argentina)
Oy GTECH Finland Ab. (Finland)
Technology Risk Management Services, Inc.
Technology Travel Corporation (Delaware)
Transaction Strategies Inc. (Delaware)
Transactive Corporation (Delaware)
(formerly GTECH Administrative Services Corp.)
Via Video Corporation (Delaware)
Watson Land Company (Rhode Island)
<PAGE>
Schedule 5.5
1. consolidated balance sheets of GTECH Holdings Corporation and subsidiaries as
of February 24, 1996 and February 25, 1995 and the related consolidated
statements of income, shareholders'equity, and cash flows for each of the three
years in the period ended February 24, 1996.
2. consolidated balance sheets of GTECH Holdings Corporation and subsidiaries as
of February 22, 1997 and February 24, 1996 and the related consolidated
statements of income, shareholders'equity, and cash flows for each of the three
years in the period ended February 22, 1997.
<PAGE>
Schedule 5.8
Part I
1. Subsequent to the trial of J. David Smith, the Company's former national
sales manager, in New Jersey, the New Jersey U.S. Attorney announced in a press
release that a grand jury investigation in that jurisdiction is continuing but
did not specify the scope of such investigation. Thereafter, the New Jersey U.S.
Attorney's Office issued subpoenas to the Company. The Texas U.S. Attorney's
Office also has issued subpoenas to the Company. The Company is cooperating in
these investigations. The Company does not believe it has engaged in any
wrongdoing in connection with these matters. However, since the current
investigations are still underway and are conducted largely in secret, the
Company lacks sufficient information to determine with certainty their ultimate
scope and whether the government authorities will assert claims resulting from
these or other investigations that could implicate or reflect adversely upon the
Company. Because the Company's reputation for integrity is an important factor
in its business dealings with lottery and other government agencies, if
government authorities were to make an allegation of, or if there were to be a
finding of, improper conduct on the part of or attributable to the Company, such
an allegation or finding could have a Material Adverse Effect.
2. On September 20, 1996, Jack M. and Linda Janis filed a class action in the
Los Angeles Superior Court (Case No. BC157693) against the California State
Lottery Commission, GTECH Holdings Corporation and Southland Corporation. The
suit involves the keno game that was operated by the California State Lottery
until the California Supreme Court ruled in June 1996 that it was not authorized
by the state's Lottery Law. The plaintiffs seek restitution of funds received by
the defendants in connection with that keno game on the theories of unjust
enrichment and unlawful, unfair or deceptive business practices. In February
1997, the Court granted the Company's motion for summary judgment on all claims,
holding that the plaintiffs failed to state a triable issue of material fact on
the causes of action asserted. On March 4, 1997, the plaintiffs filed an amended
action with the Court. The Company has publicly stated that it believes the
claim has no merit. Even considering that plaintiffs' chances of success are
near zero, however, the size of the potential damages require listing this
matter as having a possible Material Adverse Effect.
Part II
The Texas Lottery Commission ("Lottery") has notified the Company of its
intention to assess liquidated damages in connection with a gift made by one of
its lobbyists to the Governor of Texas, and has requested information on any
other occasion when the Company or its lobbyists may have provided meals or
entertainment to state officials without reimbursement. While it has not done
so, the Lottery may take the position that such actions constitute a default
under the Company's contract with the Lottery. In addition, the Lottery has
instructed its staff to prepare and issue, by June 30, 1997, requests for
proposal for the same goods and services currently provided by the Company. As a
result of this process, the Lottery may in the future attempt to terminate the
contract.
<PAGE>
Part A: Schedule 5.15
GTECH Corporation
Debt Summary
2/22/97
<TABLE>
<CAPTION>
Bank S/T Outstanding Description Final Maturity
<S> <C> <C> <C>
Nations Facility 0 Term Loan 09/99
Scotia Bank de Puerto Rico 2,136,000 Term Loan 09/98
Woodchester Credit Lyonnais 1,939,168 Term Loan 12/99
Citizens Trust 0 Demand Note Demand
First Union 0 Demand Note Demand
NationsBank 829,082 Capital Lease 03/98
473,922 Capital Lease 07/98
670,776 Capital Lease 08/98
</TABLE>
<TABLE>
<CAPTION>
Bank L/T Outstanding Description Final Maturity
<S> <C> <C> <C>
Nations Facility 367,000,000 Term Loan 09/99
Scotia Bank de Puerto Rico 1,592,000 Term Loan 09/98
Woodchester Credit Lyonnais 3,878,342 Term Loan 12/99
Citizens Trust 1,000,000 Demand Note Demand
First Union 8,400,000 Demand Note Demand
NationsBank 71,451 Capital Lease 03/98
206,036 Capital Lease 07/98
350,958 Capital Lease 08/98
Total: 388,547,735
</TABLE>
Part B: To the extent that any of the above-referenced Capital Leases are
determined to be loans coupled with a security interest, they would be Liens.
<PAGE>
[FORM OF SERIES A NOTE]
GTECH CORPORATION
7.75% SERIES A GUARANTEED SENIOR NOTE DUE 2004
No. [_____] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, GTECH CORPORATION (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid)
on May 15, 2004, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.75% per
annum from the date hereof, payable semiannually, on the 15th day of May and
November in each year, commencing with November 15, 1997, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note and Guarantee Agreement referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 9.75%
or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York from time to time in New York, New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the United
States of America at the principal office of The Bank of New York in New York,
New York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note and Guarantee
Agreement referred to below.
This Note is one of a series of Guaranteed Senior Notes
(herein called the "Notes") issued pursuant to the Note and Guarantee Agreement
dated as of May 15, 1997 (as from time to time amended, the "Note and Guarantee
Agreement"), between the Company, GTECH Holdings Corporation (the "Guarantor")
and the respective Purchasers named therein and is entitled to the benefits
thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality provisions set forth in Section 21 of the
Note and Guarantee Agreement and (ii) to have made the representation set forth
in Section 6.2 of the Note and Guarantee Agreement.
Payment of the principal of, and Make-Whole Amount, if any,
and interest on this Note has been guaranteed by the Guarantor in accordance
with the terms of the Note and Guarantee Agreement.
<PAGE>
This Note is a registered Note and, as provided in the Note
and Guarantee Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Note of the same series for a like principal amount
will be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note and
Guarantee Agreement, but not otherwise.
If an Event of Default, as defined in the Note and Guarantee
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note and
Guarantee Agreement.
This Note shall be construed and enforced in accordance with
the laws of the State of New York.
GTECH CORPORATION
By_________________________
Title:
<PAGE>
[FORM OF SERIES B NOTE]
GTECH CORPORATION
7.87% SERIES B GUARANTEED SENIOR NOTE DUE 2007
No. [_____] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, GTECH CORPORATION (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid)
on May 15, 2007, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.87% per
annum from the date hereof, payable semiannually, on the 15th day of May and
November in each year, commencing with November 15, 1997, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note and Guarantee Agreement referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 9.87%
or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York from time to time in New York, New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the United
States of America at the principal office of The Bank of New York in New York,
New York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note and Guarantee
Agreement referred to below.
This Note is one of a series of Guaranteed Senior Notes
(herein called the "Notes") issued pursuant to the Note and Guarantee Agreement
dated as of May 15, 1997 (as from time to time amended, the "Note and Guarantee
Agreement"), between the Company, GTECH Holdings Corporation (the "Guarantor")
and the respective Purchasers named therein and is entitled to the benefits
thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality provisions set forth in Section 21 of the
Note and Guarantee Agreement and (ii) to have made the representation set forth
in Section 6.2 of the Note and Guarantee Agreement.
Payment of the principal of, and Make-Whole Amount, if any,
and interest on this Note has been guaranteed by the Guarantor in accordance
with the terms of the Note and Guarantee Agreement.
<PAGE>
This Note is a registered Note and, as provided in the Note
and Guarantee Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Note of the same series for a like principal amount
will be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note and
Guarantee Agreement, but not otherwise.
If an Event of Default, as defined in the Note and Guarantee
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note and
Guarantee Agreement.
This Note shall be construed and enforced in accordance with
the laws of the State of New York.
GTECH CORPORATION
By_________________________
Title:
<PAGE>
EXHIBIT 1-C
[FORM OF GUARANTEE]
For value received, the undersigned hereby unconditionally and
irrevocably guarantees to the holder of the foregoing Note the due and punctual
payment of the principal of, Make-Whole Amount, if any, and interest on said
Note, as more fully provided in the Note and Guarantee Agreement referred to in
said Note.
