<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 8, 1997
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(Date of the earliest event reported)
AMERICAN BUSINESS INFORMATION, INC.
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(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 0-19598 47-0751545
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(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification Number)
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5711 South 86th Circle, Omaha, Nebraska 68127
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(Address of principal executive offices) (Zip Code)
402/593-4500
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Registrant's telephone number, including area code
<PAGE>
Item 5. Other Events
On September 8, 1997, American Business Information, Inc. (the
"Company") completed its acquisition of the retail and direct marketing
operations of Pro CD, Inc., a subsidiary of Acxiom Corporation (the
"Acquisition"). Pro CD, headquartered in Danvers, MA, is a leading provider of
telephone directory and other business software products on CD-ROM to consumers.
The cash payment for the purchase price of $18 million has been funded
by First Union National Bank (the "Bank") of North Carolina, pursuant to an
existing loan agreement between the Company and the Bank dated February 14,
1997, as amended and restated in connection with the Acquisition.
Item 7. Financial Statements
(c) Exhibits
99.1 Agreement of Sale of Certain Assets of Pro CD, Inc. a subsidiary of
Acxiom Corporation ("Acxiom") Corporation, to CD-Rom Technologies, Inc.
("CTI") a subsidiary of American Business Information, Inc. and License
of Technology from Axciom to CTI dated July 24, 1997
99.2 Technology License Agreement between Pro CD, Inc. and CD-Rom
Technologies, Inc. dated September 4, 1997
99.3 Data License Agreement between American Business Information, Inc.
and Acxiom Corporation dated July 24, 1997
99.4 Press Release dated September 8, 1997
99.5 Amended and Restated Credit Agreement between American Business
Information, Inc. and First Union National Bank, dated August 29, 1997,
including all Exhibits thereto
<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 hereunto duly authorized.
Date: October 3, 1997 /s/ Steve Purcell
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Steve Purcell, Chief Financial Officer
<PAGE>
Exhibit 99.1
July 24, 1997
Mr. Vinod Gupta
President
CD-Rom Technologies, Inc.
5711 South 86th Circle
P.O. Box 27347
Omaha, Nebraska 68127
Re: Agreement of Sale ("Agreement") of Certain Assets of Pro CD/(R)/, Inc.
("Pro CD"), a subsidiary of Acxiom/(R)/ Corporation ("Acxiom"), to CD-
Rom Technologies, Inc. ("CTI"), a subsidiary of American Business
Information, Inc. ("ABI") and License of Technology from Acxiom to CTI
Dear Vin:
The following Agreement sets forth the terms of the acquisition by CTI of
certain assets of Pro CD, a wholly-owned subsidiary of Acxiom, and the license
by CTI of technology from Acxiom.
1. Purchase and Sale.
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(a) Subject to the matters referred to hereinbelow, and subject to
satisfactory completion of due diligence by CTI as described in paragraph 7
below, CTI agrees to purchase and Pro CD and Acxiom agree to sell, upon the
terms contained herein, all of the assets of Pro CD which are used in connection
with its business of retail and direct sales of reference products on CD-ROM/DVD
consisting of all versions thereof (other than file server versions, intranet
versions and new client server versions (the sale of such other versions is
referred to herein as "Corporate Sales")) (the "Business"), including but not
limited to inventory, hardware, furniture, fixtures, equipment, supplies,
accounts receivable, contract rights, customer lists and records, rights to the
"PRO CD," "SelectPhone(R)," "SelectLink/TM/" and other trade names and
trademarks as used in the Business including all registrations thereof and the
goodwill associated therewith, the Web site for the Business, and sales
distribution rights, but excluding the assets described in subsections 1(d) and
(g), below (collectively, the "Assets"). The Assets shall be itemized on an
addendum ("Addendum"), which Addendum, including all other matters to be set
forth thereon as described in this Agreement, shall be agreed upon by the
parties acting in good faith prior to or at the closing. CTI is not purchasing
any Pro CD assets associated solely with Pro CD's Corporate Sales business.
(b) The Assets shall be sold subject to, and CTI shall assume, certain
agreed upon liabilities and encumbrances as of the closing date (including such
accounts payable and other selected
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 2
liabilities as may be agreed upon by the parties acting in good faith, all of
which shall be set forth by account number on the Addendum). Prior to and after
the closing date, Pro CD will timely pay and discharge all of its accounts
payable and other liabilities which are not expressly assumed by CTI. In no
event shall CTI assume or be deemed to have assumed any intercompany obligations
or liabilities related to Corporate Sales.
(c) At the closing, CTI shall take over Pro CD's operations in
Danvers, Massachusetts, and shall assume all of Pro CD's leases for personal and
real property used in the Business, except as set forth in subsection (e) below.
Within sixty (60) days of the closing, Acxiom and Pro CD will vacate the
Danvers, Massachusetts premises; provided, however, that in the event Acxiom
and/or Pro CD does not vacate the premises at such time, Acxiom and/or Pro CD
shall be treated as a "holdover" tenant and shall be required to then pay CTI a
monthly lease/rental rate equal to Acxiom/Pro CD's pro rata share of all of
CTI's occupancy costs therefor. On the closing date, CTI will assume the general
ledger and general accounting functions of Pro CD relating to the Business, with
Acxiom and CTI working together to transition such functions from Acxiom to CTI,
and CTI will assume any further customary and usual responsibilities and/or
obligations, all as will be set forth in the Addendum.
(d) This sale shall not include any cash on hand, cash in bank or
investment accounts, reserves, or other assets of Pro CD or Acxiom which are not
specifically described above or in the Addendum. Further, this sale shall not
include Pro CD's SelectPhone search engine technology or Pro CD's SelectLink
technology. For a license fee of Eight Million Dollars ($8,000,000), payable
over two (2) years in quarterly installments of One Million ($1,000,000) each,
Acxiom and/or Pro CD will grant to CTI a perpetual license to Pro CD's
SelectPhone search engine technology and Pro CD's SelectLink technology,
including all updates thereto, pursuant to a technology license agreement
("Technology License Agreement") in a mutually acceptable form to be executed
and delivered by the parties on or before the closing. The Technology License
Agreement shall provide an exclusive license to CTI for Business sales, except
that Acxiom shall continue to have the right to use the licensed technology for
its own purposes and except for other licenses therefor in existence as of the
date hereof.
(e) Pro CD and Acxiom will use their best efforts to amend, on or
before the closing, that certain License Agreement dated October 30, 1995, by
and between Pro CD and Qualitative Marketing Software, Inc. ("QMS") so as to
give CTI, as of the closing date, rights equal to those of Pro CD in the
SelectMail/TM/ software developed by QMS for use by Pro CD.
(f) CTI will have the right to use Acxiom's updated EDGE file of
compiled telephone book data in the 1997-1999 Pro CD retail and direct product
lines only, such royalty-free license to be effective as of the closing date and
continuing through July, 1999. CTI shall defend, protect, indemnify and hold
Acxiom harmless from and against all costs, expenses and damages attributable to
any claim related to CTI's unauthorized use of the EDGE file as provided herein,
provided that (i) Acxiom gives CTI prompt written notice of any such claim of
which it has knowledge; and (ii) CTI is given full control over the defense of
such claim and receives the full cooperation of Acxiom in the defense thereof.
Acxiom shall defend, protect, indemnify and hold CTI harmless from and against
all costs, expenses and damages attributable to any claim related to the
compilation of the EDGE file as provided herein, provided that (i) CTI gives
Acxiom prompt written notice of any such claim of which it has knowledge; and
(ii) Acxiom is given full control over the defense of such claim and receives
the full cooperation of CTI in the defense thereof.
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 3
(g) Without prejudice to CTI's rights hereunder, Pro CD and Acxiom
shall have the following rights: (i) marketing rights to Pro CD's registered
customers; (ii) rights to use for three (3) months from the closing date hereof
the Pro CD server assets used for file builds as included in the Assets; (iii)
file sales including, without limitation, internet file sales using the Pro CD
file and any other sales outside of the Business using Acxiom's and/or Pro CD's
existing data compiled from White Page or business page directories; (iv) the
right to use the "Pro CD" trade name outside of the Business, the use of which
Acxiom will phase out by the end of 1998; (v) except as set forth above, all
rights to the QMS software for the Pro CD product(s); (vi) the SelectPhone
search engine software and the SelectLink technology, subject to the Technology
License Agreement; (vii) all rights to the file server version, the intranet
version, and/or the new client server version of the Pro CD product(s) and
related trade names and contracts; (viii) all rights to any "keys" which are
included in the ABI retail market CD-ROM/DVD reference products; and (ix) all
rights, subject to all lease and other obligations, if any, to any desktop
hardware, furniture, equipment and fixtures used by the Pro CD associates
retained by Acxiom, as described in paragraph 11 below.
(h) As part of the consideration for the Assets, Acxiom shall also
receive marketing rights to ABI's consumer CD-ROM registered customers, as long
as that certain Data License Agreement of even date herewith by and between
Acxiom and ABI (the "License") remains in effect.
(i) At the closing, Pro CD shall assign to CTI, and CTI shall assume,
all agreements between Pro CD and third parties relating to (i) Pro CD's retail
and direct distribution channels and (ii) material technology used in the
Business pursuant to license (collectively, the "Assumed Contracts"), a
specific list of which shall be set forth on the Addendum. As a condition to
closing, CTI shall have received all required consents to the assignment of
Assumed Contracts which are material to the Business.
(j) Acxiom shall be entitled, during the term of the License or the
"Long-Term Data License Agreement" (as defined in the Data License Agreement),
to integrate Acxiom's "Project Daytona" CD-ROM/DVD product into all ABI retail
market CD-ROM/DVD reference products or, in the alternative, an Acxiom Project
Daytona CD-ROM/DVD will be distributed with all ABI retail market CD-ROM/DVD
reference products. In addition, Acxiom will be entitled to have promotional
inserts included in ABI's retail market CD-ROM/DVD reference product packaging.
Acxiom will reimburse ABI for any direct costs associated with such distribution
and/or for integrating the Project Daytona product into ABI's software. ABI
will cooperate with the integration of Project Daytona into ABI's existing and
future software as long as such integration has no material effect on ABI
software's functionality or performance. In connection with the foregoing,
Acxiom shall pay to ABI on a monthly basis a commission equal to ten percent
(10%) of the difference between Acxiom's gross revenue on Project Daytona
product sales initiated through ABI's retail market CD-ROM/DVD reference
products (including the acquired assets of Pro CD) and reasonable third party
data charges incurred by Acxiom therefor, for as long as the License or the
Long-Term Data License Agreement is in effect. In connection with the foregoing
commission payment and all other commissions payable to ABI hereunder, ABI shall
have the right to audit Acxiom's books and records to verify the accuracy of the
payments made.
(k) During the term of the License or so long as the Long-Term Data
License Agreement is in effect, for any sales leads provided by ABI to Acxiom
for upgrades to the file server version, the intranet version, and/or the new
client server version of the Pro CD product(s), Acxiom shall pay to ABI on a
monthly basis a commission equal to five percent (5%) of the difference between
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 4
Acxiom's first year's gross revenues actually received from the products and
services sold by Acxiom to such customers referred by ABI, and the reasonable
cost of any third-party data charges incurred by Acxiom therefor.
2. Purchase Price. The purchase price for the Assets shall be Eighteen
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Million and no/100 dollars ($18,000,000.00), payable at the closing by wire
transfer of immediately available funds to an account designated by Acxiom.
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 5
3. Proration. Taxes (other than income taxes), rents for the real and
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personal property leases included in the Assets, utilities, employee
compensation for Pro CD associates hired by CTI as of the closing date and other
similar expenses will be prorated between the parties as of the close of
business on the closing date.
4. Closing. The closing shall occur within two (2) business days of
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receipt by both parties of any required governmental consent(s) including, but
not limited to, any approvals required under the Hart-Scott-Rodino Act.
5. Expenses. Each party will pay its own costs and expenses incurred in
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connection with these transactions.
6. Hart-Scott-Rodino Act Filings. Acxiom and ABI agree to file their
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respective Hart-Scott-Rodino Act Notification and Report Forms as soon as
possible after the date hereof, but in no event later than fifteen (15) calendar
days hereafter.
7. Due Diligence. Pending the closing, Pro CD and Acxiom shall give CTI
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reasonable access to Pro CD's personnel, contracts, books and records, and
facilities for purposes of conducting a due diligence review of the following
areas: (i) the Financial Statements (as defined in paragraph 13(c) below); (ii)
day-to-day operations of the Business; (iii) information relating to the
manufacturing and sale of the Business' products; and (iv) any other area or
material matter deemed necessary by CTI acting in good faith. CTI will conduct
its review in a reasonable manner which does not interfere with the on-going
operations of Pro CD and Acxiom. Pro CD will assign its most knowledgeable
accounting personnel to assist CTI with its review. CTI acknowledges that the
information provided to it by Pro CD and Acxiom is confidential and is subject
to that certain Confidentiality Agreement between Acxiom and ABI dated July 21,
1997 (the "Confidentiality Agreement"). CTI agrees to use such information
solely for purposes of its due diligence review. In the event that this
transaction fails to close, CTI agrees to return all such materials and all
copies thereof to Pro CD and Acxiom, and agrees to hold all such information in
strict confidence.
8. Termination. Neither ABI, CTI, Acxiom nor Pro CD shall have the right
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to terminate this Agreement unless (i) the parties, or any party hereto, shall
have been unable to obtain any required governmental consent(s) necessary for
the consummation of the transactions contemplated hereby, including, but not
limited to, clearance by the U.S. Department of Justice and/or the Federal Trade
Commission pursuant to the Hart-Scott-Rodino Act; (ii) CTI's due diligence shall
have revealed any material adverse item relating to the Business; or (iii) Pro
CD is unable to obtain any material consent as described in subsection 1(i),
above, in which event ABI and CTI, but not Pro CD or Acxiom, shall have the
right to terminate this Agreement.
9. Public Disclosure. Any public disclosures of the transactions
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described herein, other than disclosures which are legally required to be made,
shall be mutually agreed upon as to timing and content. In the event either
party is legally required to make any such disclosure, it will provide the other
party with as much notice thereof as possible.
10. Confidentiality. Each party agrees to maintain strict confidentiality
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with regard to the terms of any documents or other information exchanged prior
to, at or after the closing, and to abide by
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 6
the terms of the Confidentiality Agreement.
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 7
11. Pro CD Associates. Acxiom will provide a list of Pro CD employee(s)
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("associate(s)") to be retained by Acxiom, which list shall be included in the
Addendum. Acxiom shall use its best efforts to ensure that all Pro CD
associates not retained by Acxiom remain available for employment by CTI. After
the closing and for a period of three (3) years, CTI shall use its best efforts
to give Acxiom fifteen (15) days' prior written notice of any termination(s) of
associates and Acxiom may, at its option, employ any such associate(s). CTI
shall assume all termination expenses and liabilities for any terminated Pro CD
associate(s). At closing, to the extent that they are assignable, Acxiom shall
assign to CTI its rights under any non-compete agreements with any former
employees, officers or shareholders of Pro CD or any current employees of Pro CD
who are not retained by Acxiom.
12. Non-Compete. For a period of ten (10) years after the closing,
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neither Pro CD, Acxiom or any entity owned or controlled by Acxiom shall
directly or indirectly, either as a principal, agent, employer, stockholder,
co-partner or in any other capacity whatsoever, within the United States and
Canada (i) engage in any business directly competitive with or similar to the
Business, or, for any purpose which is competitive with the Business, solicit,
call on, take away, divert or assist any person in so soliciting, diverting,
calling on or taking away any Business-related customers of CTI or any of its
affiliates; (ii) with the exception of any licenses or other agreements in
effect as of the date of this Agreement (the "Existing Agreement(s)"), license
or sell the EDGE file, the SelectPhone search engine technology or the
SelectLink technology to any third party for use in a product which competes
with the Business; provided, however, that any such Existing Agreement that is
not automatically renewed at the end of its current term will be subject to the
foregoing prohibition in any renewal term, as will that certain agreement dated
as of August 1, 1994 by and between Acxiom and Metromail Corporation; or (iii)
induce any employee of CTI or any of its affiliates to terminate their
employment with CTI or its affiliates. Notwithstanding the foregoing, Pro CD
shall have the right to engage in sales of all Project Daytona-related products,
as well as the Corporate Sales. The covenants contained in this paragraph shall
be construed and interpreted in any judicial proceeding or arbitration to permit
its enforcement to the maximum extent. Pro CD and Acxiom agree that the
restraints imposed are necessary for the reasonable and proper protection of CTI
and its affiliates, and that said restraints are reasonable in terms of subject
matter, duration and geographic scope. It is understood by and between the
parties that these restrictive covenants are an essential element of this
Agreement and that, but for such covenants, CTI would not have entered into this
Agreement. Without intending in any way to limit the remedies available to CTI,
Pro CD and Acxiom further understand and agree that damages at law may be an
insufficient remedy to CTI if either breaches its covenants not to compete or
solicit and that CTI may have injunctive relief in any court of competent
jurisdiction to restrain the breach or the threatened breach of or otherwise
specifically to enforce the covenants contained in this paragraph.
13. Representations, Warranties and Covenants of Pro CD and Acxiom. Pro
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CD and Acxiom, jointly and severally, represent, warrant and covenant to CTI,
its successors and assigns, that, as of the date of this Agreement and as of the
closing date:
(a) Title to Assets; Absence of Liens and Encumbrances. Pro CD has
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and will have and convey good and marketable title to all of the Assets, free
and clear of all liens, claims, charges and encumbrances of any kind whatsoever.
(b) Authority; No Conflict. The execution, delivery and performance
----------------------
of this Agreement have been duly and validly authorized and approved by all
necessary corporate action. This
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 8
Agreement is a valid and binding instrument, enforceable against Pro CD and
Acxiom in accordance with its terms, and does not violate any provision of law
and does not and will not conflict with, nor result in a breach by Pro CD or
Acxiom of, nor constitute a default under (i) any of the terms, conditions or
provisions of any mortgage, deed of trust, lease, contract, agreement or other
instrument to which Pro CD or Acxiom is a party or by which either Pro CD,
Acxiom or any of the Assets may be bound or affected, or (ii) any order,
judgment, decree, or any other restriction of any kind or character to which Pro
CD or Acxiom is subject or by which Pro CD, Acxiom or any of the Assets may be
bound or affected.
(c) No Material Adverse Change. Pro CD has delivered or will deliver
--------------------------
prior to closing to CTI its financial statements for the fiscal year ending
March 31, 1997 and the period ended June 30, 1997 (the "Financial Statements").
The Financial Statements are true, correct and complete and fairly present the
results of operations and the financial condition of Pro CD. Since June 30,
1997, there has been and until the closing there will be no material adverse
change in any of the Assets or in the Business or the prospects of the Business.
Pro CD will notify CTI prior to the closing of any occurrence, event or
condition which has occurred since such date or occurs prior to the closing
date, and which has a reasonable likelihood of materially adversely affecting
the Assets or the Business. Pro CD will preserve the present relationships
with customers, merchants, suppliers and other persons having business dealings
with the Business, maintain the Assets in customary repair, order and condition,
pay its payables and discharge its liabilities in the ordinary course of
business and maintain in force existing insurance policies; and Pro CD will not
sell any Assets out of the ordinary course or change the character of the
Business, make material changes in the compensation payable to its employees, or
take actions which would materially increase the operating expenses of the
Business.
14. Representations, Warranties and Covenants of ABI and CTI. ABI and
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CTI, jointly and severally, represent, warrant and covenant to Acxiom, its
successors and assigns, that, as of the date of this Agreement and as of the
closing date, the execution, delivery and performance of this Agreement have
been duly and validly authorized and approved by all necessary corporate action.
This Agreement is a valid and binding instrument, enforceable against ABI and
CTI in accordance with its terms, and does not violate any provision of law and
does not and will not conflict with, nor result in a breach by ABI or CTI of,
nor constitute a default under (i) any of the terms, conditions or provisions of
any mortgage, deed of trust, lease, contract, agreement or other instrument to
which ABI or CTI is a party or by which ABI or CTI may be bound or affected, or
(ii) any order, judgment, decree, or any other restriction of any kind or
character to which ABI or CTI is subject or by which ABI or CTI may be bound or
affected.
15. Indemnification. Pro CD and Acxiom, jointly and severally, agree to
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defend, indemnify and hold CTI harmless from and against any actual loss, cost,
damage, liability and expense of any kind or nature whatsoever (including,
without limitation, costs of investigation, defense and reasonable accountants'
and reasonable attorneys' fees) which may be sustained or incurred by CTI,
arising out of, based upon, or by reason of (i) a material breach of any
representation or warranty, or a material failure to perform any covenant
(including but not limited to the covenants set forth in paragraph 12, above),
made by either of them in this Agreement or in any document delivered hereunder,
(ii) any indebtedness, obligation or other liability, liquidated or
unliquidated, of Pro CD not expressly assumed by CTI hereunder sought to be
imposed on CTI, or (iii) the laws of any jurisdiction relating to sales of
property in bulk, whether asserted prior to or subsequent to the closing. CTI
shall have the right, but shall not have the obligation, to offset any finally
resolved claim for indemnification hereunder against payments
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 9
then owing by CTI pursuant to the Technology License Agreement.
