CONFORMED COPY
CREDIT AGREEMENT
DATED AS OF AUGUST 8, 1997
AMONG
POLICY MANAGEMENT SYSTEMS CORPORATION,
THE GUARANTORS PARTY HERETO,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BANCAMERICA SECURITIES, INC.
TABLE OF CONTENTS
Section Page
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ARTICLE 1
DEFINITIONS
1.1 Definitions 1
1.2 Accounting Terms and Determinations 15
ARTICLE 2
THE CREDIT
2.1 Commitments to Lend 17
2.2 Procedure for Committed Borrowing 17
2.3 Notes 18
2.4 Conversion and Continuation Elections 19
2.5 Bid Borrowings 20
2.6 Procedure for Bid Borrowings 20
2.7 Maturity of Loans 25
2.8 Interest Rates 25
2.9 Fees 26
2.10 Optional Termination or Reduction of Commitments 26
2.11 Mandatory Termination of Commitments 26
2.12 Optional Prepayments 26
2.13 General Provisions as to Payments 27
2.14 Funding Losses 27
2.15 Computation of Interest and Fees 28
2.16 Regulation D Compensation 28
ARTICLE 3
CONDITIONS
3.1 Closing 29
3.2 Borrowings 30
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Corporate Existence and Power 31
4.2 Corporate and Governmental Authorization:
No Contravention 31
4.3 Binding Effect 31
4.4 Financial Information 31
4.5 Litigation 32
4.6 Compliance with ERISA 32
4.7 Environmental Matters 32
4.8 Taxes 33
4.9 Material Subsidiaries 33
4.10 Regulatory Restrictions on Borrowing 33
4.11 Full Disclosure 33
4.12 Representations of Guarantors 34
ARTICLE 5
COVENANTS
5.1 Information 35
5.2 Payment of Obligations 37
5.3 Maintenance of Property; Insurance 37
5.4 Conduct of Business and Maintenance of Existence 38
5.5 Compliance with Laws 38
5.6 Inspection of Property, Books and Records 39
5.7 Mergers and Sales of Assets 39
5.8 Use of Proceeds 39
5.9 Negative Pledge 39
5.10 Limitation on Debt of Subsidiaries 41
5.11 Leverage Ratio 41
5.12 Minimum Consolidated Tangible Net Worth 41
5.13 Restricted Payments 42
5.14 Investments 42
5.15 Transactions with Affiliates 42
5.16 Additional Guarantors 43
ARTICLE 6
DEFAULTS
6.1 Events of Default 44
6.2 Notice of Default 46
ARTICLE 7
THE AGENT
7.1 Appointment and Authorization; "Agent" 47
7.2 Delegation of Duties 47
7.3 Liability of Agent 47
7.4 Reliance by Agent 48
7.5 Notice of Default 48
7.6 Credit Decision 49
7.7 Indemnification of Agent 49
7.8 Agent in Individual Capacity 50
7.9 Successor Agent 50
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1 Basis for Determining Interest Rate
Inadequate or Unfair 51
8.2 Illegality 51
8.3 Increased Cost and Reduced Return 52
8.4 Taxes 53
8.5 Base Rate Committed Loans Substituted for
Affected Euro-Dollar Rate Loans 55
ARTICLE 9
GUARANTY
9.1 The Guaranty 57
9.2 Guaranty Unconditional 57
9.3 Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances 58
9.4 Waiver by each Guarantor 58
9.5 Subrogation and Contribution 58
9.6 Stay of Acceleration 58
9.7 Limit of Liability 58
ARTICLE 10
MISCELLANEOUS
10.1 Notices 60
10.2 No Waivers 60
10.3 Costs and Expenses 61
10.4 Sharing of Set-Offs 61
10.5 Amendments and Waivers 62
10.6 Successors and Assigns 62
10.7 Collateral 64
10.8 Governing Law; Submission to Jurisdiction 64
10.9 Counterparts; Integration; Effectiveness 64
10.10 WAIVER OF JURY TRIAL 65
10.11 Confidentiality 65
SCHEDULES
Pricing Schedule
Schedule 4.6 ERISA
Schedule 5.3 Insurance
Schedule 10.1 Addresses for Notices to Borrower and Agent
EXHIBITS
Exhibit A-1 Committed Note
Exhibit A-2 Bid Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D-1 Form of Legal Opinion of South Carolina
Counsel to Obligors
Exhibit D-2 Form of Legal Opinion of General Counsel to
Obligors
Exhibit D-3 Form of Legal Opinion of Delaware Counsel to
Policy Management Systems Investment, Inc.
Exhibit E Form of Compliance Certificate
Exhibit F Form of Auditor's Statement
Exhibit G Form of Competitive Bid Request
Exhibit H Form of Invitation for Competitive Bids
Exhibit I Form of Competitive Bid
Exhibit J Form of Assignment and Assumption Agreement
AGREEMENT dated as of August 8, 1997 among POLICY MANAGEMENT SYSTEMS
CORPORATION, the GUARANTORS party hereto, the BANKS listed on the signature
pages hereof and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.1 The following
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terms, as used herein, have the following meanings:
"Absolute Rate" has the meaning specified in subsection 2.6(c).
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"Absolute Rate Auction" means a solicitation of Competitive Bids
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setting forth Absolute Rates pursuant to Section 2.6.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a
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rate determined with reference to the Absolute Rate.
"Administrative Questionnaire" means, with respect to each Bank, an
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administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly
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through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to vote 25% or more of any class of voting securities of a Person or to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
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and any successor agent arising under Section 7.9.
"Agent-Related Persons" means BofA and any successor agent arising
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under Section 7.9, together with their respective affiliates (including, in
the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and affiliates.
"Agent's Payment Office" means the address for payments set forth in
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the signature pages hereto or such other address as the Agent may from time to
time specify.
"Applicable Lending Office" means, with respect to any Bank, (i) in
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the case of its Base Rate Loans, its Domestic Lending Office and (ii) in the
case of its Euro-Dollar Rate Loans, its Euro-Dollar Lending Office.
"Arranger" means BancAmerica Securities, Inc., a Delaware
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corporation.
"Assignee" has the meaning set forth in Section 10.6(c).
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"Attorney Costs" means and includes all fees and disbursements of
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any law firm or other external counsel and the allocated cost of internal
legal services and all disbursements of internal counsel; provided that in
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determining Attorney Costs associated with any matter, there is no duplication
of legal services in respect of such matter by external counsel and internal
counsel.
"Bank" means each financial institution listed on the signature
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pages hereof under the caption "Banks", each Assignee which becomes a Bank
pursuant to Section 10.6(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
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of (i) the Reference Rate for such day or (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Committed Loan" means a Committed Loan that bears
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interest based on the Base Rate.
"Benefit Arrangement" means at any time an employee benefit plan
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within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Bid Borrowing" means a Borrowing hereunder consisting of one or
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more Bid Loans made to the Borrower on the same day by one or more Banks.
"Bid Loan" means a Loan by a Bank to the Borrower under Section 2.5,
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which may be a LIBOR Bid Loan or an Absolute Rate Bid Loan.
"Bid Loan Lender" means, in respect of any Bid Loan, the Bank making
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such Bid Loan to the Borrower.
"Bid Loan Note" means a promissory note of the Borrower in
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substantially the form of Exhibit A-2 hereto.
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"BofA" means Bank of America National Trust and Savings Association,
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a national banking association.
"Borrower" means Policy Management Systems Corporation, a South
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Carolina corporation, and its successors.
"Borrower's 1996 Form 10-K" means the Borrower's annual report on
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Form 10-K for the fiscal year ended December 31, 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly report
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on Form 10-Q for the quarter ended March 31, 1997, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrowing" means a borrowing hereunder consisting of Loans of the
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same Type made to the Borrower on the same day by the Banks under Article 2,
and may be a Committed Borrowing or a Bid Borrowing and, other than in the
case of Base Rate Committed Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.2 or 2.5.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City or San Francisco are authorized
or required by law to close and, if the applicable Business Day relates to any
Euro-Dollar Rate Loan, means such a day on which dealings are carried on in
the applicable offshore dollar interbank market.
"Capital Expenditures" means, for any period, on a consolidated
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basis for the Borrower and its Consolidated Subsidiaries, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities during that
period and including that portion of capital leases (except any capitalized
interest) which is capi-talized on the consolidated balance sheet of the
Borrower and its Subsidiaries) made by the Borrower or any Consolidated
Subsidiary during such period that, in conformity with generally accepted
accounting principles, are required to be included in or reflected by
property, plant or equip-ment, licenses and permits, or other similar fixed
asset accounts as reflected in such balance sheet (including expenditures for
equipment purchased simul-taneously with the trade-in of existing equipment
owned by the Borrower or any such Subsidiary to the extent the gross amount of
such purchase price exceeds the book value of the equipment being traded in,
but excluding expenditures made in connection with the replacement or
restoration of assets, to the extent xxxx-bursed or financed from insurance
proceeds or condemnation awards).
"Closing Date" means the date on or after the Effective Date on
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which the Agent shall have received the documents specified in or pursuant to
Section 3.1.
"Commitment" means, with respect to each Bank, the amount set forth
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opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 2.10.
"Committed Borrowing" means a Borrowing hereunder consisting of
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Committed Loans made on the same day by the Banks ratably according to their
respective Pro Rata Shares and, in the case of Euro-Dollar Committed Loans,
having the same Interest Periods.
"Committed Loan" means a Loan by a Bank to the Borrower under
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Section 2.1, and may be an Euro-Dollar Committed Loan or a Base Rate Committed
Loan (each, a "Type" of Committed Loan).
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"Committed Loan Note" means a promissory note of the Borrower in
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substantially the form of Exhibit A-1 hereto.
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"Competitive Bid" means an offer by a Bank to make a Bid Loan in
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accordance with subsection 2.6(b).
"Competitive Bid Request" has the meaning specified in subsection
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2.6(a).
"Consolidated Capitalization" means, as at any date of
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determination, the sum of Consolidated Funded Debt at such date and Total
--
Shareholders' Equity at such date.
"Consolidated Adjusted Cash Flow" means, for any four consecutive
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fiscal quarters of the Borrower, Consolidated Net Income for such period plus,
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to the extent deducted in determining Consolidated Net Income, the aggregate
amount of (i) Consolidated Interest Expense; (ii) income tax expense; and
(iii) the amount of all amortization of intangibles and depreciation that were
deducted in determining Consolidated Net Income for the period.
"Consolidated Funded Debt" means all Debt of the Borrower and the
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Consolidated Subsidiaries for borrowed money.
"Consolidated Interest Expense" means, for any fiscal period, the
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interest expense of the Borrower and its Consolidated Subsidiaries (whether
expensed or capitalized) determined on a consolidated basis for such fiscal
period.
"Consolidated Net Income" means, for any four consecutive fiscal
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quarters of the Borrower, the net income of the Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis for such period, minus (i)
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any extraordinary gain (but not extraordinary loss), other than any
extraordinary gain as a result of the receipt of casualty proceeds for a
casualty event with respect to which an extraordinary loss has been realized
during such fiscal period or any prior fiscal period and (ii) to the extent
not reflected in any extraordinary gain, any gain (a) as a result of an asset
disposition (including without limitation any disposition of capital stock and
any such disposition consisting of receipt of casualty proceeds with respect
to any asset (except as a result of the receipt of casualty proceeds for a
casualty event with respect to which a loss has been realized during such
period or any prior fiscal period)), other than dispositions of inventory,
marketable securities and services in the ordinary course of business, (b) as
a result of the disposition of a separate business segment, (c) on
restructuring payables or receivables, (d) on the extinguishment of debt, (e)
as a result of a prior period adjustment, (f) as a result of an accounting
change and (g) from discontinued operations (other than from the
discontinuance of the businesses referred to in clause (iv) of the first
proviso to Section 5.4); provided that, with respect to all of the foregoing
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provisions of this definition, if the aggregate of the Borrower's Investments
in Subsidiaries that are not wholly-owned exceeds $15,000,000, then (x) the
net income of any Subsidiary of the Borrower which is not a wholly-owned
Subsidiary and for which the Borrower's Investment therein is accounted for
with the equity method of accounting shall have its net income included in
Consolidated Net Income of the Borrower only to the extent of the amount of
cash dividends or distributions paid by such subsidiary to the Borrower during
such period and (y) the net income of Software Consult Micado AG shall be
included in the calculation of Consolidated Net Income.
"Consolidated Subsidiary" means at any date any Subsidiary or other
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entity the accounts of which would be consolidated with those of the Borrower
in its consolidated financial statements if such statements were prepared as
of such date.
"Consolidated Tangible Net Worth" means with respect to the Borrower
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and its Consolidated Subsidiaries at a particular date, an amount equal to (i)
the aggregate par value of the outstanding shares of all classes of stock of
the Borrower plus paid-in capital in excess of the par value of any shares of
stock plus retained earnings, less (ii) the aggregate amount of all items and
assets categorized as intangibles, including but not limited to "goodwill",
customer lists, contract acquisition costs, covenants not to compete and
capitalized software costs, all as on the consolidated balance sheet of the
Borrower as determined in accordance with generally accepted accounting
principals.
"Conversion/Continuation Date" means any date on which, under
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Section 2.4, the Borrower (a) converts Committed Loans of one Type to another
Type, or (b) continues as Committed Loans of the same Type, but with a new
Interest Period, Committed Loans having Interest Periods expiring on such
date.
"Debt" of any Person means at any date, without duplication, (i) all
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obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except (x) trade accounts payable arising in the
ordinary course of business and (y) any other accrued expenses incurred in the
ordinary course of business, and (z) payment of amounts pursuant to a
"contingent earn-out" or similar provisions the payment of which amounts is
contingent upon the achievement of good faith performance targets, but only to
the extent that such payment is not, or would not be, reflected as a liability
on the balance sheet of such Person at such date, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all non-contingent obligations (and, for purposes
of Section 5.9(a), (f) and (k) and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter
of credit, (vi) all obligations of such Person with respect to Designated
Swaps, but only to the extent that such obligations are, or would be reflected
as a liability on the balance sheet of such Person at such date, (vii) all
Debt secured by a Lien on any asset of such Person, whether or not such Debt
is otherwise an obligation of such Person and (viii) all Debt of others
Guaranteed by such Person. It is understood that the payment obligations of
the Borrower to a counterparty under any equity swap (each such swap, a
"Designated Swap") to be entered into between the Borrower and such
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counterparty with respect to shares of outstanding common stock of the
Borrower in connection with the Borrower's share repurchase program shall not
constitute "Debt" except as set forth in clause (vi) of the definition of
Debt.
"Default" means any condition or event which constitutes an Event of
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Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defeased Debt" means the Loan Notes (the "Loan Notes") of Policy
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Management Systems International, Ltd. in the aggregate principal amount of
1,271,967 for which, as of the Closing Date, Policy Management Systems
International, Ltd. has deployed the assets described in Section 5.9(j) to
retire such Loan Notes and all related interest expense; but only so long as
the Loan Notes are not reflected as Debt on the consolidated financial
statements of the Borrower most recently delivered pursuant to Sections
4.4(b), 5.1(a) or (b), as the case may be.