GTECH HOLDINGS CORPORATION
By___________________________
Title:
<PAGE>
Exhibit 3
Suppliers of On-Line Lottery Products and Services
1. Video Lottery Technologies, Inc. ("VLT") - shares traded on NASDAQ
2. Automated Wagering International, Inc. ("AWI"), a wholly-owned sub of VLT
3. Autotote Corporation
4. Telecontrol (an Austrian company and sub of Autotote)
5. Essnet/Alcatel (a Swedish company)
6. International Lottery and Totalizator Systems, Inc. ("ITS")
7. Berjaya Lottery Management (HK) Ltd. (A parent company of this entity
(also with Berjaya in the name) owns at least 40% of ITS. The Berjaya
companies compete through ITS and separately, through other Berjaya affiliates)
8. Scientific Games, Inc.
9. International des Jeux ("Lotto France")
10. International Game Technology, Inc.
11. Siemens-Nixdorf Information Systems AG
12. CGK Computer Gesellschaft Konstanz mbH (a wholly-owned sub of Siemens)
Suppliers of Systems and Services for the Electronic Delivery of Government
Benefits
1. Deluxe Data Systems, Inc., a sub of Deluxe Corporation
2. Citibank
<PAGE>
EXHIBIT 4.4(a)
Matters To Be Covered In Opinion of Counsel To the Obligors
1. Each of the Obligors and their respective Subsidiaries
being duly incorporated, validly existing and in good standing and having
requisite corporate power and authority to issue and sell the Notes and to
execute and deliver the documents.
2. The Guarantor and each Restricted Subsidiary being
duly qualified and in good standing as a foreign corporation in appropriate
jurisdictions.
3. Due authorization and execution of the documents
and such documents being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other
agreements.
5. All consents required to issue and sell the Notes
and the Guarantees and to execute and deliver the documents having been
obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities
Act of 1933, as amended; no need to qualify an indenture under the Trust
Indenture Act of 1939, as amended.
8. No violation of Regulations G, T or X of the
Federal Reserve Board.
9. Neither Obligor is an "investment company", or a
company "controlled" by an "investment company", under the Investment Company
Act of 1940, as amended.
<PAGE>
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
FOR THE PURCHASERS
<PAGE>
[NAME OF SUBSIDIARY GUARANTOR]
GUARANTEE
Dated ________________
GUARANTEE
GUARANTEE dated as of [_____________] by [NAME OF SUBSIDIARY
GUARANTOR] (the "Subsidiary Guarantor"), a corporation organized under the laws
of [___________] [(the "Guarantor Jurisdiction")]1, in favor of each person who
is from time to time a holder (each, a "Holder" and, collectively, the
"Holders") of one or more of (i) the 7.75% Series A Guaranteed Senior Notes due
2004 issued in an original aggregate principal amount of $150,000,000 and (ii)
the 7.87% Series B Guaranteed Senior Notes due 2007 issued in an original
aggregate principal amount of $150,000,000 (collectively, together with all
notes delivered in substitution or exchange for any of said notes pursuant to
the Note Agreement referred to below, the "Notes") issued by GTECH Corporation,
a Delaware corporation (the "Company"), pursuant to the Note and Guarantee
Agreement dated as of May 15, 1997 (as amended, modified or supplemented from
time to time, the "Note Agreement") among the Company, GTECH Holdings
Corporation and the Purchasers whose names appear in Schedule A to the Note
Agreement. All capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed thereto in the Note Agreement.
Section 1. GUARANTEE, ETC.
Section 1.1. Guarantee. The Company will use the proceeds from
the issuance of the Notes to repay certain Indebtedness, and for general
corporate purposes, of the group of companies comprised by Company and its
consolidated Subsidiaries, and the Subsidiary Guarantor is part of such
corporate group. For such valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Subsidiary Guarantor does hereby absolutely
and unconditionally, for the benefit of each of the Holders, guarantee the full
and timely payment when due, whether by acceleration or otherwise (including
amounts which, but for the operation of the automatic stay under Section 362(a)
of the United States Bankruptcy Code or any successor statute, would become
due), of all indebtedness, obligations and liabilities of the Company, now or
hereafter existing, under or in connection with the Note Agreement or any Note,
and whether of principal, interest (including interest which, but for the filing
of a petition in bankruptcy with respect to the Company, would accrue),
Make-Whole Amounts, fees, expenses or otherwise, in each case whether direct or
indirect, joint or several, absolute or contingent, liquidated or unliquidated,
now or hereafter existing, amended, extended, renewed, replaced, refinanced or
restructured, whether or not from time to time decreased or extinguished and
later increased, created or incurred (all indebtedness, obligations and
liabilities of the Company described in this Section 1.1 are collectively
referred to as the "Guarantied Obligations").
Section 1.2. Guarantee Of Payment. This is a guaranty of
payment and not merely of collection. In the event of any default in payment or
otherwise on any of the Guarantied Obligations, the Subsidiary Guarantor will
pay on demand all or any portion of the Guarantied Obligations due or thereafter
becoming due, whether by acceleration or otherwise, without offset of any kind
whatsoever, without any Holder first being required to make demand upon the
Company or pursue any of its rights against the Company, or against any other
Person, including other guarantors, and without being required to liquidate or
to realize on any collateral security. In any right of action accruing to any
Holder, such Holder may elect to proceed against (a) the Subsidiary Guarantor
together with the Company or any other guarantor of any Guarantied Obligation;
(b) the Subsidiary Guarantor and the Company or any such other guarantor
individually in separate actions; or (c) the Subsidiary Guarantor only without
having first commenced any action against the Company or any such other
guarantor.
Section 1.3. Right to Deal with Guarantied Obligations. Any
Holder, without notice to or consent of the Subsidiary Guarantor, may do any one
or more of the following, all without impairing the liability of the Subsidiary
Guarantor hereunder: deal with any Guarantied Obligation and any collateral
security therefor in such manner as it may deem advisable and renew, amend or
extend the Guarantied Obligations, the Note Agreement, any Note or any part
thereof; accept partial payment, or settle, release, compound, or compromise the
same; demand additional collateral security therefor, and substitute or release
the same; and compromise or settle with or release and discharge from liability
any other guarantor of any Guarantied Obligation, or any other Person liable to
such Holder for all or any portion of the obligations of any obligor in respect
of any Guarantied Obligation.
Section 1.4. Waiver of Subrogation. The Subsidiary Guarantor
hereby unconditionally waives with respect to this Guarantee any right of
subrogation, indemnity, reimbursement or contribution from the Company and any
other guarantor.
Section 1.5. Other Waivers. The Subsidiary Guarantor hereby
unconditionally waives with respect to this Guarantee: (a) notice of acceptance
of this Guarantee by any Holder and any notice of the incurring by the Company
of any Guarantied Obligation; (b) presentment for payment, protest, notice of
protest and notice of dishonor to any party including the Company or the
Subsidiary Guarantor; (c) all other notices which the Company or the Subsidiary
Guarantor may be entitled to but which may legally be waived; (d) demand for
payment as a condition of liability; (e) any disability of the Company or any
other obligor or obligors or defense available to the Company, the Subsidiary
Guarantor or any other obligor or obligors in respect of any Guarantied
Obligation, including absence or cessation of the Company or any such other
obligor's liability for any reason whatsoever; (f) any defense or circumstances
which might otherwise constitute a legal or equitable discharge of a guarantor
or surety; and (g) all rights under any otherwise applicable law dealing with or
affecting the rights of creditors of the Subsidiary Guarantor and inconsistent
with the express provisions hereof.
Section 1.6. Subordination. Until the Guarantied Obligations
are paid in full the Subsidiary Guarantor hereby unconditionally subordinates
all present and future debts, liabilities or obligations of the Company to the
Subsidiary Guarantor to the Guarantied Obligations, and all amounts received by
the Subsidiary Guarantor with respect to such debts, liabilities or obligations
shall, upon the occurrence and during the continuance of an Event of Default, be
held in trust for the benefit of, and shall be immediately paid over to the
Holders and to any other Persons who shall have the benefit of a guarantee by
the Subsidiary Guarantor of Indebtedness of the Company which is owing to such
Persons and which ranks at least pari passu to the Indebtedness owed to the
Holders, ratably according to the unpaid principal amount of such Indebtedness
of the Company owed to the Holders and such other Persons. The Subsidiary
Guarantor, at the request of any Holder, shall execute such further documents in
favor of the Holders to further evidence and support the purpose of this Section
1.6.