16. Further Assurances. At the closing, and from time to time
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thereafter, each party agrees to execute and deliver all documents and
instruments reasonably requested by any other party to evidence the transaction
described in this Agreement.
17. Counterparts. This Agreement may be executed in any number of
------------
counterparts, including facsimile copies, each of which may be executed by less
than all of the parties hereto, each of which shall be enforceable with respect
to the parties actually executing such counterparts, and all of which together
shall constitute one document.
This Agreement is entered into as of the date set forth above by the duly
authorized representatives of each party, as evidenced by their signatures
below.
Sincerely,
Acxiom Corporation
Rodger S. Kline
Chief Operating Officer
ACCEPTED & AGREED:
AMERICAN BUSINESS INFORMATION, INC.
By:
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Vinod Gupta
Chairman of the Board and CEO
CD-ROM TECHNOLOGIES, INC.
By:
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Vinod Gupta
President
ACXIOM CORPORATION
By:
----------------------------------
Rodger S. Kline
Chief Operating Officer
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 10
PRO CD, INC.
By:
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Rodger S. Kline
Chairman of the Board
<PAGE>
Exhibit 99.2
TECHNOLOGY LICENSE AGREEMENT
This Technology License Agreement ("License Agreement") is made as of the 4th
day of September, 1997 ("Effective Date"), by and between Pro CD, Inc.
("Licensor"), a Delaware corporation with a place of business at 222 Rosewood
Drive, Danvers, Massachusetts 01923-4520 (and CD-Rom Technologies, Inc.
("Licensee"), a Delaware corporation with a place of business at 5711 South
86/th/ Circle, P.O. Box 27347, Omaha, Nebraska 68127.
WHEREAS, for the terms and the mutual covenants contained herein, and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I - DEFINITIONS
1.1 "Licensee" shall include the above-named company and any divisions,
subsidiaries or affiliates of such company.
1.2 "Technology" shall include Licensor's SelectPhone search engine technology
and Licensor's SelectLink technology, including the source codes and all
Licensor updates thereto.
1.3 "Documentation" shall include all manuals, specifications and written
correspondence including electronic, machine-readable form regarding the
Technology.
ARTICLE II - LICENSE
2.1 Subject to all of the terms and conditions of this License Agreement and
that certain Agreement of Sale ("Agreement") dated July 24, 1997, Licensor
hereby grants to Licensee a perpetual, transferable license ("License") to use
the Technology in accordance with paragraph 1(d) of the Agreement, such License
to be exclusive to Licensee for Business (as defined in the Agreement) sales,
except that Licensor shall continue to have the right to use the licensed
technology for its own purposes and except for other licenses therefor in
existence as of the date of the Agreement. Licensee agrees to accept electronic
delivery(ies) of the Technology from Licensor at Licensee's Carter Lake, Iowa
facility.
2.2 Licensee shall pay Licensor a license fee of Eight Million Dollars
($8,000,000) for the Technology, payable over two (2) years in quarterly
installments of One Million Dollars ($1,000,000) each. Licensee shall pay
Licensor a fee of Five Hundred Dollars ($500.00) for the Documentation.
2.3 Licensee shall pay to Licensor all taxes (including, without limitation,
sales, use, property, excise, value added and gross receipts) levied upon this
License Agreement or the Technology, except taxes based upon Licensor's net
income or corporate franchise. Licensee may provide Licensor with a tax
exemption number or affidavit of exemption; provided, however, that Licensee
agrees to indemnify Licensor for any taxes, penalties and interest arising from
claimed exemptions which are disallowed by any governmental agency.
2.4 Title and ownership rights to the Technology, Documentation, and other
materials relating thereto supplied by Licensor to Licensee shall remain in
Licensor, and Licensee acknowledges that the same are subject to the proprietary
rights of Licensor. Licensee agrees that the Technology, Documentation and all
information or data relating thereto supplied by Licensor are trade secrets of
Licensor except where otherwise noted. Licensee further understands that all
operator manuals, training aids and other written materials produced by Licensor
are subject to copyright laws.
<PAGE>
ARTICLE III - TECHNOLOGY OWNERSHIP
Licensor represents that it has full right, title and authority to license the
Technology to Licensee. Licensee specifically acknowledges that this License
Agreement is not and shall not be construed as an assignment, sale or any other
transfer of title or ownership rights in the Technology or the Documentation to
Licensee.
ARTICLE IV - WARRANTY
4.1 EXCEPT AS OTHERWISE PROVIDED HEREIN, THE TECHNOLOGY IS PROVIDED "AS IS"
WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. LICENSOR DOES NOT WARRANT THAT THE FUNCTIONS CONTAINED IN
THE TECHNOLOGY WILL MEET LICENSEE'S REQUIREMENTS OR THAT THE OPERATION OF THE
TECHNOLOGY WILL BE UNINTERRUPTED OR ERROR FREE.
4.2 Licensee's exclusive remedies for damage or loss arising from use of the
Technology or from Licensor's support services or breach of warranty hereunder
shall be the repair or replacement of the Technology at no cost to Licensee. In
the event that repair or replacement is not possible within a reasonable period
of time, Licensee shall be entitled to terminate the License. Licensor shall
have no liability for any problems in the Technology caused by alteration or
modification by Licensee, or for problems arising out of the malfunction of
Licensee's equipment or other technology not supplied by Licensor.
4.3 EXCEPT AS PROVIDED IN ARTICLE V HEREIN, IN NO EVENT SHALL LICENSOR'S
LIABILITY, ARISING OUT OF OR BASED UPON THIS LICENSE AGREEMENT REGARDLESS OF THE
FORM IN WHICH ANY LEGAL OR EQUITABLE ACTION MAY BE BROUGHT, INCLUDING, WITHOUT
LIMITATION, ANY ACTION IN TORT OR CONTRACT, EXCEED ONE MILLION AND NO/100
DOLLARS ($1,000,000.00).
ARTICLE V - PATENT, COPYRIGHT AND TRADE SECRET INDEMNITY
5.1 Licensor warrants that the use of the Technology will not infringe upon
any United States patent, copyright or trade secret. Licensor, at its own
expense, will defend or settle any claim, suit or proceeding brought by a third
party against Licensee alleging infringement, and Licensor shall indemnify
Licensee for all costs (including attorneys' fees and costs) or damages awarded
as a result of such infringement, provided that Licensor is given prompt notice
of any such claim, suit or proceeding and sole control of the defense of such
claim, suit or proceeding, including negotiations, appeals and settlements;
provided, however, that if Licensor does not proceed diligently to defend,
Licensee shall have the right, but not the obligation, to control the defense
without impairing its indemnification rights hereunder. Licensee agrees to
provide reasonable information and assistance to Licensor, at Licensor's
expense. This indemnity shall not apply to any claim of infringement resulting
from Licensee's modification of the Technology or the combination of the
Technology with other software not provided by Licensor.
5.2 If the Technology is held to infringe, or in Licensor's opinion is likely
to be held to infringe, any third party intellectual property right, Licensor
shall, at its expense, secure the right for Licensee to continue using the
Technology or shall replace or modify the Technology to make it noninfringing.
If commercially reasonable efforts to achieve the foregoing are unsuccessful,
Licensee shall be entitled to terminate the License.
2
<PAGE>
ARTICLE VI - LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER INCLUDING WITHOUT LIMITATION, DAMAGES
FOR LOSS OF GOOD WILL, WORK STOPPAGE, DATA LOSS, LOST PROFITS OR COMPUTER
FAILURE, REGARDLESS OF THE FORM IN WHICH ANY LEGAL ACTION OR EQUITABLE ACTION
MAY BE BROUGHT, INCLUDING WITHOUT LIMITATION, ANY ACTION IN TORT OR CONTRACT.
ARTICLE VII - MISCELLANEOUS
7.1 Each party agrees to perform its obligations hereunder in accordance with
all applicable laws, rules and regulations now or hereafter in effect. If any
term or provision of this License Agreement shall be found to be illegal or
unenforceable, then notwithstanding such a finding, this License Agreement shall
remain in full force and effect, and the illegal or unenforceable provision
shall be deemed stricken.
7.2 The persons signing this License Agreement on behalf of the respective
parties have been properly authorized and empowered to do so. Any notice
required or permitted to be given hereunder shall be in writing sent by
certified or registered mail addressed to the parties at their respective
addresses set forth above.
7.3 This License Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to conflict of law
principles.
7.4 Neither party shall be liable for delays in performance or non-performance
under this License Agreement caused by such events as fires, power failures or
surges, strikes, riots, war, governmental regulation, failure of third parties,
acts of God, or, without limiting the generality of the foregoing, causes beyond
the parties' control.
7.5 The headings used in this License Agreement are for reference purposes
only and shall not be deemed a substantive part of this License Agreement.
7.6 No amendment or waiver of any provision of this License Agreement shall be
effective unless the same shall be in writing and signed by the authorized
representative of each party. Any waiver or consent given by the parties shall
be effective only in the specific instance and for the specific purpose for
which it is given.
7.7 Licensee shall have the right, but not the obligation, to offset against
the fees payable hereunder as provided in paragraph 15 of the Agreement.
7.8 This License Agreement and the applicable portions of the Agreement
constitute the entire agreement between the parties and supersedes all proposals
or prior agreements, whether written or oral, regarding the subject matter of
this License Agreement.
7.9 This License Agreement may be executed in any number of counterparts,
including facsimile copies, each of which may be executed by less than all of
the parties hereto, each of which shall be enforceable with respect to the
parties actually executing such counterparts, and all of which together shall
constitute one document.
[Signature Page To Follow.]
3
<PAGE>
IN WITNESS WHEREOF, the parties caused this License Agreement to be executed by
their duly authorized representative as of the date first written above.
CD-ROM TECHNOLOGIES, INC. PRO CD, INC.
- ---------------------------------- -----------------------------------
Signature Signature
- ---------------------------------- -----------------------------------
Printed Name Printed Name
- ---------------------------------- -----------------------------------
Title Title
4
<PAGE>
Exhibit 99.3
July 24, 1997
Mr. Vinod Gupta
Chairman of the Board and CEO
American Business Information, Inc.
5711 South 86th Circle
P.O. Box 27347
Omaha, Nebraska 68127
Re: Data License Agreement between American Business Information, Inc.
("ABI") and Acxiom/(R)/ Corporation ("Acxiom")
Dear Vin:
This Data License Agreement ("Agreement") sets forth the terms of the
license by Acxiom of data from ABI.
1. Data License. (a) Effective as of the execution of this Agreement,
------------
ABI shall grant to Acxiom, including any current and future Acxiom subsidiaries
and/or affiliates (referred to together herein as "Acxiom"), with such
restrictions as set forth herein, a non-exclusive, non-transferable license
("License") to all of the current data elements included in the ABI business
database, which shall be listed by data elements, and which shall also include
such data elements as may be added to the ABI business database from time to
time (the "Data"). The Data shall be as complete as, as up-to-date as, and of
the highest and best quality which ABI makes available to its customers.
(b) The Data and the list of current data elements shall be delivered
to Acxiom no later than fifteen (15) days from execution of this Agreement.
(c) ABI will provide Acxiom with updates to the Data on a monthly
basis, which updates shall include ABI's most current available Data.
(d) The term ("Term") of the License shall be two (2) years.
(e) Acxiom and ABI will negotiate in good faith and use their best
efforts to execute a long-term data license agreement ("Long-Term Data License
Agreement") for the Data within one hundred, eighty (180) days of the date of
this Agreement.
(f) Except as noted herein and except with respect to any current or
future Acxiom affiliate and/or subsidiary, Acxiom shall not sell or license the
Data during the Term to any list wholesalers, any list resellers or to any
internet publishers, excluding, however, resellers of Project Daytona-related
products and/or Project Daytona channel partners. Acxiom may, however, with
prior written approval of ABI, which approval shall not be unreasonably
withheld, license a full copy of the Data during the Term to Trans Union
Corporation ("Trans Union") for any product that Trans Union is building;
provided, however, that Trans Union shall be bound by the restrictions and
conditions on use of the Data set forth in this paragraph 1. In such event,
Acxiom shall pay to ABI on a monthly basis a commission equal to fifty percent
(50%) of Acxiom's gross revenues from such license. ABI shall have
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 2
- ---------------
the right to audit Acxiom's books and records to verify the accuracy of the
commission payments.
(g) Acxiom will be authorized to integrate the Data into Acxiom's
product(s). In addition, full or partial ABI business database copy sales may
be made to mailers of Acxiom, subject to the restrictions and conditions on use
of the Data set forth in this paragraph 1.
(i) During the Term hereof and the term of the Long-Term Data
License Agreement, if any, Acxiom may not sell the Data to current or future ABI
business database license holders ("ABI Licensee(s)"), an itemized list of whom
will be set forth by ABI on a schedule to be attached hereto and incorporated
herein ("Schedule A") within sixty (60) days of the date of this Agreement
(which list shall be updated by ABI on a quarterly basis), if such a sale would
result in the discontinuance of the existing ABI business database license.
(ii) For purposes of this subparagraph (g), ABI Licensees shall
not include any affiliates, subsidiaries and/or divisions of the ABI Licensee
that are not entitled to utilize the Data pursuant to the applicable ABI
business database license agreement. Acxiom will, however, be allowed to sell
other Acxiom products and/or services to the ABI Licensees.
(iii) In the event Acxiom's total solution for an ABI Licensee
involves an existing installed Data file, Acxiom shall work directly with ABI
concerning the terms and conditions of the Acxiom solution, which terms and
conditions shall be agreed upon by the parties acting in good faith, and, during
the Term hereof and the term of the Long-Term Data License Agreement, if any,
Acxiom shall also pay to ABI on a monthly basis an amount equal to the amount of
the license fees ABI would have received from the ABI Licensee had the Acxiom
solution not included an existing installed Data file.
(iv) If, however, a dissatisfied ABI Licensee approaches Acxiom,
then Acxiom will endeavor to sell the Data to such ABI Licensee at ABI's
published prices, or otherwise with ABI's prior written consent, which consent
shall not be unreasonably withheld, and, if Acxiom is awarded the business,
Acxiom shall pay to ABI on a monthly basis a commission equal to seventy percent
(70%) of Acxiom's gross revenues on the Data from such license. ABI shall have
the right to audit Acxiom's books and records to verify the accuracy of the
commission payments.
(v) Notwithstanding the foregoing, with the exclusion of
Project Daytona, in no event shall Acxiom be permitted to sell or license the
Data, or any portion thereof in the form of lists, using any direct marketing
technique.
(h) Notwithstanding any other provision of this Agreement, ABI shall
be entitled to terminate the License or the Long-Term Data License Agreement
immediately in the event more than fifty percent (50%) of the outstanding common
stock of Acxiom becomes owned or controlled by a competitor of ABI, which
competitors shall initially include Dun & Bradstreet, Experian/TRW, MetroMail,
Equifax, Harte-Hanks, Abacus Direct, and R.L. Polk. Any subsequent competitors
will be set forth in quarterly supplements to Schedule A, which supplements will
be agreed upon by the parties, acting in good faith.
(i) ABI shall defend, protect, indemnify and hold Acxiom harmless from
and against all costs, expenses and damages attributable to any claim related to
the compilation of the Data, provided
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 3
- ---------------
that (i) Acxiom gives ABI prompt written notice of any such claim of which it
has knowledge; and (ii) ABI is given full control over the defense of such claim
and receives the full cooperation of Acxiom in the defense thereof.
(j) Acxiom shall defend, protect, indemnify and hold ABI harmless from
and against all costs, expenses and damages attributable to any claim related to
Acxiom's unauthorized use of the Data as provided herein, provided that (i) ABI
gives Acxiom prompt written notice of any such claim of which it has knowledge;
and (ii) Acxiom is given full control over the defense of such claim and
receives the full cooperation of ABI in the defense thereof.
(k) Acxiom shall pay the following annual license fees for the Data:
(i) Year 1 $4,000,000; and
(ii) Year 2 $4,000,000.
(l) In the event the parties do not consummate the sale of certain
assets of Pro CD, Inc. ("Pro CD") to CD-Rom Technologies, Inc., a wholly-owned
subsidiary of ABI, pursuant to that certain Agreement of Sale dated of even date
herewith (the "Sale of Assets"), then Acxiom shall retain the right to license
the Data as provided for herein pursuant to the License for the following annual
license fees (which fees supercede the annual license fees set forth in
paragraph 1(k) of this Agreement):
(i) Year 1 $4,000,000.00; and
(ii) Year 2 $6,000,000.00.
(m) Upon completion of (i) the first or second year of the License if
the Sale of Assets is not consummated; or (ii) the Term of this Agreement if the
Sale of Assets is consummated, as applicable, Acxiom may, at its option,
terminate the License and continue to use the Data "as is," without updates, for
an indefinite period of time for an additional fee of Four Million and no/100
dollars ($4,000,000.00), payable upon termination of the License. Such use by
Acxiom of the Data shall be subject to the restrictions set forth in this
paragraph 1 for a period of three (3) years. Thereafter, Acxiom may use the
Data with no restrictions imposed by ABI in this or any other current or future
agreement between the parties.
(n) The annual license fee(s) will be paid by Acxiom to ABI in equal
quarterly installments on the last day of each quarter during the Term of this
Agreement.
(o) Upon execution of this Agreement, any and all agreements in place
between ABI and Acxiom/Direct Media/TM/, Inc. ("Direct Media"), a wholly-owned
subsidiary of Acxiom, shall be rendered null and void without any further action
on the part of ABI or Direct Media. Minimum royalty payments due will be
prorated up to the date hereof. Likewise, any and all agreements in place
between ABI and any future Acxiom subsidiary and/or affiliate shall be rendered
null and void upon Acxiom's acquisition of such entity.
2. Public Disclosure. Any public disclosures of the transactions
-----------------
described herein, other than disclosures which are legally required to be made,
shall be mutually agreed upon as to timing and content. In the event either
party is legally required to make any such disclosure, it will provide the other
party with as much notice thereof as possible. Acxiom will not refer in its
marketing materials to ABI or
<PAGE>
Mr. Vinod Gupta
July 24, 1997
Page 4
- ---------------
American Business Information, Inc. or indicate that any Acxiom database
includes the ABI Data, without having first received ABI's prior consent. In
connection therewith, Acxiom shall instruct its employees, and in particular its
sales force, to refrain from referring to ABI as a source of Acxiom's database.
Acxiom will use its best efforts to ensure that the aforementioned policy is
enforced. Notwithstanding the foregoing, both Acxiom and ABI may disclose to
stock analysts and the investment community, and in their respective SEC
filings, that ABI is one of Acxiom's business data sources.
3. Counterparts. This Agreement may be executed in any number of
------------
counterparts, including facsimile copies, each of which may be executed by less
than all of the parties hereto, each of which shall be enforceable with respect
to the parties actually executing such counterparts, and all of which together
shall constitute one document.
This Agreement is entered into as of the date set forth above by the duly
authorized representatives of each party, as evidenced by their signatures
below.
Sincerely,
Acxiom Corporation
Rodger S. Kline
Chief Operating Officer
ACCEPTED & AGREED:
AMERICAN BUSINESS INFORMATION, INC.
By:
---------------------------------
Vinod Gupta
Chairman of the Board and CEO
ACXIOM CORPORATION
By:
---------------------------------
Rodger S. Kline
Chief Operating Officer
<PAGE>
Exhibit 99.4
FOR IMMEDIATE RELEASE
MONDAY, SEPTEMBER 8, 1997
CONTACT:
STEVEN PURCELL - CHIEF FINANCIAL OFFICER
Phone: (402) 593-4632 Fax: (402) 537-6197
E-Mail: [email protected]
SHELLY VAUGHN - DIRECTOR, INVESTOR RELATIONS
Phone: (402) 596-8929 Fax: (402) 592-4006
E-Mail: [email protected]
PRO CD, INC.(R) ACQUIRED BY AMERICAN BUSINESS INFORMATION, INC.(R)
(OMAHA, NE) -- American Business Information, Inc.(R) (NASDAQ: ABII) announced
today that it had completed its acquisition of the retail and direct marketing
operations of Pro CD, Inc.(R), a subsidiary of Acxiom(R) Corporation (NASDAQ:
ACXM). Pro CD, headquartered in Danvers, MA, is a leading provider of telephone
directory and other business software products on CD-ROM to consumers.
According to Vinod Gupta, Chairman and Chief Executive Officer of ABI, "The
acquisition of the retail and direct marketing operations of Pro CD clearly
strengthens ABI's competitive position as a leader in the consumer marketplace.
This business combination has created the world's premier supplier of multiple
CD-ROM directory products for consumer and home office applications." Gupta
further stated, "We see a tremendous need for information in the consumer
marketplace and ABI will satisfy this demand with multiple products ranging from
$10 to $150 through CD-ROM, DVD and Internet technologies. We are expanding our
extensive distribution network by offering our products through department
stores, grocery stores, drug stores and other retail outlets."
American Business Information, Inc.(R) is a leading compiler of information on
businesses and consumers in the United States and Canada and provides data
processing and analytical services. Over 1 million customers have used American
Business Information, Inc.(R) to generate sales leads, reduce selling costs,
improve marketing efficiency and for business credit purposes. Founded in 1972,
the Company is headquartered at 5711 South 86th Circle, P.O. Box 27347, Omaha,
NE 68127-0347. American Business Information(R) can be contacted at
(402) 593-4500, or on the Internet at: http://www.SalesLeadsUSA.com.