"Derivatives Obligations" of any Person means all obligations of
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such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Lending Office" means, as to each Bank, its office located
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at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Effective Date" means the date this Agreement becomes effective in
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accordance with Section 10.9.
"Environmental Laws" means any and all federal, state, local and
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foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
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as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of
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a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
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branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Committed Loan" means any Committed Loan that bears
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interest based on the LIBO Rate.
"Euro-Dollar Rate Loan" means a Loan that bears interest based on
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the LIBO Rate.
"Euro-Dollar Margin" means a rate per annum determined in accordance
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with the Pricing Schedule.
"Euro-Dollar Reserve Percentage" means for any day that percentage
--------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
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of liabilities which includes deposits by reference to which the interest rate
on Euro-Dollar Rate Loans is determined or any category of extensions of
credit or other assets which includes loans by , non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.1.
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"Facility Fee Rate" has the meaning set forth in Section 2.9.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if such day is not a Business Day, the
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Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
BofA on such day on such transactions as determined by the Agent.
"Guarantee" by any Person means any obligation, contingent or
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otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to take or
pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
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not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
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"Guarantor" means Cybertek Corporation, Policy Management Systems
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International, Ltd., Policy Management Systems Investments, Inc., PMSI, L.P.,
and Cybertek Solutions, L.P. and each other Person who has executed this
Agreement as a guarantor.
"Hazardous Substances" means any toxic, radioactive, caustic or
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otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnified Liabilities" means any and all liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with
respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto.
"Indemnitee" has the meaning set forth in Section 10.3(c)
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"Interest Period" means (i) as to any Euro-Dollar Rate Loan, the
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period commencing on the Borrowing Date such Loan is disbursed, or (in the
case of any Euro-Dollar Rate Committed Loan) on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Euro-Dollar
Committed Loan, and ending on the date one, two, three or six months
thereafter as selected by the Borrower in its Notice of Borrowing, Notice of
Conversion/Continuation or Competitive Bid Request, as the case may be; and
(ii) as to any Absolute Rate Bid Loan, a period of not less than 5 days and
not more than 180 days as selected by the Borrower in the applicable
Competitive Bid Request;
(a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period which 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 such Interest Period)
shall, subject to clause (c) below, end on the last Business Day of a calendar
month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
----------------------
mended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
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share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).
"Leverage Ratio" means at any date the ratio of (i) Consolidated
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Funded Debt to (ii) Consolidated Adjusted Cash Flow minus Capital
Expenditures.
"LIBO Rate" means, for any Interest Period with respect to a LIBOR
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Bid Loan or Euro-Dollar Committed Loan the rate of interest per annum
determined by the Agent to be the arithmetic mean (rounded upward to the
nearest 1/16th of 1%) of the rates of interest per annum notified to the Agent
by each Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of, in the case of LIBOR Bid Loans, the LIBOR Bid Loans to
be borrowed in such Bid Loan Borrowing, and, in the case of Euro-Dollar
Committed Loans, the Euro-Dollar Committed Loan to be made by such Reference
Bank, and having a maturity comparable to such Interest Period, would be
offered to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"LIBOR Auction" means a solicitation of Competi-tive Bids setting
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forth a LIBOR Bid Margin pursuant to Section 2.6.
"LIBOR Bid Loan" means any Bid Loan that bears interest at a rate
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based upon the LIBO Rate.
"LIBOR Bid Margin" has the meaning specified in subsection
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2.6(c)(ii)(C).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary 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 an extension of credit by a Bank to the Borrower under
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Article 2, and may be a Committed Loan or a Bid Loan.
"Material Debt" means Debt (other than the Notes and any loans
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solely between the Borrower and its Subsidiaries or between its Subsidiaries)
of the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate principal or face amount
exceeding $20,000,000.
"Material Financial Obligations" means a principal or face amount of
------------------------------
Debt and/or payment or collateralization obligations in respect of Derivatives
Obligations of the Borrower and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, exceeding in the aggregate
$20,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
--------------
Unfunded Liabilities in excess of $3,000,000.
"Material Subsidiary" means, at any date, (i) any Subsidiary of the
--------------------
Borrower whose total assets, total revenue or net income (or, in the case of a
Subsidiary which has subsidiaries, consolidated total assets, total revenue or
net income of such Subsidiary with its subsidiaries) are at least 5% of the
consolidated total assets, total revenue or net income, respectively, of the
Borrower and its Consolidated Subsidiaries (as shown on the consolidated
financial statements of Borrower then most recently delivered) at or, as
relevant, for the four consecutive fiscal quarters ended on or most recently
prior to such date, (ii) any Subsidiary whose outstanding balance of Debt owed
to the Borrower or any other Subsidiary (net of the aggregate amount of Debt
owed to such Subsidiary by the Borrower or any other Subsidiary) exceeds
$10,000,000 (as shown in the certificate of the Borrower listing its Material
Subsidiaries then most recently delivered or (iii) any Subsidiary whose
outstanding balance of Debt from the Borrower or any other Subsidiary (net of
the aggregate amount of Debt owed by such Subsidiary by the Borrower or any
other Subsidiary) exceeds $10,000,000 (as shown in the certificate of the
Borrower listing its Material Subsidiaries then most recently delivered);
provided that no foreign Subsidiary of the Borrower or of Policy Management
---- ----
Systems International, Ltd. shall be deemed to be a Material Subsidiary.
"Multiemployer Plan" means at any time an employee pension benefit
-------------------
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group
during such five year period.
"Notes" means the Committed Loan Notes, and the Bid Loans Notes.
-----
"Notice of Borrowing" means a notice in substantially the form of
---------------------
Exhibit B hereto.
--------
"Notice of Conversion/Continuation" means a notice in substantially
----------------------------------
the form of Exhibit C hereto.
----------
"Obligor" means the Borrower and each Guarantor.
-------
"Parent" means, with respect to any Bank, any Person controlling
------
such Bank.
"Participant" has the meaning set forth in Section 10.6(b)
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability
------
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
----
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any time
within the preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as
-----------------
such.
"Pro Rata Share" means, as to any Bank at any time, the percentage
----------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of all
Banks.
"Reference Rate" means the rate of interest in effect for such day
---------------
as publicly announced from time to time by BofA in San Francisco, California,
as its "reference rate." (The "reference rate" is a rate set by BofA based
upon various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.)
Any change in the Reference Rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement of
such change.
"Reference Banks" means BofA and Wachovia Bank, N.A.
----------------
"Regulation U" means Regulation U of the Board of Governors of the
-------------
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51% of the
---------------
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Responsible Officer" means the chief executive officer or the
--------------------
president of the Borrower, any other officer having substantially the same
authority and responsibility, or the general counsel of the Borrower; or, with
respect to compliance with financial covenants, the chief financial officer or
the treasurer of the Borrower, or any other officer having substantially the
same authority and responsibility.
"Restricted Payment" means (i) any dividend or other distribution on
------------------
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of
the Borrower's capital stock (but not including payments of principal, premium
(if any) or interest made pursuant to the terms of convertible debt securities
prior to conversion).
"Revolving Credit Period" means the period from and including the
-------------------------
Effective Date to but not including the Termination Date.
"Subsidiary" means, as to any Person, any corporation or other
----------
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person or any other entity the management of which is directly or
indirectly controlled by such Person; unless otherwise specified, "Subsidiary"
----------
means a Subsidiary of the Borrower.
"Temporary Cash Investment" means any Investment in (i) direct
---------------------------
obligations of the United States or any agency thereof or the Commonwealth of
Australia, or obligations guaranteed by the United States or any agency
thereof or the Commonwealth of Australia, (ii) commercial paper rated at least
A-1 by Standard & Poor's Rating Group and P-l by Xxxxx'x Investors Service,
Inc., (iii) time deposits with, including certificates of deposit issued by,
any office located in the United States of (x) any Bank or (y) any bank or
trust company which is organized under the laws of the United States or any
state thereof or the United Kingdom and has capital, surplus and undivided
profits aggregating at least $750,000,000, (iv) repurchase agreements with
respect to securities described in clause (i) above entered into with an
office of a bank or trust company meeting the criteria specified in clause
(iii) above or (v) municipal bonds issued by municipalities located in the
United States rated at least A or the equivalent thereof by Standard & Poor's
Rating Group or A2 or the equivalent thereof by Xxxxx'x Investors Service,
Inc. and, if such bonds are rated by both such agencies, then at least A or
the equivalent thereof by Standard & Poor's Rating Group and A2 or the
equivalent thereof by Xxxxx'x Investors Service, Inc.; and (vi) Debt
securities of any Person which are rated at least A or the equivalent thereof
by Standard & Poor's Rating Group or A2 or the equivalent thereof by Xxxxx'x
--
Investors Service, Inc. and, if such Debt securities are rated by both such
agencies, then at least A or the equivalent thereof by Standard & Poor's
Rating Group and A2 or the equivalent thereof by Xxxxx'x Investors Service,
---
Inc.; provided that any Investment described in clauses (i), (ii), (iii) or
--------
(iv) matures within one year from the date of acquisition thereof by the
Borrower or a Subsidiary and any Investment described in clause (vi) matures
within 90 days from the date of acquisition thereof by the Borrower or a
Subsidiary.
"Termination Date" means August 8, 2002.
-----------------
"Total Shareholders' Equity" means, as of any date of determination,
--------------------------
the shareholders' equity at such date of the Borrower and its Consolidated
Subsidiaries, as determined in accordance with generally accepted accounting
principles.
"Type" has the meaning specified in the definition of Committed
----
Loan.
"Unfunded Liabilities" means, with respect to any Plan at any time,
---------------------
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined
as of the then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the
--------------
States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.2 Accounting Terms and Determinations.
----------------------------------- Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies
-------- ----
the Agent that the Borrower wishes to amend any covenant in Article 5 to
eliminate the effect of any change in generally accepted accounting principles
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
ARTICLE 2
THE CREDIT
SECTION 2.1 Commitments to Lend.
-------------------
During the Revolving Credit Period, each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make loans to the
Borrower from time to time pursuant to this Section 2.1 in amounts such that
(a) the aggregate principal amount of Committed Loans by such Bank at any one
time outstanding shall not exceed the amount of its Commitment and (b) after
giving effect to any Committed Borrowing, the aggregate amount of all
outstanding Committed Loans plus the aggregate amount of all Bid Loans
outstanding shall not exceed the combined Commitments of all the Banks. Each
Borrowing under this Section shall be in an aggregate principal amount of
$15,000,000 or any larger multiple of $1,000,000 (except that any such
Borrowing may be in the aggregate amount of the unused Commitments) and shall
be made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.12, prepay Loans and
reborrow at any time during the Revolving Credit Period under this Section.
SECTION 2.2 Procedure for Committed Borrowing.2
---------------------------------
(a) The Borrower shall give the Agent notice (a "Notice of
---------
Borrowing") not later than 7:30 a.m. (San Francisco time) on (x) the date of
----
each Borrowing with respect to Base Rate Committed Loans, (y) the third
Business Day before each Borrowing with respect to Euro-Dollar Committed
Loans, specifying:
(i) the date of such Borrowing, which shall be a Business Day
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to be, Base
Rate Committed Loans or Euro-Dollar Committed Loans; and
(iv) in the case of a Borrowing with respect to Euro-Dollar
Committed Loans, the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower, except pursuant to an election made by the Borrower
as expressly permitted by the last sentence of Section 8.1.
(c) Not later than 9:00 a.m. (San Francisco time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or
other funds immediately available, to the Agent at its address referred to in
Section 10.1. Unless the Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at the Agent's aforesaid
address.
(d) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has made such share available to the Agent on the date of such Borrowing
in accordance with subsections (c) of this Section and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent within three Business Days of demand therefor such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate or the interest rate applicable
thereto pursuant to Section 2.8 or (ii) in the case of such Bank, the Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.3 Notes. (a) The Committed Loans and the Bid
-----
Loans of each Bank shall be evidenced by one or more notes (the Committed Loan
Notes and the Bid Loan Notes, respectively) payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an
amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A-1 or A-2 hereto with
----------- ---
appropriate modifications to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to the "Note" of such
----
Bank shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Committed Loan Note or Bid Loan
Note pursuant to Section 3.1(a), the Agent shall forward such Committed Loan
Note or Bid Loan Note to such Bank. Each Bank shall record the date, amount,
type and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its
Committed Loan Note or Bid Loan Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
-------- ----
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Committed Loan Note or Bid
Loan Note. Each Bank is hereby irrevocably authorized by the Borrower so to
endorse its Committed Loan Note or Bid Loan Note and to attach to and make a
part of its Committed Loan Note or Bid Loan Note a continuation of any such
schedule as and when required.
SECTION 2.4 Conversion and Continuation Elections for Committed
-----------------------------------------------------
Borrowings. (a) The Borrower may, upon irrevocable written notice to the
-------
Agent in accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Committed Loans, or as of the last day of the applicable Interest Period, in
the case of any other Type of Committed Loans, to convert any such Committed
Loans (or any part thereof in an amount not less than $15,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof) into Committed Loans
of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Committed Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than $15,000,000, or that
is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Euro-Dollar Committed
--------
Loans in respect of any Committed Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $15,000,000, such
Euro-Dollar Committed Loans shall automatically convert into Base Rate
Committed Loans, and on and after such date the right of the Borrower to
continue such Committed Loans as, and convert such Committed Loans into,
Euro-Dollar Committed Loans shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 7:30 a.m.
(San Francisco time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Committed Loans are to be converted into
or continued as Euro-Dollar Committed Loans; and (ii) on the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Committed Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Committed Loans to be continued
or converted;
(C) the Type of Committed Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Committed Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Euro-Dollar Committed Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to such Euro-Dollar Committed Loans, or if
any Default or Event of Default then exists, the Borrower shall be deemed to
have elected to convert such Euro-Dollar Committed Loans into Base Rate
Committed Loans effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Committed
Loans with respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
existence of a Default or Event of Default, the Borrower may not elect to have
a Committed Loan converted into or continued as an Euro-Dollar Committed Loan.
SECTION 2.5 Bid Borrowings. In
---------------
addition to Committed Borrowings pursuant to Section 2.2, each Bank severally
agrees that the Borrower may, as set forth in Section 2.6, from time to time
request the Banks prior to the Termination Date to submit offers to make Bid
Loans to the Borrower; provided, however, that the Banks may, but shall have
-------- -------
no obligation to, submit such offers and the Borrower may, but shall have no
obligation to, accept any such offers; and provided, further, that at no time
-------- -------
shall (a) the outstanding aggregate principal amount of all Bid Loans made by
all Banks, plus the outstanding aggregate principal amount of all Committed
Loans made by all Banks exceed the combined Commitments of all the Banks; or
(b) the number of Interest Periods for Bid Loans then outstanding plus the
number of Interest Periods for Committed Loans then outstanding exceed 10.