Section 1.7. No Right of Set Off. No act of commission or
omission of any kind or at any time upon the part of the Company or any Holder
or their respective successors or assigns in respect of any matter whatsoever
shall in any way affect or impair the rights of any Holder to enforce any right,
power or benefit under this Guarantee, and no set-off, recoupment, claim,
reduction or diminution of any obligation or any defense (legal or equitable),
counterclaim, cross claim or other claim of any kind or nature which the
Subsidiary Guarantor has or may have against the Company or any Holder or any
such successor or assign shall be available to or asserted by the Subsidiary
Guarantor in any suit or action brought by any Holder, or any such successor or
assign, to enforce any right, power or benefit under this Guarantee or as an
offset to payment hereunder.
Section 1.8. Special Representations and Warranties relating
to the Guarantee. The Subsidiary Guarantor represents and warrants to the
Holders that: (a) no other agreement, representation or special condition exists
between the Subsidiary Guarantor and any Holder regarding the liability of the
Subsidiary Guarantor under this Guarantee; nor does any understanding exist
between the Subsidiary Guarantor and any Holder that the obligations of the
Subsidiary Guarantor under this Guarantee are or will be other than as set out
herein; and (b) as of the date hereof, the Subsidiary Guarantor has no defense
whatsoever to any action or proceeding that may be brought to enforce this
Guarantee.
Section 1.9. No Waiver by Holders. No failure or delay on the
part of any Holder in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. Failure by any
Holder to insist upon strict performance hereof shall not constitute a
relinquishment of its right to demand strict performance at another time.
Receipt by any Holder of any payment by any Person on any Guarantied Obligation,
with knowledge of a default in respect of any Guarantied Obligation or of a
breach of this Guarantee, or both, shall not be construed as a waiver of the
default or breach.
Section 1.10. CONTINUING GUARANTEE; TERMINATION. SUBJECT TO
SECTION 3.7, THIS GUARANTEE IS A CONTINUING GUARANTEE AND SHALL CONTINUE IN FULL
FORCE AND EFFECT UNTIL SUCH TIME AS ALL GUARANTIED OBLIGATIONS SHALL HAVE BEEN
INDEFEASIBLY PAID IN FULL.
Section 1.11. Remedies Cumulative, etc. All remedies under
this Guarantee are cumulative and are not exclusive of any other rights and
remedies of the Holders provided by law or under the Note Agreement, any Note,
or any other applicable agreement or instrument. The extensions of credit to the
Company pursuant to the Note Agreement shall be presumed conclusively to have
been made or extended, respectively, in reliance upon the obligations of the
Subsidiary Guarantor incurred pursuant to this Guarantee.
Section 1.12. Repayment or Recovery. If claim is ever made
upon any Holder for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guarantied Obligations and any of the
Holders repays all or part of said amount by reason of (a) any judgment, decree
or order of any court or administrative body having jurisdiction over such
Holder or any of its property (including as a result of any proceedings in
bankruptcy or reorganization with respect to the Company) or (b) any settlement
or compromise of any such claim effected by such Holder with any such claimant
(including the original obligor), then and in such event the Subsidiary
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it, notwithstanding any revocation hereof or the
cancellation of any Notes or other instrument evidencing any Guarantied
Obligation or any security therefor, and the Subsidiary Guarantor shall be and
remain liable to the aforesaid Holder for the amount so repaid or recovered to
the same extent as if such amount had never originally been received by such
Holder.
[Section 1.13. Tax Indemnity. (a) In the event of the
imposition by or for the account of any Governmental Authority of or in the
Guarantor Jurisdiction or any political subdivision thereof or therein (an
"Applicable Taxing Authority") or of any other Governmental Authority of any
jurisdiction in which the Subsidiary Guarantor resides for tax purposes or any
jurisdiction from or through which the Subsidiary Guarantor is making any
payment in respect of this Guarantee, other than any Governmental Authority of
or in the United States of America or any political subdivision thereof or
therein, of any tax (whether income, documentary, sales, stamp, registration,
issue, capital, property, excise or otherwise), duty, levy, impost, fee, charge
or withholding (each a "Tax" and collectively "Taxes") upon or with respect to
any payments in respect of this Guarantee, whether by withholding or otherwise,
the Subsidiary Guarantor hereby agrees to pay forthwith from time to time in
connection with each such payment to each Holder such amounts as shall be
required so that every payment received by such Holder in respect of this
Guarantee will not, after such withholding or deduction or other payment for or
on account of such Tax and any interest or penalties relating thereto, be less
than the amount due and payable to such Holder in respect of this Guarantee
before the assessment of such Tax; provided, however, that the Subsidiary
Guarantor shall not be obliged to pay such amounts to any Holder in respect of
Taxes to the extent such Taxes exceed the Taxes that would have been payable:
(i) had such Holder not had any connection with the
Guarantor Jurisdiction or any territory or political
subdivision thereof other than the holding of a Note (or the
receipt of any payments in respect thereof) or activities
incidental thereto; or
(ii) but for the delay or failure by such Holder
(following a written request by the Subsidiary Guarantor) in
the filing with an appropriate Governmental Authority or
otherwise of forms, certificates, documents, applications or
other reasonably required evidence (collectively "Forms"),
that is required to be filed by such Holder to avoid or reduce
such Taxes and that in the case of any of the foregoing would
not result in any confidential or proprietary income tax
return information being revealed, either directly or
indirectly, to any Person and such delay or failure could have
been lawfully avoided by such Holder, provided that such
Holder shall be deemed to have satisfied the requirements of
this clause (ii) upon the good faith completion and submission
of such Forms as may be specified in a written request of the
Subsidiary Guarantor no later than 45 days after receipt by
such Holder of such written request.
(b) Within 60 days after the date of any payment by the
Subsidiary Guarantor of any Tax in respect of any payment under this Guarantee
or this Section 1.13, the Subsidiary Guarantor shall furnish to each Holder such
documentary evidence with respect to such payment as may be reasonably requested
by such Holder.
(c) The obligations of the Subsidiary Guarantor under this
Section 1.13 shall survive the transfer or payment of any Note.]1
Section 2. REPRESENTATIONS. The Subsidiary Guarantor
represents and warrants as follows:
Section 2.1. Organization; Power and Authority. The Subsidiary
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
Subsidiary Guarantor has the corporate power and authority to execute and
deliver this Guarantee and to perform the provisions hereof.
Section 2.2. Authorization, Etc. This Guarantee has been duly
authorized by all necessary corporate action on the part of the Subsidiary
Guarantor, and this Guarantee constitutes a legal, valid and binding obligation
of the Subsidiary Guarantor enforceable against the Subsidiary Guarantor in
accordance with its terms, except as the enforceability thereof may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 2.3. Compliance with Laws, Other Instruments of the
Subsidiary Guarantor, Etc. The execution, delivery and performance by the
Subsidiary Guarantor of this Guarantee will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Subsidiary Guarantor under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Subsidiary
Guarantor is bound or by which the Subsidiary Guarantor or any of its properties
may be bound or affected, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the Subsidiary
Guarantor or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Subsidiary Guarantor.
Section 2.4. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing, or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Subsidiary Guarantor of this Guarantee. [It is not necessary
to ensure the legality, validity, enforceability or admissibility into evidence
in the Guarantor Jurisdiction of this Guarantee that this Guarantee or any other
document be filed, recorded or enrolled with any Governmental Authority, or that
any such agreement or document be stamped with any stamp, registration or
similar transaction tax.]1
Section 2.5. Ranking. All obligations and liabilities of the
Subsidiary Guarantor under this Guarantee constitute direct, unconditional and
general obligations of the Subsidiary Guarantor and rank in right of payment
either pari passu or senior to all other Indebtedness of the Subsidiary
Guarantor, except for such Indebtedness which is preferred as a result of being
secured (but then only to the extent of such security).
[Section 2.6. Taxes. No liability for any Tax directly or
indirectly imposed, assessed, levied or collected by or for the account of any
Applicable Taxing Authority will be incurred by the Subsidiary Guarantor or any
Holder as a result of the execution or delivery of this Guarantee and, based on
present law, no deduction or withholding in respect of Taxes imposed by or for
the account of any Applicable Taxing Authority is required to be made from any
payment by the Subsidiary Guarantor under this Guarantee except for any such
withholding or deduction arising out of the conditions described in the proviso
to Section 1.13(a).]1
Section 3. MISCELLANEOUS.
Section 3.1. Successors and Assigns. All agreements contained
in this Guarantee bind the Subsidiary Guarantor and inure to the benefit of the
Holders and in each case to their respective successors and assigns (including,
without limitation, any subsequent Holder of a Note) whether so expressed or
not.