# # #
<PAGE>
Exhibit 99.5
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 29 day of August,
1997, by and among AMERICAN BUSINESS INFORMATION, INC., a corporation organized
under the laws of Delaware (the "Borrower"), the Lenders who are or may become a
party to this Agreement, and FIRST UNION NATIONAL BANK, as Agent for the
Lenders.
STATEMENT OF PURPOSE
--------------------
The Borrower, the Lenders party thereto (the "Original Lenders") and
the Agent entered into the Credit Agreement dated as of February 14, 1997 (the
"Original Credit Agreement") pursuant to which the Original Lenders agreed to
extend certain Extensions of Credit to the Borrower as more particularly
described therein.
The Borrower has entered into the Agreement of Sale (the "Acquisition
Agreement") dated as of July __, 1997 between the Borrower and Acxiom
Corporation (the "Seller") pursuant to which the Borrower has agreed to purchase
certain assets of Pro CD, Inc., a Subsidiary of the Seller (the "Acquisition").
The Borrower, the Lenders and the Agent now desire to amend and
restate the Original Credit Agreement in its entirety in order to, among other
things, increase the Aggregate Commitment to $100,000,000; permit the
Acquisition; and amend the limitations on Tangible Net Worth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1 Definitions. The following terms when used in this
-----------
Agreement shall have the meanings assigned to them below:
"Acquisition" shall have the meaning assigned thereto in the Statement
-----------
of Purpose hereof.
"Acquisition Agreement" shall have the meaning assigned thereto in the
---------------------
Statement of Purpose hereof.
"Affiliate" means, with respect to any Person, any other Person (other
---------
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
<PAGE>
"Agent" means First Union in its capacity as Agent hereunder, and any
-----
successor thereto appointed pursuant to Section 12.9.
"Agent's Office" means the office of the Agent specified in or
--------------
determined in accordance with the provisions of Section 13.1.
"Aggregate Commitment" means the aggregate amount of the Lenders'
--------------------
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be One Hundred Million and No/100 Dollars
($100,000,000).
"Agreement" means this Credit Agreement, as amended, amended and
---------
restated, modified or supplemented from time to time.
"Application" means an application, in the form specified by the
-----------
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Applicable Law" means all applicable provisions of constitutions,
--------------
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
-----------------
4.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
-------------------------
Section 13.10.
"Available Commitment" means, as to any Lender at any time, an amount
--------------------
equal to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Extensions of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or
---------
(b) the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall
take effect simultaneously with the corresponding change or changes in the Prime
Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
--------------
the Base Rate as provided in Section 4.1(a).
"Borrower" means American Business Information, Inc., in its capacity
--------
as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
------------
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina, New York, New York and Omaha,
Nebraska, are open for the conduct of
2
<PAGE>
their commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.
"Capital Lease" means, with respect to the Borrower and its
-------------
Subsidiaries, any lease of any property that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
-----------------
11.1(h).
"Closing Date" means the date of this Agreement.
------------
"Code" means the Internal Revenue Code of 1986, and the rules and
----
regulations thereunder, each as amended or supplemented from time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to
----------
make Loans to and issue or participate in Letters of Credit issued for the
account of the Borrower hereunder in an aggregate principal or face amount at
any time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule 1 hereto, as the same may be reduced or modified at any time or
----------
from time to time pursuant to the terms hereof.
"Commitment Fee Rate" shall have the meaning assigned thereto in
-------------------
Section 4.3.
"Commitment Percentage" means, as to any Lender at any time, the ratio
---------------------
of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment of all of the Lenders.
"Consolidated" means, when used with reference to financial statements
------------
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Contingent Obligation" means, with respect to the Borrower and its
---------------------
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or
3
<PAGE>
services, to take-or-pay, or to maintain financial statement condition or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, that the term Contingent Obligation shall not include endorsements for
- --------
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligations shall be deemed to be an amount equal to the maximum
reasonably anticipated liability in respect thereof determined by the Borrower
in good faith.
"Credit Facility" means the collective reference to the Revolving
---------------
Credit Facility and the L/C Facility.
"DBA" means DBA Holdings, Inc., a New Jersey corporation.
---
"DBA Acquisition Agreement" means the Agreement and Plan of
-------------------------
Reorganization dated as of February 14, 1997 by and among the Borrower; Info
USA, Inc. (the "Merger Sub"); DBA Holdings, Inc. ("DBA"); Paul Goldner; Mark
Goldner and Helene Hordes, as Trustees of the Paul A. Goldner Retained Annuity
Trust; and Trustees of the Database America Companies Retirement Trust.
"DBA Acquisition and Merger" means the merger of DBA with and into the
--------------------------
Merger Sub and the exchange of all of the outstanding common stock of DBA for a
combination of cash and common stock in the Borrower, pursuant to the terms and
conditions of the DBA Acquisition Agreement.
"Debt" means, with respect to any Person and its Subsidiaries at any
----
date, the sum, without duplication, of the following calculated in accordance
with GAAP: (a) all indebtedness for borrowed money including but not limited to
obligations evidenced by bonds, debentures, notes or other similar instruments
of any such Person, (b) all obligations to pay the deferred purchase price of
property or services of any such Person (including, without limitation, all
obligations under non-competition agreements), except trade payables arising in
the ordinary course of business and paid in accordance with standard business
practices in the ordinary course of business, (c) all obligations of any such
Person as lessee under Capital Leases, (d) all Debt of any other Person secured
by a Lien on any asset of such Person, (e) all Contingent Obligations of any
such Person, (f) all obligations, contingent or otherwise, of any such Person
relative to the face amount of letters of credit, whether or not drawn,
including without limitation any Reimbursement Obligation, (g) all contractual
obligations to redeem, repurchase, exchange, defease or otherwise make payments
in respect of capital stock or other securities of such Person and (h) all
termination payments which are due and payable by any such Person pursuant to
Hedging Agreements. The amount of any Contingent Obligations or other Debt of
unspecified
4
<PAGE>
amount shall be deemed to be an amount equal to the maximum reasonably
anticipated liability in respect thereof determined by the Borrower in good
faith. Debt shall exclude any liability or obligation described above to the
extent the Borrower or any of its Subsidiaries has placed funds in an escrow
account to cover such liability or obligation, pursuant to an escrow agreement
with terms and conditions satisfactory to the Agent.
"Default" means any of the events specified in Section 11.1 which
-------
with the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Disclosure Letter" means the Disclosure Letter of even date from the
-----------------
Borrower to the Agent and the Lenders setting forth certain information required
pursuant to Article VI hereof.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
--------------
currency of the United States.
"EBITDA" means, with respect to the Borrower and its Subsidiaries for
------
any period, the sum of (a) Net Income for such period, plus (b) the sum of the
----
following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense, (iii) amortization, depreciation and
other non-cash charges (including amortization of goodwill, transaction
expenses, covenants not to compete and other intangible assets) and (iv) the
after tax effect of any and all charges related to the Employment Termination
Agreements referred to in the DBA Acquisition Agreement and the "bonus pool"
payments made in connection with the DBA Acquisition and Merger (which payments
shall be in an amount not to exceed $21,500,000), less (c) any items of gain
----
which were included in determining Net Income and were not realized in the
ordinary course of business, all determined for such period on a Consolidated
basis in accordance with GAAP.
"Eligible Assignee" means, with respect to any assignment of the
-----------------
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a finance company, insurance company or other
financial institution which in the ordinary course of business extends credit of
the type extended hereunder and that has total assets in excess of
$1,000,000,000, (c) already a Lender hereunder (whether as an original party to
this Agreement or as the assignee of another Lender), (d) the successor (whether
by transfer of assets, merger or otherwise) to all or substantially all of the
commercial lending business of the assigning Lender, or (e) any other Person
that has been approved in writing as an Eligible Assignee by the Borrower and
the Agent.
5
<PAGE>
"Employee Benefit Plan" means any employee benefit plan within the
---------------------
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
------------------
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with the Borrower is
---------------
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Requirements" means, for any day, the percentage
-------------------------------
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.1;
----------------
provided, that any requirement for passage of time, giving of notice, or any
- --------
other condition, has been satisfied.
"Extensions of Credit" means, as to any Lender at any time, an amount
--------------------
equal to the sum of (a) the aggregate principal amount of all Loans made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"FDIC" means the Federal Deposit Insurance Corporation, or any
----
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
------------------
necessary, to the next higher 1/100th of 1%)
6
<PAGE>
representing the daily effective federal funds rate as quoted by the Agent and
confirmed in Federal Reserve Board Statistical Release H.15 (519) or any
successor or substitute publication selected by the Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Agent, to be the rate at which
federal funds are being offered for sale in the national federal funds market at
9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be the same as
the rate for the most immediate preceding Business Day.
"First Union" means First Union National Bank, a national banking
-----------
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its
-----------
Subsidiaries ending on December 31.
"GAAP" means generally accepted accounting principles, as recognized
----
by the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower and its
Subsidiaries.
"Governmental Approvals" means all authorizations, consents,
----------------------
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.
"Governmental Authority" means any nation, province, state or
----------------------
political subdivision thereof, and any government or any Person exercising
executive, legislative, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Materials" means any substances or materials (a) which are
-------------------
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance, a trespass
or pose a health or safety hazard to persons or neighboring properties, (f)
which are materials consisting of underground or aboveground storage tanks,
whether empty, filled or partially
7
<PAGE>
filled with any substance, or (g) which contain, without limitation, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest
-----------------
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower under this Agreement, and any
confirming letter executed pursuant to such hedging agreement, all as amended,
amended and restated, modified or supplemented from time to time.
"Interest Expense" means, with respect to the Borrower and its
----------------
Subsidiaries for any period, the gross interest expense (including without
limitation, interest expense attributable to Capital Leases and all net
obligations pursuant to Hedging Agreements) of the Borrower and its
Subsidiaries, all determined for such period on a Consolidated basis in
accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
---------------
4.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any
--------------
Letter of Credit, or any successor thereto.
"L/C Commitment" means Five Million and No/100 Dollars ($5,000,000).
--------------
"L/C Facility" means the letter of credit facility established
------------
pursuant to Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of
---------------
(a) the aggregate undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
----------------
other than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set
------
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.10.
"Lending Office" means, with respect to any Lender, the office of
--------------
such Lender maintaining such Lender's Commitment Percentage of the Loans.
8
<PAGE>
"Letters of Credit" shall have the meaning assigned thereto in
-----------------
Section 3.1(a).
"Leverage Ratio" means the ratio calculated pursuant to Section 9.1
--------------
hereof.
"LIBOR Rate" means the rate for deposits in Dollars for a period
----------
equal to the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period (rounded upward, if necessary, to
the nearest one-sixteenth of one percent (1/16%)). In the event that such rate
does not appear on Telerate Page 3750, the rate shall be determined by the Agent
to be the arithmetic average (rounded upward, if necessary, to the nearest one-
sixteenth of one percent (1/16%)) of the rate per annum at which Dollars in the
amount of $5,000,000 would be offered to the Agent at approximately 11:00 a.m.
London time, two (2) Business Days prior to the commencement of the applicable
Interest Period for settlement in immediately available funds by leading banks
in the London interbank market for a period equal to the Interest Period
selected.
"LIBOR Rate Loan" means any Loan bearing interest at a rate based
---------------
upon the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any revolving loan made to the Borrower pursuant to
----
Section 2.1, and all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Disclosure
--------------
Letter, the Notes, the Subsidiary Guaranty, any Hedging Agreement executed
between the Borrower and any Lender and each other document, instrument and
agreement executed and delivered by the Borrower or its Subsidiaries in
connection with this Agreement or otherwise referred to herein or contemplated
hereby, all as may be amended, amended and restated, modified or supplemented
from time to time.
"Material Adverse Effect" means, with respect to the Borrower and its
-----------------------
Subsidiaries, taken as a whole, a material adverse effect on the properties,
business, prospects, operations or condition (financial or otherwise) of any
such Person or the ability of any such Person to perform its obligations under
the Loan Documents or
9
<PAGE>
Material Contracts, in each case to which it is a party.
"Material Contract" means (a) any contract or other agreement,
-----------------
written or oral, of the Borrower or any of its Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $1,000,000 per
annum, or (b) any other contract or agreement, written or oral, of the Borrower
or any of its Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
"Material Subsidiary" means any Subsidiary of the Borrower, which
-------------------
Subsidiary has, on an actual or pro forma basis, (a) revenues at least equal to
--- -----
five percent (5%) of the Consolidated revenues of the Borrower and its
Subsidiaries, calculated for the period of four (4) fiscal quarters ending on or
immediately prior to any date of determination or (b) assets with a fair
saleable value at least equal to five percent (5%) of the fair saleable value of
the Consolidated assets of the Borrower and its Subsidiaries.
"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions within the preceding
six years.
"Net Income" means, with respect to the Borrower and its Subsidiaries
----------
for any period, the Consolidated net income (or loss) of the Borrower and its
Subsidiaries for such period determined in accordance with GAAP; provided, that
--------
there shall be excluded from net income (or loss) the income (or loss) of any
Person (other than a Wholly-Owned Subsidiary of such Person) in which such
Person has an ownership interest unless received by such Person in a cash
distribution.
"Notes" means the separate Amended and Restated Revolving Credit
-----
Notes made by the Borrower payable to the order of each Lender, substantially in
the form of Exhibit A hereto, evidencing the Revolving Credit Facility, and any
---------
amendments and modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in whole or in part;
"Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned
-----------------------------
thereto in Section 5.2(f)(i).
"Notice of Borrowing" shall have the meaning assigned thereto in
-------------------
Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
---------------------------------
thereto in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto
--------------------
10
<PAGE>
in Section 2.3(c).
"Obligations" means, in each case, whether now in existence or
-----------
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, (c) all payment and other obligations owing by the Borrower
to any Lender or the Agent under any Hedging Agreement permitted pursuant to
Section 10.1 and (d) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrower to the Lenders or the
Agent under or in respect of this Agreement, any Letter of Credit or any of the
other Loan Documents, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money.
"Officer's Compliance Certificate" shall have the meaning assigned
--------------------------------
thereto in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section
-----------
4.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor agency.
"Pension Plan" means any Employee Benefit Plan, other than a
------------
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any of their current
or former ERISA Affiliates.
"Person" means an individual, corporation, partnership, limited
------
liability company, association, trust, business trust, joint venture, joint
stock company, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental Authority or any other form of entity or group
thereof.
"Prime Rate" means, at any time, the rate of interest per annum
----------
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Register" shall have the meaning assigned thereto in Section
--------
11
<PAGE>
13.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of
----------------
at least sixty-six and two-thirds percent (66-2/3%) of the aggregate unpaid
principal amount of the Notes, or if no amounts are outstanding under the Notes,
any combination of Lenders whose Commitment Percentages aggregate at least
sixty-six and two-thirds percent (66-2/3%).
"Revolving Credit Facility" means the revolving credit facility
-------------------------
established pursuant to Article II hereof.
"Solvent" means, as to the Borrower and its Subsidiaries on a
-------
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subsidiary" means as to any Person, any corporation, partnership or
----------
other entity of which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity is at the time, directly or indirectly, owned by or
the management is otherwise controlled by such Person (irrespective of whether,
at the time, capital stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency). Unless otherwise qualified references to "Subsidiary" or
"Subsidiaries" herein shall refer to those of the Borrower.
"Subsidiary Guaranty" means the Amended and Restated Unconditional
-------------------
Guaranty Agreement of even date executed by the Subsidiary Guarantors in favor
of the Agent, for the benefit of itself and the Lenders, substantially in the
form of Exhibit H, as amended, amended and restated, modified or supplemented
---------
from time to time.
"Subsidiary Guarantors" means American Business Information
---------------------
Marketing, Inc., a Delaware corporation; CD Rom Technologies, Inc., a Delaware
corporation; Contacts Influential, Inc., a Delaware corporation; County Data
Corp., a Vermont corporation; Info USA,
12
<PAGE>
Inc., a Delaware corporation; and any additional Subsidiaries of the Borrower
who become party to the Subsidiary Guaranty pursuant to the requirements of
Section 8.11.
"Tangible Net Worth" means, with respect to the Borrower and its
------------------
Subsidiaries at any date, Consolidated stockholders' equity minus Consolidated
-----
intangible assets, including, without limitation, goodwill, all calculated in
accordance with GAAP.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
-----
"Termination Date" means the earliest of the dates referred to in Section
----------------
2.6.
"Termination Event" means: (a) a "Reportable Event" described in Section
-----------------
4043 of ERISA, or (b) the withdrawal of the Borrower or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"UCC" means the Uniform Commercial Code as in effect in the State of North
---
Carolina.
"Uniform Customs" the Uniform Customs and Practice for Documentary Credits
---------------
(1994 Revision), International Chamber of Commerce Publication No. 500.
"United States" means the United States of America.
-------------
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of the
------------
shares of capital stock or other ownership interests of which are, directly or
indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
13
<PAGE>
SECTION 1.2 General. Unless otherwise specified, a reference in this
-------
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
--------------------------------
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
------------------------
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
-------------
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
-------------------------
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions of
----------------------
this Agreement, each Lender severally agrees to make Loans to the Borrower from
time to time from the Closing Date through the Termination Date as requested by
the Borrower in accordance with the terms of Section 2.2; ; provided, that (a)
--------
the aggregate principal amount of all outstanding Loans (after giving effect to
any amount requested) shall not exceed the Aggregate Commitment less the L/C
Obligations and (b) the principal amount of outstanding Loans from any Lender to
the Borrower shall not at any time exceed such Lender's Commitment. Each Loan by
a Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Loans hereunder until the Termination Date.
SECTION 2.2 Procedure for Advances of Loans.
-------------------------------
(a) Requests for Borrowing. The Borrower shall give the Agent irrevocable
prior written notice in the form attached hereto as Exhibit B (a "Notice of
---------
Borrowing") not later than 11:00 a.m.
14
<PAGE>
(Charlotte time) (i) on the same Business Day as each Base Rate Loan and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be (x) with respect to Base
Rate Loans in an aggregate principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof and (y) with respect to LIBOR Rate Loans in an
aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof, (C) whether the Loans are to be LIBOR Rate Loans or Base Rate
Loans and (D) in the case of a LIBOR Rate Loan, the duration of the Interest
Period applicable thereto. Notices received after 11:00 a.m. (Charlotte time)
shall be deemed received on the next Business Day. The Agent shall promptly
notify the Lenders of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time)
---------------------
on the proposed borrowing date, each Lender will make available to the Agent,
for the account of the Borrower, at the office of the Agent in funds immediately
available to the Agent, such Lender's Commitment Percentage of the Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by crediting such proceeds to a
deposit account of the Borrower maintained with the Agent or by wire transfer to
such account as may be agreed upon by the Borrower and the Agent from time to
time. Subject to Section 4.7 hereof, the Agent shall not be obligated to
disburse the portion of the proceeds of any Loan requested pursuant to this
Section 2.2 to the extent that any Lender has not made available to the Agent
its Commitment Percentage of such Loan.
SECTION 2.3 Repayment of Loans.
------------------
(a) Repayment on Termination Date. The Borrower shall repay the outstanding
-----------------------------
principal amount of all Loans in full, together with all accrued but unpaid
interest thereon, on the Termination Date.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
-----------------------------------
principal amount of all Loans exceeds the Aggregate Commitment less the L/C
Obligations, the Borrower shall repay immediately upon notice from the Agent, by
payment to the Agent for the account of the Lenders, the Loans in an amount
equal to such excess. Each such repayment shall be accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
(c) Optional Repayments. The Borrower may at any time and from time to time
-------------------
repay the Loans, in whole or in part, upon prior written notice, which notice
shall be irrevocable, not later than 11:00 a.m. (Charlotte time) at least three
(3) Business Days prior to the repayment of any LIBOR Rate Loan and one (1)
Business Day
15
<PAGE>
prior to the repayment of any Base Rate Loan, in the form attached hereto as
Exhibit C (a "Notice of Prepayment") specifying the date and amount of repayment
- ---------
and whether the repayment is of LIBOR Rate Loans, Base Rate Loans, or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of such notice, the Agent shall promptly notify each Lender.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date set forth in such notice. Partial repayments shall be in
an aggregate amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof with respect to Base Rate Loans and $5,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to LIBOR Rate Loans. Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
-------------------------------------------
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
SECTION 2.4 Revolving Credit Notes. Each Lender's Loans and the obligation
----------------------
of the Borrower to repay such Loans shall be evidenced by a Note executed by the
Borrower payable to the order of such Lender representing the Borrower's
obligation to pay such Lender's Commitment or, if less, the aggregate unpaid
principal amount of all Loans made and to be made by such Lender to the Borrower
hereunder, plus interest and all other fees, charges and other amounts due
thereon. Each Note shall be dated the date hereof and shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 4.1.