SECTION 2.6 Procedure for Bid Borrowings.
----------------------------
(a) When the Borrower wishes to request the
Banks to submit offers to make Bid Loans hereunder, it shall transmit to the
Agent by telephone call followed promptly by facsimile transmission a notice
in substantially the form of Exhibit G hereto (a "Competitive Bid Request") so
--------- -----------------------
as to be received no later than 7:00 a.m. (San Francisco time) (x) four
Business Days prior to the date of a proposed Bid Borrowing in the case of a
LIBOR Auction, or (y) one Business Days prior to the date of a pro-posed Bid
Borrowing in the case of an Absolute Rate Auction, specifying:
(i) the date of such Bid Borrowing, which shall be a Business
Day;
(ii) the aggregate amount of such Bid Borrowing, which shall
be a minimum amount of $1,000,000 or in multiples of $500,000 in excess
thereof;
(iii) whether the Competitive Bids requested are to be for
LIBOR Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period appli-cable thereto,
subject to the provisions of the definition of "Interest Period" herein.
Subject to subsection 2.6(c), the Borrower may not request Competitive Bids
for more than three Interest Periods in a single Competitive Bid Request and
may not request Competitive Bids more than once in any period of five Business
Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Banks by facsimile transmission an Invitation for
Competitive Bids in substantially the form of Exhibit H hereto, which shall
---------
constitute an invitation by the Borrower to each Bank to submit Competitive
Bids offering to make the Bid Loans to which such Competitive Bid Request
relates in accordance with this Section 2.6.
(c) (i) Each Bank may at its discretion submit a Competitive
Bid containing an offer or offers to make Bid Loans in response to any
Invitation for Com-petitive Bids. Each Competitive Bid must comply with the
requirements of this subsection 2.6(c) and must be submitted to the Agent by
facsimile transmis-sion at the Agent's office for notices set forth on the
signature pages hereto not later than (1) 6:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction or (2) 6:30 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction; provided that Competitive
-------- ----
Bids submitted by the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (A) 6:15 a.m. (San Francisco time) three Business Days
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (B)
6:15 a.m. (San Francisco time) on the proposed date of Borrowing, in the case
of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form
of Exhibit I hereto, specifying therein:
----------
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be equal to,
greater than or less than the Commitment of the quoting Bank, (y) must be
$1,000,000 or in multiples of $500,000 in excess thereof, and (z) may not
exceed the principal amount of Bid Loans for which Competitive Bids were
requested;
(C) in case the Borrower elects a LIBOR Auction, the
margin above or below LIBOR (the "LIBOR Bid Margin") offered for each such Bid
----------------
Loan, expressed in multiples of 1/1000th of one basis point to be added to or
subtracted from the applicable LIBOR and the Interest Period applicable
thereto;
(D) in case the Borrower elects an Absolute Rate Auction,
the rate of interest per annum expressed in multiples of 1/1000th of one basis
point (the "Absolute Rate") offered for each such Bid Loan and the Interest
--------------
Period applicable thereto; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by the quoting
Bank with respect to each Inter-est Period specified in the related Invitation
for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit I
---------
hereto or does not specify all of the information required by subsection
(c)(ii) of this Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in subsection
(c)(i).
(d) Promptly on receipt and not later than 7:00 a.m. (San Francisco
time) three Business Days prior to the proposed date of Borrowing in the case
of a LIBOR Auction, or 7:00 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction, the Agent will notify the
Borrower of the terms (i) of any Competitive Bid submitted by a Bank that is
in accordance with subsection 2.6(c), and (ii) of any Competitive Bid that
amends, modifies or is otherwise inconsistent with a previous Competitive Bid
submitted by such Bank with respect to the same Competitive Bid Request. Any
such subsequent Competitive Bid shall be disregarded by the Agent unless such
subsequent Competitive Bid is submitted solely to correct a manifest error in
such former Competitive Bid and only if received within the times set forth in
subsection 2.6(c). The Agent's notice to the Borrower shall specify (1) the
aggre-gate principal amount of Bid Loans for which offers have been received
for each Interest Period specified in the related Competitive Bid Request; and
(2) the respective principal amounts and LIBOR Bid Margins or Absolute Rates,
as the case may be, so offered. Subject only to the provisions of Sections
8.2 and 3.2 hereof and the provisions of this subsection (d), any Competitive
Bid shall be irrevocable except with the written consent of the Agent given on
the written instructions of the Borrower.
(e) Not later than 7:30 a.m. (San Francisco time) three Business
Days prior to the proposed date of Borrowing, in the case of a LIBOR Auction,
or 7:30 a.m. (San Francisco time) on the proposed date of Borrowing, in the
case of an Absolute Rate Auction, the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection 2.6(d). The Borrower shall be under no obligation to accept any
offer and may choose to reject all offers. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each
Interest Period that is accepted. The Borrower may accept any Competitive Bid
in whole or in part; provided that:
-------- ----
(i) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the principal amount of each Bid Borrowing must be
$1,000,000 or in any multiple of $500,000 in excess thereof;
(iii) acceptance of offers may only be made on the basis of
ascending LIBOR Bid Margins or Absolute Rates within each Interest Period, as
the case may be; and
(iv) the Borrower may not accept any offer that is described
in subsection 2.6(c)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(f) If offers are made by two or more Banks with the same LIBOR Bid
Margins or Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are accepted
for the related Interest Period, the principal amount of Bid Loans in respect
of which such offers are accepted shall be allocated by the Agent among such
Banks as nearly as possible (in such multiples, not less than $1,000,000, as
the Agent may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Determination by the Agent of the amounts of Bid
Loans shall be conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Bank having
submitted a Competitive Bid if its offer has been accepted and, if its offer
has been accepted, of the amount of the Bid Loan or Bid Loans to be made by it
on the date of the Bid Borrowing.
(ii) Each Bank which has received notice pur-suant to
subsection 2.6(g)(i) that its Competitive Bid has been accepted, shall make
the amounts of such Bid Loans available to the Agent for the account of the
Borrower at the Agent's Payment Office, by 11:00 a.m. (San Francisco time) in
the case of Absolute Rate Bid Loans, and by 11:00 a.m. (San Francisco time) in
the case of LIBOR Bid Loans, on such date of Bid Bor-row-ing, in funds
immediately available to the Agent for the account of the Borrower at the
Agent's Payment Office.
(iii) Promptly following each Bid Borrowing, the Agent shall
notify each Bank of the ranges of bids submitted and the highest and lowest
Bids accepted for each Interest Period requested by the Borrower and the
aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Borrower and the Banks shall
furnish such information to the Agent as the Agent may request relating to the
making of Bid Loans, including the amounts, interest rates, dates of
Borrowings and maturities thereof, for purposes of the allocation of amounts
received from the Borrower for payment of all amounts owing hereunder.
(h) If, on or prior to the proposed date of a Borrowing, the
Commitments have not been terminated and if, on such proposed date of a
Borrowing all applicable conditions to funding referenced in Sections 8.2 and
3.2 hereof are satisfied, the Banks whose offers the Borrower has accepted
will fund each Bid Loan so accepted. Nothing in this Section 2.6 shall be
construed as a right of first offer in favor of the Banks or to otherwise
limit the ability of the Borrower to request and accept credit facilities from
any Person (including any of the Banks), provided that no Default or Event of
-------- ----
Default would otherwise arise or exist as a result of the Borrower executing,
delivering or performing under such credit facilities.
SECTION 2.7 Maturity of Loans.
-----------------
(a) The Borrower shall repay to the Banks on the Termination
Date the aggregate principal amount of Committed Loans outstanding on such
date.
(b) The Borrower shall repay each Bid Loan on the last day of the
relevant Interest Period.
SECTION 2.8 Interest Rates. (a) Each
--------------
Base Rate Committed Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made until it becomes
due, at a rate per annum equal to the Base Rate for such day. Such interest
shall be payable on the last day of each calendar quarter. Any overdue
principal of or interest on any Base Rate Committed Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
sum of 2% plus the rate otherwise applicable to Base Rate Committed Loans for
such day.
(b) Each Euro-Dollar Committed Rate Loan shall bear interest on
the outstanding principal amount thereof, for each day during the Interest
Period applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin for such day plus the LIBO Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
(c) Each Bid Loan shall bear interest on the outstanding principal
amount thereof from the relevant Borrowing Date at a rate per annum equal to
the LIBO Rate plus (or minus) the LIBOR Bid Margin, or at the Absolute Rate,
as the case may be. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
(d) Any overdue principal of or interest on any Euro-Dollar Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the LIBO Rate applicable to the Interest Period for such
Loan or (ii) the sum of 2% plus the Euro-Dollar Margin for such day plus the
average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Dollar Business Days, then for such other period
of time not longer than three months as the Agent may select) deposits in
dollars in an amount approximately equal to such overdue payment due to each
of the Reference Banks are offered to such Reference Bank in the London
interbank market for the applicable period determined as provided above (or,
if the circumstances described in clause (a) or (b) of Section 8.1 shall
exist, at a rate per annum equal to the sum of 2% plus the rate applicable to
Base Rate Committed Loans for such day).
(e) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of error.
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.1 shall
apply.
SECTION 2.9 Fees. The Borrower shall pay to the Agent for
----
the account of the Banks ratably a facility fee at the Facility Fee Rate
(determined daily in accordance with the Pricing Schedule). Such facility fee
shall accrue (i) from and including the Effective Date to but excluding the
date of termination of the Commitments in their entirety, on the daily
aggregate amount of the Commitments (whether used or unused) and (ii) from and
including such date of termination to but excluding the date the Loans shall
be repaid in their entirety, on the daily aggregate outstanding principal
amount of the Loans. Subject to the third sentence of Section 2.13(a),
accrued fees under this Section shall be payable quarterly in arrears on each
September 30, December 31, March 31 and June 30 and on the date of termination
of the Commitments in their entirety (and, if later, the date the Loans shall
be repaid in their entirety).
SECTION 2.10 Optional Termination or Reduction of Commitments
-----------------------------------------------------
During the Revolving Credit Period, the Borrower
may, upon at least three Business Days' notice to the Agent, (i) terminate the
Commitments at any time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of $15,000,000 or a
larger multiple of $1,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the Loans.
SECTION 2.11 Mandatory Termination of Commitments.
--------------------------------------- The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.12 Optional Prepayments.
---------------------
(a) Subject in the case of any Euro-Dollar Borrowing to Section
2.14, the Borrower may, upon at least one Business Day's notice to the Agent,
prepay any Base Rate Loan or upon at least three Business Days' notice to the
Agent, prepay any Euro-Dollar Committed Loan, in each case in whole at any
time, or from time to time in part in amounts aggregating $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Committed Loans of
the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
(c) Bid Loans may not be voluntarily prepaid.
SECTION 2.13 General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make
each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 9:00 a.m. (San Francisco time) on the date when due,
in Federal or other funds immediately available, to the Agent at its address
referred to in Section 10.1. The Agent will promptly distribute to each Bank
its ratable share of each such payment received by the Agent for the account
of the Banks. Whenever any payment of principal of, or interest on, the Loans
(other than Euro-Dollar Rate Loans) or of fees shall be due on a day which is
not a Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day. Whenever any payment of principal of, or interest
on, a Euro-Dollar Rate Loan shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case
the date for payment thereof shall be the next preceding Business Day. If the
date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent that the Borrower shall not have so made such payment,
each Bank shall repay to the Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate.
SECTION 2.14 Funding Losses.14 If the
--------------
Borrower makes any payment of principal with respect to any Euro-Dollar Rate
Loan (pursuant to Article 2, 6 or 8 or otherwise) on any day other than the
last day of the Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.8(d), or if the Borrower fails
to borrow, prepay, convert or continue any Euro-Dollar Rate Loans after notice
has been given to any Bank in accordance with Section 2.2(b) or 2.4, the
Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such payment or failure
to borrow or prepay, provided that such Bank shall have delivered to the
-------- ----
Borrower a certificate detailing the calculation by such Bank as to the amount
of such loss or expense, which certificate shall be conclusive in the absence
of error.
SECTION 2.15 Computation of Interest and Fees
------------------------------------
Interest based on the
Reference Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.16 Regulation D Compensation.
--------------------------
Each Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Committed
Loans, additional interest on the related Euro-Dollar Committed Loan of such
Bank at a rate per annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable LIBO Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable LIBO Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Committed Loans of such Bank shall be payable to such Bank at the
place indicated in such notice with respect to each Interest Period commencing
at least three Business Days after the giving of such notice and with respect
to which Interest Period the Borrower has not delivered a Notice of Borrowing
prior to receipt by the Borrower of such notice by such Bank and (y) shall
notify the Borrower at least five Business Days prior to each date on which
interest is payable on the Euro-Dollar Committed Loans of the amount then due
it under this Section.
ARTICLE 3
CONDITIONS
SECTION 3.1 Closing. The obligation of each Bank to
-------
make its initial Committed Loan hereunder, and to receive through the Agent
the initial Competitive Bid Request, is subject to the condition that the
Agent shall have received on or before the Closing Date all of the following,
in form and substance satisfactory to the Agent and each Bank, and in
sufficient copies for each Bank:
(a) This Agreement and the Notes, if requested by any Bank,
executed by each party thereto;
(b) (i) an opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx,
L.L.P., counsel for the Obligors, substantially in the form of Exhibit D-1
-----------
hereto, (ii) an opinion of the General Counsel of the Obligors, substantially
in the form of Exhibit D-2 hereto, and (iii) an opinion of Delaware counsel
-----------
for Policy Management Systems Investments, Inc., substantially in the form of
Exhibit D-3 hereto, and in each case covering such additional matters relating
-----------
to the transactions contemplated hereby as the Required Banks may reasonably
request;
(c) evidence of payment by the Borrower of all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of Attorney
Costs as shall constitute BofA's reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided
--------
that such estimate shall not thereafter preclude final settling of accounts
between the Borrower and BofA).
(d) evidence satisfactory to the Agent that the Borrower shall
have paid in full to BancAmerica Securities Inc., as Arranger, fees in the
amounts previously agreed upon between them;
(e) all documents the Agent may reasonably request relating to
the existence of the Obligors, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent;
(f) Certificate. A certificate signed by a Responsible Officer,
-----------
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article 4
are true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result
from the initial Borrowing; and
(iii) there has occurred since December 31, 1996, no event or
circumstance that has resulted or could reasonably be expected to result in a
material adverse effect on the consolidated business, financial condition,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole; and
(g) Evidence satisfactory to the Agent that the existing credit
agreement among the Borrower, Xxxxxx Guaranty Trust Company of New York, as
Agent, X.X. Xxxxxx Securities Inc., as arranger and the banks and guarantors
party thereto, has been terminated and all outstanding obligations thereunder
have been repaid or will be repaid with the proceeds of the initial Loan.