Section 3.2. Severability. Any provision of this Guarantee
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 3.3. Construction. Each agreement contained herein
shall be construed (absent express provision to the contrary) as being
independent of each other agreement contained herein, so that compliance with
any one agreement shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other agreement. Where any provision herein
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
Section 3.4. Governing Law. This Guarantee shall be construed
and enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of New York excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.
Section 3.5. Expenses; Indemnity. The Subsidiary Guarantor
will upon demand pay to each Holder the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which such Holder may incur in connection with enforcement
of this Guarantee or the failure by the Subsidiary Guarantor to perform or
observe any of the provisions hereof. To the extent permitted by law, the
Subsidiary Guarantor agrees to indemnify and hold harmless each Holder and each
officer, director, employee, trustee or agent thereof from and against any and
all claims, demands, losses, judgments and liabilities (including liabilities
for penalties) of whatsoever kind or nature, growing out of or resulting from
this Guarantee or the exercise by any Holder of any right or remedy granted to
it hereunder or under the Note Agreement or any Note, other than such items
arising out of gross negligence or willful misconduct on the part of such
Holder. If and to the extent that the obligations of the Subsidiary Guarantor
under this Section 3.5 are unenforceable for any reason, the Subsidiary
Guarantor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.
Section 3.6. Waiver of Immunity. To the extent the Subsidiary
Guarantor may now or hereafter be entitled, in any jurisdiction in which
judicial proceedings may at any time be commenced with respect to this
Guarantee, to claim for itself or its revenues or properties immunity from suit,
set-off, attachment upon or prior to judgment or in aid of execution or
execution of a judgment or from any other legal process, and to the extent that
in any such jurisdiction there may be attributed to the Subsidiary Guarantor
such an immunity (whether or not claimed), the Subsidiary Guarantor hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity
until the obligations of the Subsidiary Guarantor hereunder are discharged.
Section 3.7. Release. Upon notice by the Company to each
Holder in respect of the Subsidiary Guarantor as provided in Section 9.8(b) of
the Note Agreement, the Subsidiary Guarantor shall be released from its
obligations under this Guarantee.
Section 3.8. Notices. All notices and communications provided
for hereunder shall be in writing and sent as provided in Section 19 of the Note
Agreement (i) if to any Holder, to the address specified for such Holder in the
Note Agreement and (ii) if to the Subsidiary Guarantor, to the address for the
Subsidiary Guarantor set forth on the signature pages hereof.
Section 3.9. Amendments. This Guarantee may be amended, and
observance of any term hereof waived (either retroactively or prospectively),
with (and only with) the written consent of the Subsidiary Guarantor and the
Required Holders.
[Section 3.10. JURISDICTION AND PROCESS. THE SUBSIDIARY
GUARANTOR AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTEE OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY
LEGAL ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED
AGAINST THE SUBSIDIARY GUARANTOR, FOR BREACH HEREOF OR THEREOF, OR AGAINST ANY
OF ITS PROPERTIES, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK BY OR ON
BEHALF OF ANY HOLDER, AS SUCH HOLDER MAY ELECT, AND THE SUBSIDIARY GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR PROCEEDING. THE
SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY APPOINTS AND DESIGNATES [CT CORPORATION
SYSTEM, WHOSE ADDRESS IS 1633 BROADWAY, NEW YORK, NY 10019], OR ANY OTHER PERSON
HAVING AND MAINTAINING A PLACE OF BUSINESS IN THE STATE OF NEW YORK WHOM THE
SUBSIDIARY GUARANTOR MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN 30
DAYS' NOTICE THEREOF TO EACH HOLDER), AS THE TRUE AND LAWFUL ATTORNEY AND DULY
AUTHORIZED AGENT FOR ACCEPTANCE OF SERVICE OF LEGAL PROCESS OF THE SUBSIDIARY
GUARANTOR. THE SUBSIDIARY GUARANTOR HEREBY AGREES THAT SERVICE OF PROCESS IN ANY
SUCH PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
IT AT ITS ADDRESS SPECIFIED IN SECTION 3.8 OR AT SUCH OTHER ADDRESS OF WHICH
EACH HOLDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IN ADDITION, THE
SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE
OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.]1
[Section 3.11. Obligation to Make Payment in U.S. Dollars. All
payments made by the Subsidiary Guarantor under this Guarantee shall be in
lawful money of the United States of America ("U.S. Dollars") and the
obligations of the Subsidiary Guarantor to make payments in U.S. Dollars of any
of its obligations hereunder shall not be discharged or satisfied by any tender,
or any recovery pursuant to any judgment, which is expressed in or converted
into any currency other than U.S. Dollars, except to the extent such tender or
recovery shall result in the actual receipt by the applicable Holder of the full
amount of U.S. Dollars expressed to be payable in respect of any such
obligations. The obligation of the Subsidiary Guarantor to make payments in U.S.
Dollars as aforesaid shall be enforceable as an alternative or additional cause
of action for the purpose of recovery in U.S. Dollars of the amount, if any, by
which such actual receipt shall fall short of the full amount of U.S. Dollars
expressed to be payable in respect of any such obligations, and shall not be
affected by judgment being obtained for any other sums due under this
Guarantee.]1
<PAGE>
EXECUTED by the Subsidiary Guarantor as of the day and year
first above written.
[SUBSIDIARY GUARANTOR]
By______________________
Title:
Address of Subsidiary Guarantor:
- --------
1 Include bracketed language if Subsidiary Guarantor is organized under
the laws of a jurisdiction other then the United States or any
political subdivision thereof.
1994 STOCK OPTION PLAN
(as amended and restated through June 1, 1997)
SECTION 1. Purpose; Definitions
The name of this plan is the GTECH Holdings Corporation 1994 Stock Option Plan
(the "Plan"). The purpose of the Plan is to enable officers and other key
employees of GTECH Holdings Corporation (the "Company") and its Affiliates to
own shares of stock in the Company, participate in the shareholder value which
has been created, and have a mutuality of interest with other shareholders,
and to enable the Company to attract, retain and motivate key employees.
For the purposes of the Plan the following terms shall be defined as set forth
below:
(a) "Affiliate" means any corporation which is a subsidiary of
the Company within the definition of "subsidiary
corporation" under Section 424(f) of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means (i) the willful failure by the Participant to
perform substantially his duties as an employee of the
Company (other than due to physical or mental illness) after
reasonable notice to the Participant of such failure, (ii)
the Participant's engaging in serious misconduct that is
injurious to the Company, (iii) the Participant's having
been convicted of, or entered a plea of nolo contendere to a
crime that constitutes a felony, (iv) the breach by the
Participant of any written covenant or agreement with the
Company not to disclose any information pertaining to the
Company or not to compete or interfere with the Company, or
(v) abuse of illegal drugs or other controlled substances,
or habitual intoxication.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 2
below. If at any time no Committee shall be in office, then
the functions of the Committee specified in the Plan shall
be exercised by the Board.
(f) "Company" means GTECH Holdings Corporation, a corporation
organized under the laws of the State of Delaware, or any
successor organization.
(g) "Disability" means permanent and total disability as
determined under the Company's long-term disability program.
(h) "Fair Market Value" means, as of any given date,
the mean of the highest and lowest quoted selling prices of
the Stock on the New York Stock Exchange (consolidated
trading) or such other method of determining Fair Market
Value as shall be authorized by the Code, or the rules and
regulations thereunder, and adopted by the Committee.
(i) "Incentive Stock Option" means any Stock Option intended to
be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
(j) "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(k) "Participant" means a key employee to whom a grant is made
under the Plan.
(l) "Plan" means the GTECH Holdings Corporation 1994 Stock
Option Plan, as hereinafter amended from time to time.
(m) "Retirement" means retirement from active employment with
the Company and any Affiliates with the consent of the Board
or in accordance with the retirement policies of the Company.
(n) "Rules" means the regulations promulgated under Section 16
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(o) "Securities Broker" means a registered securities broker
acceptable to the Company who agrees to effect the cashless
exercise of an Option pursuant to paragraph 5(d) below.
(p) "Stock" means the Common Stock $.01 par value per share, of
the Company.
(q) "Stock Option" or "Option" means any Incentive or
Non-Qualified Stock Option to purchase shares of Stock
granted pursuant to Section 5 below.
In addition, the terms "Change-in-Control" and "Incumbent Director" shall have
meanings set forth, respectively, in Section 6.