SECTION 2.5 Permanent Reduction of the Aggregate Commitment. The Borrower
-----------------------------------------------
shall have the right at any time and from time to time, upon at least five (5)
Business Days prior written notice to the Agent, to permanently reduce, in whole
at any time or in part from time to time, without premium or penalty, the
Aggregate Commitment in an aggregate principal amount not less than $5,000,000
or any whole multiple thereof. Each such permanent reduction shall be
accompanied by a payment of principal sufficient to reduce the aggregate
outstanding Extensions of Credit of the Lenders after such reduction to the
Aggregate Commitment as so reduced. Any reduction of the Aggregate Commitment to
zero shall be accompanied by payment of all outstanding Obligations (and
furnishing of cash collateral satisfactory to the Agent for all L/C Obligations)
and, if such reduction is permanent, termination of the Commitments and Credit
Facility. Such cash collateral shall be applied in accordance with Section
11.2(b). If the reduction of the Aggregate Commitment requires the repayment of
any LIBOR Rate Loan, such reduction may be made only on the last day of the then
16
<PAGE>
current Interest Period applicable thereto unless such repayment is accompanied
by any amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.6 Termination of Credit Facility. The Credit Facility shall
------------------------------
terminate on the earliest of (a) February 14, 2000, (b) the date of reduction of
the Aggregate Commitment to zero by the Borrower pursuant to Section 2.5, and
(c) the date of termination by the Agent on behalf of the Lenders pursuant to
Section 11.2(a); provided, that not earlier than the one hundred and twentieth
--------
(120th) day and not later than the ninetieth (90th) day prior to the first
anniversary and the second anniversary, respectively, of the Closing Date (the
"Extension Date"), the Borrower may, by written notice (an "Extension Request")
given to the Agent, request that the date set forth in clause (a) above be
extended to February 14, 2001. The Agent shall promptly advise each Lender of
its receipt of any Extension Request and furnish each Lender with a copy
thereof. Each Lender may, in its sole discretion, consent to the requested
extension by giving written notice thereof to the Agent not later than the
Business Day (the "Extension Confirmation Date") immediately preceding the date
which is thirty (30) days after receipt of the Extension Request. No Lender
shall be under any obligation or commitment to extend such date and no such
obligation or commitment on the part of any Lender shall be inferred from the
provisions of this Section 2.6. Failure on the part of any Lender to respond to
an Extension Request by the applicable Extension Confirmation Date shall be
deemed to be a denial of such request by such Lender. The requested extension
shall not be granted unless 100% of the Lenders shall have consented in writing
to such extension. In the event that the Agent determines, in its sole and
absolute discretion, to approve the requested extension, the Agent shall use its
best efforts to assist the Borrower in obtaining the approval of 100% of the
Lenders; provided, that the Agent shall incur no liability whatsoever for the
--------
failure of any Lender to approve such extension.
SECTION 2.7 Use of Proceeds. The Borrower shall use the proceeds of the
---------------
Loans (a) to finance a portion of the costs of the Acquisition and (b) for
working capital and general corporate requirements of the Borrower and its
Subsidiaries (including acquisitions and investments permitted pursuant to
Section 10.4 (a) through (d) hereof), including the payment of certain fees and
expenses incurred in connection with the transactions.
ARTICLE III
LETTER OF CREDIT FACILITY
-------------------------
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
--------------
the Issuing Lender, in reliance on the
17
<PAGE>
agreements of the other Lenders set forth in Section 3.4(a), agrees to issue
standby letters of credit ("Letters of Credit") for the account of the Borrower
on any Business Day from the Closing Date through but not including the
Termination Date in such form as may be approved from time to time by the
Issuing Lender; provided, that the Issuing Lender shall have no obligation to
--------
issue any Letter of Credit if, after giving effect to such issuance, (a) the L/C
Obligations would exceed the L/C Commitment or (b) the Available Commitment of
any Lender would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars in a minimum amount of $250,000, (ii) be a standby letter
of credit issued to support obligations of the Borrower or any of its
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business, (iii) expire on a date satisfactory to the Issuing Lender, which date
shall be no later than the Termination Date and (iv) be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
North Carolina. The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law. References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower may
-------------------------------------------
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at the Agent's Office an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender shall process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish to the Borrower a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
L/C Participation therein, all promptly following the issuance of such Letter of
Credit.
SECTION 3.3 Commissions and Other Charges.
-----------------------------
(a) The Borrower shall pay to the Agent, for the account of
18
<PAGE>
the Issuing Lender and the L/C Participants, a letter of credit fee with respect
to each Letter of Credit in an amount equal to the product of (i) a per annum
fee equal to the Applicable Margin in effect with respect to LIBOR Rate Loans as
set forth in Section 4.1(c) and (ii) the face amount of such Letter of Credit.
Such fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter of the Borrower and on the Termination Date. The Agent shall,
promptly following its receipt thereof, distribute to the Issuing Lender and L/C
Participants all commissions received by the Agent in accordance with their
respective Commitment Percentages.
(b) The Borrower shall pay to the Issuing Lender a fronting fee with
respect to each Letter of Credit in an amount equal to the product of (i) 0.125%
(on a per annum basis) and (ii) the face amount of such Letter of Credit. Such
fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter of the Borrower as long as such Letter of Credit is
outstanding.
(c) In addition to the foregoing fees, the Borrower shall pay or reimburse
the Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by the Issuing Lender in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
------------------
(a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand
at the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Commitment Percentage of the amount of such draft, or any
part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing
19
<PAGE>
Lender shall notify each L/C Participant of the amount and due date of such
required payment and such L/C Participant shall pay to the Issuing Lender the
amount specified on the applicable due date. If any such amount is paid to the
Issuing Lender after the date such payment is due, such L/C Participant shall
pay to the Issuing Lender on demand, in addition to such amount, the product of
(i) such amount, times (ii) the daily average Federal Funds Rate as determined
by the Agent during the period from and including the date such payment is due
to the date on which such payment is immediately available to the Issuing
Lender, times (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. A certificate of
the Issuing Lender with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if
the L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due that
Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such
payment shall be due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.4,
the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, or any payment of interest on
account thereof, the Issuing Lender will distribute to such L/C Participant its
pro rata share thereof; provided, that in the event that any such payment
- --- ---- --------
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. The Borrower
-----------------------------------------
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article III from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full (including without limitation as a result of
the extension of a Base Rate Loan pursuant to the following sentence) at the
rate which would be payable on any outstanding Base Rate Loans which were then
overdue. If the Borrower fails to timely
20
<PAGE>
reimburse the Issuing Lender on the date the Borrower receives the notice
referred to in this Section 3.5, the Borrower shall be deemed to have timely
given a Notice of Borrowing hereunder to the Agent requesting the Lenders to
make a Base Rate Loan on such date in an amount equal to the amount of such
drawing and, subject to the satisfaction or waiver of the conditions precedent
specified in Article V, the Lenders shall make Base Rate Loans in such amount,
the proceeds of which shall be applied to reimburse the Issuing Lender for the
amount of the related drawing and costs and expenses.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under
---------------------
this Article III (including without limitation the Reimbursement Obligation)
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit. The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC,
shall be binding on the Borrower and shall not result in any liability of the
Issuing Lender to the Borrower. The responsibility of the Issuing Lender to the
Borrower in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision
----------------------
of any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
21
<PAGE>
ARTICLE IV
GENERAL LOAN PROVISIONS
-----------------------
SECTION 4.1 Interest.
---------
(a) Interest Rate Options. Subject to the provisions of this
---------------------
Section 4.1, at the election of the Borrower, the aggregate principal balance of
the Notes or any portion thereof shall bear interest at the Base Rate or the
LIBOR Rate, plus, in each case, the Applicable Margin as set forth below;
----
provided, that the LIBOR Rate shall not be available at any time prior to the
- --------
third Business Day after the Closing Date. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given pursuant to Section 2.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2. Each Loan or portion
thereof bearing interest based on the Base Rate shall be a "Base Rate Loan" and
each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a
"LIBOR Rate Loan". Any Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
----------------
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Loan,
which Interest Period shall be a period of one (1), two (2), three (3), or six
(6) months; provided, that until the completion of the syndication of the Credit
--------
Facility on terms and conditions reasonably satisfactory to the Agent, the
Borrower shall only be permitted to select Interest Periods of one (1) month;
provided further, that:
- -------- -------
(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period would otherwise expire on a
--------
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) any Interest Period that begins on the last 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
22
<PAGE>
such Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Termination Date; and
(v) there shall be no more than seven (7) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in
-----------------
Section 4.1(a) with respect to the Loans (the "Applicable Margin") shall for
each fiscal quarter be determined by reference to the Leverage Ratio as of the
end of the fiscal quarter immediately preceding the delivery of the applicable
Officer's Compliance Certificate (or, with respect to the Closing Date, the
Financial Condition Certificate delivered pursuant to Section 5.2(d)(ii)) as
follows:
<TABLE>
<CAPTION>
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ---------------------------
<S> <C> <C>
Greater than or equal
to 2.00 to 1.00 0.00% 0.625%
Greater than or equal
to 1.00 to 1.00 but less
than 2.00 to 1.00 0.00% 0.500%
Less than 1.00 to 1.00 0.00% 0.375%
</TABLE>
Adjustments, if any, in the Applicable Margin shall be made by the Agent on the
tenth (10th) Business Day after receipt by the Agent of quarterly financial
statements for the Borrower and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Leverage Ratio of the Borrower and its
Subsidiaries as of the most recent fiscal quarter end. Subject to
Section 4.1(d), in the event the Borrower fails to deliver such financial
statements and certificate within the time required by Section 7.2 hereof, the
Applicable Margin shall be the highest Applicable Margin set forth above until
the delivery of such financial statements and certificate.
(d) Default Rate. Upon the occurrence and during the continuance of
------------
an Event of Default, (i) the Borrower shall no longer have the option to request
LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a
rate per annum two percent (2%) in excess of the rate then applicable to LIBOR
Rate Loans until the end of the applicable Interest Period and thereafter at a
rate equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a
rate per annum equal to two percent (2%) in excess of the rate then applicable
to Base Rate
23
<PAGE>
Loans; provided, that with respect to subclauses (ii) and (iii), such rates
--------
shall not be applicable upon the occurrence and during the continuance of an
Event of Default set forth in Sections 11.1 (c) through (m) until the Agent,
with the consent or at the request of the Required Lenders, shall have provided
notice to the Borrower. Interest shall continue to accrue on the Notes after the
filing by or against the Borrower of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
--------------------------------
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 1997. Interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
(or, with respect to the Base Rate, a 365/366-day year) and assessed for the
actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
------------
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Agent's option
promptly refund to the Borrower any interest received by Lenders in excess of
the maximum lawful rate or shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrower not pay or contract
to pay, and that neither the Agent nor any Lender receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrower under Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans.
---------------------------------------------------------
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
its outstanding Base Rate Loans in a principal amount equal to $5,000,000 or any
whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans
or (b) upon the expiration of any Interest Period, (i) convert all or any part
of its outstanding LIBOR Rate Loans in a principal amount equal to $1,000,000 or
a whole multiple of $500,000 in excess thereof into Base Rate Loans or (ii)
continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower
24
<PAGE>
desires to convert or continue Loans as provided above, the Borrower shall give
the Agent irrevocable prior written notice in the form attached as Exhibit D (a
---------
"Notice of Conversion/ Continuation") not later than 11:00 a.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period thereof, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.3 Fees.
-----
(a) Commitment Fee. The Borrower shall pay to the Agent, for the
--------------
account of the Lenders, a non-refundable commitment fee at a rate per annum
equal to the commitment fee rate set forth below (the "Commitment Fee Rate") on
the average daily unused portion of the Aggregate Commitment (for the purposes
hereof, the Aggregate Commitment shall be deemed used to the extent of any
issued Letters of Credit). The Commitment Fee Rate shall be determined by
reference to the Leverage Ratio as of the end of the fiscal quarter immediately
preceding the delivery of the applicable Officer's Compliance Certificate (or,
with respect to the Closing Date, the Financial Condition Certificate delivered
pursuant to Section 5.2(d)(ii)) as follows:
<TABLE>
<CAPTION>
Leverage Ratio Commitment Fee Rate
-------------- -------------------
<S> <C>
Greater than or equal
to 2.00 to 1.00 0.25%
Greater than or equal
to 1.00 to 1.00 but less
than 2.00 to 1.00 0.20%
Less than 1.00 to 1.00 0.15%
</TABLE>
Adjustments, if any, in the Commitment Fee Rate shall be made by the Agent on
the tenth (10th) Business Day after receipt by the Agent of quarterly financial
statements for the Borrower and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Leverage Ratio of the Borrower and its
Subsidiaries as of the most recent fiscal quarter end. In the event the
Borrower fails to deliver such financial statements and
25
<PAGE>
certificate within the time required by Section 7.2 hereof, the Commitment Fee
Rate shall be the highest Commitment Fee Rate set forth above until the delivery
of such financial statements and certificate. The commitment fee shall be
payable in arrears on the last Business Day of each calendar quarter during the
term of this Agreement commencing September 30, 1997, and on the Termination
Date. Such commitment fee shall be distributed by the Agent to the Lenders
pro rata in accordance with the Lenders' respective Commitment Percentages.
- --- ----
(b) Agent's and Other Fees. In order to compensate the Agent for
----------------------
structuring and syndicating the Loans and for its obligations and
responsibilities hereunder, the Borrower agrees to pay to the Agent, for its
account, the fees set forth in the separate fee letter agreement executed by the
Borrower and the Agent dated August 8, 1997.
SECTION 4.4 Manner of Payment. Each payment by the Borrower on
------------------
account of the principal of or interest on the Loans or of any fee, commission
or other amounts (including the Reimbursement Obligation) payable to the Lenders
under this Agreement or any Note shall be made not later than 1:00 p.m.
(Charlotte time) on the date specified for payment under this Agreement to the
Agent at the Agent's Office for the account of the Lenders (other than as set
forth below) pro rata in accordance with their respective Commitment
--- ----
Percentages, in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 2:00 p.m. (Charlotte time) on such day shall be
deemed a payment on such date for the purposes of Section 11.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 2:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Agent of each such payment, the Agent shall distribute to each
Lender at its address for notices set forth herein its pro rata share of such
--- ----
payment in accordance with such Lender's Commitment Percentage and shall wire
advice of the amount of such credit to each Lender. Each payment to the Agent
of the Issuing Lender's fees or L/C Participants' commissions shall be made in
like manner, but for the account of the Issuing Lender or the L/C Participants,
as the case may be. Each payment to the Agent of Agent's fees or expenses shall
be made for the account of the Agent and any amount payable to any Lender under
Sections 4.8, 4.9, 4.10, 4.11 or 13.2 shall be paid to the Agent for the account
of the applicable Lender.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that
-----------------------------------
the Borrower shall fail to pay any of the Obligations when due and the
Obligations have been accelerated pursuant to Section 11.2, all payments
received by the Lenders upon the Notes
26
<PAGE>
and the other Obligations and all net proceeds from the enforcement of the
Obligations shall be applied first to all expenses then due and payable by the
Borrower hereunder, then to all indemnity obligations then due and payable by
the Borrower hereunder, then to all Agent's fees then due and payable, then to
all commitment and other fees and commissions then due and payable, then to
accrued and unpaid interest on the Notes, the Reimbursement Obligation and any
termination payments due in respect of a Hedging Agreement with any Lender
permitted pursuant to Section 10.1 (pro rata in accordance with all such
--- ----
amounts due), then to the principal amount of the Notes and Reimbursement
Obligation and then to the cash collateral account described in Section 11.2(b)
hereof to the extent of any L/C Obligations then outstanding, in that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefitted Lender") shall
------------
at any time receive any payment of all or part of its Extensions of Credit, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to its Extensions of Credit (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Extensions of Credit, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, that if all
--------
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of
--------------------------------------------------------
Credit; Assumption by the Agent. The obligations of the Lenders under this
- --------------------------------
Agreement to make the Loans and issue or participate in Letters of Credit are
several and are not joint or joint and several. Unless the Agent shall have
received notice from a Lender prior to a proposed borrowing date that such
Lender will not make available to the Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Agent may assume that such Lender has made
such portion available to the Agent on the proposed borrowing date in accordance
with Section 2.2(b) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If
27
<PAGE>
such amount is made available to the Agent on a date after such borrowing date,
such Lender shall pay to the Agent on demand an amount, until paid, equal to the
product of (a) the amount of such Lender's Commitment Percentage of such
borrowing, times (b) the daily average Federal Funds Rate during such period as
determined by the Agent, times (c) a fraction the numerator of which is the
number of days that elapse from and including such borrowing date to the date on
which such Lender's Commitment Percentage of such borrowing shall have become
immediately available to the Agent and the denominator of which is 360. A
certificate of the Agent with respect to any amounts owing under this Section
shall be conclusive, absent manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Agent by such Lender
within three (3) Business Days after such borrowing date, the Agent shall be
entitled to recover such amount made available by the Agent with interest
thereon at the rate per annum applicable to Base Rate Loans hereunder, on
demand, from the Borrower. The failure of any Lender to make its Commitment
Percentage of any Loan available shall not relieve it or any other Lender of its
obligation, if any, hereunder to make its Commitment Percentage of such Loan
available on such borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Commitment Percentage of such Loan
available on the borrowing date.
SECTION 4.8 Changed Circumstances.
---------------------
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
-----------------------------------------------
any Interest Period the Agent or any Lender (after consultation with Agent)
shall determine that, by reason of circumstances affecting the foreign exchange
and interbank markets generally, deposits in eurodollars, in the applicable
amounts are not being quoted via Telerate Page 3750 or offered to the Agent or
such Lender for such Interest Period, then the Agent shall forthwith give notice
thereof to the Borrower. Thereafter, until the Agent notifies the Borrower that
such circumstances no longer exist, the obligation of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Loan to or continue any
Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall repay in
full (or cause to be repaid in full) the then outstanding principal amount of
each such LIBOR Rate Loan together with accrued interest thereon, on the last
day of the then current Interest Period applicable to such LIBOR Rate Loan or
convert the then outstanding principal amount of each such LIBOR Rate Loan to a
Base Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
--------------------------------------
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or
28
<PAGE>
compliance by any Lender (or any of their respective Lending Offices) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, shall make it
unlawful or impossible for any of the Lenders (or any of their respective
Lending Offices) to honor its obligations hereunder to make or maintain any
LIBOR Rate Loan, such Lender shall promptly give notice thereof to the Agent and
the Agent shall promptly give notice to the Borrower and the other Lenders.
Thereafter, until the Agent notifies the Borrower that such circumstances no
longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans and
the right of the Borrower to convert any Loan or continue any Loan as a LIBOR
Rate Loan shall be suspended and thereafter the Borrower may select only Base
Rate Loans hereunder, and (ii) if any of the Lenders may not lawfully continue
to maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall
immediately be converted to a Base Rate Loan for the remainder of such Interest
Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
---------------
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect to any Note,
Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System but excluding any such reserve included in the definition of Eurodollar
Reserve Requirement), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note;
29
<PAGE>
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Agent, and the Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within thirty (30)
days after such notice by the Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The Agent will promptly notify the Borrower of any
event of which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 4.8(c); provided, that the Agent shall incur no
--------
liability whatsoever to the Lenders or the Borrower in the event it fails to do
so. The amount of such compensation shall be determined, in the applicable
Lender's sole discretion, based upon the assumption that such Lender funded its
Commitment Percentage of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis
for determining such amount or amounts necessary to compensate such Lender shall
be forwarded to the Borrower through the Agent and shall be conclusively
presumed to be correct save for manifest error.
(d) Eurodollar Reserve Requirements. In the event that any Lender shall
-------------------------------
determine at any time that by reason of Regulation D, such Lender is required to
maintain Eurodollar Reserve Requirements during any period that it has any LIBOR
Rate Loans outstanding, then such Lender shall promptly notify the Borrower by
written notice (or telephonic notice promptly confirmed in writing) specifying
the additional amounts reasonably determined by the Lender to be required to
indemnify such Lender against the cost of maintaining such Eurodollar Reserve
Requirements (such written notice to provide a computation of such additional
amounts) and the Borrower shall, within thirty (30) days after such notice, pay
to such Lender such specified amounts as additional interest. A certificate of
such Lender setting forth the basis for determining such amount or amounts shall
be conclusively presumed to be correct save for manifest error.
SECTION 4.9 Indemnity. The Borrower hereby indemnifies each of the
---------
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow on a
date specified therefor in a Notice of
30
<PAGE>
Borrowing or Notice of Continuation/Conversion or (c) due to any payment,
prepayment or conversion of any LIBOR Rate Loan on a date other than the last
day of the Interest Period therefor. The amount of such loss or expense shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrower through the Agent and shall be conclusively presumed to be correct save
for manifest error.
SECTION 4.10 Capital Requirements. If either (a) the introduction of, or
--------------------
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within thirty (30) days after written
demand by any such Lender, the Borrower shall pay to such Lender from time to
time as specified by such Lender additional amounts sufficient to compensate
such Lender or other corporation for such reduction. A certificate as to such
amounts submitted to the Borrower and the Agent by such Lender, shall, in the
absence of manifest error, be presumed to be correct and binding for all
purposes.
SECTION 4.11 Taxes.