The Agent shall promptly notify the Borrower and the Banks of the Closing
Date, and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.2 Borrowings. The obligation of each
----------
Bank to make any Committed Loan to be made by it, and the obligation of any
Bank to make any Bid Loan as to which the Borrower has accepted the relevant
Competitive Bid (including its initial Loan), is subject to the satisfaction
of the following conditions precedent on the relevant disbursement date:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.2 or 2.6;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Obligors contained in this Agreement shall be true in all material respects on
and as of the date of such Borrowing.
Each Notice of Borrowing and Competitive Bid Request hereunder shall be
deemed to be a representation and warranty on the date of such Borrowing by
the Borrower as to the facts specified in clauses (b), (c) and (d) of this
Section and by each other Obligor, with respect to itself only, as to the
facts specified in clause (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants (and each Guarantor represents and
warrants, with respect to itself only, as to the matters set forth in Section
4.12) that:
SECTION 4.1 Corporate Existence and Power
------------------------------
The Borrower is a corporation duly
incorporated and validly existing under the laws of the State of South
Carolina, and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted.
SECTION 4.2 Corporate and Governmental Authorization: No Contravention
----------------------------------------------------------
The execution, delivery and
performance by the Borrower of this Agreement and the Notes are within the
corporate powers of the Borrower, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
articles of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries or result in the creation or imposition of
any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.3 Binding Effect. This
---------------
Agreement constitutes a valid and binding agreement of the Borrower and each
Note, when executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms.
SECTION 4.4 Financial Information.
---------------------
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the related consolidated
statements of income and cash flows and changes in stockholders' equity for
the fiscal year then ended, reported on by the Borrower's independent public
accountants and set forth in the Borrower's 1996 Form 10-K, a copy of which
has been delivered to each of the Banks, fairly present in all material
respects and in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of March 31, 1997, and the related unaudited
consolidated statements of income and cash flows for the three months then
ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present in all material respects and in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such three month period (subject to normal
year-end adjustments).
(c) Except as disclosed in the Borrower's Latest Form 10-Q,
since December 31, 1996, there has been no material adverse change in the
business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.5 Litigation. Except as disclosed in
----------
the Borrower's 1996 Form 10-K and the Borrower's Latest Form 10-Q, there is no
action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a likelihood of an adverse decision which could
materially adversely affect (i) the business of the Borrower and its
Consolidated Subsidiaries, considered as a whole, (ii) the consolidated
financial position of the Borrower and its Consolidated Subsidiaries,
considered as a whole or (iii) the consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole (considered
on an annual basis), or which in any manner draws into question the validity
or enforceability of this Agreement or the Notes.
SECTION 4.6 Compliance with ERISA
---------------------
Except as set forth on Schedule 4.6 hereto, each member of the
------------
ERISA Group has fulfilled its obligations under the minimum funding standards
of ERISA, and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each Plan. No member
of the ERISA Group has (i) sought a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code in respect of any Plan, (ii)
failed to make any contribution or payment to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.7 Environmental Matters
---------------------
The Borrower has reasonably concluded that the liabilities and costs
associated with the effect of Environmental Laws on the business, operations
and properties of the Borrower, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
consolidated business, financial condition, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.8 Taxes. The Borrower and its Subsidiaries
-----
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Borrower or any Subsidiary, other than any such assessment which is being
protested under the administrative procedure provided in the taxing
jurisdiction proposing such assessment. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxed or other
governmental charges (including without limitation any assessments which are
being protested as described in the immediately preceding sentence) are, in
the opinion of the Borrower, adequate.
SECTION 4.9 Material Subsidiaries.
----------------------
(a) Each of the Borrower's corporate Material Subsidiaries is a
corporation duly incorporated, validly existing and in good standing (if such
concept is applicable in the relevant jurisdiction of incorporation) under the
laws of its jurisdiction of incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
(b) Each of the Borrower's Material Subsidiaries which is a
partnership is a partnership duly formed pursuant to applicable laws and is
validly existing and in good standing (if such concept is applicable in the
relevant jurisdiction of formation) under the laws of its jurisdiction of
formation, and has all partnership powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
(c) The Guarantors are all of the Material Subsidiaries of the
Borrower.
SECTION 4.10 Regulatory Restrictions on Borrowing.
---------------------------------------
The Borrower
is not an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or otherwise subject to any
regulatory scheme which restricts its ability to incur debt.
SECTION 4.11 Full Disclosure. All
---------------
information (other than financial projections) heretofore furnished by the
Borrower to the Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby, taken as a whole, is, and
all such written information (other than financial projections) hereafter
furnished by the Borrower to the Agent or any Bank, taken as a whole, will be,
true and accurate in all material respects on the date as of which such
information is stated or certified. All financial projections delivered or to
be delivered to the Banks have been or will be prepared on the basis of the
assumptions stated therein. Such projections represent the Borrower's
reasonable good faith estimate of the Borrower's future financial performance
and such assumptions are believed by the Borrower to be fair in light of
current business conditions. The Borrower cannot give any assurances that any
projections will be realized. The Borrower has disclosed to the Banks in
writing any and all facts, known trends or uncertainties the Borrower
reasonably expects will have a material and adverse effect on or may affect
(to the extent the Borrower can now reasonably foresee), the business,
operations or financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Obligors to perform
their obligations under this Agreement.
SECTION 4.12 Representations of Guarantors.
-------------------------------
(a) Each corporate Guarantor is a
corporation duly incorporated, validly existing and in good standing (if such
concept is applicable in the relevant jurisdiction of incorporation) under the
laws of the jurisdiction of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The execution, delivery
and performance by each corporate Guarantor of this Agreement are within such
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of such Guarantor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon such
Guarantor or result in the creation or imposition of any Lien on any asset of
such Guarantor.
(b) Each Guarantor which is a limited partnership is a limited
partnership duly formed pursuant to applicable laws and is validly existing
and in good standing (if such concept is applicable in the relevant
jurisdiction of formation) under the laws of the jurisdiction of its
formation, and has all partnership powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The execution, delivery and performance by each
Guarantor which is a limited partnership of this Agreement are within such
Guarantor's partnership powers, have been duly authorized by all necessary
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
partnership agreement of such Guarantor or of any agreement, judgment,
injunction, order, decree or other instrument binding upon such Guarantor or
result in the creation or imposition of any Lien on any asset of such
Guarantor.
(c) This Agreement constitutes a valid and binding agreement of
each Guarantor in each case enforceable in accordance with its terms.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.1 Information. The Borrower will
-----------
deliver to each of the Banks:
(a) within 2 Business Days after the filing of each Form 10-K by
the Borrower with the Securities and Exchange Commission (and in any event no
later than 120 days after the end of each fiscal year of the Borrower), a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
as of the end of such fiscal year and the related consolidated statements of
income and cash flows and changes in stockholders' equity for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission and accompanied by a report of independent public
accountants or nationally recognized standing in scope and manner acceptable
to the Securities and Exchange Commission;
(b) within 2 Business Days after the filing of each Form 10-Q by
the Borrower with the Securities and Exchange Commission (and in any event no
later than 90 days after the end of each of the first three quarters of each
fiscal year of the Borrower), a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in the case of such statements of income and cash flows, in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief
financial officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower
substantially in the form of Exhibit E hereto (i) setting forth in reasonable
---------
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.7 to 5.14, inclusive, on the
date of such financial statements, (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto and (iii) listing all Material Subsidiaries on the
date of such financial statements;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of the firm
of independent public accountants which reported on such statements
substantially in the form of Exhibit F hereto (i) whether anything has come to
---------
their attention to cause them to believe that any Default existed on the date
of such statements and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously with the annual financial
statements in accordance with clause (c) above;
(e) within five Business Days after the chief financial officer,
the controller, the general counsel or any other officer of the Borrower who
is directly responsible for the administration by the Borrower of this
Agreement obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer or the controller of
the Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under Section 4041(C) of
ERISA, a copy of such notice and other information filed with the PBGC; (vi)
gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a
copy of such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security,
a certificate of the chief financial officer or the chief accounting officer
of the Borrower setting forth details as to such occurrence and action, if
any, which the Borrower or applicable member of the ERISA Group is required or
proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.2 Payment of Obligations.
----------------------
The Borrower will pay and discharge, and will cause each
Subsidiary to pay and discharge, at or before maturity, all their respective
material obligations and liabilities (including, without limitation, tax
liabilities and claims of materialmen, warehousemen and the like which if
unpaid might by law give rise to a Lien, but excluding any intercompany
loans), except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.
SECTION 5.3 Maintenance of Property; Insurance.
-------------------------------------
(a) The Borrower will
keep, and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition or covered by
adequate insurance in accordance with Section 5.3(b), ordinary wear and tear
excepted.
(b) The Borrower will maintain, and will cause each Material
Subsidiary to maintain, or be covered under, (i) physical damage insurance on
all real and personal property on an all risks basis (including the perils of
flood and quake), covering the repair and replacement cost of all such
property and consequential loss coverage for extra expense and (ii) public
liability insurance (including products/completed operations liability
coverage) all on terms and conditions and in scope substantially commensurate
with that which is currently maintained as described on Schedule 5.3 hereto
------------
and evidenced by the certificate contemplated by clause (w) of the second
following sentence and with risk retention thereunder up to an amount which in
the good faith business judgement of the Borrower's or such Material
Subsidiary's management could not reasonably be expected to expose the
Borrower or such Material Subsidiary to a materially adverse noninsured loss.
All such insurance shall be provided by insurers having an A.M. Best
policyholders rating of not less than B+ or such other insurers as the
Required Banks may approve in writing. The Borrower will deliver to the Agent
for distribution to each of the Banks (w) on the date of the first Borrowing
hereunder, a certificate dated such date showing the amount of coverage as of
such date, (x) upon request of any Bank through the Agent from time to time
full information as to the insurance carried, (y) within seven Business Days
of receipt of notice from any insurer a copy of any notice of cancellation or
material change in coverage from that existing on the date of this Agreement
and (z) forthwith upon receipt thereof, notice of any cancellation or
nonrenewal of coverage by the Borrower.
SECTION 5.4 Conduct of Business and Maintenance of Existence.
------------------------------------------------
The Borrower will continue, and will cause each Subsidiary to
continue, to engage in business of the same general type as now conducted by
the Borrower and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Subsidiary to preserve, renew and keep
in full force and effect their respective corporate existence and their
respective rights, privileges and franchises necessary in the normal conduct
of business; provided that nothing in this Section 5.4 shall prohibit (i) the
-------- ----
merger or consolidation of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and be continuing,
(ii) the transfer of assets by a Subsidiary to the Borrower or to another
Subsidiary if, after giving effect thereto, no Default shall have occurred and
be continuing, (iii) the dissolution or termination of the corporate existence
of any Subsidiary if the Borrower in good faith determines that such
termination is in the best interest of the Borrower and is not materially
disadvantageous to the Banks (provided that if such Subsidiary is a Guarantor,
-------- ----
it shall have transferred all of its assets and liabilities to the Borrower or
another Guarantor as part of such dissolution or termination) or (iv) the
sale, divestiture or other disposition by the Borrower of its Property and
Casualty Information Services business and/or its Life Information Services
business as conducted by PMSI, L.P. and Life Information Services Holding,
Inc. (provided that any such sale, divestiture or other disposition pursuant
-------- ----
to this clause (iv) shall be for fair consideration determined in good faith
by the Board of Directors of the Borrower (or the Executive Committee thereof)
and, in any event, for not less than the tangible value of the applicable
assets); and provided further that nothing in this Section 5.4 shall be
-------- -------
construed to prohibit a sale, lease or other transfer of assets expressly
permitted by Section 5.7.
SECTION 5.5 Compliance with Laws.
--------------------
The Borrower will comply, and cause each Subsidiary to comply, in all
material respects with all material laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings.
SECTION 5.6 Inspection of Property, Books and Records.
-----------------------------------------
The
Borrower will keep, and will cause each Material Subsidiary to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Material Subsidiary to
permit, representatives of any Bank at such Bank's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their executive officers and independent
public accountants, all at such reasonable times during normal business hours
and as often as may reasonably be desired without disrupting the normal
conduct of business of the Borrower and its Subsidiaries.
SECTION 5.7 Mergers and Sales of Assets.
---------------------------
(a) The Borrower will not consolidate or merge
with or into any other Person; provided that the Borrower may merge with
-------- ----
another Person if (i) the Borrower is the corporation surviving such merger
and (ii) after giving effect to such merger, no Default shall have occurred
and be continuing; and provided further that nothing in this Section 5.7 shall
-------- -------
prohibit any transaction expressly permitted by proviso (i) of Section 5.4.
(b) the Borrower will not, directly or indirectly, sell, assign,
lease, convey or otherwise dispose of whether in one or a series of
transactions any property (including accounts and notes receivable, with or
without recourse except for dispositions in which (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, and (ii) the aggregate book value of all assets so sold by the
Borrower and its Subsidiaries, together, shall not exceed in the aggregate 5%
of Total Shareholders' Equity, provided that nothing in this Section 5.7 shall
-------- ----
prohibit (x) the licensing by the Borrower of software in the ordinary course
of its business or in connection with any acquisition or divestiture or (y)
any transaction expressly permitted by clause (ii), (iii) or (iv) of the first
proviso to Section 5.4.
SECTION 5.8 Use of Proceeds. The
----------------
proceeds of the Loans made under this Agreement will be used by the Borrower
for general corporate purposes. None of such proceeds will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U,
other than the share repurchases described in the last sentence of Section
5.12, in which case the relevant Loans will be made in compliance with
Regulation U.
SECTION 5.9 Negative Pledge. Neither
---------------
the Borrower nor any Subsidiary will create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except for the
following:
(a) Liens existing on the date of this Agreement securing Debt
(other than Defeased Debt) outstanding on the date of this Agreement in an
aggregate principal or face amount not exceeding $500,000;
(b) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary and not created in contemplation of such
event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such asset
(including without limitation pursuant to a sale/leaseback transaction),
provided that such Lien attaches to such asset concurrently with or within 90
------- ----
days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation of
such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
-------- ----
secured by any additional assets;
(g) (i) inchoate statutory Liens arising in the ordinary
course of its business securing lis pendens, (ii) Liens securing judgments or
orders for the payment of money in an amount up to $15,000,000 and (iii) Liens
securing judgments or orders for the payment of money in an amount in excess
of $15,000,000 but not more than $20,000,000 which are effectively stayed
within 30 days of the judgment or order;
(h) Liens (other than Liens described in clause (g)) arising in
the ordinary course of its business which (i) do not secure Debt or
Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $3,000,000 and (iii) do not in the aggregate materially detract from
the value of its assets or materially impair the use thereof in the operation
of its business;
(i) Liens on cash and certificates of deposit in an aggregate
amount not to exceed 1,271,967 issued by Barclays Bank PLC to Policy
Management Systems International, Ltd. to support such bank's obligations to
repay the holders of Defeased Debt; and
(j) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at any
date not to exceed 5% of Total Shareholders' Equity.