SECTION 2. Administration
The Plan shall be administered by a Committee of not fewer than two (2)
"non-employee directors" (within the meaning of Rule 16b-3(b) (3) under the
Exchange Act, or any successor thereto) of the Company who are also "outside
directors" (within the meaning of Treasury Regulation Section 1.162-27(e) (3),
or any successor thereto), who shall be appointed by the Board of Directors of
the Company and who shall serve at the pleasure of the Board.
The Committee shall have the authority to grant Stock Options to eligible
employees, pursuant to the terms of the Plan.
In particular, the Committee shall have the authority, subject to the terms of
the Plan, to:
(a) select the officers and other key employees of the Company
and its Affiliates to whom Stock Options may from time to
time be granted hereunder;
(b) determine whether and to what extent Incentive Stock Options
and Non-Qualified Stock Options or any combination thereof,
are to be granted hereunder;
(c) determine the number of shares to be covered by each such
grant hereunder; and to
(d) determine the terms and conditions of any grant hereunder
including, but not limited to: the share price, any
restriction or limitation regarding, or any vesting
acceleration or forfeiture relating to, any Stock Option or
the shares of Stock relating thereto, based on such factors
as the Committee shall determine, in its sole discretion,
from time to time.
The Committee shall be responsible for the administration of the Plan. The
Committee, by majority action thereof, is authorized to prescribe, amend, and
rescind rules and regulations relating to the Plan, to provide for conditions
deemed necessary or advisable to protect the interests of the Company, and to
make all other determinations (including, without limitation, whether a
Participant has incurred a Disability) necessary or advisable for the
administration and interpretation of the Plan in order to carry out its
provisions and purposes. Determinations, interpretations, or other actions
made or taken by the Committee pursuant to the provisions of the Plan shall be
final, binding, and conclusive for all purposes and upon all persons including
the Company and Plan participants.
SECTION 3. Authorized Shares and Adjustments
(a) Stock Subject to Plan. The stock to be subject or related
to grants under the Plan shall be shares of the Company's
Stock and may be either shares held in the treasury of the
Company or authorized and unissued shares. Subject to
adjustment in accordance with paragraph 3(b) below, up to an
aggregate maximum of 1,800,000 shares shall be authorized
for Stock Options under the Plan, any or all of which may be
granted in the form of Incentive Stock Options; provided
however, that in any calendar year in which the Plan is in
existence, Stock Options granted to any one Participant in
the Plan may not cover more than 12 1/2% of the total shares
of Stock authorized under the Plan.
Any shares of Stock subject to a Stock Option which expires
or otherwise terminates for any reason whatever (including,
without limitation, the surrender thereof) without having
been exercised, shall continue to be available for the
granting of Options under the Plan, provided, however, that
(i) if a Stock Option is cancelled, the shares covered by
the cancelled Stock Option shall be counted against the
maximum number of shares specified in this paragraph 3(a)
for which Stock Options may be granted to an individual
Participant, and (ii) if the exercise price of a Stock
Option is reduced after the date of grant (otherwise than
pursuant to paragraph 3(b) below), the transaction shall be
treated as a cancellation of the original Stock Option and
the grant of a new Stock Option for purposes of counting the
maximum number of shares for which Stock Options may be
granted to an individual Participant.
(b) Capital Adjustments. The number of shares which may be
issued under the Plan, the maximum number of shares with
respect to which Stock Options may be granted to any
individual Participant under the Plan, both as stated in
paragraph 3(a) above, the number of shares issuable upon
exercise of outstanding Stock Options under the Plan (as
well as the Option exercise price per share under such
outstanding Options), shall, subject to the applicable
provisions of Section 424(a) of the Code, be adjusted, as
may be deemed appropriate by the Committee, to reflect any
stock dividend, stock split, share combination, or similar
change in the capitalization of the Company.
In the event of a corporate transaction (as that term is
described in Section 424(a) of the Code and the Treasury
Regulations issued thereunder as, for example, a merger,
consolidation, acquisition of property or stock,
reorganization, or liquidation), each outstanding Stock
Option shall be assumed by the surviving or successor
corporation; provided, however, that, in the event of a
proposed corporate transaction, the Committee may terminate
all or a portion of the outstanding Stock Options if it
determines that such termination is in the best interests of
the Company. If the Committee decides to terminate
outstanding Stock Options, the Committee shall give each
Participant holding a Stock Option to be terminated not less
than fourteen days' notice prior to any such termination by
reason of such a corporate transaction, and any such Stock
Option which is to be so terminated may be exercised (to the
extent that it is then exercisable or to any greater extent
as the Committee, in its sole discretion, shall determine)
up to and including the date immediately preceding such
termination.
The Committee also, in its discretion, may change the terms
of any outstanding Stock Option to reflect any such
corporate transaction, provided that, in the case of
Incentive Stock Options, such change is excluded from the
definition of a "modification" under Section 424(h) of the
Code.
SECTION 4. Eligibility
Officers and other key employees of the Company and its Affiliates (but
excluding members of the Committee, any person who serves only as a director
of the Company and/or of its Affiliates and Messrs. Guy B. Snowden and Victor
Markowicz) who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company and/or its Affiliates and
who are selected by the Committee are eligible for grants under the Plan.
Selection of an employee for a grant at any time does not give an employee the
right to receive any additional grants in the future, unless such employee is
again selected by the Committee.
SECTION 5. Stock Options
The Committee shall have the authority to grant any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options. To the
extent that any Stock Option does not qualify as an Incentive Stock Option, it
shall constitute a separate Non-Qualified Stock Option. Any Stock Option
granted under the Plan shall be in such form as the Committee may from time to
time approve.
Each Stock Option shall be evidenced by a Stock Option (i.e., Grant) agreement
that shall specify the type of Option granted, the exercise price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other terms and conditions not inconsistent with the Plan
as the Committee shall determine.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s), so as to disqualify any Incentive Stock Option
under such Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) Option Price. The option exercise price per share of Stock
shall be determined by the Committee at the time of grant
but shall be not less than the 100% of the Fair Market Value
of the Stock on the date of grant. However, any Incentive
Stock Option granted to any optionee who, at the time such
Option is granted, owns more than 10% of the voting power of
all classes of stock of the Company or of a "Parent" or
"Subsidiary" corporation (as such terms are defined in the
Code and the regulations promulgated thereunder), shall have
an exercise price not less than 110% of Fair Market Value
per share on date of the grant.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable
more than ten years after the date the Option is granted.
However, any Incentive Stock Option granted to any optionee
who, at the time the option is granted owns more than 10% of
the voting power of all classes of Stock of the Company, or
of a Parent or Subsidiary corporation, may not have a term
of more than five years. No Option may be exercised by any
person after expiration of the term of such Option.
(c) Exercisability. Subject to Section 7 below, Stock Options
shall be exercisable at such time or times (including on an
accelerated basis) and subject to such terms and conditions
as shall be determined by the Committee at or after grant;
provided however, that except as provided in paragraph 5(f)
or Section 6 below, unless otherwise determined by the
Committee at or after grant, no Stock Option shall be
exercisable during the six months following the date of the
granting of such Option. Only full shares shall be issued
under the Plan, and any fractional share which might
otherwise be issuable upon the exercise of an Option granted
under the Plan shall be forfeited.
(d) Method of Exercise. Subject to the terms and conditions
established by the Committee under paragraph 5(c) above,
Stock Options may be exercised, in whole or in part to the
extent exercisable, at any time and from time to time during
the option exercise period, by giving written notice of
exercise to the Company specifying the number of shares to
be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or such
other instrument as the Committee may accept. As determined
by the Committee, in its sole discretion, at or after grant,
payment in full or in part may also be made in the form of
unrestricted Stock already owned by the optionee; provided
however, that in the case of an Incentive Stock Option, the
right to make a payment in the form of currently owned
shares may be authorized only at the time such Option is
granted.
If payment of the option exercise price of a Stock Option is
made in whole or in part in the form of stock already owned
by the Participant, the Company may require that the Stock
be owned by the Participant for a period of time so that
such payment would not result in a charge to the Company's
earnings as a result of the exercise. Such provision also
may be used by the Company to prevent a pyramid exercise.
As soon as practicable after receipt of a written exercise
notice and full payment of the exercise price, the Company
shall deliver to the Participant a certificate or
certificates representing the acquired shares of Stock.
Notwithstanding the foregoing, the Committee, in its sole
discretion, may permit a "cashless exercise" of an Option.
Any such cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions
to sell a sufficient number of shares of Common Stock to
cover the costs and expenses associated therewith.