-----
(a) Payments Free and Clear. Any and all payments by the Borrower
-----------------------
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Agent, income and
franchise taxes imposed by the jurisdiction under the laws of which such Lender
or the Agent (as the case may be) is organized or is or should be qualified to
do business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any
31
<PAGE>
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Agent, (A) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 4.11) such Lender or the Agent (as the case may
be) receives an amount equal to the amount such party would have received had no
such deductions been made, (B) the Borrower shall make such deductions, (C) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with applicable law, and (D) the Borrower shall
deliver to the Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 4.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
---------------------
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the Agent
---------
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.11) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. In the event the Borrower believes that any such Taxes or
Other Taxes were incorrectly or illegally asserted, the Agent and each of the
Lenders hereby agrees to take reasonable steps to assist the Borrower in
asserting a claim against the applicable Governmental Authority for such Taxes
or Other Taxes. Such indemnification shall be made within thirty (30) days from
the date such Lender or the Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of
-------------------
any payment of Taxes or Other Taxes, the Borrower shall furnish to the Agent, at
its address referred to in Section 13.1, the original or a certified copy of a
receipt evidencing payment thereof or other evidence of payment satisfactory to
the Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
---------------------
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the
32
<PAGE>
Agent, on the Closing Date or concurrently with the delivery of the relevant
Assignment and Acceptance, as applicable, (i) two United States Internal Revenue
Service Forms 4224 or Forms 1001, as applicable (or successor forms) properly
completed and certifying in each case that such Lender is entitled to a complete
exemption from withholding or deduction for or on account of any United States
federal income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding taxes. Each such Lender further agrees to
deliver to the Borrower, with a copy to the Agent, a Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms or manner of certification, as the
case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, certifying in the case
of a Form 1001 or 4224 that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes (unless in any such case an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders such forms inapplicable
or the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(f) Survival. Without prejudice to the survival of any other
--------
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 4.12 Affected Lenders. If (a) any Lender requests compensation
----------------
pursuant to Section 4.8(c), 4.8(d), 4.10 or 4.11, (b) the obligation of the
Lenders to make LIBOR Rate Loans or to continue, or to convert Base Rate Loans
into, LIBOR Rate Loans shall be suspended pursuant to Section 4.8(a) or (b) due
to an event affecting any Lender or (c) any Lender shall deny the request of the
Borrower to extend the Termination Date pursuant to the provisions of Section
2.6, then, so long as there does not then exist any Default or Event of Default,
the Borrower may demand that such Lender (the "Affected Lender"), and upon such
demand the Affected Lender shall promptly, assign its Commitment to an Eligible
Assignee selected by the Borrower, subject to and in accordance with the
provisions of Section 13.10(b), for a purchase price equal to the aggregate
principal balance of Extensions of Credit then owing to the Affected Lender plus
any accrued but unpaid interest thereon, accrued but unpaid fees and any other
amounts owing to the Affected Lender hereunder. The Agent shall
33
<PAGE>
cooperate in effectuating the replacement of an Affected Lender under this
Section, but at no time shall the Agent be obligated in any way whatsoever to
initiate any such replacement. The exercise by the Borrower of its rights under
this Section shall be at the Borrower's sole cost and expense (including with
respect to the assignment fee required pursuant to Section 13.10(b)(v)), and at
no cost or expense to the Agent, the Affected Lender or any of the other
Lenders.
SECTION 4.13 Similarly Situated Loans. In no event shall any Lender be
------------------------
entitled to any compensation or other amounts under Sections 4.8 through 4.11 to
the extent such Lender was compensated for such cost under another of such
Sections. In calculating or demanding compensation or other amounts due under
Sections 4.8 and 4.10, each Lender agrees that it shall use its best efforts to
treat its Loans under this Agreement in the same manner as it generally treats
all similarly situated loans then outstanding from such Lender to other
borrowers.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 5.1 Closing. The closing shall take place at the offices of
-------
Borrower on August 29, 1997, or at such other place or on such other date as the
parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
------------------------------------------------------
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue the initial Letter of Credit is subject to the satisfaction of each of
the following conditions:
(a) Executed Loan Documents. This Agreement, the Notes and the
-----------------------
Subsidiary Guaranty shall have been duly authorized, executed and delivered to
the Agent by the parties thereto, shall be in full force and effect and no
default shall exist thereunder, and the Borrower shall have delivered original
counterparts thereof to the Agent.
(b) Closing Certificates; etc.
-------------------------
(i) Officers's Certificate of the Borrower. The Agent shall have
--------------------------------------
received a certificate from the chief executive officer or chief financial
officer of the Borrower, in form and substance satisfactory to the Agent, to the
effect that all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true, correct and complete in all
material respects; that the Borrower is not in violation of any of the covenants
contained in this Agreement and
34
<PAGE>
the other Loan Documents; that, after giving effect to the transactions
contemplated by this Agreement, no Default or Event of Default has occurred and
is continuing; and that the Borrower has satisfied each of the closing
conditions.
(ii) Certificate of Secretary of the Borrower and each Subsidiary
------------------------------------------------------------
Guarantor. The Agent shall have received a certificate of the secretary or
- ---------
assistant secretary of the Borrower and each Subsidiary Guarantor certifying
that the articles of incorporation and bylaws of the Borrower or such Subsidiary
Guarantor, as applicable, delivered to the Agent on February 14, 1997 have not
been repealed, revoked, rescinded or amended in any respect; that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of the Borrower or such Subsidiary Guarantor, as applicable,
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party and, with respect to the Borrower,
the borrowings contemplated hereunder; and as to the incumbency and genuineness
of the signature of each officer of the Borrower or such Subsidiary Guarantor,
as applicable, executing Loan Documents to which it is a party.
(iii) Certificates of Good Standing. The Agent shall have
-----------------------------
received long-form certificates as of a recent date of the good standing of the
Borrower and each Subsidiary Guarantor under the laws of its jurisdiction of
organization and each other jurisdiction reasonably requested by the Agent and a
certificate of the relevant taxing authorities of such jurisdictions certifying
that such Person has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Agent shall have received favorable
-------------------
opinions of counsel to the Borrower and Subsidiary Guarantors addressed to the
Agent and the Lenders with respect to the Borrower, the Subsidiary Guarantors,
the Loan Documents and such other matters as the Lenders shall request.
(v) Tax Forms. The Agent shall have received copies of the United
---------
States Internal Revenue Service forms required by Section 4.11(e) hereof.
(c) Consents; Defaults.
------------------
(i) Governmental and Third Party Approvals. All necessary
--------------------------------------
approvals, authorizations and consents, if any be required, of any Person and of
all Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement, the other Loan Documents and the
Acquisition shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding,
------------------
35
<PAGE>
investigation, regulation or legislation shall have been instituted, threatened
or proposed before any Governmental Authority to enjoin, restrain, or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of this Agreement, the other Loan Documents, the Acquisition or the
consummation of the transactions contemplated hereby or thereby, or which, in
the Agent's discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall
-------------------
have occurred and be continuing.
(d) Financial Matters.
-----------------
(i) Financial Statements. The Agent shall have received the
--------------------
most recent audited Consolidated financial statements of the Borrower and its
Subsidiaries, prepared in accordance with GAAP. Without limitation of the
foregoing, the Agent and each Lender shall have received audited financial
statements of the Borrower and its Subsidiaries for the Fiscal Year ended
December 31, 1996 and unaudited financial statements for the Borrower and its
Subsidiaries for the six month period ending June 30, 1997.
(ii) Financial Condition Certificate. The Borrower shall have
-------------------------------
delivered to the Agent a certificate, in form and substance satisfactory to the
Agent, and certified by the chief executive officer or chief financial officer
of the Borrower, that (A) the Borrower and each of its Subsidiaries are each
Solvent, (B) attached thereto is a pro forma balance sheet of the Borrower and
--- -----
its Subsidiaries setting forth on a pro forma basis the financial condition of
--- -----
the Borrower and its Subsidiaries on a Consolidated basis as of the Closing Date
and reflecting on a pro forma basis the effect of the transactions contemplated
--- -----
herein (including the Acquisition), including all fees and expenses in
connection therewith, evidencing compliance on a pro forma basis with the
--- -----
covenants contained in Articles IX and X hereof and calculating on a pro forma
--- -----
basis the Applicable Margin pursuant to Section 4.1(c), representing the good
faith estimates and calculations of the Borrower and senior management as to the
financial information contained therein and (C) attached thereto are the
financial projections previously delivered to the Agent representing the good
faith opinions of the Borrower and senior management thereof as to the projected
results contained therein.
(iii) Payment at Closing. There shall have been paid by the
------------------
Borrower to the Agent and the Lenders the fees set forth or referenced in
Section 4.3 and any other accrued and unpaid fees or commissions due hereunder
(including, without limitation, legal fees and expenses), with respect to which
the Borrower has received a statement in reasonable detail at least one Business
Day
36
<PAGE>
prior to the Closing Date, and to any other Person such amount as may be due
thereto in connection with the transactions contemplated hereby, including all
taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of any of the Loan Documents.
(e) Acquisition Agreement. The Borrower shall have delivered to the Agent
---------------------
a true, correct and complete copy of the Acquisition Agreement.
(f) Miscellaneous.
-------------
(i) Notice of Borrowing. The Agent shall have received a Notice of
-------------------
Borrowing from the Borrower in accordance with Section 2.2(a), and a written
notice in the form attached hereto as Exhibit E (a "Notice of Account
---------
Designation") specifying the account or accounts to which the proceeds of any
Loans made after the Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and other
-------------------------
instruments and all proceedings in connection with the transactions contemplated
by this Agreement (including the Acquisition) shall be satisfactory in form and
substance to the Lenders. The Lenders shall have received copies of all other
instruments and other evidence as the Lenders may reasonably request, in form
and substance satisfactory to the Lenders, with respect to the transactions
contemplated by this Agreement and the Acquisition and the taking of all actions
in connection therewith.
(iii) Due Diligence and Other Documents. The Borrower shall have
---------------------------------
delivered to the Agent such other documents, certificates and opinions as the
Agent reasonably requests, certified by a secretary or assistant secretary of
the Borrower as a true and correct copy thereof.
SECTION 5.3 Conditions to All Loans and Letters of Credit. The
---------------------------------------------
obligations of the Lenders to make any Loan or issue any Letter of Credit are
subject to the satisfaction of the following conditions precedent on the
relevant borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties contained in Article VI shall be true and correct
in all material respects on and as of such borrowing date with the same effect
as if made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date).
(b) No Existing Default. No Default or Event of
-------------------
37
<PAGE>
Default shall have occurred and be continuing hereunder (i) on the borrowing
date with respect to such Loan or after giving effect to the Loans to be made on
such date or (ii) on the issue date with respect to such Letter of Credit or
after giving affect to such Letters of Credit on such date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
SECTION 6.1 Representations and Warranties. To induce the Agent to
------------------------------
enter into this Agreement and the Lenders to make the Loans or issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Agent and Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and
----------------------------------
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, has the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect. The jurisdictions in which the Borrower and its
Subsidiaries are organized and qualified to do business as of the Closing Date
are described on Schedule 6.1(a) of the Disclosure Letter.
---------------
(b) Ownership. Each Subsidiary of the Borrower, as of the
---------
Closing Date, is listed on Schedule 6.1(b) of the Disclosure Letter. The
---------------
capitalization of the Borrower and its Subsidiaries, as of the Closing Date,
consists of the number of shares, authorized, issued and outstanding, of such
classes and series, with or without par value, described on Schedule 6.1(b) of
---------------
the Disclosure Letter. All outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. The shareholders of the
Subsidiaries of the Borrower, as of the Closing Date, and the number of shares
owned by each are described on Schedule 6.1(b) of the Disclosure Letter. As of
---------------
the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or
nature whatsoever, which are convertible into, exchangeable for or otherwise
provide for or permit the issuance of capital stock of the Borrower or its
Subsidiaries, except as described on Schedule 6.1(b) of the Disclosure Letter.
---------------
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
--------------------------------------------------------
the Borrower and its Subsidiaries has the right, power and authority and has
taken all necessary corporate
38
<PAGE>
and other action to authorize the execution, delivery and performance of this
Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms. This Agreement and each of the other
Loan Documents have been duly executed and delivered by the duly authorized
officers of the Borrower and each of its Subsidiaries party thereto, and each
such document constitutes the legal, valid and binding obligation of the
Borrower and each of its Subsidiaries party thereto, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect which affect the enforcement of creditors'
rights in general and by the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
----------------------------------------------------------------
Etc. The execution, delivery and performance by the Borrower and its
- ----
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries or any material indenture, agreement or
other instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such Person, or
(iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Person other
than Liens arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
-------------------------------------------
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except for such Governmental Approvals the absence of
which could not reasonably be expected to have a Material Adverse Effect and
(ii) is in compliance with each Governmental Approval applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties, except in each case where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its
------------------------
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of,
39
<PAGE>
all federal, state, local and other taxes, assessments and governmental charges
or levies upon it and its property, income, profits and assets which are due and
payable, except any nonpayment permitted under Section 8.5, the result of which
could reasonably be expected to have a Material Adverse Effect. No Governmental
Authority has asserted any Lien or other claim against the Borrower or
Subsidiary thereof with respect to unpaid taxes which has not been discharged or
resolved which could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower and any of its
Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof since the organization of the Borrower and any of its
Subsidiaries are in the judgment of the Borrower adequate, and the Borrower does
not anticipate any additional taxes or assessments for any of such years, the
result of which could reasonably be expected to have a Material Adverse Effect.
(g) Intellectual Property Matters. Each of the Borrower and its
-----------------------------
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business, except where the failure to so own or possess such rights
could not reasonably be expected to have a Material Adverse Effect. No event
has occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such rights, and neither the
Borrower nor any Subsidiary thereof is liable to any Person for infringement
under Applicable Law with respect to any such rights as a result of its business
operations, the result of which could reasonably be expected to have a Material
Adverse Effect.
(h) Environmental Matters. Except for matters existing on the Closing
---------------------
Date and set forth on Schedule 6.1(h) of the Disclosure Letter and except for
---------------
matters which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect,
(i) The properties of the Borrower and its Subsidiaries do not
contain, and to the Borrower's knowledge have not previously contained, any
Hazardous Materials in amounts or concentrations which (A) constitute or
constituted a violation of, or (B) could give rise to liability under,
applicable Environmental Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such
40
<PAGE>
properties or impair the fair saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary thereof has received
any notice of violation, alleged violation, noncompliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does the Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of from
the properties of the Borrower and its Subsidiaries in violation of, or in a
manner or to a location which could give rise to liability under, Environmental
Laws, nor have any Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of such properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Laws;
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
such properties or such operations; and
(vi) There has been no release, or to the best of the Borrower's
knowledge, the threat of release, of Hazardous Materials at or from such
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
(i) ERISA. Except as disclosed on Schedule 6.1(i) of the Disclosure
----- ---------------
Letter:
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans;
(ii) the Borrower and each ERISA Affiliate is in material compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code
41
<PAGE>
has been determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under Section 501(a)
of the Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A) engaged
in a nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments
which are due and unpaid, (C) failed to make a required contribution or payment
to a Multiemployer Plan, or (D) failed to make a required installment or other
required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is existing
or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3 (1) of ERISA) currently maintained or contributed to by the Borrower
or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is
------------
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation G, T, U or X of such Board of Governors.
42
<PAGE>
(k) Government Regulation. Neither the Borrower nor any Subsidiary
---------------------
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Borrower nor any Subsidiary thereof is, or
after giving effect to any Loan will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) of the Disclosure Letter sets
------------------ ---------------
forth a complete and accurate list of all Material Contracts of the Borrower and
its Subsidiaries in effect as of the Closing Date not listed on any other
Schedule hereto or to the Disclosure Letter; other than as set forth in Schedule
--------
6.1(l) of the Disclosure Letter, each Material Contract is, and after giving
- ------
effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in all material respects in
accordance with the terms thereof. The Borrower and its Subsidiaries have
delivered to the Agent a true and complete copy of each Material Contract
required to be listed on Schedule 6.1(l) of the Disclosure Letter.
---------------
(m) Employee Relations. Each of the Borrower and its Subsidiaries has
------------------
a stable work force in place and as of the Closing Date is not, except as set
forth on Schedule 6.1(m) of the Disclosure Letter, party to any collective
---------------
bargaining agreement nor has any labor union been recognized as the
representative of its employees. The Borrower knows of no pending, threatened
or contemplated strikes, work stoppage or other collective labor disputes
involving its employees or those of its Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary
---------------------
thereof is a party to any indenture, agreement, lease or other instrument, or
subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries do not presently anticipate that future expenditures needed
to meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(o) Financial Statements. The (i) Consolidated balance sheets of the
--------------------
Borrower and its Subsidiaries as of December 31, 1996 and the related statements
of income and retained earnings and cash flows for the Fiscal Years then ended
and (ii) unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries as of June 30, 1997 and related unaudited interim statements of
revenue and
43
<PAGE>
retained earnings, copies of which have been furnished to the Agent and each
Lender, are complete and correct and fairly present the assets, liabilities and
financial position of the Borrower and its Subsidiaries as at such dates, and
the results of the operations and cash flows for the periods then ended. All
such financial statements, including the related notes thereto, have been
prepared in accordance with GAAP, except in the case of the unaudited financial
statements, for year-end adjustments and the absence of footnotes. The Borrower
and its Subsidiaries have no Debt, obligation or other unusual forward or long-
term commitment which is not fairly reflected in the foregoing financial
statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1996, there has
--------------------------
been no Material Adverse Effect and no event has occurred or condition arisen
that could reasonably be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
--------
Loan made hereunder, the Borrower and each of its Material Subsidiaries will be
Solvent.
(r) Titles to Properties. Each of the Borrower and its Subsidiaries
--------------------
has such title to the real property owned by it as is necessary or desirable to
the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Section 6.1(o), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
-----
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names the Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.3 hereof.
(t) Debt and Contingent Obligations. Schedule 6.1(t) of the
------------------------------- ---------------
Disclosure Letter is a complete and correct listing of all Debt and Contingent
Obligations of the Borrower and its Subsidiaries in excess of $250,000 as of the
Closing Date. The Borrower and its Subsidiaries have performed and are in
compliance with all of the terms of such Debt and Contingent Obligations and
44
<PAGE>
all instruments and agreements relating thereto, and no default or event of
default, or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Borrower or its
Subsidiaries exists with respect to any such Debt or Contingent Obligation.
(u) Litigation. Except for matters existing on the Closing Date and
----------
set forth on Schedule 6.1(u) of the Disclosure Letter and except for matters
---------------
which, if adversely determined, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, there are no actions,
suits or proceedings pending nor, to the knowledge of the Borrower, threatened
against or in any other way relating adversely to or affecting the Borrower or
any Subsidiary thereof or any of their respective properties in any court or
before any arbitrator of any kind or before or by any Governmental Authority.
(v) Absence of Defaults. No event has occurred or is continuing which
-------------------
constitutes a Default or an Event of Default.
(w) Accuracy and Completeness of Information. All written
----------------------------------------
information, reports and other papers and data produced by or on behalf of the
Borrower or any Subsidiary thereof and furnished to the Lenders were, at the
time the same were so furnished, complete and correct in all material respects
to the extent necessary to give the recipient a true and accurate knowledge of
the subject matter. No document furnished or written statement made to the
Agent or the Lenders by the Borrower or any Subsidiary thereof in connection
with the negotiation, preparation or execution of this Agreement or any of the
Loan Documents contains or will contain any untrue statement of a fact material
to the creditworthiness of the Borrower or its Subsidiaries or omits or will
omit to state a material fact necessary in order to make the statements
contained therein not misleading. The Borrower is not aware of any facts which
it has not disclosed in writing to the Agent having a Material Adverse Effect,
or insofar as the Borrower can now foresee, could reasonably be expected to have
a Material Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, Etc.
-----------------------------------------------
All representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
45
<PAGE>
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
---------------------------------
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower will
furnish or cause to be furnished to the Agent at the Agent's Office (and, with
respect to the items referred to in Sections 7.1(a) and (b) and 7.4(b), to the
Lenders at their respective addresses as set forth on Schedule 1), or such other
----------
office as may be designated by the Agent and Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
------------------------------------
(a) Quarterly Financial Statements. As soon as practicable and in any
------------------------------
event within sixty (60) days after the end of each fiscal quarter, an unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such fiscal quarter and unaudited Consolidated statements of income, retained
earnings and cash flows for the fiscal quarter then ended and that portion of
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures for the
preceding Fiscal Year and prepared by the Borrower in accordance with GAAP,
except for year end adjustments and the absence of footnotes, and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
---------------------------
event within one hundred (100) days after the end of each Fiscal Year, an
audited Consolidated balance sheet of the Borrower and its Subsidiaries as of
the close of such Fiscal Year and audited Consolidated statements of income,
retained earnings and cash flows for the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by Coopers &
Lybrand, or other independent certified public accounting firm with nationally
recognized standing, in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operation of
any change in the application of accounting principles
46
<PAGE>
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Subsidiaries or with respect
to accounting principles followed by the Borrower or any of its Subsidiaries not
in accordance with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as
----------------------------------------------
practicable and in any event within sixty (60) days after the beginning of each
Fiscal Year, a business plan of the Borrower and its Subsidiaries in form and
substance reasonably satisfactory to the Agent.