SECTION 5.10 Limitation on Debt of Subsidiaries.
----------------------------------
The Borrower will not
permit any of its Subsidiaries to incur or at any time be liable with respect
to any Debt except for the following:
(a) Defeased Debt;
(b) Debt secured by Liens permitted by Section 5.9(c);
(c) Debt (other than Debt described in clause (a) above) of any
wholly-owned Subsidiary (other than a Guarantor) owed to the Borrower or any
wholly-owned Subsidiary;
(d) Debt (other than Debt described in clause (a) above) of any
Guarantor owed to any other Guarantor or to the Borrower;
(e) Debt of any Guarantor consisting of the Guarantee granted by
such Guarantor under Article 9 of this Agreement;
(f) Debt of any Person outstanding at the time such Person
becomes a Subsidiary and not incurred in contemplation of such event; provided
--------
that such Indebtedness is extinguished or refinanced by the Borrower (solely
----
as Debt of the Borrower) within 90 days after such event; and
(g) Debt of the Consolidated Subsidiaries not otherwise
permitted by the foregoing clauses of this Section not to exceed in the
aggregate 10% of Total Shareholders' Equity as of the most recent calendar
quarter.
SECTION 5.11 Leverage Ratio. The
---------------
Borrower will not permit at any time the Leverage Ratio to exceed 2.5:1.0.
SECTION 5.12 Minimum Consolidated Tangible Net Worth.
-------------------------------------------
At
any date, Consolidated Tangible Net Worth will not be less than (i)
$80,000,000 plus on an annual basis (ii) beginning with the fiscal year
----
beginning January 1, 1997, 50% of Consolidated Net Income, if positive. There
shall be excluded from the calculation of Consolidated Tangible Net Worth all
acquisition related charges of intangibles and any amounts expended to
repurchase shares of the Borrower's common stock in purchases at fair market
value up to an amount, in the aggregate, not to exceed 2.5 million shares in a
maximum dollar amount not to exceed $200,000,000.
SECTION 5.13 Restricted Payments.
--------------------
Neither the Borrower nor any Subsidiary (i) will declare or make
any Restricted Payment unless, after giving effect thereto, no Default shall
have occurred and be continuing or (ii) will optionally prepay, defease or
purchase any Debt of the Borrower or any Subsidiary other than (x) the Loans,
(y) Debt under the credit agreement referred to in Section 3.1(g) as provided
therein, or (z) any other Debt of the Borrower incurred for working capital
purposes provided that the aggregate amount of such Debt prepaid, defeased or
-------- ----
purchased is less than $15,000,000.
SECTION 5.14 Investments. Neither the
-----------
Borrower nor any Subsidiary will hold, make or acquire any Investment in any
Person other than:
(a) (i) Investments in Persons which are Subsidiaries on the
date hereof and (ii) Investments in Persons which are Subsidiaries immediately
after any such Investment is made;
(b) Temporary Cash Investments;
(c) Investments in any customer of the Borrower or any of its
Subsidiaries (or in any other Person the accounts of which would be
consolidated with those of such customer in such customer's consolidated
financial statements if such statements were prepared as of the date such
Investments are made) which are characterized as "inducements" and are made in
connection with long term processing contracts entered into by the Borrower or
such Subsidiary with such customer; and
(d) any Investment not otherwise permitted by the foregoing
clauses of this Section if, immediately after such Investment is made or
acquired, the aggregate net book value of all Investments permitted by this
clause (d) in any consecutive four quarter period does not exceed (i) 20% of
Total Shareholders' Equity and (ii) 10% of Total Shareholders' Equity for any
individual Investment.
SECTION 5.15 Transactions with Affiliates.
------------------------------
The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction
with, any Affiliate except on an arms-length basis on terms at least as
favorable to the Borrower or such Subsidiary than could have been obtained
from a third party who was not an Affiliate; provided that the foregoing
-------- ----
provisions of this Section shall not prohibit any such Person from declaring
or paying any lawful dividend or other payment ratably in respect of all of
its capital stock of the relevant class so long as, after giving effect
thereto, no Default shall have occurred and be continuing.
SECTION 5.16 Additional Guarantors.
---------------------
The Borrower shall from time to time cause each Subsidiary of
the Borrower or other entity that is not a Material Subsidiary on the date
hereof but becomes a Material Subsidiary after the date hereof (whether by
acquisition of capital stock by the Borrower or otherwise) to become party
hereto as guarantor by executing a supplement hereto in form and substance
satisfactory to the Agent, such supplement to be executed by such Material
Subsidiary within 10 days after the date on which the Borrower acquires or
forms such Material Subsidiary, or a Subsidiary not originally a Guarantor
becomes a Material Subsidiary.
ARTICLE 6
DEFAULTS
SECTION 6.1 Events of Default.
-----------------
If one or more of the following events ("Events of Default") shall have
-----------------
occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Committed Loan or any Bid Loan, or any interest, any fees or any other amount
payable hereunder within 3 Business Days of the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.1 through
5.6;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a)
or (b) above) for 30 days after notice thereof has been given to the Borrower
by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement
made by any Obligor in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall prove
to have been incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or within
any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such
Debt or any Person acting on such holder's behalf to accelerate the maturity
thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such relief or
to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due, or shall take any corporate action to
authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or selecting the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it,
or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $3,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate
a Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group
to incur a current payment obligation in excess of $3,000,000;
(j) judgments or orders for the payment of money in excess of
$15,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgments or orders shall remain undischarged for a period of 30 days unless
execution shall have been effectively stayed;
(k) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 35%
or more of the outstanding shares of common stock of the Borrower having the
power to vote for the election of directors; or, during any period of 12
consecutive calendar months, individuals who were either (i) directors of the
Borrower on the first day of such period or (ii) elected to fill vacancies
caused by the ordinary course resignation or retirement of any other director
and whose nomination or election was approved by a vote of at least two-thirds
of the directors then still in office who were directors of the Borrower on
the first day of such period, shall cease to constitute a majority of the
board of directors of the Borrower; or
(l) the Guarantee granted by any Guarantor under Article 9 of
this Agreement shall cease at any time to be in full force and effect (except
as expressly permitted by the first proviso of Section 5.4), or the Borrower
or any Guarantor shall so assert in writing;
then, and in every such event, the Agent shall (i) if requested by
Banks having more than 51% in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments and they shall thereupon terminate,
and (ii) if requested by Banks holding more than 51% of the aggregate
principal amount of the Loans, by notice to the Borrower declare the Loans
(together with accrued interest thereon) to be, and the Loans shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in clause
---- ----
6.1(g) or 6.1(h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Loans (together with accrued interest thereon)
shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.2 Notice of Default.
-----------------
The Agent shall give notice to the Borrower under Section 6.1(c) promptly upon
being requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
THE AGENT
SECTION 7.1 Appointment and Authorization; "Agent".
--------------------------------------
Each Bank
hereby irrevocably (subject to Section 7.9) appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
SECTION 7.2 Delegation of Duties.
--------------------
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
shall 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 agent or attorney-in-fact that it selects with reasonable
care.
SECTION 7.3 Liability of Agent.
------------------
None of the Agent-Related Persons shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement, representation or
warranty made by the Borrower or any Subsidiary or Affiliate of the Borrower,
or any officer thereof, contained in this Agreement or in any other Loan
Document, 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 any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
SECTION 7.4 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement
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 counsel to the Borrower),
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Banks and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 3.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
SECTION 7.5 Notice of Default.
-----------------
The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". The Agent will notify the Banks of its receipt of any such notice.
The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Required Banks in accordance with Article
7; provided, however, that unless and until the Agent has received any such
-------- -------
request, 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 or in the best interest of the Banks.
SECTION 7.6 Credit Decision. Each
---------------
Bank acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and credit worthiness of the Borrower
and its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person 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 investigations as it deems
necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and credit worthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to
be furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or credit worthiness of the Borrower which may come into the
possession of any of the Agent-Related Persons.
SECTION 7.7 Indemnification of Agent.
--------------------------
Whether or not the transactions contemplated hereby
are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), pro rata, from and
against any and all Indemnified Liabilities; provided, however, that no Bank
-------- -------
shall be liable for the payment to the Agent-Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all obligations
hereunder and the resignation or replacement of the Agent.
SECTION 7.8 Agent in Individual Capacity.
----------------------------
BofA and its affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that,
pursuant to such activities, BofA or its affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BofA shall have
the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" include BofA in its individual capacity.
SECTION 7.9 Successor Agent. The
----------------
Agent may, and at the request of the Required Banks shall, resign as Agent
upon 30 days' notice to the Banks. If the Agent resigns under this Agreement,
the Required Banks shall appoint from among the Banks a successor agent for
the Banks which successor agent shall be approved by the Borrower. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Banks and the
Borrower, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Agent and the term
"Agent" shall mean such successor agent and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 7 and Section
10.3 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Agent hereunder until such time, if any, as the Required Banks
appoint a successor agent as provided for above.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
If on or prior to the first day of any
Interest Period for any Euro-Dollar Rate Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) Banks having 51% or more of the aggregate amount of the
Commitments advise the Agent that the LIBO Rate as determined by the Agent
will not adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Rate Loans, as the case may be, for such Interest Period, the
Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Rate Loans, shall be suspended. Unless the Borrower notifies the
Agent prior to 10:30 A.M. on the date of any Euro-Dollar Rate Loan for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.2 Illegality. If, on or after the
----------
date of this Agreement, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, 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 compliance by any Bank (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans (including in respect of any
LIBOR Bid Loan as to which the Borrower has accepted such Bank's Competitive
Bid, but as to which the Borrowing Date has not arrived) and such Bank shall
so notify the Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Rate Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section,
such Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to maintain and fund
any of its outstanding Euro-Dollar Rate Loans to maturity and shall so specify
in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Rate Loan, together with
accrued interest thereon. Concurrently with prepaying each such Euro-Dollar
Rate Loan, the Borrower shall borrow a Base Rate Committed Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Rate Loans of the other
Banks), and such Bank shall make such a Base Rate Committed Loan.
SECTION 8.3 Increased Cost and Reduced Return.
-----------------------------------
(a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, 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 compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding with respect to any Euro-Dollar Rate Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or shall impose on any Bank (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Euro-Dollar Rate Loans, its
Notes or its obligation to make Euro-Dollar Rate Loans and the result of any
of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Euro-Dollar Rate Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Notes with
respect thereto, by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, (including any determination by any such
authority, central bank or comparable agency that, for purposes of capital
adequacy requirements, the Commitments hereunder do not constitute commitments
with an original maturity of one year or less) has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.4 Taxes. (a) For the purposes of this Section
-----
8.4, the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
-----
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower or any Guarantor, as the case may be, pursuant to this Agreement
or under any Note, and all liabilities with respect thereto, excluding (i) in
the case of each Bank and the Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by a jurisdiction under the laws of
which such Bank or the Agent (as the case may be) is organized or in which its
principal executive office is located or, in the case of each Bank, in which
its Applicable Lending Office is located and (ii) in the case of each Bank,
any United States withholding tax imposed on such payments but only at the
rate of United States withholding tax that such Bank is subject to on such
payments at the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
-----------
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or
from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note.
(b) Any and all payments by the Borrower or any Guarantor to or
for the account of any Bank or the Agent hereunder or under any Note shall be
made without deduction for any Taxes or Other Taxes; provided that, if the
-------- ----
Borrower or any Guarantor shall be required by law to deduct any Taxes or
Other Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Bank or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or any Guarantor,
as the case may be, shall make such deductions, (iii) the Borrower or such
Guarantor, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 10.1, the original or a certified copy of a receipt evidencing
payment thereof or, in the case of United States withholding tax, a copy of
Form 1042-S as a receipt evidencing such payments made by the Borrower during
the calendar year.
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section) paid by such Bank or the Agent (as the case may
be) and any liability (including penalties, interest and expenses, so long as
the Agent or relevant Bank exercised good faith in not having paid the
applicable Taxes or Other Taxes giving rise thereto) arising therefrom or with
respect thereto. This indemnification shall be paid within 15 days after such
Bank or the Agent (as the case may be) makes demand therefor. Each Bank and
the Agent agrees to use reasonable good faith efforts to cooperate with any
refund claims that the Borrower may pursue in good faith in order to reduce or
eliminate an assessment for Taxes or Other Taxes subject to the
indemnification provisions of this subsection (c); provided however, that
nothing in this subsection (c) shall be construed to require any Bank or the
Agent to institute any administrative or judicial proceeding that is not made
in good faith or that, in the reasonable judgment of such Bank or the Agent
(as the case may be), is disadvantageous to such Bank or the Agent.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each
other Bank, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Bank remains lawfully able to do so), shall
provide the Borrower and the Agent with Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Bank from
United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate form pursuant to
Section 8.4(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.4(b) or (c) with respect to Taxes imposed by the United
States; provided that if a Bank, which is otherwise exempt from or subject to
-------- ----
a reduced rate of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes
(f) If the Borrower or any Guarantor is required to pay
additional amounts to or for the account of any Bank pursuant to this Section,
then such Bank will change the jurisdiction of its Applicable Lending Office
if, in the judgment of such Bank, such change (i) will eliminate or reduce any
such additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
SECTION 8.5 Base Rate Committed Loans Substituted for Affected
--------------------------------------------------------
Euro-Dollar Rate Loans.
-----------------------
If (i) the obligation of any Bank to make Euro-Dollar
Rate Loans has been suspended pursuant to Section 8.2 or (ii) any Bank has
demanded compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar
Rate Loans and the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Agent, have elected that the provisions
of this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Rate Loans, shall be made instead as Base Rate Committed Loans (on
which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Rate Loans of the other Banks); and
(b) after each of its Euro-Dollar Rate Loans, has been repaid,
all payments of principal which would otherwise be applied to repay such
Euro-Dollar Rate Loans shall be applied to repay its Base Rate Committed Loans
instead.
SECTION 8.6 Substitution of Bank. If (i) the obligation of any Bank to
--------------------
make Euro-Dollar Rate Loans has been suspended pursuant to Section 8.2 or (ii)
any Bank has demanded compensation under Section 8.3 or 8.4, the Borrower
shall have the right, with the assistance of the Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one or more of the Banks)
to purchase the Note and assume the Commitment of such Bank.
ARTICLE 9
GUARANTY
SECTION 9.1 The Guaranty. Each Guarantor,
------------
as primary obligor and not merely as surety, hereby unconditionally guarantees
jointly and severally the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by the Borrower under this
Agreement. Upon failure by the Borrower to pay on the date when due any
principal on any Loan, or any interest, any fees or any other amount payable
hereunder within 3 Business Days of the due date thereof, each Guarantor shall
forthwith on demand pay the amount not so paid at the place and in the manner
specified in this Agreement.