(e) Transferability of Options. No Stock Option shall be
transferable by the optionee other than by will or by the
laws of descent and distribution, and all Stock Options
shall be exercisable, during such optionee's lifetime, only
by the optionee, except to the extent otherwise permitted by
the Committee and, in the case of Stock Options intended to
be Incentive Stock Options, under the applicable provisions
of Code Section 422 and the regulations promulgated
thereunder.
A transferred Stock Option shall continue to be subject to
the same terms and conditions as were applicable to such
Stock Option immediately prior to transfer, and the original
optionee shall remain subject to tax withholding under
paragraph 8(d) below with respect to such Stock Option.
Further, the events of termination of employment of
paragraphs 5(f) and (g) below shall continue to be applied
with respect to the original optionee, following which
events the transferred Stock Option shall be exercisable by
the transferee only to the extent, and for the periods
specified in, said paragraphs 5(f) and (g).
(f) Termination of Employment. Subject to Section 7 below, at
or after the date of grant, the Committee shall determine,
in its sole discretion, the extent to which any unexercised
Options held by the optionee shall be exercised during the
remaining term of such Options, including whether such
Options shall be exercised on an accelerated basis, in the
event an optionee's employment by the Company terminates by
reason of death, Disability, Retirement, or termination
without Cause; provided however, that the exercise period
for any Option shall not exceed the shorter of (i) one year
(or such shorter period required by Section 422 of the Code
in the case of Incentive Stock Options) from the date of
such termination or (ii) the stated term of such Stock
Option.
(g) Termination for Cause. Unless otherwise determined by the
Committee, in its sole discretion, if an optionee's
employment by the Company terminates for Cause, all
unexercised vested and non-vested outstanding Options held
by such optionee shall lapse and be forfeited.
(h) Incentive Stock Option Limitations. To the extent required
for "Incentive Stock Option" status under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Stock with respect to which Incentive
Stock Options granted are exercisable for the first time by
the optionee during any calendar year under the Plan and/or
any other stock option plan of the Company or a Parent or
Subsidiary of the Company (within the meaning of Section 424
of the Code) shall not exceed $100,000.
SECTION 6. Change-In-Control Provisions
(a) Impact of Event. In the event of a "Change-In-Control" as
defined in paragraph 6(b) below, unless otherwise determined
by the Committee at or after grant, but prior to the
occurrence of such Change-In-Control and subject to
paragraph 3(b) above, any and all Stock Options awarded
under the Plan not previously exercisable and vested shall
become fully vested and exercisable.
(b) Definition of "Change-In-Control." For purposes of
paragraph 6(a) above, a "Change-In-Control" means the
happening of any of the following:
(i) the members of the Board at the beginning of any
consecutive twenty-four calendar month period (the
"Incumbent Directors") cease for any reason other
than due to death to constitute at least a majority
of the members of the Board, provided that any
director whose election, or nomination for election
by the Company's stockholders, was approved by a
vote of at least a majority of the members of the
Board then still in office who were members of the
Board at the beginning of such twenty-four calendar
month period shall be deemed an Incumbent Director;
(ii) any "person," including a "group" (as such terms
are used in Sections 13(d) and (14(d) of Exchange
the Act, but excluding the Company, any of its
Affiliates or any employee benefit plan of the
Company or any of its Affiliates) is or becomes the
"beneficial owner" (as defined in Rule 13(d)(3)
under the Exchange Act), directly or indirectly, of
securities of the Company representing the greater
of 30% or more of the combined voting power of the
Company's then outstanding securities;
(iii) the stockholders of the Company shall approve a
definitive agreement (1) for the merger or other
business combination of the Company with or into
another corporation if (A) a majority of the
directors of the surviving corporation were not
directors of the Company immediately prior to the
merger or (B) the stockholders of the Company
immediately prior to the effective date of such
merger own less than 50% of the combined voting
power in the then outstanding securities in such
surviving corporation or (2) for the sale or other
disposition of all or substantially all of the
assets of the Company; or
(iv) the purchase of Stock pursuant to any tender or
exchange offer made by any "person, "including a
"group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than the
Company, any of its Affiliates or any employee
benefit plan of the Company or any of its
Affiliates, for 30% or more of the Stock of the
Company.
SECTION 7. Amendments and Termination
The Board may amend, alter, or discontinue the Plan at any time and from time
to time, but no amendment, alteration, or discontinuation shall be made which
would materially impair the rights of a Participant with respect to a Stock
Option which has been granted under the Plan, without the Participant's
consent, and no amendment shall be made which, without the approval of the
Company's stockholders:
(a) would, with respect to any amendment:
(i) materially increase the benefits accruing to
directors and officers, within the meaning of Rule
16a-1(f) under the Exchange Act (hereinafter
referred to as "Officers"), under the Plan;
(ii) materially increase the number of shares of Stock
which may be issued to directors and Officers under
the Plan; or
(iii) materially modify the requirements as to
eligibility for directors and Officers to
participate in the Plan;
(b) would, with respect to Incentive Stock Options:
(i) change the class of employees eligible to
participate in the Plan;
(ii) except as permitted under Section 3 above, increase
the maximum number of shares of Stock with respect
to which Incentive Stock Options may be granted
under the Plan; or
(iii) extend the duration of the Plan under Section 9
below with respect to any Incentive Stock Options
granted hereunder; or
(c) would require shareholder approval pursuant to Treasury
Regulation Section 1.162-27(e)(4)(vi), or any successor
thereto.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall materially impair the rights of any holder
without the holder's consent. Subject to paragraph 3(a) above, the Committee
may also substitute new Stock Options for previously granted Stock Options,
including previously granted Stock Options having higher option prices.
Subject to the above provisions, the Board shall have broad authority to amend
the Plan to take into account changes in applicable tax laws and accounting
rules, as well as other developments.
SECTION 8. General Provisions
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option under the Plan to represent to
and agree with the Company in writing that the optionee or
Participant is acquiring the shares without a view to
distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to
reflect any restrictions on transfer.
All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other
requirements of the Exchange Act, any stock exchange upon
which the Stock is then listed, and any applicable Federal
or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board of
Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan and the receipt of grants hereunder
shall not confer upon any employee of the Company or any
Affiliate any right to continued employment with the Company
or any Affiliate, as the case may be, nor shall it interfere
in any way with the right of the Company or any Affiliate to
terminate the employment of any of its employees at any
time. Further, an optionee shall have no rights as a
shareholder of the Company with respect to any shares
covered by such person's Options until the issuance of a
stock certificate to him or her representing such shares.
(d) No later than the date as of which an amount first becomes
includible in the gross income of a Participant for Federal
income tax purposes with respect to any Stock Option under
the Plan, such Participant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind
required by law to be withheld with respect to such amount.
Unless otherwise determined by the Committee, the minimum
required withholding obligations may be settled with Stock,
including Stock that is part of the Stock Option that gives
rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditioned on such payment
or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the
Participant.
(e) At the time of grant of any Stock Option, the Committee may
provide that any shares of Stock received as a result of
such grant shall be subject to a right of first refusal,
pursuant to which the Participant shall be required to offer
to the Company any shares that the Participant wishes to
sell, with the price being the then Fair Market Value of the
Stock, subject to such other terms and conditions as the
Committee may specify at the time of grant.
(f) Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified and held
harmless by the Company, to the fullest extent permissible
by Delaware Law, against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred
by such person in connection with or resulting from any
claim, action, suit, or proceeding to which such person may
be made a party or in which such person may be involved by
reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by such person
in settlement thereof, with the Company's approval, or paid
by such person in satisfaction of any judgement in any such
action, suit, or proceeding against such person, provided
such person shall give the Company an opportunity, at its
own expense, to handle and defend the same before such
person undertakes to handle and defend it on such person's
own behalf. The foregoing right of indemnification shall
not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation
or By-laws, by contract, as a matter of law, or otherwise.
(g) Nothing in the Plan shall be construed to limit the right of
the Company to establish other plans or to pay compensation
to its employees in cash or property, in a manner which is
not expressly authorized under the Plan.
(h) The granting of awards and the issuance of shares of Stock
shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.
(i) Grants made and amounts received under the Plan shall not be
deemed compensation for purposes of calculating an
employee's rights under any employee benefit plan unless
otherwise expressly stated in such plan.
(j) The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with laws
of the State of Delaware.
SECTION 9. Effective Date and Duration of Plan
The Plan originally became effective on May 5, 1994 and was approved by
shareholders on July 12, 1994. As amended and restated hereby, the Plan shall
be effective on June 1, 1997. Unless earlier terminated as provided in the
Plan, the Plan shall terminate at 12:00 midnight on May 4, 2004, and no Stock
Option shall be granted under the Plan thereafter. However, termination of
the Plan shall not affect any Stock Options previously granted, which Stock
Options shall remain in effect in accordance with their terms and the terms of
the Plan.
GTECH HOLDINGS CORPORATION
1996 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN
(as amended through June 1, 1997)
1. Purpose
This GTECH HOLDINGS CORPORATION 1996 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN (the "Plan") is intended to provide a means whereby GTECH
Holdings Corporation (the "Company") may, through the grant of non-qualified
stock options ("Options") to purchase common stock of the Company ("Common
Stock") to Non-Employee Directors (as defined in Section 3 hereof), attract
and retain capable outside directors and motivate such outside directors to
promote the best interests of the Company, its related corporations and
shareholders.
For purposes of the Plan, a Related Corporation of the
Company shall mean a corporate subsidiary of the Company, as defined in
section 424(f) of the Internal Revenue Code of 1986, as amended ("Code").
Further, as used in the Plan, the term "non-qualified stock option" shall mean
an option which, at the time such option is granted, does not qualify as an
incentive stock option within the meaning of section 422 of the Code.
2. Administration
The Plan shall be administered by the Company's Board of
Directors (the "Board"). The Board shall have all the powers vested in it by
the terms of the Plan, such powers to include authority (within any
limitations described herein) to prescribe the form of the agreement embodying
awards of Options. The Board shall, subject to the provisions of the Plan,
implement the grant of Options under the Plan and shall have the power to
construe the Plan, to determine all questions arising thereunder and to adopt
and amend such rules and regulations for the administration of the Plan as it
may deem desirable. Any decisions of the Board in the administration of the
Plan, as described herein, shall be final and conclusive. The Board may
authorize any one or more of its number or the Secretary or any other officer
of the Company to execute and deliver documents on behalf of the Board. No
member of the Board shall be liable for anything done or omitted to be done by
him or by any other member of the Board in connection with the Plan, except
for his own willful misconduct or as expressly provided by statute.
3. Eligibility
The persons who shall be eligible to receive Options under
the Plan ("Non-Employee Directors") shall be those directors of the Company
who:
(a) Are not employees of the Company or of any Related
Corporation; and
(b) Have not been employees of the Company or of any
Related Corporation during the immediately preceding twelve (12)
month period.
4. Authorized Shares
Options may be granted under the Plan to purchase up to a
maximum of one hundred eighty thousand (180,000) shares of Common Stock, par
value $.01 per share, subject to adjustment as hereinafter provided. Shares
issuable under the Plan may be authorized but unissued shares or reacquired
shares, and the Company may purchase shares of Common Stock against which
Options may be granted hereunder, from time to time, if it deems such
purchases to be advisable.
If any Option granted under the Plan expires or otherwise
terminates, in whole or in part, for any reason whatever (including, without
limitation, a Non-Employee Director's surrender thereof) without having been
exercised, the shares subject to the unexercised portion of such Option shall
continue to be available for the granting of Options under the Plan as fully
as if such shares had never been subject to an Option.
5. Granting of Options
Each year, commencing in 1996, on the third business day
following the date of the Company's Annual Meeting of Stockholders, each
person elected, reelected or continuing as a Non-Employee Director
automatically shall be granted an Option to purchase ten thousand (10,000)
shares of Common Stock, subject to the terms of the Plan, including, without
limitation, Sections 7 and 12(d) hereof.
6. Terms and Conditions of Options
Options granted pursuant to the Plan shall include
expressly or by reference the following terms and conditions:
(a) Number of Shares. A statement of the number of
shares to which the Option pertains.
(b) Price. A statement of the Option exercise price
(the "Option Price"). The Option Price shall be the greater of one
hundred percent (100%) of the Fair Market Value of the Common Stock,
or the par value thereof, on the date the Option is granted. For the
purposes of the Plan, the Fair Market Value of the Common Stock shall
be:
(i) The average of the high and low sale
prices of a share of Common Stock as reported on
the New York Stock Exchange Composite Transactions
Tape or, if the New York Stock Exchange is closed
on that date, on the last preceding date on which
the New York Stock Exchange was open for trading;
or
(ii) If paragraph (b)(i) above is
inapplicable, such other method of determining Fair
Market Value as shall be authorized by the Code, or
the rules or regulations thereunder, and adopted by
the Board.
(c) Term. Subject to earlier termination as provided
in Sections 6(e), (f) and (g) and in Section 8 hereof, the term of
each Option shall be five (5) years from the date of grant.
(d) Exercise. Options shall be exercisable commencing
one (1) year after the date of grant, except that, if the date of the
next succeeding annual meeting of shareholders is less than one (1)
year from the date of grant of the Options, then such Options shall
be exercisable, commencing on the day preceding the date of the
annual meeting of shareholders next succeeding the date of grant of
such Options. Except as otherwise provided in Sections 6(e), (f) and
(g) hereof, Options shall only be exercisable while a Non-Employee
Director remains a director of the Company. Any Option shares, the
right to the purchase of which has accrued, may be purchased at any
time up to the expiration or termination of the Option. Exercisable
Options may be exercised, in whole or in part, from time to time by
giving written notice of exercise to the Company at its principal
office, specifying the number of shares to be purchased and
accompanied by payment in full of the aggregate price for such
shares. Only full shares shall be issued under the Plan, and any
fractional share which might otherwise be issuable upon exercise of
an Option granted hereunder shall be forfeited.
The Option Price shall be payable:
(1) In United States dollars by cash or check;
or
(2) In lieu thereof, by tendering to the
Company Common Stock owned by the person
exercising the Option and having a Fair Market Value on the
date of exercise equal to the Option Price applicable to
such Option; or
(3) By a combination of United States dollars
and Common Stock as aforesaid.
(e) Termination of Service as a Director. If a
Non-Employee Director's service as a director of the Company
terminates prior to the expiration date of his or her Options
for any reason (such as, without limitation, failure to be re-elected
by the shareholders or resignation) other than those set forth in
Sections 6(f) and (g) below, all such Non-Employee Director's
outstanding options immediately shall terminate, except that if such
Non-Employee Director has been a director of the Company for at least
eighteen (18) months immediately prior to his or her termination of
service as a director, any of his or her unexercisable Options which
have been outstanding for at least four (4) months immediately shall
become fully exercisable, and all his or her outstanding Options may
be exercised by the Non-Employee Director, at any time prior to the
earlier of:
(1) The expiration date specified in such Options;
or
(2) Nine (9) months after the date of such
termination of service as a director.
(f) Disability of Non-Employee Director. If a
Non-Employee Director shall become disabled (within the meaning of
section 22(e)(3) of the Code) during the period in which he or she is
a director of the Company and, prior to the expiration date fixed for
his or her Options, his or her service as a director with the Company
is terminated as a consequence of such disability, all such
Non-Employee Director's outstanding options immediately shall
terminate, except that if such Non-Employee Director has been a
director of the Company for at least eighteen (18) months immediately
prior to his or her termination of service as a director, any of his
or her unexercisable Options which have been outstanding for at least
four (4) months immediately shall become fully exercisable, and all
his or her outstanding Options may be exercised, at any time prior to
the earlier of:
(1) The expiration date specified in such Options;
or
(2) One (1) year after the date of the Non-Employee
Director's ceasing to be a director by reason of disability.
In the event of a Non-Employee Director's legal disability,
such Options may be so exercised by the Non-Employee Director's legal
representative.
(g) Death of Non-Employee Director. If a Non-Employee
Director ceases to be a director of the Company by reason of his or
her death prior to the expiration date fixed for his or her Options,
all of such Non-Employee Director's outstanding Options immediately
shall become fully exercisable, and such Options may be exercised at
any time prior to the earlier of:
(1) The expiration date specified in such
Options; or
(2) Eighteen (18) months after the date of the
Non-Employee Director's death.
If a Non-Employee Director who ceases to be a director
for reasons described in Sections 6(e) and (f) hereof shall die
following his or her ceasing to be a director but prior to the
earlier of the expiration date fixed for his or her Options, or the
expiration of the period determined under Sections 6(e) and (f)
hereof, as the case may be, such Options may be exercised, to the
extent of the number of shares with respect to which the Non-Employee
Director could have exercised it on the date of his or her death, at
any time prior to the earlier of:
(1) The expiration date specified in such Option; or
(2) One (1) year after the date of the Non-Employee
Director's death.