(d) DBA Financial Statements. As soon as practicable and in any event
------------------------
within ninety (90) days after the end of the fiscal year ended January 31, 1997,
an audited Consolidated balance sheet of DBA and its Subsidiaries as of the
close of such fiscal year and audited Consolidated statements of income,
retained earnings and cash flows for the fiscal year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding fiscal year and prepared by BDO Seidman,
LLP, or other independent certified public accounting firm with nationally
recognized standing, in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operation of
any change in the application of accounting principles and practices during the
year, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by DBA or any of
its Subsidiaries or with respect to accounting principles followed by DBA or any
of its Subsidiaries not in accordance with GAAP.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
--------------------------------
statements are delivered pursuant to Sections 7.1 (a) or (b), a certificate of
the chief financial officer or the treasurer of the Borrower in the form of
Exhibit F attached hereto (an "Officer's Compliance Certificate").
- ---------
SECTION 7.3 Accountants' Certificate. At each time financial
------------------------
statements are delivered pursuant to Section 7.1(b), a certificate of the
independent public accountants certifying such financial statements addressed to
the Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such
47
<PAGE>
accountants required to establish whether or not the Borrower and its
Subsidiaries are in compliance with the financial covenants set forth in Article
IX hereof as at the end of each respective period.
SECTION 7.4 Other Reports.
-------------
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any final management report and any management responses thereto;
(b) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by the Borrower
or any of its Subsidiaries with the Securities and Exchange Commission ("SEC")
and required by the SEC to be delivered to the shareholders of the Borrower or
any of its Subsidiaries, and (ii) each report made by the Borrower or any of its
Subsidiaries to the SEC on Form 8-K and each final registration statement of the
Borrower or any of its Subsidiaries filed with the SEC; and
(c) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the Agent
or any Lender may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no
--------------------------------------
event later than ten (10) days after the Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer of the Borrower obtains knowledge
thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses;
(b) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws, which individually or
together with all such other notices of violation, could reasonably be expected
to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrower or any Subsidiary
thereof;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against or threatened
48
<PAGE>
against the Borrower or any Subsidiary thereof;
(e) any Default or Event of Default;
(f) any event which constitutes or which with the passage of time or
giving of notice or both would constitute a default or event of default under
any Material Contract to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower or any Subsidiary thereof or any of their
respective properties may be bound, the result of which could reasonably be
expected to have a Material Adverse Effect; and
(g) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
SECTION 7.6 Accuracy of Information. All written information, reports,
-----------------------
statements and other papers and data furnished by or on behalf of the Borrower
to the Agent or any Lender (other than financial forecasts) whether pursuant to
this Article VII or any other provision of this Agreement, or any other Loan
Document, shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Agent or any Lender
complete, true and accurate knowledge of the subject matter based on the
Borrower's knowledge thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
---------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner provided for in Section 13.11, the Borrower will, and
will cause each of its Subsidiaries to:
49
<PAGE>
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
-------------------------------------------------------
Except as permitted by Section 10.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
SECTION 8.2 Maintenance of Property. Protect and preserve all properties
-----------------------
useful in and material to its business, including copyrights, patents, trade
names and trademarks; maintain in good working order and condition all
buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; except in each case where the failure to take such action could
not reasonably be expected to have a Material Adverse Effect.
SECTION 8.3 Insurance. Maintain insurance with financially sound and
---------
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law, and on the Closing Date and from time to time thereafter deliver
to the Agent upon its request a detailed list of the material policies of
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
SECTION 8.4 Accounting Methods and Financial Records. Maintain a system of
----------------------------------------
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. (a) Pay and perform
--------------------------------------
all Obligations under this Agreement and the other Loan Documents and (b) pay or
perform all material taxes, assessments and other governmental charges that may
be levied or assessed upon it or any of its property; provided, that the
--------
Borrower or such Subsidiary may contest any item described in clause (b) of this
Section 8.5 in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and remain in
----------------------------------
compliance in all material respects with all
50
<PAGE>
Applicable Laws and maintain in full force and effect in all material respects
all Governmental Approvals, in each case applicable to the conduct of its
business.
SECTION 8.7 Environmental Laws. In addition to and without limiting the
------------------
generality of Section 8.6, (a) comply with, and use its best efforts to ensure
such compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use its best
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect, (b)
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect and (c) defend,
indemnify and hold harmless the Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the Borrower or such Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without limiting
---------------------
the generality of Section 8.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Agent upon the Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Agent, except, in each case, where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
51
<PAGE>
SECTION 8.9 Compliance With Agreements. Comply in all respects with each
--------------------------
material term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; provided, that the
--------
Borrower or such Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 8.10 Visits and Inspections. Permit representatives of the Agent
----------------------
or any Lender, from time to time, during normal business hours and upon
reasonable notice, to visit and inspect its properties; inspect, audit and make
extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
SECTION 8.11 Additional Subsidiary Guarantors. Upon the creation of any
--------------------------------
Material Subsidiary permitted by this Agreement or upon any Subsidiary becoming
a Material Subsidiary, cause to be executed and delivered to the Agent within
ten (10) Business Days after the creation of such Subsidiary: (a) the Supplement
attached to the Subsidiary Guaranty, executed by such new Subsidiary, (b) the
closing documents and certificates required of each of the Subsidiary Guarantors
pursuant to Section 5.2(b) hereof with respect to such new Subsidiary and (c)
such other documents reasonably requested by the Agent in order that such new
Subsidiary shall become bound by all of the terms, covenants and agreements
contained in the Subsidiary Guaranty. Upon satisfaction of the conditions set
forth in this Section 8.11, such new Subsidiary shall become a Subsidiary
Guarantor as if an original signatory to the Subsidiary Guaranty.
SECTION 8.12 Further Assurances. Make, execute and deliver all such
------------------
additional and further acts, things, deeds and instruments as the Agent or any
Lender may reasonably require to document and consummate the transactions
contemplated hereby and to vest completely in and insure the Agent and the
Lenders their respective rights under this Agreement, the Notes, the Letters of
Credit and the other Loan Documents.
52
<PAGE>
ARTICLE IX
FINANCIAL COVENANTS
-------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower and its
Subsidiaries on a Consolidated basis will not:
SECTION 9.1 Leverage Ratio. As of the end of any fiscal quarter, permit
--------------
the ratio of (a) the Consolidated Debt of the Borrower and its Subsidiaries as
of such date to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on such date, to exceed 2.50 to 1.00. For the purposes of this
Section 9.1, EBITDA for each of the fiscal quarters ending on or prior to March
31, 1997, shall be calculated on a pro forma basis to combine the EBITDA of the
--- -----
Borrower and its Subsidiaries with the EBITDA of DBA and its Subsidiaries.
SECTION 9.2 Interest Coverage Ratio. As of the end of any fiscal quarter,
-----------------------
permit the ratio of (a) EBITDA for the period of four (4) consecutive fiscal
quarters ending on such date to (b) Consolidated Interest Expense of the
Borrower and its Subsidiaries for such period of four (4) fiscal quarters, to be
less than 4.00 to 1.00; provided, that for the fiscal quarter ending September
--------
30, 1997, such calculation shall be made for the period of three (3) fiscal
quarters ending on such date. For the purposes of this Section 9.2, EBITDA for
the fiscal quarter ending on March 31, 1997, shall be calculated on a pro forma
--- -----
basis to combine the EBITDA of the Borrower and its Subsidiaries with the EBITDA
of DBA and its Subsidiaries.
SECTION 9.3 Minimum Tangible Net Worth. Permit, at any time, Tangible Net
--------------------------
Worth to be less than (a) $0 plus (b) 50% of cumulative quarterly Consolidated
----
Net Income (prior to the impact of non-cash charges related to the write down of
intangibles) of the Borrower and its Subsidiaries commencing on July 1, 1997
(without deduction for any quarterly losses) plus (c) 50% of the net proceeds
----
received by the Borrower or any of its Subsidiaries of any public equity
issuance by the Borrower or any of its Subsidiaries subsequent to the Closing
Date.
53
<PAGE>
ARTICLE X
NEGATIVE COVENANTS
------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower has not
and will not permit any of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer to
-------------------
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions reasonably satisfactory to the Agent;
(c) Debt existing on the Closing Date, as set forth on Schedule 6.1(t)
---------------
of the Disclosure Letter and the renewal and refinancing (but not the increase)
thereof;
(d) Debt of the Borrower and its Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $2,000,000 on any
date of determination;
(e) purchase money Debt of the Borrower and its Subsidiaries in an
aggregate amount not to exceed $1,000,000 on any date of determination;
(f) Debt of the Borrower and its Subsidiaries owing to sellers in
connection with acquisitions permitted pursuant to Section 10.4(c) in an
aggregate amount not to exceed $10,000,000 on any date of determination;
provided, that such Debt shall be subordinated substantially in accordance with
- --------
the terms and provisions set forth on Exhibit J attached hereto and incorporated
---------
herein by reference;
(g) intercompany Debt; provided, that the aggregate amount of Debt
--------
owing from any Subsidiary which is not a Subsidiary Guarantor to the Borrower or
any Subsidiary Guarantor shall not exceed $5,000,000 on any date of
determination;
(h) Debt of the Borrower and its Subsidiaries not otherwise permitted
hereby in an aggregate amount not to exceed $1,000,000 on any date of
determination; and
(i) Debt consisting of Contingent Obligations permitted by Section
10.2;
54
<PAGE>
provided, that none of the Debt permitted to be incurred by this Section shall
- --------
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of the Borrower to make any payment to the Borrower or any of its
Subsidiaries (in the form of dividends, intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.
SECTION 10.2 Limitations on Contingent Obligations. Create, incur, assume
-------------------------------------
or suffer to exist any Contingent Obligations except:
(a) Contingent Obligations in favor of the Agent for the benefit of
the Agent and the Lenders;
(b) Contingent Obligations existing on the Closing Date and not
otherwise permitted under this Section 10.2, as set forth on Schedule 6.1(t) of
---------------
the Disclosure Letter and the renewal and refinancing (but not the increase)
thereof;
(c) Contingent Obligations with respect to Debt permitted pursuant to
Section 10.1; and
(d) Contingent Obligations in an amount not to exceed $1,000,000 on
any date of determination.
SECTION 10.3 Limitations on Liens. Create, incur, assume or suffer to
--------------------
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens of the Agent for the benefit of the Agent and the Lenders;
(b) Liens not otherwise permitted by this Section 10.3 and in
existence on the Closing Date and described on Schedule 10.3 of the Disclosure
-------------
Letter;
(c) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(d) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
55
<PAGE>
appropriate proceedings;
(e) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation;
(f) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(g) Liens securing Debt permitted under Sections 10.1(d) and (e);
provided, that (i) such Liens shall be created substantially simultaneously with
- --------
the lease or acquisition of the related asset, (ii) such Liens do not at any
time encumber any property other than the property financed by such Debt, (iii)
the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt secured by any such Lien shall at no time exceed ninety percent
(90%) of the original lease payment amount or purchase price of such property at
the time it was leased or acquired;
(h) Liens on any "margin stock" (as defined in Regulations G and U of
the Board of Governors of the Federal Reserve System) owned by the Borrower or
any of its Subsidiaries, to the extent that the value of such margin stock is
equal to or greater than 25% of the value of the total assets of the Borrower
and its Subsidiaries;
(i) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Borrower or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Borrower or any Subsidiary at the time such property is so acquired (so long as
the Debt secured thereby shall have been assumed and is otherwise permitted
under Section 9.1 or 9.2); provided, that (i) no such Lien shall have been
--------
created or assumed in contemplation of such consolidation or merger or such
Person's becoming a Subsidiary or such acquisition of property, and (ii) each
such Lien shall extend solely to the item or items of property so acquired;
(j) leases or subleases and licenses or sublicenses granted to another
Person in the ordinary course of the Borrower's business and not interfering in
any material respect with the business of the Borrower and its Subsidiaries,
taken as a whole;
(k) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default
56
<PAGE>
under Section 11.1(m);
(l) Liens which constitute rights of set-off of a customary nature or
banker's Liens with respect to amounts on deposit, whether arising by operation
of law or by contract in connection with arrangements entered into with banks in
the ordinary course of business; and
(m) Liens securing Debt permitted under Section 10.1(h).
SECTION 10.4 Limitations on Loans, Advances, Investments and
-----------------------------------------------
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
- ------------
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person, or enter into, directly or
indirectly, any commitment or option in respect of the foregoing except:
(a) investments in Subsidiaries existing on the Closing Date or
formed at any time thereafter, or acquired in compliance with clause (c) of this
Section 10.4; and the existing loans, advances and investments described on
Schedule 10.4 of the Disclosure Letter;
- -------------
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. or Moody's
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
--------
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder;
57
<PAGE>
(c) investments by the Borrower or any of its Subsidiaries in the
form of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any combination
thereof) of any other Person (including, without limitation, the Acquisition) if
such acquisition meets all of the following requirements: (i) the Person whose
equity interest is to be acquired shall be or, as a result of such acquisition
shall become, a Wholly-Owned Subsidiary of the Borrower and no Change in Control
shall have been effected thereby, (ii) the Person whose equity interest is to be
acquired shall engage in a business or the assets being acquired are to be used
in a business described in Section 10.11, (iii) evidence of approval of the
acquisition by the board of directors or equivalent governing body of the
acquired Person, including, without limitation, resolutions duly adopted by the
board of directors or equivalent governing body of the acquired Person
authorizing the acquisition and the execution, delivery and performance of any
transactions contemplated thereby, shall have been delivered to the Agent, (iv)
the Borrower shall have demonstrated pro forma compliance with each covenant
--- -----
contained in Articles VIII, IX and X hereof prior to consummating the
acquisition and no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the acquisition, (v) a
description of the acquisition and the governing documentation shall have been
delivered to the Agent at least fifteen (15) Business Days prior to the
consummation of the acquisition and a copy of the final governing documentation
shall be delivered within a reasonable time after the acquisition, (vi) the
Borrower shall comply and cause each of its Subsidiaries to comply with Section
8.11 and (vii) the fair market value of all consideration paid (including,
without limitation, cash consideration paid, Debt assumed and the value of any
stock transferred in any "pooling of interests" or otherwise) in connection with
all such acquisitions in the aggregate shall not exceed $50,000,000 in any
Fiscal Year;
(d) loans and advances to employees in the ordinary course of
business in an aggregate amount not to exceed $250,000 at any time; and
(e) investments by the Borrower (i) pursuant to its investment policy
in effect on the Closing Date and attached hereto as Exhibit I, as amended from
---------
time to time with the consent of the Required Lenders, (ii) in publicly traded
common stock and (iii) in non-publicly traded common stock or investment funds;
provided, that (A) aggregate investments (calculated on a cost basis) pursuant
- --------
to this clause (e) (except as set forth in the last sentence of this clause (e))
shall not exceed $20,000,000 on any date of determination, (B) aggregate
investments (calculated on a cost basis) pursuant to subclauses (ii) and (iii)
of this clause (e) (except as set forth in the last sentence of this clause (e))
58
<PAGE>
shall not exceed $12,000,000 on any date of determination, (C) aggregate
investments (calculated on a cost basis) pursuant to subclause (iii) of this
clause (e) shall not exceed $4,000,000 on any date of determination and (D)
investments pursuant to subclauses (ii) and (iii) of this clause (e) shall be in
Persons engaged in a business described in Section 10.11. Notwithstanding the
foregoing and in addition to the investments permitted above, at any time prior
to December 31, 1997, the Borrower may have aggregate investments not to exceed
$18,000,000 (calculated on a cost basis) in publicly traded stock of a company
disclosed to the Lenders; provided, that at any time during such period that the
--------
Borrower has any such investments, (1) the aggregate investments (calculated on
a cost basis) permitted pursuant to subclause (A) above shall not exceed
$16,000,000 on any date of determination and (2) the aggregate investments
(calculated on a cost basis) permitted pursuant to subclauses (B) above shall
not exceed $8,000,000 on any date of determination.
SECTION 10.5 Limitations on Mergers and Liquidation. Merge, consolidate
--------------------------------------
or enter into any similar combination with any other Person or liquidate, wind-
up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Subsidiary of the Borrower may merge with or wind-up into the
Borrower or any Subsidiary Guarantor; and
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 10.4(c); provided, that the surviving entity shall be or
--------
become a Subsidiary Guarantor.
SECTION 10.6 Limitations on Sale of Assets. Convey, sell, lease, assign,
-----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets or assets no longer used or usable in
the business of the Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any Subsidiary
Guarantor pursuant to Section 10.5;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection
59
<PAGE>
with the compromise or collection thereof;
(e) transfers consisting of the granting of non-exclusive licenses
and similar arrangements for the use of the property of the Borrower and its
Subsidiaries in the ordinary course of business;
(f) transfers constituting investments permitted under Section 10.4
or the liquidation of such investments (except to the extent that any such
liquidation is prohibited pursuant to Section 10.5);
(g) transfers from any Subsidiary to any other Subsidiary or the
Borrower; and
(h) other transfers not otherwise permitted by this Section 10.6 not
exceeding an amount equal to five percent (5%) of Consolidated Tangible Net
Worth (calculated as of the end of the Fiscal Year most recently ended) in any
Fiscal Year.
SECTION 10.7 Limitations on Dividends and Distributions. Declare or pay
------------------------------------------
any dividends upon of its capital stock; purchase, redeem, retire or otherwise
acquire, directly or indirectly, any shares of its capital stock, or make any
distribution of cash, property or assets among the holders of shares of its
capital stock; provided, that:
--------
(a) the Borrower and its Subsidiaries may pay cash dividends or
redeem capital stock, in an aggregate amount during any period of four (4)
fiscal quarters not to exceed the lesser of: (i) $5,000,000 or (ii) 25% of the
Consolidated Net Income of the Borrower and its Subsidiaries for such period of
four (4) fiscal quarters;
(b) the Borrower or any Subsidiary may pay dividends in shares of its
own capital stock; and
(c) any Subsidiary may pay dividends to the Borrower or any
Subsidiary.
SECTION 10.8 Transactions with Affiliates. To the extent not otherwise
----------------------------
expressly permitted herein, directly or indirectly: (a) make any loan or advance
to, or purchase or assume any note or other obligation to or from, any of its
officers, directors, shareholders or other Affiliates, or to or from any member
of the immediate family of any of its officers, directors, shareholders or other
Affiliates, or subcontract any operations to any of its Affiliates, or (b) enter
into, or be a party to, any transaction with any of its Affiliates, except
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
60
<PAGE>
comparable arm's length transaction with a Person not its Affiliate.
SECTION 10.9 Certain Accounting Changes. Change its Fiscal Year end, or
--------------------------
make any change in its accounting treatment and reporting practices except as
required or permitted by GAAP.
SECTION 10.10 Restrictive Agreements. Enter into any Debt which contains
----------------------
any negative pledge on assets other than the assets or properties securing such
Debt or any covenants more restrictive than the provisions of Articles VIII, IX
and X hereof, or which restricts, limits or otherwise encumbers its ability to
incur Liens on or with respect to any of its assets or properties other than the
assets or properties securing such Debt.
SECTION 10.11 Conduct of Business. Not engage in any material line of
-------------------
business substantially different from those businesses in which it engages as of
the Closing Date, or lines of business reasonably related or incidental thereto.
ARTICLE XI
DEFAULT AND REMEDIES
--------------------
SECTION 11.1 Events of Default. Each of the following shall constitute
-----------------
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
----------------------------------------------------------
Obligation. The Borrower shall default in any payment of principal of any Loan,
- ----------
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
---------------------
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for five (5)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
-----------------
to be made by the Borrower or any of its Subsidiaries under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
61
<PAGE>
(d) Default in Performance of Certain Covenants. The Borrower shall
-------------------------------------------
default in the performance or observance of any covenant or agreement contained
in Sections 7.2, 7.5(e) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
--------------------------------------------------------
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Agent.
(f) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
------------------
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $1,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $1,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(g) Other Cross-Defaults. The Borrower or any of its Subsidiaries
--------------------
shall default in the payment when due (the aggregate outstanding amount of which
past due payments are in excess of $2,000,000) under any Material Contract
unless, but only as long as, the existence of any such default is being
contested by the Borrower or such Subsidiary in good faith by appropriate
proceedings and adequate reserves in respect thereof have been established on
the books of the Borrower or such Subsidiary to the extent required by GAAP.
(h) Change in Control. Any person or group of persons (within the
-----------------
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended),
shall obtain ownership or control in one or more series of transactions of more
than thirty percent (30%) of the common stock or thirty percent (30%) of the
voting power of the Borrower entitled to vote in the election of members of the
board of directors of the Borrower (any such event, a "Change in Control").
62
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(i) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
-------------------------------
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding
---------------------------------
shall be commenced against the Borrower or any Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(k) Failure of Agreements. Any provision of the Subsidiary Guaranty
---------------------
shall for any reason cease to be valid and binding on the Subsidiary Guarantors
party thereto or any such Person shall so state in writing, other than in
accordance with the express terms thereof.
(l) Termination Event. The occurrence of any of the following events:
-----------------
(i) the Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
63
<PAGE>
$1,000,000.