SECTION 9.2 Guaranty Unconditional.
----------------------
The obligations of each Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other Guarantor
under this Agreement, or any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower or any other
Guarantor under this Agreement or any Note;
(d) any change in the corporate existence, structure or
ownership of the Borrower or any other Guarantor, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Borrower,
any other Guarantor or their respective assets or any resulting release or
discharge of any obligation of the Borrower or any other Guarantor contained
in this Agreement or any Note;
(e) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against the Borrower, any other Guarantor,
the Agent, any Bank or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the
-------- ----
assertion of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
the Borrower or any other Guarantor for any reason of this Agreement or any
Note, or any provision of applicable law or regulation purporting to prohibit
the payment by the Borrower or any other Guarantor of the principal of or
interest on any Note or any other amount payable by the Borrower or any other
Guarantor under this Agreement; or
(g) any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, the Agent, any Bank or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
SECTION 9.3 Discharge Only Upon Payment In Full; Reinstatement In
---------------------------------------------------------
Certain Circumstances. Each Guarantor's obligations hereunder shall remain in
---------------------
full force and effect until the Commitments shall have terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrower under this Agreement shall have been paid in full. If at any time
any payment of the principal of or interest on any Note or any other amount
payable by the Borrower under this Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Guarantor or otherwise, each Guarantor's obligations
hereunder with respect to such payment shall be reinstated at such time as
though such payment had been due but not made at such time.
SECTION 9.4 Waiver by each Guarantor. Each Guarantor irrevocably waives
------------------------
acceptance hereof,presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Guarantor or any other Person.
SECTION 9.5 Subrogation and Contribution. Upon making any payment
------------------------------
hereunder, each Guarantor shall be subrogated to the rights of the payee
against the Borrower with respect to such payment and shall have a right
of contribution with respect to the other Guarantors; provided that such
-------- ----
Guarantor shall not enforce any payment by way of subrogation and shall not
enforce any right to receive any payment, including any right of
contribution or for any other reason, from any other Guarantor with
respect to such payment until all amounts payable by the Borrower hereunder
and under the Notes have been paid in full.
SECTION 9.6 Stay of Acceleration.
----------------------
If acceleration of the time for payment of any amount payable
by the Borrower under this Agreement or any Note is stayed upon insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless be
payable by each Guarantor hereunder forthwith on demand by the Agent made at
the request of the requisite proportion of the Banks specified in Article 6 of
the Agreement.
SECTION 9.7 Limit of Liability.
------------------
The obligations of each Guarantor hereunder shall be limited to an aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provisions of any applicable state law.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Notices. All notices, requests and
-------
other communications to any party hereunder shall be in writing (including
bank wire, telex, facsimile transmission or similar writing) and shall be
given to such party:
(a) in the case of the Borrower or the Agent, at its address,
facsimile number or telex number set forth on Schedule 10.1 hereto,
--------------
(b) in the case of any Guarantor, in care of the Borrower,
(c) in the case of any Bank, at its address, facsimile number or
telex number set forth in its Administrative Questionnaire or
(d) in the case of any party, such other address, facsimile
number or telex number as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower.
Each such notice, request or other communication shall be effective:
(i) if given by telex, when such telex is transmitted to the
telex number specified in this Section and the appropriate answerback is
received;
(ii) if given by facsimile transmission, when transmitted to
the facsimile number specified in this Section and confirmation of receipt is
received;
(iii) if given by overnight courier, 24 hours after such
communication is delivered to such courier with postage prepaid, addressed as
aforesaid, so long as such courier can confirm delivery at such address; or
(iv) if given by any other means, when delivered at the
address specified in this Section; provided that notices to the Agent under
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Article 2 or Article 8 and notices to the Borrower under Section 6.2 shall not
be effective until received.
SECTION 10.2 No Waivers. No failure or delay
----------
by the Agent or any Bank in exercising any right, power or privilege hereunder
or under any Note shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.3 Costs and Expenses.
--------------------
(a) The Borrower shall reimburse BofA (including in its capacity
as Agent) within five Business Days after demand for all reasonable costs and
expenses incurred by BofA (including in its capacity as Agent) in connection
with the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case,
whether or not consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby, including reasonable
Attorney Costs incurred by BofA (including in its capacity as Agent) with
respect thereto.
(b) The Borrower shall pay or reimburse the Agent, the Arranger
and each Bank within five Business Days after demand for all reasonable costs
and expenses (including Attorney Costs) incurred by them in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence
of an Event of Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any insolvency proceeding or appellate proceeding).
(c) Except for actions by the Borrower against the Agent, the
Arranger or the Banks, the Borrower agrees to indemnify the Agent, the
Arranger and each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages (excluding consequential damages), costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought
or threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
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have the right to be indemnified hereunder (including, without limitation,
pursuant to Section 8.4(c)) for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 10.4 Sharing of Set-Offs.
---------------------
Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to any Note held
by it which is greater than the proportion received by any other Bank in
respect of the aggregate amount of principal and interest due with respect to
any Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the Notes
held by the Banks shall be shared by the Banks pro rata; provided that nothing
-------- ----
in this Section shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of any Obligor other than its
indebtedness hereunder. Each Obligor agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in
a Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of such Obligor in the amount of such participation.
SECTION 10.5 Amendments and Waivers.
----------------------
(a) Any provision of this Agreement or the Notes may be amended
or waived if, but only if such amendment or waiver is in writing and is signed
by the Borrower and the Required Banks (and, if the rights or duties of the
Agent are affected thereby, by the Agent); provided that no such amendment or
-------- ----
waiver shall, unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of
all Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any
Loan or any fees hereunder or for any scheduled termination of any Commitment,
(iv) release any Guarantor from its obligations hereunder (except as provided
in Section 10.5(b)) or (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
(b) Upon the receipt by the Agent of a certificate of a Responsible
Officer representing that the Life Information Services business conducted by
PMSI, L.P. has been sold, divested or otherwise disposed of in accordance with
the provisions of clause (iv) of the first proviso to Section 5.4, the Agent
shall (at the sole expense of the Borrower) execute such documents and
instruments as are reasonably requested by the Borrower to release PMSI, L.P.
from its obligations as a Guarantor hereunder, without the need for any
consent or authorization by any Bank.
SECTION 10.6 Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of all
Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
-----------
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
--------
that such participation agreement may provide that such Bank will not agree to
----
any modification, amendment or waiver of this Agreement described in clause
(i), (ii), or (iii) of Section 10.5 without the consent of the Participant.
Subject to Section 10.6(e), the Borrower agrees that each Participant shall,
to the extent provided in its participation agreement, be entitled to the
benefits of Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent
of a participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part
--------
(equivalent to an initial Commitment of not less than $5,000,000) of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit J hereto
---------
executed by such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower, which shall not be unreasonably withheld
or delayed, and the Agent; provided that if an Assignee is an affiliate of
-------- ----
such transferor Bank or was a Bank immediately prior to such assignment, no
such consent shall be required and provided further that any such assignment
-------- -------
may be for an amount equivalent to an initial Commitment of less than
$5,000,000 if consented to by the Borrower. Upon execution and delivery of
such instrument (including a Notice of Assignment and Assumption substantially
in the form of Annex I thereto) and payment by such Assignee to such
--------
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the Assignee. In
connection with any such assignment (other than any such assignment in which
the Assignee is an affiliate of the transferor Bank or was a Bank immediately
prior to such assignment), the transferor Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or
8.4 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 10.7 Collateral. Each of the Banks
----------
represents to the Agent and each of the other Banks that it in good faith is
not relying upon any "margin stock" (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in this Agreement.
SECTION 10.8 Governing Law; Submission to Jurisdiction.
-----------------------------------------
This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. Each Obligor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Obligor irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
SECTION 10.9 Counterparts; Integration; Effectiveness.
----------------------------------------
This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 10.10 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE OBLIGORS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11 Confidentiality. The
---------------
Agent and each Bank agrees to keep any information delivered or made available
by the Obligors to it confidential from anyone other than persons employed or
retained by such Bank who are expected to become engaged in evaluating,
approving, structuring or administering the Loans and who will use any such
information solely for such purposes; provided that nothing herein shall
-------- ----
prevent any Bank from disclosing such information (a) to any other Bank or to
the Agent, (b) to any other Person if reasonably incidental to the
administration of the Loans, (c) upon the order of any court or administrative
agency, (d) upon the request or demand of any regulatory agency or authority,
(e) which had been publicly disclosed other than as a result of a disclosure
by the Agent or any Bank prohibited by this Agreement, (f) in connection with
any litigation to which the Agent, any Bank or its subsidiaries or Parent may
be a party, (g) to the extent necessary in connection with the exercise of any
remedy hereunder, (h) to such Bank's or Agent's legal counsel and independent
auditors and (i) subject to provisions substantially similar to those
contained in this Section, to any actual or proposed Participant or Assignee;
provided further that each person who receives any such information from any
-------- -------
Bank or the Agent as permitted by this Section shall be informed by such Bank
or the Agent of the existence and the contents of this Section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
POLICY MANAGEMENT SYSTEMS
CORPORATION
CYBERTEK CORPORATION
POLICY MANAGEMENT SYSTEMS
INTERNATIONAL, LTD.
PMSI, L.P.
By POLICY MANAGEMENT
SYSTEMS CORPORATION;
its General Partner
CYBERTEK SOLUTIONS, L.P.
By POLICY MANAGEMENT
SYSTEMS CORPORATION;
its General Partner
By: Xxxxxxx X. Xxxxxxxx
Secretary
POLICY MANAGEMENT SYSTEMS
INVESTMENTS, INC.
By: Xxxxxxxxx X. Xxxxxx
President
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent
By: Xxxxxxx X. XxXxxxxx
Vice President
COMMITMENT: BANKS:
$70,000,000 BANK OF AMERICA
NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Bank
By: Xxxxxxx X. XxXxxxxx
Vice President
$40,000,000 WACHOVIA BANK, N.A.
By: Xxxxxx X. Xxxxxxx, Xx.
Vice President
$35,000,000 FIRST UNION NATIONAL BANK
By: Xxxxx Xxxx
Senior Vice President
$25,000,000 DEUTSCHE BANK AG,
New York Branch and/or
Cayman Islands Branch
By: Xxxx Xxxxxxxx
Vice President
By: Xxxx X. Xxxxxxxx
Vice President
$20,000,000 DAI-ICHI KANGYO BANK, LTD.,
Atlanta Agency
By: Xxxxxxx Xxxxxxx
Joint General Manager
$10,000,000 THE FUJI BANK, LIMITED,
Atlanta Agency
By: Xxxxxxxxx Xxxxxx
Senior Vice President
and Senior Manager
PRICING SCHEDULE
Each of "Eurodollar Margin" and "Facility Fee Rate" means, for any
date, the rates set forth below in the row opposite such term and in the
column corresponding to the "Pricing Level" that applies at such date:
Level I Level II Level III
------- -------- ---------
Euro-Dollar Margin 0.2250% 0.2500% 0.3500%
Facility Fee Rate 0.1000% 0.1250% 0.1500%
For purposes of this Schedule, the following terms have the
following meanings:
"Level I Pricing" applies at any date if, at such date, the Consolidated
Funded Debt to Consolidated Capitalization is less than 20%.
"Level II Pricing" applies at any date if, at such date, the Consolidated
Funded Debt to Consolidated Capitalization is equal to or greater than 20% but
less than 30%.
"Level III Pricing" applies at any date if, at such date, the
Consolidated Funded Debt to Consolidated Capitalization is equal to or greater
than 30%.
"Pricing Level" refers to the determination of which of Level I, Level II
or Level III applies at any date.
The effective date of any increase or decrease in the Euro-Dollar
Margin or the Facility Fee Rate as a result of any change in the Leverage
Ratio shall be the day on which the Borrower shall have delivered (or shall
have been required to deliver) the financial statements pursuant to Section
5.1(a) or 5.1(b), as the case may be, on the basis of which any such increase
or decrease is calculated.
SCHEDULE 4.6
ERISA Disclosure
[An accounting firm is conducting an audit for the purpose of issuing the
opinion of an independent qualified public account (as described in, and
required under, ERISA Section 103) relating to the Cybertek Corporation
Cybersaver 401(k) Plan (the "Plan"), for the Plan's plan year ending December
31, 1993 (the "1993 Opinion"), but this audit has not been completed. The
Annual Return/Report of Employee Benefit Plan (known as "Form 5500") for the
Plan's plan year ending December 31, 1993, was filed without the 1993 Opinion.
The Internal Revenue Service ("IRS") has noted the absence of the 1993 Opinion
and has requested a copy of it; and Borrower is proceeding as promptly as
possible to obtain the 1993 Opinion and file it with the IRS.]
SCHEDULE 10.1
Addresses for Notices to
Borrower and Agent
Borrower:
Policy Management Systems Corporation
0 XXXX Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Agent:
All Notices Pursuant to Articles 2 and 8:
Bank of America National Trust
and Savings Association
0000 Xxxxxxx Xxxxxxxxx - 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Agency Administrative
Services #5596
All Other Notices:
Bank of America National Trust
and Savings Association
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, #3196
EXHIBIT A-1
COMMITTED LOAN NOTE
New York, New York
August, 1997
For value received, POLICY MANAGEMENT SYSTEMS CORPORATION, a South
Carolina corporation (the "Borrower"), promises to pay to the order of
--------
____________________________ (the "Bank"), for the account of its Applicable
----
Lending Office, the unpaid principal amount of each Loan made by the Bank to
the Borrower pursuant to the Credit Agreement referred to below on the
Termination Date. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of Bank of America National
Trust and Savings Association, 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx
00000.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Committed Loan Notes referred to in the Credit
Agreement dated as of August 8, 1997 among the Borrower, the Guarantors party
thereto, the financial institutions listed on the signature pages thereof
(including the Bank), and Bank of America National Trust and Savings
Association, as Agent (as the same may be amended from time to time, the
"Credit Agreement") and is subject to the terms and conditions of the Credit
-------------
Agreement and entitled to the benefits thereof. Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
The payment in full of the principal and interest on this note has,
pursuant to the provisions of the Credit Agreement, been unconditionally
guaranteed by certain Guarantors.
The Borrower hereby waives diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this note to be executed and
delivered by its duly authorized officer, as of this day and year.