In the event of a Non-Employee Director's death, such
Options may be so exercised by the Non-Employee Director's estate, personal
representative or beneficiary who acquired the right to exercise such Option
by bequest or inheritance or by reason of the death of the Non-Employee
Director.
(h) Non-Transferability. Except as otherwise provided
in any Option Agreement (as defined in Section 7 hereof), no Option
shall be assignable or transferable by the Non-Employee Director
otherwise than by will or by the laws of descent and distribution,
and during the lifetime of the Non-Employee Director, the Option
shall be exercisable only by him or by his or her guardian or legal
representative. If the Non-Employee Director is married at the time
of exercise and if the Non-Employee Director so requests at the time
of exercise, the share certificate or certificates shall be
registered in the name of the Non-Employee Director and the
Non-Employee Director's spouse, jointly, with right of survivorship.
(i) Rights as a Shareholder. An optionee under the
Plan shall have no rights as a shareholder with respect to any shares
covered by his or her Option until the issuance of a stock
certificate to him or her for such shares.
(j) Listing and Registration of Shares. Each Option
shall be subject to the requirement that, if at any time the Board
shall determine, in its discretion, that the listing, registration or
qualification of the shares covered thereby upon any securities
exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of
such Option or the purchase of shares thereunder, or that action by
the Company or by a Non-Employee Director should be taken in order to
obtain an exemption from any such requirement, no such Option may be
granted or be exercised, in whole or in part, unless and until such
listing, registration, qualification, consent, approval, or action
shall have been effected, obtained, or taken under conditions
acceptable to the Board. Without limiting the generality of the
foregoing, each Non-Employee Director or his or her legal
representative or beneficiary may also be required to give
satisfactory assurance that shares purchased upon exercise of an
Option are being purchased for investment and not with a view to
distribution, and certificates representing such shares may be
legended accordingly.
7. Option Agreements - Other Provisions
Options granted under the Plan shall be evidenced by written
documents ("Option Agreements") in such form as the Board shall, from time to
time, approve, which Option Agreements shall contain such provisions, not
inconsistent with the provisions of the Plan as the Board shall deem
advisable. Each Non-Employee Director shall enter into, and be bound by, such
Option Agreements.
8. Capital Adjustments
The number of shares of Common Stock which may be issued
under the Plan, as stated in Section 4 hereof, the number of shares covered by
future Option grants, as stated in Section 5 hereof, and the number of shares
issuable upon exercise of outstanding Options under the Plan (as well as the
Option price per share under such outstanding Options) shall be adjusted
proportionately to reflect any stock dividend, stock split, share combination,
or similar change in the capitalization of the Company.
In the event of a corporate transaction (as that term is
described in section 424(a) of the Code and the Treasury Regulations issued
thereunder as, for example, a merger, consolidation, acquisition of property
or stock, separation, reorganization, or liquidation) and provision is not
made for the continuance and assumption of Options under the Plan, or the
substitution for such Options of new Options to acquire securities or other
property to be delivered in connection with the transaction, the Board shall,
upon written notice to the holders of Options, provide that all unexercised
Options will terminate immediately prior to the consummation of such merger,
consolidation, acquisition, reorganization, liquidation, sale or transfer
unless exercised by the holder within a specified number of days (which shall
not be less than fourteen (14) days) following the date of such notice, and on
the date of such notice all such unexercised Options automatically shall
become fully exercisable.
9. Amendment, Suspension and Discontinuance of the Plan
The Board, from time to time, may suspend or discontinue the
Plan or amend the Plan or any Option outstanding under it in any respect
whatsoever, including, without limitation, increasing the number of shares
authorized for issuance under the Plan and extending the duration of the Plan,
provided, however, that no amendment to the Plan shall become effective
without shareholder approval if such shareholder approval is required by
applicable law, rule or regulation, and provided further, that no amendment
shall materially impair the rights of any holder of an outstanding Option
without the consent of such holder.
10. Effective Date
The Plan shall become effective when the Plan is approved
and adopted by the Company's shareholders.
11. Termination of Plan
Unless earlier terminated as provided in the Plan, the Plan
and all authority granted hereunder shall terminate absolutely at 12:00
midnight on December 31, 1998, and no Options hereunder shall be granted
thereafter. Nothing contained in this Section 11, however, shall terminate or
affect the continued existence in accordance with their terms of Options
outstanding on the date of termination of the Plan.
12. General Provisions
(a) Nothing contained in the Plan shall prevent the
Board from adopting other or additional compensation arrangements for
directors (subject to shareholder approval if such approval is
required); and such arrangements may be either generally applicable
or applicable only in specific cases.
(b) The adoption of the Plan and the receipt of grants
hereunder shall not confer upon any person any right to continued
services as a director of the Company.
(c) In the event of exercise of an Option, the optionee
shall pay to the Company, upon its demand, such amount as may be
requested by the Company for the purpose of satisfying any liability
to withhold Federal, state, local, or foreign income or other taxes
(which payment may be made in any manner prescribed in Section 6(d)
hereof). The obligations of the Company under the Plan shall be
conditioned on such payment, and the Company shall have the right to
withhold the issuance of shares to the optionee and, to the extent
permitted by law, shall have the right to deduct any such taxes from
any payment of any kind otherwise due to the Non-Employee Director.
(d) At the time of grant of any Option, the Board may
provide that any shares of Common Stock received as a result of
exercise of such Option shall be subject to a right of first refusal,
pursuant to which the Non-Employee Director shall be required to
offer to the Company any such shares that he or she wishes to sell,
with the price being the then Fair Market Value of the shares,
subject to such other terms and conditions as the Board may specify
at the time of grant.
(e) Each person who is or shall have been a member of
the Board shall be indemnified and held harmless by the Company, to
the fullest extent permissible by Delaware Law, against and from any
loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting
from any claim, action, suit, or proceeding to which such person may
be made a party or in which such person may be involved by reason of
any action taken or failure to act under or with respect to the Plan
and against and from any and all amounts paid by such person in
settlement thereof, with the Company's approval, or paid by such
person in satisfaction of any judgement in any such action, suit, or
proceeding against such person, provided such person shall give the
Company an opportunity, at the Company's expense, to handle and
defend the same before such person undertakes to handle and defend it
on such person's own behalf. The foregoing right of indemnification
shall not be exclusive and shall be independent of any other rights
of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or By-laws, by contract, as a
matter of law, or otherwise.
(f) The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with laws
of the State of Delaware.
EXHIBIT 11--COMPUTATIONS OF EARNINGS PER SHARE
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
Three Months Ended
----------------------------
May 31, May 25,
1997 1996
------------ ------------
Primary: (1)
Net income ................................... $ 19,320,000 $ 18,203,000
============ ============
Weighted average common shares outstanding ... 42,078,000 43,086,000
Net effect of dilutive stock options--based on
the treasury stock method using the average
market price for the period ................. 323,000 341,000
------------ ------------
Totals ....................................... 42,401,000 43,427,000
============ ============
Earnings per common share .................... $ .46 $ .42
============ ============
Fully diluted: (1)
Net income ................................... $ 19,320,000 $ 18,203,000
============ ============
Weighted average common shares outstanding ... 42,078,000 43,086,000
Net effect of dilutive stock options--based on
the treasury stock method using the quarter-
end market price which is higher than the
average market price ........................ 375,000 432,000
------------ ------------
Totals ....................................... 42,453,000 43,518,000
============ ============
Earnings per common share .................... $ .46 $ .42
============ ============
(1) The primary and fully diluted earnings per share were not presented on the
face of the Consolidated Income Statements because fully diluted earnings
per share differed by less than three percent from earnings per share
calculated based on weighted average common shares.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Feb-28-1998
<PERIOD-START> Feb-23-1997
<PERIOD-END> May-31-1997
<CASH> 15,139
<SECURITIES> 0
<RECEIVABLES> 109,120
<ALLOWANCES> 0
<INVENTORY> 39,197
<CURRENT-ASSETS> 196,233
<PP&E> 1,237,422
<DEPRECIATION> 644,496
<TOTAL-ASSETS> 1,009,989
<CURRENT-LIABILITIES> 154,914
<BONDS> 445,986
0
0
<COMMON> 438
<OTHER-SE> 362,078
<TOTAL-LIABILITY-AND-EQUITY> 1,009,989
<SALES> 19,241
<TOTAL-REVENUES> 245,171
<CGS> 11,328
<TOTAL-COSTS> 168,043
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,676
<INCOME-PRETAX> 32,200
<INCOME-TAX> 12,880
<INCOME-CONTINUING> 19,320
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,320
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