(m) Judgment. A judgment or order for the payment of money which
--------
causes the aggregate amount of all such judgments to exceed $1,000,000 in any
Fiscal Year shall be entered against the Borrower or any of its Subsidiaries by
any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, with
--------
the consent of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent shall, by notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
---------------------------------------
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the Agent
under this Agreement or any of the other Loan Documents and all other
Obligations (including, without limitation, all L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder), to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived, anything
in this Agreement or the other Loan Documents to the contrary notwithstanding,
and terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
--------
of an Event of Default specified in Section 11.1(i) or (j), the Credit Facility
shall be automatically terminated and all Obligations shall automatically become
due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
-----------------
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the Agent to
the payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay the other Obligations. After all such
Letters of Credit shall have expired or been fully drawn upon, the Reimbursement
Obligation shall have been satisfied and all other Obligations shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the
--------------------
64
<PAGE>
Lenders all of its other rights and remedies under this Agreement, the other
Loan Documents and Applicable Law, in order to satisfy all of the Borrower's
Obligations.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
-----------------------------------------------
enumeration of the rights and remedies of the Agent and the Lenders set forth in
this Agreement is not intended to be exhaustive and the exercise by the Agent
and the Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower, the Agent and the
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
ARTICLE XII
THE AGENT
---------
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably
-----------
designates and appoints First Union as Agent of such Lender under this Agreement
and the other Loan Documents and each such Lender irrevocably authorizes First
Union as 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 and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement and such other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or such other Loan Documents, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Agent.
SECTION 12.2 Delegation of Duties. The Agent may execute any of its
--------------------
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall
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be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by the Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person's own gross negligence or willful misconduct), or (b) 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
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of the Borrower or any of its Subsidiaries to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Borrower or any of its
Subsidiaries.
SECTION 12.4 Reliance by the Agent. The 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,
telex or teletype 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 Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 13.10 hereof. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders (or, when expressly required
hereby or by the relevant other Loan Document, all the Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of
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the Required Lenders (or, when expressly required hereby, all the Lenders), and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
SECTION 12.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower 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 Agent receives such
a notice, it shall promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that unless and until the
--------
Agent shall have received such directions, the 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.
SECTION 12.6 Non-Reliance on the Agent and Other Lenders. Each Lender
-------------------------------------------
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates has made any representations or warranties to it and that no act by
the Agent hereinafter 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 Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the 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 business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans and issue or
participate in Letters of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder or by the other Loan Documents, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower or any of its Subsidiaries
which may come into the possession of the Agent or any
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of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the Agent
---------------
in its capacity as such and (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
the respective amounts of their Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the 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 solely from the Agent's bad faith,
gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Notes, any Reimbursement Obligation and all
other amounts payable hereunder and the termination of this Agreement.
SECTION 12.8 The Agent in Its Individual Capacity. The Agent and its
------------------------------------
respective Subsidiaries and Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Agent were not an Agent hereunder. With respect to any Loans made or renewed by
it and any Note issued to it and with respect to any Letter of Credit issued by
it or participated in by it, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
SECTION 12.9 Resignation of the Agent; Successor Agent. Subject to the
-----------------------------------------
appointment and acceptance of a successor as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, with the
consent of the Borrower (which consent shall not unreasonably be withheld or
delayed), to appoint a successor Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Agent's giving of notice of
resignation, then the Agent may, on behalf of the Lenders, with the consent of
the Borrower (which consent shall not unreasonably be withheld or
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delayed), appoint a successor Agent, which successor shall have minimum capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 12.9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.1 Notices.
-------
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the Agent as
understood by the Agent will be deemed to be the controlling and proper notice
in the event of a discrepancy with or failure to receive a confirming written
notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
---------------------
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: American Business Information, Inc.
5711 So. 86th Circle
P.O. Box 27347
Omaha, Nebraska 68127-0347
Attention: Mr. Jon H. Wellman
Mr. Eric Groves
Telephone No.: (402) 596-8900
Telecopy No.: (402) 339-0265
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With copies to: Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Francis S. Currie
Telephone: (415) 493-9300
Telecopy: (415) 496-4006
If to First Union as
Agent: First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina
28288-0608
Attention: Syndication Agency
Services
Telephone No.: (704) 383-0281
Telecopy No.: (704) 383-0288
With copies to: First Union National Bank
One First Union Center, DC-5
301 South College Street
Charlotte, North Carolina
28288
Attention: Doug Sleeper
Telephone No.: (704) 374-4367
Telecopy No.: (704) 374-2802
If to any Lender: To the Address set forth on
Schedule 1 hereto
----------
(c) Agent's Office. The Agent hereby designates its office located at
--------------
the address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrower and Lenders, as the
Agent's Office referred to herein, to which payments due are to be made and at
which Loans will be disbursed and Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity. The Borrower will, within thirty (30)
-------------------
days after demand, (a) pay all reasonable out-of-pocket expenses of the Agent in
connection with: (i) the preparation, execution and delivery of this Agreement
and each other Loan Document, whenever the same shall be executed and delivered,
including without limitation all reasonable out-of-pocket syndication and due
diligence expenses and reasonable fees and disbursements of counsel for the
Agent and (ii) the preparation, execution and delivery of any waiver, amendment
or consent by the Agent or the Lenders relating to this Agreement or any other
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Loan Document, including without limitation reasonable fees and disbursements of
counsel for the Agent, (b) pay all out-of-pocket expenses of the Agent and each
Lender in connection with the administration and enforcement of any rights and
remedies of the Agent and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the Agent or any
Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (c) defend, indemnify and
hold harmless the Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with the Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon and
after the occurrence of any Event of Default and during the continuance thereof,
the Lenders and any assignee or participant of a Lender in accordance with
Section 13.10 are hereby authorized by the Borrower at any time or from time to
time, without notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of the
Borrower against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 11.2 and although such
Obligations shall be contingent or unmatured.
SECTION 13.4 Governing Law. This Agreement, the Notes and the other Loan
-------------
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 13.5 Consent to Jurisdiction. The Borrower hereby
-----------------------
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irrevocably consents to the personal jurisdiction of the state and federal
courts located in Mecklenburg County, North Carolina, in any action, claim or
other proceeding arising out of any dispute in connection with this Agreement,
the Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations. The Borrower
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Agent or any Lender in
connection with this Agreement, the Notes or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations, on behalf of itself or its property, in the manner specified in
Section 13.1. Nothing in this Section 13.5 shall affect the right of the Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Agent or any Lender to bring any action or
proceeding against the Borrower or its properties in the courts of any other
jurisdictions.
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.
-----------------------------------------
(a) Binding Arbitration. Upon demand of any party, whether made
-------------------
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("Disputes"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from Loan Documents executed in the future, or claims concerning any
aspect of the past, present or future relationships arising out of or connected
with the Loan Documents. Arbitration shall be conducted under and governed by
the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
-- ---
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted. Notwithstanding the foregoing, this paragraph shall not apply to
any Hedging Agreement
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<PAGE>
that is a Loan Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE AGENT,
----------
EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
--------------------------------
binding arbitration provisions, the parties hereto and to the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed
in any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining provisional
or ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 13.7 Reversal of Payments. To the extent the Borrower makes a
--------------------
payment or payments to the Agent, for the benefit of itself or the Lenders, or
the Agent receives any payment or proceeds of the collateral which payments or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
repaid, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or proceeds
had not been received by the Agent.
SECTION 13.8 Punitive Damages. The Agent, Lenders and Borrower (on behalf
----------------
of itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved
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through arbitration or judicially.
SECTION 13.9 Accounting Matters. All financial and accounting
------------------
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Agent to the contrary agreed
to by the Borrower, be performed in accordance with GAAP as in effect on the
Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
SECTION 13.10 Successors and Assigns; Participations.
--------------------------------------
(a) Benefit of Agreement. This Agreement shall be binding upon and
--------------------
inure to the benefit of the Borrower, the Agent and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrower shall not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
---------------------
Agent and the Borrower, which consents shall not be unreasonably withheld or
delayed, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Extensions of Credit at the time owing to it
and the Notes held by it); provided, that:
--------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than $5,000,000 and the
Commitment so retained shall not be less than $5,000,000;
(iii) the parties to each such assignment shall
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<PAGE>
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit G attached hereto
---------
(an "Assignment and Acceptance") , together with any Note or Notes subject to
such assignment;
(iv) such assignment shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and
(v) the assigning Lender shall pay to the Agent an assignment fee
of $3,000 upon the execution by such Lender of the Assignment and Acceptance;
provided, that no such fee shall be payable upon any assignment by a Lender to
- --------
an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
---------------------------------
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Agent shall maintain a copy of each Assignment and
--------
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders and the amount of the Extensions of Credit with respect
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
---------------------
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit G:
---------
(i) accept such Assignment and Acceptance;
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(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Agent, in exchange for the surrendered Note or Notes,
a new Note or Notes to the order of such Eligible Assignee in amounts equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance and a
new Note or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall
be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or
--------------
more banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided, that:
--------
(i) each such participation shall be in an amount not less than
$3,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it for
all purposes of this Agreement;
(v) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this Agreement or any
other Loan Document other than waivers,
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amendments or modifications which would reduce the principal of or the interest
rate on any Loan or Reimbursement Obligation, extend the term or increase the
amount of the Commitment, reduce the amount of any fees to which such
participant is entitled, extend any scheduled payment date for principal of any
Loan or release any Subsidiary Guarantor; and
(vii) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Agent and the
------------------------------------------
Lenders shall hold all non-public information with respect to the Borrower
obtained pursuant to the Loan Documents in accordance with their customary
procedures for handling confidential information. Any Lender may, in connection
with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 13.10, disclose to the assignee,
participant, proposed assignee or proposed participant, any information relating
to the Borrower furnished to such Lender by or on behalf of the Borrower;
provided, that prior to any such disclosure, each such assignee, proposed
- --------
assignee, participant or proposed participant shall agree with the Borrower or
such Lender to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
------------------------------
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.11 Amendments, Waivers and Consents. Except as set forth below,
--------------------------------
any term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents may be amended or waived by the Lenders, and any consent given by
the Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Agent with the consent of the Required
Lenders) and delivered to the Agent and, in the case of an amendment, signed by
the Borrower; provided, that no amendment, waiver or consent shall (a) increase
--------
the amount or extend the time of the obligation of the Lenders to make Loans or
issue or participate in Letters of Credit (including without limitation pursuant
to Section 2.6), (b) extend the originally scheduled time or times of payment of
the principal of any Loan or Reimbursement Obligation or the time or times of
payment of interest on any Loan or Reimbursement Obligation, (c) reduce the rate
of interest or fees payable on any Loan or Reimbursement Obligation, (d) permit
any subordination of the principal or interest on any Loan or Reimbursement
Obligation, (e) release any Subsidiary Guarantor or (f) amend the provisions of
this Section 13.11 or the definition of
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Required Lenders, without the prior written consent of each Lender. In addition,
no amendment, waiver or consent to the provisions of Article XII shall be made
without the written consent of the Agent.
SECTION 13.12 Performance of Duties. The Borrower's obligations under this
---------------------
Agreement and each of the Loan Documents shall be performed by the Borrower at
its sole cost and expense.
SECTION 13.13 All Powers Coupled with Interest. All powers of attorney and
--------------------------------
other authorizations granted to the Lenders, the Agent and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied or the Credit Facility has not been terminated.
SECTION 13.14 Survival of Indemnities. Notwithstanding any termination of
-----------------------
this Agreement, the indemnities to which the Agent and the Lenders are entitled
under the provisions of this Article XIII and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising after such
termination as well as before; provided, that those indemnities set forth in
--------
Sections 4.8 through 4.11 shall terminate ninety (90) days following the
termination of this Agreement.
SECTION 13.15 Titles and Captions. Titles and captions of Articles,
-------------------
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.16 Severability of Provisions. Any provision of this Agreement
--------------------------
or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.17 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 13.18 Term of Agreement. This Agreement shall remain in effect
-----------------
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. No
termination of this
78
<PAGE>
Agreement shall affect the rights and obligations of the parties hereto arising
prior to such termination.
79
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] AMERICAN BUSINESS INFORMATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FIRST UNION NATIONAL BANK, as Agent
and Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLEET BANK, N.A., as Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
COMERICA BANK, as Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
FIRST BANK, N.A., as Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
<PAGE>
SCHEDULE 1: LENDERS AND COMMITMENTS
<TABLE>
<CAPTION>
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE
- ------ ----------
<S> <C>
First Union National Bank $47,500,000
One First Union Center, TW-10 47.50%
301 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone No.: (704) 383-0281
Telecopy No.: (704) 382-0288
First Union National Bank
One First Union Center, DC-5
301 South College Street
Charlotte, North Carolina
28288
Attention: Doug Sleeper
Telephone No.: (704) 374-4367
Telecopy No.: (704) 374-2802
Fleet Bank $20,000,000
208 Harristown Road 20.00%
Glenn Rock, NJ 07452
Attention: Kathryn T. Murphy
Telephone No.: (201) 251-5317
Telecopy No.: (201) 251-5275
Comerica Bank $17,500,000
500 Woodward Ave. 17.50%
Mail Code 3269
Detroit, MI 48226
Attention: David L. Morrison
Telephone No.: (313) 222-3808
Telecopy No.: (313) 222-9516
First Bank, N.A. $15,000,000
5332 S. 138th Street 15.00%
Omaha, NE 68137
Attention: Steve Adams
Telephone No.: (402) 233-7163
Telecopy No.: (402) 233-7168
</TABLE>
<PAGE>
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of August 29, 1997,
by and among
AMERICAN BUSINESS INFORMATION, INC.,
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Agent
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
ARTICLE I............................................................. 1
DEFINITIONS........................................ 1
-----------
SECTION 1.1 Definitions........................................ 1
-----------
SECTION 1.2 General............................................ 13
-------
SECTION 1.3 Other Definitions and Provisions................... 13
--------------------------------
ARTICLE II............................................................ 14
REVOLVING CREDIT FACILITY.......................... 14
-------------------------
SECTION 2.1 Revolving Credit Loans............................. 14
----------------------
SECTION 2.2 Procedure for Advances of Loans.................... 14
-------------------------------
SECTION 2.3 Repayment of Loans................................. 15
------------------
SECTION 2.4 Revolving Credit Notes............................. 15
----------------------
SECTION 2.5 Permanent Reduction of the Aggregate..................
------------------------------------
SECTION 2.6 Termination of Credit Facility..................... 16
------------------------------
SECTION 2.7 Use of Proceeds.................................... 17
---------------
ARTICLE III........................................................... 17
LETTER OF CREDIT FACILITY.......................... 17
-------------------------
SECTION 3.1 L/C Commitment..................................... 17
--------------
SECTION 3.2 Procedure for Issuance of Letters of..................
------------------------------------
SECTION 3.3 Commissions and Other Charges...................... 18
-----------------------------
SECTION 3.4 L/C Participations................................. 18
------------------
SECTION 3.5 Reimbursement Obligation of the.......................
-------------------------------
SECTION 3.6 Obligations Absolute............................... 20
--------------------
SECTION 3.7 Effect of Application.............................. 21
---------------------
ARTICLE IV............................................................ 21
GENERAL LOAN PROVISIONS............................ 21
-----------------------
SECTION 4.1 Interest........................................... 21
--------
SECTION 4.2 Notice and Manner of Conversion or....................
----------------------------------
SECTION 4.3 Fees............................................... 25
----
SECTION 4.4 Manner of Payment.................................. 25
-----------------
SECTION 4.5 Crediting of Payments and Proceeds................. 26
----------------------------------
SECTION 4.6 Adjustments........................................ 26
-----------
SECTION 4.7 Nature of Obligations of Lenders......................
--------------------------------
SECTION 4.8 Changed Circumstances.............................. 27
---------------------
SECTION 4.9 Indemnity.......................................... 30
---------
SECTION 4.10 Capital Requirements............................... 30
--------------------
SECTION 4.11 Taxes.............................................. 31
-----
SECTION 4.12 Affected Lenders................................... 33
----------------
SECTION 4.13 Similarly Situated Loans........................... 33
------------------------
ARTICLE V............................................................. 33
CLOSING; CONDITIONS OF CLOSING AND BORROWING....... 33
--------------------------------------------
SECTION 5.1 Closing............................................ 33
-------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.2 Conditions to Closing and Initial.....................
---------------------------------
SECTION 5.3 Conditions to All Loans and Letters of................
--------------------------------------
ARTICLE VI............................................................ 37
REPRESENTATIONS AND WARRANTIES OF THE.................
-------------------------------------
SECTION 6.1 Representations and Warranties..................... 37
------------------------------
SECTION 6.2 Survival of Representations and.......................
-------------------------------
ARTICLE VII........................................................... 45
FINANCIAL INFORMATION AND NOTICES.................. 45
---------------------------------
SECTION 7.1 Financial Statements and Projections............... 45
------------------------------------
SECTION 7.2 Officer's Compliance Certificate................... 47
--------------------------------
SECTION 7.3 Accountants' Certificate........................... 47
------------------------
SECTION 7.4 Other Reports...................................... 47
-------------
SECTION 7.5 Notice of Litigation and Other Matters............. 48
--------------------------------------
SECTION 7.6 Accuracy of Information............................ 49
-----------------------
ARTICLE VIII.......................................................... 49
AFFIRMATIVE COVENANTS.............................. 49
---------------------
SECTION 8.1 Preservation of Corporate Existence and...............
---------------------------------------
SECTION 8.2 Maintenance of Property............................ 49
-----------------------
SECTION 8.3 Insurance.......................................... 49
---------
SECTION 8.4 Accounting Methods and Financial......................
--------------------------------
SECTION 8.5 Payment and Performance of Obligations............. 50
--------------------------------------
SECTION 8.6 Compliance With Laws and Approvals................. 50
----------------------------------
SECTION 8.7 Environmental Laws................................. 50
------------------
SECTION 8.8 Compliance with ERISA.............................. 51
---------------------
SECTION 8.9 Compliance With Agreements......................... 51
--------------------------
SECTION 8.10 Visits and Inspections............................. 51
----------------------
SECTION 8.11 Additional Subsidiary Guarantors................... 51
--------------------------------
SECTION 8.12 Further Assurances................................. 52
------------------
ARTICLE IX............................................................ 52
FINANCIAL COVENANTS................................ 52
-------------------
SECTION 9.1 Leverage Ratio..................................... 52
--------------
SECTION 9.2 Interest Coverage Ratio............................ 52
-----------------------
SECTION 9.3 Minimum Tangible Net Worth......................... 52
--------------------------
ARTICLE X............................................................. 53
NEGATIVE COVENANTS................................. 53
------------------
SECTION 10.1 Limitations on Debt................................ 53
-------------------
SECTION 10.2 Limitations on Contingent Obligations.............. 54
-------------------------------------
SECTION 10.3 Limitations on Liens............................... 54
--------------------
SECTION 10.4 Limitations on Loans, Advances,.......................
-------------------------------
SECTION 10.5 Limitations on Mergers and Liquidation............. 58
--------------------------------------
SECTION 10.6 Limitations on Sale of Assets...................... 58
-----------------------------
SECTION 10.7 Limitations on Dividends and..........................
----------------------------
SECTION 10.8 Transactions with Affiliates....................... 59
----------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 10.9 Certain Accounting Changes........................ 59
--------------------------
SECTION 10.10 Restrictive Agreements............................ 59
----------------------
SECTION 10.11 Conduct of Business............................... 60
-------------------
ARTICLE XI............................................................ 60
DEFAULT AND REMEDIES.............................. 60
--------------------
SECTION 11.1 Events of Default................................. 60
-----------------
SECTION 11.2 Remedies.......................................... 62
--------
SECTION 11.3 Rights and Remedies Cumulative; Non-.................
------------------------------------
ARTICLE XII........................................................... 64
THE AGENT......................................... 64
---------
SECTION 12.1 Appointment....................................... 64
-----------
SECTION 12.2 Delegation of Duties.............................. 64
--------------------
SECTION 12.3 Exculpatory Provisions............................ 64
----------------------
SECTION 12.4 Reliance by the Agent............................. 65
---------------------
SECTION 12.5 Notice of Default................................. 65
-----------------
SECTION 12.6 Non-Reliance on the Agent and Other..................
-----------------------------------
SECTION 12.7 Indemnification................................... 66
---------------
SECTION 12.8 The Agent in Its Individual Capacity.............. 67
------------------------------------
SECTION 12.9 Resignation of the Agent; Successor..................
-----------------------------------
ARTICLE XIII.......................................................... 67
MISCELLANEOUS..................................... 67
-------------
SECTION 13.1 Notices........................................... 67
-------
SECTION 13.2 Expenses; Indemnity............................... 69
-------------------
SECTION 13.3 Set-off........................................... 70
-------
SECTION 13.4 Governing Law..................................... 70
-------------
SECTION 13.5 Consent to Jurisdiction........................... 70
-----------------------
SECTION 13.6 Binding Arbitration; Waiver of Jury..................