POLICY MANAGEMENT SYSTEMS
CORPORATION
By:
Name
Title
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount of Loan Type of Loan Amount of Principal Repaid
Maturity Date Notation Made By
EXHIBIT A-2
FORM OF BID LOAN NOTE
-------------------------
New York, New York
____________, 199
FOR VALUE RECEIVED, the undersigned, POLICY MANAGEMENT SYSTEMS
CORPORATION, a South Carolina corporation (the "Borrower") hereby promises to
--------
pay to the order of __________________________ (the "Bank") the principal sum
----
of each Bid Loan made by the Bank to the Borrower pursuant to the Credit
Agreement dated as of August 8, 1997 (as from time to time amended, modified
or supplemented, the "Credit Agreement"), among the Borrower, the Guarantors
----------------
party thereto, the financial institutions listed on the signature pages
thereto (including the Bank), and Bank of America National Trust and Savings
Association, as Agent, on the maturity date for such Bid Loan as determined in
accordance with the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal amount
of each Bid Loan from time to time outstanding from the date of disbursement
thereof until paid in full at the rates and at the times which shall be
determined in accordance with the provisions of the Credit Agreement.
The Bank shall endorse on the schedule annexed to this Note, the date,
amount and maturity of each Bid Loan made by it and the amount of each payment
of principal and interest made by the Borrower with respect thereto; provided
--------
that the failure to make, or an error in making, a notation thereon shall not
----
limit or otherwise affect the obligation of the Borrower hereunder with
respect to payments of principal or interest on this Note.
This promissory note (this "Note") is one of the Borrower's Bid Loan
----
Notes issued pursuant to and entitled to the benefits of the Credit Agreement,
to which reference is hereby made for a more complete statement of the terms
and conditions under which the Bid Loans evidenced hereby are made and are to
be repaid. Capitalized terms used in this Note without definition shall have
the meanings specified in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in immediately available
funds at the office of the Agent at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement. Each of
the Bank and any subsequent holder of this Note agrees that before disposing
of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid.
No Bid Loan evidenced by this Note may be prepaid prior to the maturity
date thereof. Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note may become, or may be declared to be, due
and payable in the manner, upon the conditions and with the effect provided in
the Credit Agreement.
The payment in full of the principal and interest on this Note has,
pursuant to the provisions of the Credit Agreement, been unconditionally
guaranteed by certain Guarantors.
The Borrower hereby waives diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and
delivered by its duly authorized officer, as of this day and year.
POLICY MANAGEMENT SYSTEMS CORPORATION
By: _________________________
Title: ______________________
TRANSACTIONS ON NOTE
----------------------
DATE TYPE OF LOAN MADE THIS DATE AMOUNT OF LOAN MADE THIS DATE END
OF INTEREST PERIOD AMOUNT OF PRINCIPAL OR INTEREST PAID THIS DATE
OUTSTANDING PRINCIPAL BALANCE THIS DATE NOTATION MADE BY
EXHIBIT B
NOTICE OF BORROWING
---------------------
Date:, 199
To: Bank of America National Trust and Savings Association as Agent for
the Banks parties to the Credit Agreement dated as of August 8, 1997 (as
extended, renewed, amended or restated from time to time, the "Credit
------
Agreement") among Policy Management Systems Corporation, the Guarantors party
-
thereto, certain Banks which are signatories thereto and Bank of America
National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Policy Management Systems Corporation (the "Borrower"),
--------
refers to the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section
2.2 of the Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
, 19.
2. The aggregate amount of the proposed Borrowing is
$.
3. The Borrowing is to be comprised of $ of [Base Rate]
[Euro-Dollar] Loans.
4. The duration of the Interest Period for the [Euro-Dollar Loans]
included in the Borrowing shall be [_____ months].
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower contained in
Article 4 of the Credit Agreement are true and correct as though made on and
as of such date (except to the extent such representations and warranties
relate to an earlier date, in which case they are true and correct as of such
date);
(b) no Default or Event of Default has occurred and is continuing,
or would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Loans plus the aggregate principal amount of all
----
outstanding Bid Loans to exceed the combined Commitments of the Banks.
POLICY MANAGEMENT SYSTEMS
CORPORATION
By:
Title:
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
-----------------------------------
Date:, 199
To: Bank of America National Trust and Savings Association as Agent for
the Banks parties to the Credit Agreement dated as of August 8, 1997 (as
extended, renewed, amended or restated from time to time, the "Credit
------
Agreement") among Policy Management Systems Corporation, the Guarantors party
---------
thereto, certain Banks which are signatories thereto and Bank of America
National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Policy Management Systems Corporation (the "Borrower"),
--------
refers to the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section
2.4 of the Credit Agreement, of the [conversion] [continuation] of the
Committed Loans specified herein, that:
1. The Conversion/Continuation Date is, 19.
2. The aggregate amount of the Committed Loans to be [converted]
[continued] is $.
3. The Committed Loans are to be [converted into] [continued as]
[Euro-Dollar] [Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the
Loans included in the [conversion] [continuation] shall be [ months].
POLICY MANAGEMENT SYSTEMS
CORPORATION
By:
Title:
EXHIBIT D-1
FORM OF OPINION OF
XXXXXX XXXXXXX XXXXX & SCARBOROUGH L.L.P.
August __, 1997
To the Banks and the Agent
Referred to Below
c/o Bank of America National Trust
and Savings Association, as Agent
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
We have acted as counsel for Policy Management Systems Corporation, a South
Carolina corporation (the "Borrower") and certain of its Subsidiaries in
connection with the Credit Agreement dated as of August 8, 1997, among the
Borrower, the Guarantors party thereto, the Banks listed on the signature
pages thereof, and Bank of America National Trust and Savings Association, as
Agent (the "Credit Agreement").
This opinion is being rendered to you pursuant to Section 3.1(b) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the following documents:
(i) the Credit Agreement and the Notes;
(ii) the governance documents relating to the
Borrower and the Guarantors; and
(iii) such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
In examining the foregoing documents, we have assumed the genuineness of all
signatures (other than signatures of representatives of the Borrower and the
Guarantors), the legal capacity of all natural persons, and the authenticity
of all documents purporting to be originals and the conformity to the
originals of all documents purporting to be copies. We have relied upon the
representations and warranties in the Credit Agreement and the Notes and on
the certificates of officers of the Borrower and the Guarantors, and on other
written or oral statements (wither in person or by telephone) of officers and
other representatives of those entities, and of public officials.
We have assumed that each of you has the power and authority to, and has taken
the corporate action necessary to, execute, deliver and perform the Credit
Agreement.
Based on the foregoing, and subject to the qualifications set forth below, we
are of the opinion that:
1. The Borrower is a corporation duly incorporated and validly
existing under the laws of the State of South Carolina.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the corporate powers of the
Borrower, have been duly authorized by all necessary corporate action and
require no action by or in respect of, or filing with, any governmental body,
agency or official.
3. Assuming due authorization, execution and delivery of the Credit
Agreement by the Agent and the Banks, the Credit Agreement constitutes a
legal, valid and binding agreement of the Borrower and each Note constitutes a
legal, valid and binding obligation of the Borrower, in each case enforceable
in accordance with its terms.
4. Except with respect to Policy Management Systems Investments, Inc.
("PMS Investments") (for which we express no opinion), the execution, delivery
and performance by each corporate Guarantor of the Credit Agreement are within
such Guarantor's corporate powers, have been duly authorized by all necessary
corporate action and require no action by or in respect of, or filing with,
any governmental body, agency or official. The execution, delivery and
performance of the Credit Agreement by each Guarantor which is a limited
partnership are within such Guarantor's partnership powers, have been duly
authorized by all necessary action, and require no action by or in respect of,
or filing with, any governmental body, agency or official. Except with
respect to PMS Investments (for which we express no opinion), assuming due
authorization, execution and delivery of the Credit Agreement by the Agent and
the Banks, the Credit Agreement constitutes a legal, valid and binding
agreement of each Guarantor.
The foregoing opinions are subject to the following qualifications:
(A) Our opinions herein are limited solely to the laws of the
United States of America and the laws of South Carolina, without reference to
choice of law provisions, and we express no opinion herein concerning the laws
of any other jurisdiction. In this regard, we note that the Credit Agreement
contains provisions to the effect that the laws of the State of New York are
intended to be governing. For purposes of this opinion, we have assumed that
the laws of New York are identical in all relevant respects to the laws of
South Carolina.
(B) With respect to the opinions expressed in numbered paragraph
3 above, such opinions are limited by principals of equity which may limit the
availability of certain rights and remedies and by the effect of bankruptcy,
insolvency, reorganization, moratorium and other laws or decisions relating to
or affecting debtors' obligations or creditors' rights generally. Such
opinions also are limited by laws and equitable doctrines including, but not
limited to, any requirement that the parties to agreements act reasonably and
in good faith and give reasonable notice prior to exercising rights and
remedies. In addition, we express no opinion regarding the effectiveness of
any of the provisions of the Credit Agreement or any other document whereby
any person or entity waives procedural or substantive rights.
(C) Our opinions are limited to the matters expressly stated
herein, and no opinion may be inferred or implied beyond the matters expressly
stated.
(D) This letter is limited to the law and facts as in existence
on the date hereof, and we undertake no responsibility to revise or supplement
this letter to reflect any change in the law or facts.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied
upon by any other person without our prior written consent.
Very truly yours,
XXXXXX XXXXXXX XXXXX & XXXXXXXXXXX,
L.L.P
EXHIBIT D-2
FORM OF OPINION OF GENERAL COUNSEL
August __, 1997
To the Banks and the Agent
Referred to Below
c/o Bank of America National Trust
and Savings Association, as Agent
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
I am the General Counsel of Policy Management Systems Corporation, a South
Carolina corporation (the "Borrower"). In this connection, I am furnishing
this opinion to you pursuant to Section 3.1(b) of the Credit Agreement dated
as of August 8, 1997, among the Borrower, the Guarantors party thereto, the
Banks listed on the signature pages thereof, and Bank of America National
Trust and Savings, as Agent (the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein as therein defined.
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
the following documents:
(i) the Agreement and the Notes;
(ii) the governance documents relating to the Borrower and the
Guarantors; and
(iii) such other documents as I have deemed necessary or appropriate
as a basis for the opinions set forth below.
In examining the foregoing documents, I have assumed the genuineness of all
signatures (other than signatures of representatives of the Borrower and the
Guarantors), the legal capacity of all natural persons, and the authenticity
of all documents purporting to be originals and the conformity to the
originals of all documents purporting to be copies. In providing the opinions
contained herein, I have relied when appropriate upon certificates of public
officials.
Based on the foregoing, and subject to the qualifications set forth below, I
am of the opinion that:
1. The Borrower has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes do not contravene, or constitute a default
under, any provision of applicable law or regulations, or of the articles of
incorporation or by-laws of the Borrower or any debt agreement or judgement
binding upon the Borrower or, to the best of my knowledge, of any other
agreement, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries and will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
3. Except as disclosed in the Borrower's 1996 Form 10-K and the
Borrower's Latest Form 10-Q, there is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a likelihood of an
adverse decision which could materially adversely affect (i) the business of
the Borrower and its Consolidated Subsidiaries, considered as a whole, (ii)
the consolidated financial position of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or (iii) the consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole (considered on an annual basis) or which in any manner draws into
question the validity of the Credit Agreement or the Notes.
4. Except with respect to Policy Management Systems Investments, Inc.
("PMSI") (for which I express no opinion), each of the Borrower's corporate
Material Subsidiaries is a corporation validly existing and in good standing
(if such concept is applicable in the relevant jurisdiction of incorporation)
under the laws of its jurisdiction of incorporation. Each of the Borrower's
corporate Material Subsidiaries has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as not conducted. Each of the Borrower's Material
Subsidiaries which is a partnership is a partnership duly formed pursuant to
applicable laws and is validly existing and in good standing (if such concept
is applicable in the relevant jurisdiction of formation) under the laws of its
jurisdiction of formation, and has all partnership powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
5. Except with respect to PMSI (for which I express no opinion), the
execution, delivery and performance by each Guarantor of the Credit Agreement
do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or by-laws of such
Guarantor. To the best of my knowledge, the execution, delivery and
performance by each Guarantor of the Credit Agreement do not contravene, or
constitute a default under any provision of any agreement, judgement,
injunction, order, decree or other instrument binding upon such Guarantors and
will not result in the creation or imposition of any Lien on any asset of such
Guarantor.
The foregoing opinions are subject to the following qualifications:
(A) My opinions herein are limited solely to the laws of the
United States of America and the laws of South Carolina, without reference to
choice of law provisions, and I express no opinion herein concerning the laws
of any other jurisdiction. In this regard, I note that the Credit Agreement
contains provisions to the effect that the laws of the State of New York are
intended to be governing. For purposes of this opinion, I have assumed that
the laws of New York are identical in all relevant respects to the laws of
South Carolina.
(B) My opinions are limited to the matters expressly stated
herein, and no opinion may be inferred or implied beyond the matters expressly
stated.
(C) This letter is limited to the law and facts as in existence
on the date hereof, and I undertake no responsibility to revise or supplement
this letter to reflect any change in the law or facts.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied
upon by any other person without my prior written consent.
Very truly yours,
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
General Counsel, Chief Administrative
Officer, and Secretary
EXHIBIT D-3
FORM OF OPINION OF DELAWARE COUNSEL
August __, 1997
To the Banks and the Agent
Referred to Below
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, #3196
Dear Sirs:
We have acted as special counsel for Policy Management Systems Investment,
Inc., a Delaware corporation (the "Obligor") in connection with the Credit
Agreement dated as of August 8, 1997, among Policy Management Systems
Corporation, a South Carolina corporation (the "Borrower"), the Guarantors
party thereto, the Banks listed on the signature pages thereof, and Bank of
America National Trust and Savings Association, as Agent (the "Credit
Agreement").
This opinion is being rendered to you pursuant to Section 3.1(b) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the following documents:
(i) the Credit Agreement;
(ii) the governance documents relating to the Obligor; and
(iii) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
In examining the foregoing documents, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, and the authenticity of
all documents purporting to be originals and the conformity to the originals
of all documents purporting to be copies. We have relied upon the
representations and warranties in the Credit Agreement and on the certificates
of officers of the Borrower and the Guarantors (including the Obligor), and on
other written or oral statements (whether in person or by telephone) of
officers and other representatives of those entities, and of public officials.
We have assumed that each of you has the power and authority to, and has taken
the corporate action necessary to, execute, deliver and perform the Credit
Agreement.
Based on the foregoing, and subject to the qualifications set forth below, we
are of the opinion that:
1. The Obligor is a corporation duly incorporated and validly
existing under the laws of Delaware.
2. The execution, delivery and performance by the Obligor of the
Credit Agreement are within the corporate powers of the Obligor, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official, and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the articles of incorporation or by-laws of the Obligor.
3. Assuming due authorization, execution and delivery of the Credit
Agreement by the Agent and the Banks, the Credit Agreement constitutes a valid
and binding agreement of the Obligor.
The foregoing opinions are subject to the following qualifications:
(A) Our opinions herein are limited solely to the laws of
Delaware, without reference to choice of law provisions, and we express no
opinion herein concerning the laws of any other jurisdiction.