-----------------------------------
SECTION 13.7 Reversal of Payments.............................. 72
--------------------
SECTION 13.8 Punitive Damages.................................. 72
----------------
SECTION 13.9 Accounting Matters................................ 72
------------------
SECTION 13.10 Successors and Assigns; Participations............ 73
--------------------------------------
SECTION 13.11 Amendments, Waivers and Consents.................. 76
--------------------------------
SECTION 13.12 Performance of Duties............................. 76
---------------------
SECTION 13.13 All Powers Coupled with Interest.................. 76
--------------------------------
SECTION 13.14 Survival of Indemnities........................... 76
-----------------------
SECTION 13.15 Titles and Captions............................... 76
-------------------
SECTION 13.16 Severability of Provisions........................ 77
--------------------------
SECTION 13.17 Counterparts...................................... 77
------------
SECTION 13.18 Term of Agreement................................. 77
-----------------
</TABLE>
<PAGE>
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Prepayment
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Notice of Account Designation
Exhibit F - Form of Officer's Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Subsidiary Guaranty
Exhibit I - Investment Policy
Exhibit J - Subordination Terms
SCHEDULES TO THIS AGREEMENT
Schedule 1 - Lenders and Commitments
DISCLOSURE LETTER SCHEDULES
Schedule 6.1(a) - Jurisdictions of Organization and
Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(h) - Environmental Matters
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining
Agreements
Schedule 6.1(t) - Debt and Contingent Obligations
Schedule 6.1(u) - Litigation
Schedule 10.3 - Existing Liens
Schedule 10.4 - Existing Loans, Advances and
Investments
<PAGE>
EXHIBIT A
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
AMENDED AND RESTATED REVOLVING CREDIT NOTE
------------------------------------------
This is one of a series of notes which amend and restate but do not extinguish
- ------------------------------------------------------------------------------
the obligations under those certain Revolving Credit Notes executed in
- ----------------------------------------------------------------------
connection with the Credit Agreement dated as of February 14, 1997 by and among
- -------------------------------------------------------------------------------
the Borrower, the Lenders party thereto and First Union National Bank (formerly
- -------------------------------------------------------------------------------
known as First Union National Bank of North Carolina), as Agent.
- ----------------------------------------------------------------
$___________ __________, ____
FOR VALUE RECEIVED, the undersigned, AMERICAN BUSINESS INFORMATION,
INC., a corporation organized under the laws of Delaware (the "Borrower"),
hereby promises to pay to the order of _______________________________ (the
"Bank"), at the times, at the place and in the manner provided in the Credit
Agreement hereinafter referred to, the principal sum of up to
______________________ Dollars ($___________), or, if less, the aggregate unpaid
principal amount of all Loans disbursed by the Bank under the Credit Agreement
referred to below, together with interest at the rates as in effect from time to
time with respect to each portion of the principal amount hereof, determined and
payable as provided in Article IV of the Credit Agreement.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Amended and Restated Credit Agreement dated as of August __,
1997 (as amended, restated or otherwise modified, the "Credit Agreement") by and
among the Borrower, the lenders (including the Bank) party thereto (the
"Lenders") and First Union National Bank, as Agent. The Credit Agreement
contains, among other things, provisions for the time, place and manner of
payment of this Note, the determination of the interest rate borne by and fees
payable in respect of this Note, acceleration of the payment of this Note upon
the happening of certain stated events and the mandatory repayment of this Note
under certain circumstances.
The Borrower agrees to pay on demand all costs of collection,
including reasonable attorneys' fees, if any part of this Note, principal or
interest, is collected after maturity with the aid of an attorney.
Presentment for payment, notice of dishonor, protest and notice of
protest are hereby waived.
THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA
<PAGE>
AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NORTH CAROLINA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
under seal by a duly authorized officer as of the day and year first above
written.
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
2
<PAGE>
EXHIBIT B
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
NOTICE OF BORROWING
-------------------
First Union National Bank, as Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you under Section
2.2 (a) of the Amended and Restated Credit Agreement dated as of August 29, 1997
(as amended, restated or otherwise modified, the "Credit Agreement"), by and
among American Business Information, Inc. ("the Borrower"), the lenders party
thereto (the "Lenders"), and First Union National Bank, as Agent.
1. The Borrower hereby requests that the Lenders make a Loan in the
aggregate principal amount of $___________ (the "Loan")./1/
2. The Borrower hereby requests that the Loan be made on the following
Business Day: _____________________./2/
3. The Borrower hereby requests that the Loan bear interest at the
following interest rate, plus the Applicable Margin, as set forth below:
----
- ----------------------
/1/ Complete with an amount in accordance with Section 2.2 of the Credit
Agreement.
/2/ Complete with a Business Day in accordance with Section 2.2 of the Credit
Agreement.
<PAGE>
Termination
Date for
Interest
Principal Period
Component of Interest Interest Period (if
Loan Rate (if applicable) applicable)
- ------------ ------ --------------- -----------
4. The principal amount of all Loans outstanding as of the date hereof
(including the requested Loan) does not exceed the maximum amount permitted to
be outstanding pursuant to the terms of the Credit Agreement.
5. All of the conditions applicable to the Loan requested herein as
set forth in the Credit Agreement have been satisfied as of the date hereof and
will remain satisfied to the date of such Loan.
6. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Borrowing this ____ day of _______, ____.
AMERICAN BUSINESS INFORMATION, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
2
<PAGE>
EXHIBIT C
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
NOTICE OF PREPAYMENT
--------------------
First Union National Bank, as Agent
One First Union Center
301 South College Street, TW-10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you by American
Business Information, Inc., a corporation organized under the laws of Delaware
(the "Borrower"), under Section 2.3(c) of the Amended and Restated Credit
Agreement dated as of August 29, 1997, as amended, restated or otherwise
modified (the "Credit Agreement"), by and among the Borrower, the Lenders party
thereto, and First Union National Bank, as Agent.
1. The Borrower hereby provides notice to the Agent that the Borrower
shall repay the following [Base Rate Loans] and/or [LIBOR Rate Loans]:
____________________./3/
2. The Borrower shall repay the above referenced Loans on the
following Business Day: _______________./4/
3. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
- -----------------
/3/ Complete with an amount in accordance with Section 2.3 of the Credit
Agreement.
/4/ Complete with a Business Day in accordance with Section 2.3 of the Credit
Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Prepayment this ____ day of _______, 19__.
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
2
<PAGE>
EXHIBIT D
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
First Union National Bank, as Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (the "Notice") is
delivered to you under Section 4.2 of the Amended and Restated Credit Agreement
dated as of August 29, 1997 (as amended, restated or otherwise modified, the
"Credit Agreement"), by and among American Business Information, Inc. ("the
Borrower"), the lenders party thereto (the "Lenders"), and First Union National
Bank, as Agent.
1. This Notice of Conversion/Continuation is submitted for the purpose
of: (Complete applicable information.)
(a) [Converting] [continuing] a _____________ Loan [into] [as] a
_____________ Loan./1/
(b) The aggregate outstanding principal balance of such Loan is
$_______________.
(c) The last day of the current Interest Period for such Loan is
______________./2/
(d) The principal amount of such Loan to be [converted] [continued] is
$_______________./3/
(e) The requested effective date of the [conversion] [continuation] of
such Loan is _______________./4/
(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _______________./5/
2. No Default or Event of Default exists, and none will
<PAGE>
exist upon the conversion or continuation of the Loan requested herein.
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Conversion/Continuation this ____ day of __________, 19__.
AMERICAN BUSINESS INFORMATION, INC.
By:
-----------------------------------
Name:
--------------------------------
Title:
------------------------------
1. Delete the bracketed language and insert "Base Rate" or "LIBOR Rate", as
applicable, in each blank.
2. Insert applicable date for any LIBOR Rate Loan being converted or continued.
3. Complete with an amount in compliance with Section 3.2 of the Credit
Agreement.
4. Complete with a Business Day at least three (3) Business Days after the date
of this Notice.
5. Complete for any LIBOR Rate Loan with an Interest Period in compliance with
Section 3.1(b) of the Credit Agreement.
3
<PAGE>
EXHIBIT E
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
NOTICE OF ACCOUNT DESIGNATION
-----------------------------
Dated: ____________
First Union National Bank, as Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by American
Business Information, Inc. (the "Borrower"), a corporation organized under the
laws of Delaware, under Section 5.2(e)(ii) of the Amended and Restated Credit
Agreement dated as of August 29, 1997 (as amended, restated or otherwise
modified, the "Credit Agreement") by and among the Borrower, the Lenders party
thereto, and First Union National Bank, as Agent.
The Agent is hereby authorized to disburse all Loan proceeds into the
following account(s):
[Insert name of bank/
ABA Routing Number/
and Account Number]
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Account Designation this ____ day of _______, 19__.
[CORPORATE SEAL] AMERICAN BUSINESS INFORMATION, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
2
<PAGE>
EXHIBIT F
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
OFFICER'S COMPLIANCE CERTIFICATE
--------------------------------
The undersigned, on behalf of American Business Information, Inc., a
corporation organized under the laws of Delaware (the "Borrower"), hereby
certifies to First Union National Bank, as Agent ("First Union"), as follows:
1. This Certificate is delivered to you pursuant to Section 7.2 of
the Amended and Restated Credit Agreement dated as of August 29, 1997 (as
amended, restated or otherwise modified, the "Credit Agreement"), by and among
the Borrower, the lenders party thereto (the "Lenders"), and First Union.
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrower and its
Subsidiaries dated as of _______________ and for the _______________ period[s]
then ended and such statements fairly present the financial condition of the
Borrower and its Subsidiaries as of the dates indicated and the results of its
operations and cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement, the Notes and
the related Loan Documents and have made, or caused to be made under my
supervision, a review in reasonable detail of the transactions and the condition
of the Borrower and its Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Default or an Event of Default, nor do I
have any knowledge of the existence of any such condition or event as at the
date of this Certificate [except, [if such condition or event existed or exists,
describe the nature and period of existence thereof and what action the Borrower
has taken, are taking and propose to take with respect thereto]].
4. The Applicable Margin and calculations determining such
<PAGE>
figure are set forth on the attached Schedule 1 and the Borrower and its
----------
Subsidiaries are in compliance with the covenants contained in Article IX of the
Credit Agreement as shown on such Schedule 1 and the Borrower and its
----------
Subsidiaries are in compliance with the other covenants and restrictions
contained in Articles VIII and X of the Credit Agreement.
WITNESS the following signatures as of the _____ day of
_________, _____.
AMERICAN BUSINESS INFORMATION, INC.
By:
---------------------------------
Name:
----------------------------
Title:
----------------------------
3
<PAGE>
Schedule 1
----------
A. Leverage Ratio
--------------
1. Consolidated Debt of the Borrower
and its Subsidiaries as of the
immediately preceding fiscal
quarter end 1 __________
2. Consolidated EBITDA of the Borrower and
its Subsidiaries for the period
of four (4) consecutive fiscal
quarters ending on such fiscal
quarter end
(a) Net Income for such
period 2(a) __________
(b) Plus: The sum of the following
----
for such period to the extent
deducted in the determination
of such Net Income: (i) income
and franchise taxes, (ii)
Interest Expense,
(iii) amortization,
depreciation and other
non-cash charges (including
amortization of goodwill,
transaction expenses, covenants
not to compete and other
intangible assets) and (iv) the
after tax effect of any and all
charges related to the Employment
Termination Agreements referred to
in the DBA Acquisition Agreement and the
"bonus pool" payments made in connection
with the DBA Acquisition and Merger (which
payments shall be in an amount not to
exceed $21,500,000) 2(b) __________
(c) Less: any items of gain
----
which were included in
determining Net Income and
were not realized in the
ordinary course of business 2(c) __________
(d) Add lines 2(a) and 2(b) and
subtract line 2(c) 2(d) __________
3
<PAGE>
3. Leverage Ratio: Divide line 1
by line 2(d) 3 __________
4. Maximum Leverage Ratio permit-
ted by Section 9.1 as of the
date hereof 2.50 to 1.0
B. Interest Coverage Ratio
-----------------------
1. Consolidated EBITDA of the Borrower and
its Subsidiaries for the immediately
preceding fiscal quarter
(a) Net Income for such
period 1(a) __________
(b) Plus: The sum of the following
----
for such period to the extent
deducted in the determination
of such Net Income: (i) income
and franchise taxes, (ii)
Interest Expense,
(iii) amortization,
depreciation and other
non-cash charges (including
amortization of goodwill,
transaction expenses, covenants
not to compete and other
intangible assets) and (iv) the
after tax effect of any and all
charges related to the Employment
Termination Agreements referred to
in the DBA Acquisition Agreement and the
"bonus pool" payments made in connection
with the DBA Acquisition and Merger (which
payments shall be in an amount not to
exceed $21,500,000) 1(b) __________
(c) Less: any items of gain
----
which were included in
determining Net Income and
were not realized in the
ordinary course of business 1(c) __________
(d) Add lines 1(a) and 1(b) and
subtract line 1(c) 1(d) __________
4
<PAGE>
2. Interest Expense for
such period 2 __________
3. Interest Coverage Ratio: Divide
line 1(d) by line 2 3 __________
4. Minimum Interest Coverage Ratio
required by Section 9.2 as of
such fiscal quarter end 4.0 to 1.0
C. Minimum Tangible Net Worth
--------------------------
1. Actual Consolidated Tangible
Net Worth
as of the immediately pre-
ceding fiscal quarter end 1 __________
2. Minimum Consolidated Net
Worth: The sum of the
following as of the such
fiscal quarter end
(a) $0 2(a) __________
(b) 50% of cumulative quarterly
Consolidated Net Income (prior
to the impact of non-cash
charges related to the write down
of intangible assets) of
the Borrower and its
Subsidiaries as of such
fiscal quarter end occur-
ring after July 1, 1997
2(b) __________
(c) 50% of the aggregate net
proceeds of any offer-
ing of equity capital of
the Borrower or any of its
Subsidiaries as of such fis-
cal quarter end received
after the Closing Date 2(c) __________
(d) Add lines 2(a), 2(b) and
2(c) 2(d) __________
5
<PAGE>
D. Applicable Margin
-----------------
1. Leverage Ratio (from line 3 of Part A) 1 __________
2. Applicable Margin per Section 4.1(c) 2 __________
6
<PAGE>
EXHIBIT G
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated _________
Reference is made to the Amended and Restated Credit Agreement dated as of
August 29, 1997 (as amended, restated or otherwise modified, the "Credit
Agreement"), by and among American Business Information, Inc. ("the Borrower"),
the lenders party thereto (the "Lenders"), and First Union National Bank, as
Agent. Capitalized terms which are defined in the Credit Agreement and which are
used herein without definition shall have the same meanings herein as in the
Credit Agreement.
______________________________________ (the "Assignor") and
--------
____________________________________ (the "Assignee") agree as follows:
--------
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (as defined below), a ____% interest (the "Assigned Interest") in and to
all of the Assignor's interests, rights and obligations under the Credit
Agreement and the Assignor thereby retains ____% of its interest therein (the
"Retained Interest"). This Assignment and Acceptance is entered pursuant to, and
authorized by, Section 13.10 of the Credit Agreement.
2. The Assignor (a) represents that, as of the date hereof, (i) its
Commitment Percentage (without giving effect to assignments thereof which have
not yet become effective) under the Credit Agreement and (ii) the outstanding
balance of its Loans (unreduced by any assignments thereof which have not yet
become effective) under the Credit Agreement are each set forth in Section 2 of
Schedule I hereto; (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
<PAGE>
pursuant thereto, other than that the Assignor is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim; (c) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or its Subsidiaries or the performance or observance by the Borrower or
its Subsidiaries of any of their obligations under the Credit Agreement or any
other Loan Document; and (d) attaches the Revolving Credit Note delivered to it
under the Credit Agreement and requests that the Borrower exchange such Note for
new Notes payable to each of the Assignor and the Assignee as follows:
<TABLE>
<CAPTION>
Revolving Credit Note
Payable to the Order of: Principal Amount of Note:
------------------------ -------------------------
<S> <C>
------------------------ $__________
------------------------ $__________
</TABLE>
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 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; (c)
agrees that it will, independently and without reliance upon the Assignor or any
other Lender or the Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (d) confirms that it is
an Eligible Assignee; (e) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
and the other Loan Documents as are delegated to the agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (f) agrees that
it will perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender; and (g) agrees that it will keep confidential all
non-public information with respect to the Borrower obtained pursuant to the
Loan Documents in accordance with Section 13.10(g) of the Credit Agreement.
4. The effective date for this Assignment and Acceptance shall be as set
forth in Section 1 of Schedule I hereto (the "Effective Date"). Following the
--------------
execution of this Assignment and Acceptance, it will be delivered to the Agent
for consent thereby and by the Borrower and acceptance and recording in the
Register.
<PAGE>
5. Upon such consents, acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the other Loan Documents to which Lenders are parties and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender under each such agreement, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such consents, acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT UNDER
SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
----------------------------------
Commitment Percentage ____%
By:
-------------------------------
Title:
----------------------------
ASSIGNEE
----------------------------------
Commitment Percentage ____%
By:
-------------------------------
Title:
----------------------------
<PAGE>
Acknowledged and Consented to:
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Consented to and Accepted:
FIRST UNION NATIONAL BANK, as Agent
By:
----------------------------------
Title:
----------------------------
<PAGE>
Schedule I
to
Assignment and Acceptance
-------------------------
<TABLE>
<S> <C>
1. Effective Date ________________, ____
--------------
2. Assignor's Interest
Prior to Assignment
-------------------
(a) Commitment Percentage
of Assignor _______%
(b) Outstanding balance
of Assignor's Loans $___________
3. Assigned Interest
(from Section 1) _______%
-----------------
4. Assignee's Loans
After Effective Date
-------------------------------
(line 2(b) times line 3) $___________
-----
5. Retained Interest of Assignor after
Effective Date
-----------------------------------
6. Assignor's Loans
After Effective Date
-------------------------------
(line 2(b) times line 5) $___________
-----
7. Payment Amount $___________
--------------
8. Payment Instructions
--------------------
(a) If payable to Assignor,
to the account of Assignor to:
--------------------------------
--------------------------------
--------------------------------
Routing No.:
--------------------
Account No.:
--------------------
Attn:
---------------------------
Reference:
----------------------
(b) If payable to Assignee, to the account
of Assignee to:
--------------------------------
--------------------------------
--------------------------------
Routing No.:
--------------------
Account No.:
--------------------
</TABLE>
<PAGE>
Attn:
---------------------------
Reference:
----------------------
<PAGE>
EXHIBIT H
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
Form of Subsidiary Guaranty
---------------------------
<PAGE>
EXHIBIT I
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
Investment Policy
-----------------
<PAGE>
EXHIBIT J
---------
to
Amended and Restated Credit Agreement
dated as of August 29, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank,
as Agent
Terms of
---------
Subordinated Seller Notes
-------------------------
1. Definitions.
-----------
(a) "Senior Debt" shall be defined as all Obligations (including post-
petition interest) under the Credit Agreement, and any extension,
renewal, refinancing or other modification thereof.
(b) Other capitalized terms used herein have the meanings assigned
thereto in the Credit Agreement.
2. Term. Such Debt shall mature no later than one year from the date thereof.
----
3. Unsecured. Such Debt shall be unsecured.
---------
4. Limitations on Payment.
----------------------
(a) Upon the occurrence of any Event of Default under the Senior Debt, no
payments (by setoff or otherwise) with respect to such Debt until
such Event of Default is waived or cured.
(b) Upon insolvency or bankruptcy of maker, all Senior Debt shall first
be paid in full in cash or in a manner satisfactory to the holders
thereof before any payment (by setoff or otherwise) with respect to
such Debt.
5. Limitation on Remedies. Upon the occurrence of any Event of Default under
----------------------
the Senior Debt, the payee may not take any action to demand or collect, or
exercise any other remedies with respect to, such Debt until the prior
payment in full in cash of the Senior Debt or in a manner satisfactory to
the holders thereof.
6. Proofs of Claim, etc. The Agent shall have the right to file proofs of
--------------------
claim (upon refusal of payee to do so within 30 days of written notice) on
payee's behalf and to vote the claims of payee in a bankruptcy of the maker
or, in lieu of such voting
<PAGE>
provision, the payee shall agree not to vote such claims in a manner
inconsistent with the terms of the subordination.
7. Improper Payments; Reinstatement. Any payment delivered to payee in
---------------------------------
violation of the subordination provisions shall be held in trust for and
promptly paid over to the Agent. If any amounts received by the Agent are
rescinded or returned for any reason, the subordination provisions shall be
reinstated with respect thereto.
8. Financial Covenants; Security. No financial covenants and no collateral or
-----------------------------
other security except as permitted under the Credit Agreement or as
approved by the Required Lenders.
9. Additional Covenants of Payee.
-----------------------------
(a) no further subordination of such Debt.
(b) no transfers, assignments or pledges of such Debt not subject to the
subordination provisions.
(c) holders of Senior Debt may specifically enforce the subordination
provisions.
(d) payee will take such action as is requested by holders of Senior Debt
to effect subordination provisions, including execution and delivery
of powers of attorney upon the refusal of payee to take any action
reasonably requested by the Agent.
(e) payee will not release, modify, compromise or discharge any part of
such Debt.
10. Waivers, Releases, Amendments, etc.
----------------------------------
(a) Waiver of all notices, demands and protests in connection with
payments of Senior Debt which might release maker or payee from the
subordination provisions.
(b) The subordination provisions shall be given full effect regardless of
any circumstance which might otherwise constitute a defense or
discharge with respect thereto.
(c) The Lenders may amend or otherwise modify the Senior Debt and take
any other action thereunder without impairing the subordination.
11. Legend. The agreement evidencing such Debt shall contain a legend noting
------
the subordination and the financial records of the payee and maker shall be
marked to reflect the subordination.