(B) The opinions expressed herein are limited by principles of
equity which may limit the availability of certain rights and remedies and by
the effect of bankruptcy, insolvency, reorganization, moratorium and other
laws or decisions relating to or affecting debtors' obligations or creditors'
rights generally. Such opinions also are limited by laws and equitable
doctrines including, but not limited to, any requirement that the parties to
agreements act reasonably and in good faith and give reasonable notice prior
to exercising rights and remedies. In addition, we express no opinion
regarding the effectiveness of any of the provisions of the Credit Agreement
or any other document whereby any person or entity waives procedural,
substantive or constitutional rights, or other or similar provisions related
to disclaimers, liability limitations with respect to third parties, releases
of other legal or equitable rights or discharge of defenses.
(C) Our opinions are limited to the matters expressly stated
herein, and no opinion may be inferred or implied beyond the matters expressly
stated.
(D) This letter is limited to the law and facts as in existence
on the date hereof, and we undertake no responsibility to revise or supplement
this letter to reflect any change in the law or facts.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied
upon by any other person without our prior written consent.
Very truly yours,
EXHIBIT E
COMPLIANCE CERTIFICATE
-----------------------
Compliance Requirements of Sections 5.7 to 5.14
FINANCIAL REPORTING DATE: ____________________, 199__
I. LIST OF MATERIAL SUBSIDIARIES
As of the financial reporting date, any subsidiary whose total assets, total
revenue or net income (or, in the case of a subsidiary which has subsidiaries,
consolidated total assets, total revenue or net income of such subsidiary with
its subsidiaries) are at least 5% of the consolidated total assets, total
revenue or net income, respectively, of PMSC and its consolidated
subsidiaries, (as reported in the consolidated financial statements of PMSC on
the above indicated financial reporting date.) Also, any subsidiary whose
outstanding balance of debt owed to PMSC or any other subsidiary exceeds
$10,000,000 or any subsidiary whose outstanding balance of debt from PMSC or
any other subsidiary exceeds $10,000,000. No foreign subsidiary of PMSC or
Policy Management Systems International, Ltd. need be included.
Material Subsidiaries
----------------------
II. SECTION 5.7 MERGERS AND SALES OF ASSETS
PMSC will not consolidate or merge with or into any other person or sell,
lease or otherwise transfer directly or indirectly, all or any substantial
part of the assets of PMSC and its subsidiaries, taken as a whole to any other
person (with certain exceptions listed under Section 5.7).
Mergers and Sales of Assets
-------------------------------
III. SECTION 5.8 USE OF PROCEEDS
The proceeds of the loans made under this agreement will be used by PMSC for
general corporate purposes. None of the proceeds will be used, directly or
indirectly, for the buying or carrying of any "margin stock" within the
meaning of Regulation U, other than the share repurchases described in the
last sentence of Section 5.12, in which case the relevant loans will be made
in compliance with Regulation U.
Use of Proceeds
-----------------
COMPLIANCE CERTIFICATE
-----------------------
Compliance Requirements of Sections 5.7 to 5.14
IV. SECTION 5.9 NEGATIVE PLEDGE
PMSC nor any subsidiary will create or assume any lien on any asset now owned
or hereafter acquired, except for the specific instances cited in the credit
agreement. Liens not otherwise permitted by the specific instances cited in
the credit agreement securing debt in aggregate principal or face amount at
any date not to exceed 5% of Total Shareholders' Equity.
Negative Pledge
----------------
V. SECTION 5.10 LIMITATION ON DEBT OF SUBSIDIARIES
PMSC will not permit any of its subsidiaries to incur or at any time be liable
with respect to any debt, with exceptions as listed in the Credit Agreement.
Subsidiary Debt
----------------
VI. SECTION 5.11 LEVERAGE RATIO
The Leverage Ratio will at no time be less than 2.5:1.0.
COMPLIANCE CERTIFICATE
-----------------------
Compliance Requirements of Sections 5.7 to 5.14
VII. SECTION 5.12 MINIMUM CONSOLIDATED TANGIBLE NET WORTH
At any date, Consolidated Tangible Net Worth plus the permitted add back at
such date will not be less than $80,000,000 plus 50% of Consolidated Net
Income.
Minimum Consolidated Tangible Net Worth Calculation
--------------------------------------------------------
VIII. SECTION 5.13 RESTRICTED PAYMENTS
Neither PMSC or any subsidiary will declare or make any restricted payment
unless, after giving effect thereto, no default shall have occurred or be
continuing. Neither PMSC or any subsidiary will prepay, defease or purchase
any debt of PMSC or any subsidiary other than the loans, any debt outstanding
under the Credit Agreement, any debt of PMSC incurred for working capital
purposes, provided that the aggregate amount of such debt prepaid, defeased or
purchased at any one time is less than $15,000,000.
Restricted Payments
--------------------
IX. SECTION 5.14 INVESTMENTS.
Neither PMSC or any subsidiary will hold, make or acquire any Investment in
any Person subject to 10% of Total Shareholders' Equity for individual
transactions and 20% of Total Shareholders' Equity in the aggregate in any
consecutive four quarter period, other than as permitted under Section 5.14.
The above calculations have been performed as described in the credit
agreement, based on the definitions contained in the credit agreement.
Dated Chief Financial Officer
OR
Dated Chief Accounting Officer
EXHIBIT F
Independent Auditor's Report
------------------------------
, 199__
Chief Financial Officer
Policy Management Systems Corporation
Dear:
We have audited, in accordance with generally accepted auditing standards, the
consolidated balance sheets of Policy Management Systems Corporation (the
"Borrower") as of December 31,, and the related statement of income, retained
earnings, and cash flows for the year then ended, and have issued our report
thereon dated.
In connection with our audit, nothing came to our attention that caused us to
believe that the Borrower failed to comply with the terms, covenants,
provisions, or conditions of sections 5.7 to 5.14, inclusive, of the Credit
Agreement dated as of August 8, 1997, among the Borrower, the Guarantors party
thereto, the financial institutions party thereto, and Bank of America
National Trust and Savings Association, as Agent (such financial institutions
and the Agent, collectively, the "Bank Group") insofar as they relate to
accounting matters. However, our audit was not directed primarily toward
obtaining knowledge of such non-compliance.
This report is intended solely for the information and use of the board of
directors and management of Policy Management Systems Corporation and the Bank
Group and should be not used for any other purposes.
Very truly yours,
/s/ Coopers & Xxxxxxx L.L.P.
EXHIBIT G
COMPETITIVE BID REQUEST
-------------------------
________________, 199_
Bank of America National Trust
and Savings Association,
as Agent
0000 Xxxxxxx Xxxxxxxxx - 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Agency Administrative Services
#5596
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of August 8, 1997 (as
amended from time to time, the "Credit Agreement"), by and among Policy
-----------------
Management Systems Corporation (the "Borrower"), the Guarantors party thereto,
--------
the Banks party thereto, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent for the Banks (the "Agent"). Capitalized terms used
-----
herein have the meanings specified in the Credit Agreement.
This is a Competitive Bid Request for Bid Loans pursuant to Section
2.6(a) of the Credit Agreement as follows:
(i) The Business Day of the proposed Bid Borrowing is ______________,
199_.
(ii) The aggregate amount of the proposed Bid Borrowing is
$___________________.
(iii) The proposed Bid Borrowing to be made pursuant to Section 2.6
shall be comprised of [LIBOR] [Absolute Rate] Bid Loans.
(iv) The Interest Period[s] for the Bid Loans comprised in the Bid
Borrowing shall be _______________, [_________________] and
[___________________].
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Bid
Borrowing, before and after giving effect thereto and to the application of
the proceeds therefrom:
(a) the representations and warranties of the Borrower contained in
Article 4 of the Credit Agreement are true and correct as though made on and
as of such date (except to the extent such representations and warranties
relate to an earlier date, in which case they are true and correct as of such
date);
(b) no Default or Event of Default has occurred and is continuing,
or would result from such proposed Bid Borrowing; and
(c) the proposed Bid Borrowing will not cause the aggregate
principal amount of all outstanding Loans to exceed the combined Commitments
of the Banks.
POLICY MANAGEMENT SYSTEMS
CORPORATION
By:
Title:
EXHIBIT H
INVITATION FOR COMPETITIVE BIDS
----------------------------------
Via Facsimile
--------------
To the Banks Listed on Annex A attached hereto:
--------
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of August 8,
1997 (as amended from time to time, the "Credit Agreement"), among POLICY
----------------
MANAGEMENT SYSTEMS CORPORATION (the "Borrower"), the Guarantors party thereto,
--------
the Banks party thereto, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent for the Banks (the "Agent"). Capitalized terms used
-----
herein have the meanings specified in the Credit Agreement.
Pursuant to subsection 2.6(b) of the Credit Agreement, you are hereby
invited to submit offers to make Bid Loans to the Borrower based on the
following specifications:
1. Date of Bid Borrowing: _______________, 199_;
2. Aggregate amount of Bid Borrowing:
$___________________;
3. The Bid Loan shall be [LIBOR Bid Loans] [Absolute Rate Bid Loans];
and
4. Interest Period[s]: ____________________, [________________] and
[________________].
All Competitive Bids must be in the form of Exhibit I to the Credit
---------
Agreement and must be received by the Agent no later than [__:__] a.m. (San
Francisco time) on ___________, 199_.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: _____________________________
Title: __________________________
ANNEX A
TO EXHIBIT H
LIST OF BANKS
-------------
Bank of America National Trust
and Savings Association, as a Bank
Facsimile: (415) 622-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
EXHIBIT I
FORM OF COMPETITIVE BID
--------------------------
________________, 199_
Bank of America National Trust
and Savings Association,
as Agent
0000 Xxxxxxx Xxxxxxxxx - 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Agency Administrative Services
#5596
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of August 8, 1997 (as
amended from time to time, the "Credit Agreement"), by and among Policy
-----------------
Management Systems Corporation (the "Borrower"), the Guarantors party thereto,
--------
the Banks party thereto, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent for the Banks (the "Agent"). Capitalized terms used
-----
herein have the meanings (if any) specified in the Credit Agreement.
In response to the Competitive Bid Request of the Borrower dated
_____________, 199_ and in accordance with subsection 2.6(c)(ii) of the Credit
Agreement, the undersigned Bank offers to make [a] Bid Loan[s] thereunder in
the following principal amount[s] at the following interest rates for the
following Interest Period[s]:
Date of Bid Borrowing: ________________, 199_
Aggregate Maximum Bid Amount: $__________________
Principal Principal Principal
Amount $_________ Amount $_________ Amount $_________
Interest: Interest: Interest:
[Absolute [Absolute [Absolute
Rate __%, __%, __%] Rate __%, __%, __%] Rate __%, __%, __%]
or
[LIBO [LIBO [LIBO
Margin +/- __%, Margin +/- __%, Margin +/- __%,
+/- __%, +/- __%] +/- __%, +/- __%] +/- __%, +/- __%]
Interest Interest Interest
Period __________ Period __________ Period __________
=================== ==================== ===================
[NAME OF BANK]
By:
Title:
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of August 8, 1997 among (the
"Assignor"), (the "Assignee"), POLICY MANAGEMENT SYSTEMS
--- --------
CORPORATION (the "Borrower") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
--------
ASSOCIATION, as Agent (the "Agent").
-----
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
---------
relates to the Credit Agreement dated as of August 8, 1997 among the Borrower,
the Guarantors party thereto, the Assignor and the other Banks party thereto,
as Banks, and the Agent (the "Credit Agreement");
-----------------
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $_________;
WHEREAS, [Committed] Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $___________ are
outstanding at the date hereof [and Bid Loans made to the Borrower by the
Assignor under the Credit Agreement in the aggregate principal amount of $ are
outstanding at the date hereof]; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $________________ (the
"Assigned Amount"), together with a corresponding portion of its outstanding
----------
[Committed] Loans, and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such
terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
-----------
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
----------
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
[Committed] Loans made by the Assignor outstanding at the date hereof. Upon
the execution and delivery hereof by the Assignor, the Assignee, [the Borrower
and the Agent] and the payment of the amounts specified in Section 3 required
to be paid on the date hereof (i) the Assignee shall, as of the date hereof,
succeed to the rights and be obligated to perform the obligations of a Bank
under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.
Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
up-front fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum. It is understood that facility fees accrued to
the date hereof are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of the Assignee. Each
of the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
SECTION 4. Notice to [and Consent of] the Borrower and the Agent.
---------------------------------------------------------
Promptly following the execution of this Agreement, the Assignor and Assignee
shall deliver to the Agent and the Borrower a Notice of Assignment and
Assumption in substantially the form of Annex I hereto, with the blanks
--------
appropriately completed (the "Assignment Notice"). [This Agreement is
------------------
conditioned upon the consent of the Borrower and the Agent pursuant to Section
10.6(c) of the Credit Agreement. The execution by the Borrower and the Agent
of the Assignment Notice is evidence of this consent.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
--------------------------
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of any Obligor, or the validity and enforceability of the
obligations of any Obligor in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Obligors.
SECTION 6. Governing Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
By:
Name:
Title:
By:
Name:
Title:
NOTICE OF ASSIGNMENT AND ASSUMPTION
---------------------------------------
_______________, 19__
n
Bank of America National Trust
and Savings Association, as Agent
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, #3196
Policy Management Systems Corporation
0 XXXX Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of August 8, 1997 (as amended,
amended and restated, modified, supplemented or renewed from time to time the
"Credit Agreement") among Policy Management Systems Corporation (the
-----------------
"Borrower"), the Banks referred to therein and Bank of America National Trust
--------
and Savings Association, as agent for the Banks (the "Agent"). Terms defined
-----
in the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of[, and request your consent to,] the
assignment by __________________ (the "Assignor") to _______________ (the
--------
"Assignee") of _____% of the right, title and interest of the Assignor in and
-----
to the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor and all
outstanding [Committed] Loans made by the Assignor pursuant to the Assignment
and Assumption Agreement attached hereto (the "Assignment and Assumption").
-------------------------
Before giving effect to such assignment the Assignor's Commitment is $
___________[,] [and] the aggregate amount of its outstanding Committed Loans
is $ [and the aggregate amount of its outstanding Bid Loans is
$_____________].
2. The Assignee agrees that, upon receiving the consent of the Agent
and the Borrower to such assignment, in each case if required by Section 10(c)
of the Credit Agreement, the Assignee will be bound by the terms of the Credit
Agreement as fully and to the same extent as if the Assignee were the Bank
originally holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
Attention:
Telephone: (___) ________
Telecopier: (___) _______
Telex (Answerback):
(B) Payment Instructions:
Account No.:
At:
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Assumption.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Assumption to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
Title:
By:
Title:
S-1
[NAME OF ASSIGNEE]
By:
Title:
By:
Title:
ACKNOWLEDGED [AND ASSIGNMENT
CONSENTED TO]:
POLICY MANAGEMENT SYSTEMS CORPORATION
By:
Title:
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Title:
