PAGE <1>
EXHIBIT 10C
[CONFORMED COPY]
$100,000,000
3-YEAR
CREDIT AGREEMENT
dated as of
August 11, 1995
among
Policy Management Systems Corporation,
The Guarantors Party Hereto,
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
J.P. Morgan Securities Inc.,
as Arranger
PAGE <2>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms and Determinations . . . . . . . . . . . . . 14
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . 15
2.2. Method of Borrowing . . . . . . . . . . . . . . . . . . . . . 15
2.3. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.4. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . 17
2.5. Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . 17
2.6. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7. Optional Termination or Reduction of
Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.8. Mandatory Termination of Commitments. . . . . . . . . . . . . 21
2.9. Optional Prepayments. . . . . . . . . . . . . . . . . . . . . 21
2.10. General Provisions as to Payments . . . . . . . . . . . . . . 21
2.11. Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . 22
2.12. Computation of Interest and Fees. . . . . . . . . . . . . . . 23
2.13. Regulation D Compensation . . . . . . . . . . . . . . . . . . 23
ARTICLE 3
CONDITIONS
3.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . 25
4.2. Corporate and Governmental Authorization; No
Contravention. . . . . . . . . . . . . . . . . . . . . . . . . 25
4.3. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . 25
4.4. Financial Information . . . . . . . . . . . . . . . . . . . . 26
4.5. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . 27
4.7. Environmental Matters . . . . . . . . . . . . . . . . . . . . 27
4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
PAGE <3>
4.9. Material Subsidiaries . . . . . . . . . . . . . . . . . . . . 27
4.10. Regulatory Restrictions on Borrowing. . . . . . . . . . . . . 28
4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . 28
4.12. Representations of Guarantors . . . . . . . . . . . . . . 29
ARTICLE 5
COVENANTS
5.1. Information . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Payment of Obligations. . . . . . . . . . . . . . . . . . 32
5.3. Maintenance of Property; Insurance. . . . . . . . . . . . 33
5.4. Conduct of Business and Maintenance of
Existence. . . . . . . . . . . . . . . . . . . . . . . . 33
5.5. Compliance with Laws. . . . . . . . . . . . . . . . . . . 34
5.6. Inspection of Property, Books and Records . . . . . . . . 34
5.7. Mergers and Sales of Assets . . . . . . . . . . . . . . . 34
5.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 35
5.9. Negative Pledge . . . . . . . . . . . . . . . . . . . . . 35
5.10. Limitation on Debt of Subsidiaries. . . . . . . . . . . . 36
5.11. Cash Flow Ratio . . . . . . . . . . . . . . . . . . . . . 37
5.12. Interest Coverage Ratio . . . . . . . . . . . . . . . . . 37
5.13. Minimum Consolidated Tangible Net Worth . . . . . . . . . 37
5.14. Restricted Payments . . . . . . . . . . . . . . . . . . . 38
5.15. Investments . . . . . . . . . . . . . . . . . . . . . . . 38
5.16. Transactions with Affiliates. . . . . . . . . . . . . . . 38
5.17. Additional Guarantors . . . . . . . . . . . . . . . . . . 39
ARTICLE 6
DEFAULTS
6.1. Events of Default . . . . . . . . . . . . . . . . . . . . 39
6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 7
THE AGENT
7.1. Appointment and Authorization . . . . . . . . . . . . . . 42
7.2. Agent and Affiliates. . . . . . . . . . . . . . . . . . . 42
7.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . 43
7.4. Consultation with Experts . . . . . . . . . . . . . . . . 43
7.5. Liability of Agent. . . . . . . . . . . . . . . . . . . . 43
7.6. Indemnification . . . . . . . . . . . . . . . . . . . . . 43
7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . 44
7.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . 44
7.9. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . 44
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ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . . . . . . . 44
8.2. Illegality. . . . . . . . . . . . . . . . . . . . . . . . 45
8.3. Increased Cost and Reduced Return . . . . . . . . . . . . 46
8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.5. Base Rate Loans Substituted for Affected
Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 9
GUARANTY
9.1. The Guaranty. . . . . . . . . . . . . . . . . . . . . . . 50
9.2. Guaranty Unconditional. . . . . . . . . . . . . . . . . . 50
9.3. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances . . . . . . . . . 51
9.4. Waiver by each Guarantor. . . . . . . . . . . . . . . . . 52
9.5. Subrogation and Contribution . . . . . . . . . . . . . . 52
9.6. Stay of Acceleration. . . . . . . . . . . . . . . . . . . 52
9.7. Limit of Liability. . . . . . . . . . . . . . . . . . . . 52
ARTICLE 10
MISCELLANEOUS
10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 53
10.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . 53
10.3. Expenses; Indemnification. . . . . . . . . . . . . . . . 53
10.4. Sharing of Set-Offs. . . . . . . . . . . . . . . . . . . 54
10.5. Amendments and Waivers . . . . . . . . . . . . . . . . . 55
10.6. Successors and Assigns . . . . . . . . . . . . . . . . . 55
10.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . 57
10.8. Governing Law; Submission to Jurisdiction. . . . . . . . 57
10.9. Counterparts; Integration; Effectiveness . . . . . . . . 57
10.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 58
10.11. Confidentiality. . . . . . . . . . . . . . . . . . . . . 58
PAGE <5>
Schedule 1 - Existing Subsidiary Debt
Schedule 2 - Insurance
Schedule 4.6 - ERISA Disclosure
EXHIBIT A - Note
EXHIBIT B-1 - Opinion of Nelson Mullins Riley &
Scarborough
EXHIBIT B-2 - Opinion of General Counsel for the
Borrower
EXHIBIT B-3 - Opinion of Canadian Counsel for
Policy Management Systems Canada, Ltd.
EXHIBIT C - Opinion of Special Counsel for the Agent
EXHIBIT D - Assignment and Assumption Agreement
EXHIBIT E - Certificate of Chief Financial Officer
or Chief Accounting Officer
EXHIBIT F - Certificate of Independent Auditors
PAGE <6>
AGREEMENT dated as of August 11, 1995 among POLICY
MANAGEMENT SYSTEMS CORPORATION, the GUARANTORS party hereto, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as
used herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in Section
2.5(b).
"Administrative Questionnaire" means, with respect to
each Bank, an 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 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; provided that in no
event will General Atlantic Partners 14 L.P., GAP Coinvestment
Partners or any Person to whom General Atlantic Partners 14 L.P.
or GAP Coinvestment Partners shall have transferred any shares of
capital stock of the Borrower be deemed an Affiliate solely by
virtue of ownership of such shares. As used herein, the term
"control" means possession, directly or indirectly, of the power
to vote 10% 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 Morgan Guaranty Trust Company of New York
in its capacity as agent for the Banks hereunder, and its
successors in such capacity.
"Applicable Lending Office" means, with respect to any
Bank, (i) in the case of its Domestic Loans, its Domestic Lending
Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
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"Assessment Rate" has the meaning set forth in Section
2.5(b).
"Assignee" has the meaning set forth in Section
10.6(c).
"Bank" means each bank listed on the signature pages
hereof, 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 of (i) the Prime Rate for such day or (ii) the sum
of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of
Borrowing or pursuant to Article 8.
"Benefit Arrangement" means at any time an employee
benefit plan 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.
"Borrower" means Policy Management Systems Corporation,
a South Carolina corporation, and its successors.
"Borrower's 1994 Form 10-K" means the Borrower's annual
report on Form 10-K for the fiscal year ended December 31, 1994,
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 on Form 10-Q for the quarter ended March 31,
1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by the Banks pursuant
to Article 2. A Borrowing is a "Domestic Borrowing" if such
Loans are Domestic Loans or a "Euro-Dollar Borrowing" if such
Loans are Euro-Dollar Loans. A Domestic Borrowing is a "CD
Borrowing" if such Domestic Loans are CD Loans or a "Base Rate
Borrowing" if such Domestic Loans are Base Rate Loans.
"Cash Flow Ratio" means at any date the ratio of (i)
Consolidated Adjusted Cash Flow for the four consecutive
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fiscal quarters of the Borrower ended on or most recently prior
to such date to (ii) Consolidated Debt at such date.
"CD Base Rate" has the meaning set forth in Section
2.5(b).
"CD Loan" means a Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Borrowing.
"CD Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"CD Reference Banks" means Bank of America Illinois,
First Union National Bank of South Carolina, Wachovia Bank of
South Carolina, N.A. and Morgan Guaranty Trust Company of New
York.
"Closing Date" means the date on or after the Effective
Date on 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 opposite the name of such Bank on the signature
pages hereof, as such amount may be reduced from time to time
pursuant to Section 2.7.
"Consolidated Adjusted Cash Flow" means, for any fiscal
period, the sum of (i) Consolidated Net Income for such period
plus (ii) to the extent deducted in determining such Consolidated
Net Income, depreciation, amortization and all other non-cash
charges (excluding any non-cash restructuring charges) plus (iii)
the amount of any increase (or minus the amount of any decrease)
in the consolidated deferred tax liabilities of the Borrower and
its Consolidated Subsidiaries during such fiscal period.
"Consolidated Debt" means at any date the Debt of the
Borrower and its Consolidated Subsidiaries (other than the
Defeased Debt), determined on a consolidated basis as of such
date.
"Consolidated EBIT" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent
deducted in determining Consolidated Net Income, the aggregate
amount of (i) Consolidated Interest Expense and (ii) income tax
expense.
"Consolidated Interest Expense" means, for any fiscal
period, the interest expense of the Borrower and its
PAGE <9>
Consolidated Subsidiaries (whether expensed or capitalized)
determined on a consolidated basis for such fiscal period.
"Consolidated Net Income" means, for any fiscal period,
the net income of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis for such fiscal period, plus,
solely for any period occurring during the 1994 fiscal year and
to the extent deducted in determining such net income during such
period, the amount of software write-offs and intangible write-
offs and research and development write-offs with respect to the
Creative acquisition deducted during such period minus (i) 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 fiscal
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.
"Consolidated Subsidiary" means at any date any
Subsidiary or other 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 at any date the
consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries less (a) their consolidated Intangible
Assets less (b) to the extent not included in Intangible Assets,
capitalized software, all determined as of such date. For
purposes of this definition, "Intangible Assets" means the amount
(to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to December
31, 1994 in the book value of any
PAGE <10>
asset owned by the Borrower or a Consolidated Subsidiary, (ii)
all investments in unconsolidated Subsidiaries and all equity
investments in Persons which are not Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade
names, anticipated future benefit of tax loss carry-forwards,
copyrights, organization or developmental expenses and other
intangible assets.
"Debt" of any Person means at any date, without
duplication, (i) all 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, (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 Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an
obligation of such Person and (vii) all Debt of others Guaranteed
by such Person.
"Default" means any condition or event which
constitutes an Event of 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 Management Systems International, Ltd. in the aggregate
principal amount of 6,952,345(British lbs.) 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 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
PAGE <11>
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 Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in New
York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its
office located 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; provided that any Bank may so
designate separate Domestic Lending Offices for its Base Rate
Loans, on the one hand, and its CD Loans, on the other hand, in
which case all references herein to the Domestic Lending Office
of such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth
in Section 2.5(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 10.9.
"Environmental Laws" means any and all federal, state,
local and 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, as amended, or any successor statute.
PAGE <12>
"ERISA Group" means the Borrower, any Subsidiary and
all members of 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 Business Day" means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank,
its office, 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 Loan" means a Loan to be made by a Bank as
a Euro-Dollar Loan in accordance with the applicable Notice of
Borrowing.
"Euro-Dollar Margin" means a rate per annum determined
in accordance with the Pricing Schedule.
"Euro-Dollar Reference Banks" means the principal
London offices of Commerzbank Aktiengesellschaft, Dai-Ichi Kangyo
Bank, Ltd., NBD Bank and Morgan Guaranty Trust Company of New
York.
"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 of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents).
"Event of Default" has the meaning set forth in Section
6.1.
"Facility Fee Rate" has the meaning set forth in
Section 2.6.
PAGE <13>
"Federal Funds Rate" means, for any day, the rate per
annum (rounded 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 Domestic
Business Day next succeeding such day, provided that (i) if such
day is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to Morgan Guaranty Trust Company of New York on such day on such
transactions as determined by the Agent.
"Fixed Rate Borrowing" means a CD Borrowing or a Euro-
Dollar Borrowing.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans
or both.
"Guarantee" by any Person means any obligation,
contingent or 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 not include endorsements for
collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means Cybertek Corporation, Policy
Management Systems International, Ltd., Policy Management Systems
Canada, Ltd., 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 otherwise hazardous substance, including petroleum,
its derivatives, by-products and other
PAGE <14>
hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section
10.3(b).
"Interest Coverage Ratio" means, at the last day of any
fiscal quarter of the Borrower, the ratio of (i) Consolidated
EBIT for the period of four consecutive fiscal quarters of the
Borrower and its Consolidated Subsidiaries ending on such day to
(ii) Consolidated Interest Expense for such period.
"Interest Period" means: (1) with respect to each Euro-
Dollar Borrowing, the period commencing on the date of such
Borrowing and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end
on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar 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 Euro-Dollar
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.
(2) with respect to each CD Borrowing, the period commencing on
the date of such Borrowing and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would
otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
PAGE <15>
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would
otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) 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 amended, or any successor statute.
"Investment" means any investment in any Person,
whether by means of share purchase, capital contribution, loan,
Guarantee, time deposit or otherwise (but not including any
demand deposit).
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, 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 a Domestic Loan or a Euro-Dollar Loan and
"Loans" means Domestic Loans, Euro-Dollar Loans or both.
"London Interbank Offered Rate" has the meaning set
forth in Section 2.5(c).
"Material Debt" means Debt (other than the Notes and
any loans 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.
PAGE <16>
"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 neither Policy Management Systems Investments, Inc., a
Delaware corporation, nor any Subsidiary of Policy Management
Systems International, Ltd., a Delaware corporation, which is not
incorporated in the United States, 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 promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
PAGE <17>
the obligation of the Borrower to repay the Loans, and "Note"
means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in
Section 2.2.
"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.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in New
York City from time to time as its Prime Rate.
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Borrowing which, after
application of the proceeds thereof, results in no net
PAGE <18>
increase in the outstanding principal amount of Loans made by any
Bank.
"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 66 2/3% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes
evidencing at least 66 2/3% of the aggregate unpaid principal
amount of the Loans.
"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; 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-1 by Moody's 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
PAGE <19>
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 Moody's 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 Moody's
Investors Service, Inc.; provided in each case (other than with
respect to any Investment described in clause (v) hereof) that
such Investment matures within one year from the date of
acquisition thereof by the Borrower or a Subsidiary.
"Termination Date" means August 11, 1998, or, if such
day is not a Euro-Dollar Business Day, the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the Termination
Date shall be the next preceding Euro-Dollar Business Day.
"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
PAGE <20>
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 CREDITS
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 in amounts such that the aggregate
principal amount of Loans by such Bank at any one time
outstanding shall not exceed the amount of its Commitment. 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 2.9, prepay Loans
and reborrow at any time during the Revolving Credit Period under
this Section.
SECTION 2.2. Method of Borrowing. The Borrower shall
give the Agent notice (a "Notice of Borrowing") not later than
10:30 A.M. (New York City time) on (x) the date of each Base Rate
Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Dollar Loans; and
PAGE <21>
(iv) in the case of a Fixed Rate Borrowing, 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 12:00 Noon (New York City 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 in New York City, 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) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from
such Bank, such Bank shall apply the proceeds of its new Loan to
make such repayment and only an amount equal to the difference
(if any) between the amount being borrowed and the amount being
repaid shall be made available by such Bank to the Agent as
provided in subsection (c) of this Section, or remitted by the
Borrower to the Agent as provided in Section 2.10, as the case
may be.
(e) 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) and (d) 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
PAGE <22>
Borrower, a rate per annum equal to the higher of the Federal
Funds Rate or the interest rate applicable thereto pursuant to
Section 2.5 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 Loans of each Bank
shall be evidenced by a single Note 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 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 Note pursuant to Section 3.1(a),
the Agent shall forward such 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
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 Notes.
Each Bank is hereby irrevocably authorized by the Borrower so to
endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.4. Maturity of Loans. Each Loan included in
any Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.5. Interest Rates. (a) Each Base Rate
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
PAGE <23>
for such day. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of or
interest on any Base Rate 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 Loans
for such day.
(b) Each CD 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
CD Margin for such day plus the Adjusted CD Rate applicable to
such Interest Period; provided that if any CD Loan shall, as a
result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such CD Loan shall
bear interest during such Interest Period at the rate applicable
to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof. Any overdue principal of or
interest on any CD 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 higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to the Interest Period for
such Loan or (ii) the rate applicable to Base Rate Loans for such
day.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is
the rate of interest determined by the Agent to be the average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of
the prevailing rates per annum bid at 10:00 A.M. (New York City
time) (or as soon thereafter as
PAGE <24>
practicable) on the first day of such Interest Period by two or
more New York certificate of deposit dealers of recognized
standing for the purchase at face value from each CD Reference
Bank of its certificates of deposit in an amount comparable to
the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity
comparable to such Interest Period.
"Domestic 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 (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
five billion dollars in respect of new non-personal time deposits
in dollars in New York City having a maturity comparable to the
related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of
the effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of
12 C.F.R. section 327.4(a) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at
offices of such institution in the United States. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar 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 London Interbank Offered
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.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum
at which deposits in dollars are offered to each of the Euro-
Dollar Reference Banks in the London
PAGE <25>
interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount
of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar 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 London Interbank
Offered 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 Euro-Dollar Reference Banks are offered to
such Euro-Dollar 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 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 2.6. 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
PAGE <26>
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
2.10(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 2.7. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower
may, upon at least three Domestic 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 2.8. 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 2.9. Optional Prepayments. (a) Subject in the
case of any Fixed Rate Borrowing to Section 2.11, the Borrower
may, upon at least one Domestic Business Day's notice to the
Agent, prepay any Domestic Borrowing or upon at least three Euro-
Dollar Business Days' notice to the Agent, prepay any Euro-Dollar
Borrowing, 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 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.
SECTION 2.10. 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
12:00 Noon (New York City time) on the date when due, in Federal
or other funds immediately available in New York City, to the
Agent at its address referred to in Section
PAGE <27>
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 Domestic Loans or of fees shall be due on a day
which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest
on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar 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 2.11. Funding Losses. If the Borrower makes
any payment of principal with respect to any Fixed 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
2.5(d), or if the Borrower fails to borrow or prepay any Fixed
Rate Loans after notice has been given to any Bank in accordance
with Section 2.2(b), 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.
PAGE <28>
SECTION 2.12. Computation of Interest and Fees.
Interest based on the Prime 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 2.13. Regulation D Compensation. Each Bank
may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest
on the related Euro-Dollar 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 London Interbank Offered Rate divided by (B)
one minus the Euro-Dollar Reserve Percentage over (ii) the
applicable London Interbank Offered 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 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 Euro-Dollar
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 Euro-Dollar
Business Days prior to each date on which interest is payable on
the Euro-Dollar Loans of the amount then due it under this
Section.
ARTICLE 3.
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall
occur upon receipt by the Agent of the following documents, each
dated the Closing Date unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated on
or before the Closing Date complying with the provisions of
Section 2.3;
(b) an opinion of Nelson Mullins Riley & Scarborough, L.L.P.,
counsel for the Obligors,
PAGE <29>
substantially in the form of Exhibit B-1 hereto, an opinion of
the general counsel for the Borrower substantially in the form of
Exhibit B-2 hereto and an opinion of Canadian counsel for Policy
Management Systems Canada, Ltd. substantially in the form of
Exhibit B-3 hereto and in each case covering such additional
matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(c) an opinion of Davis Polk & Wardwell, special counsel for the
Agent, substantially in the form of Exhibit C hereto and covering
such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) evidence satisfactory to the Agent that the Borrower shall
have paid in full to J.P. Morgan Securities Inc., as arranger,
fees in the amounts previously agreed upon between them; and
(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.
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 any Bank
to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) the fact that the Closing Date shall have occurred on or
prior to August 31, 1995;
(b) receipt by the Agent of a Notice of Borrowing as required by
Section 2.2;
(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not
exceed the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
PAGE <30>
(e) the fact that the representations and warranties of the
Obligors contained in this Agreement (except, in the case of a
Refunding Borrowing, the representations and warranties set forth
in Section 4.4(c) and Section 4.5 as to any matter which has
theretofore been disclosed in writing by the Borrower to the
Banks) shall be true in all material respects on and as of the
date of such Borrowing.
Each Borrowing 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 (c), (d) and (e) of this Section
and by each other Obligor, with respect to itself only, as to the
facts specified in clause (e) 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
PAGE <31>
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, 1994 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 1994 Form 10-K, a copy of which has been delivered to
each of the Banks, fairly present, 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, 1995 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 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, 1994 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 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
PAGE <32>
(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, 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
taxes 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
PAGE <33>
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,
PAGE <34>
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.
PAGE <35>
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 Domestic 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 of
nationally recognized standing in scope and manner acceptable to
the Securities and Exchange Commission;
(b) within 2 Domestic 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
PAGE <36>
(b) above, a certificate of the chief financial officer or the
chief accounting officer of the Borrower substantially in the
form of Exhibit E (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 (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 Domestic 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
PAGE <37>
"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.
PAGE <38>
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 II hereto and evidenced by
the certificate contemplated by clause (w) 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 Domestic 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
PAGE <39>
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 or (ii) 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 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. The
Borrower will not (i) consolidate or merge with or into any other
Person or (ii) sell, lease or otherwise transfer, directly or
indirectly, all or any substantial part of the consolidated
assets of the Borrower and its Subsidiaries, taken as a whole, to
any other Person; provided that the Borrower may merge with
another Person if (a) the Borrower is the corporation surviving
such merger and (b) 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
PAGE <40>
permitted by the first proviso to clause (ii) of 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.
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:
(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
PAGE <41>
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 cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed
$3,000,000;
(j) Liens on cash and certificates of deposit in an aggregate
amount not to exceed 6,952,345(British lbs.) issued by Barclay's Bank Plc to
Policy Management Systems International, Ltd. to support such
bank's obligations to repay the holders of Defeased Debt; and
(k) 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 Consolidated Tangible Net
Worth.
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:
(a)(i) Defeased Debt and (ii) Debt (other than Defeased
Debt) outstanding on the date hereof not in excess of
$3,800,000 in aggregate principal amount and identified on
Schedule I and refinancings thereof; provided that the
principal amount thereof is not increased beyond the amount
outstanding thereunder on the date hereof;
(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; provided that the aggregate principal
PAGE <42>
amount of Debt of each such wholly-owned Subsidiary outstanding
at any time and permitted by this clause (c) (net of the
aggregate amount of Debt owed to such wholly-owned Subsidiary by
the Borrower or any other wholly-owned Subsidiary) does not
exceed $10,000,000;
(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
and the 364-Day Credit Agreement dated as of August 11, 1995
among the Borrower, the Guarantors party thereto, the banks
listed therein and Morgan Guaranty Trust Company of New
York, as agent, as amended from time to time; and
(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 Debt is
extinguished or refinanced by the Borrower (solely as Debt
of the Borrower) within 90 days after such event.
SECTION 5.11. Cash Flow Ratio. The Cash Flow Ratio
will at no time be less than .25:1.
SECTION 5.12. Interest Coverage Ratio. As of the last
day of each fiscal quarter of the Borrower, the Interest Coverage
Ratio at such last day will not be less than 3:1.
SECTION 5.13. 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 $162,500,000.
"Permitted Add Back" means, at any date, an amount equal to the
lesser of (a) $75,000,000 and (b)(i) for any date on or prior to
December 31, 1995, the sum of (w) the aggregate amount of
payments made by the Borrower after the date hereof and on or
prior to such date to repurchase shares of its outstanding common
stock in open market purchases at fair market value or from
General Atlantic Partners 14 L.P. and GAP Coinvestment Partners
or any Person to whom General Atlantic Partners 14 L.P. or GAP
Coinvestment Partners shall have transferred any shares of
capital stock of the Borrower, (x) all investments in
unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries made after December 31, 1994 and on or
prior to such date and
PAGE <43>
(y) goodwill and other intangibles acquired in connection with
any acquisition made after December 31, 1994 and on or prior to
such date and (ii) for any date after December 31, 1995, the sum
of (x) the aggregate amount of payments made by the Borrower
after the date hereof to repurchase shares of its outstanding
common stock in open market purchases at fair market value or
from General Atlantic Partners and (y) goodwill and other
intangibles acquired in connection with any acquisition made
after December 31, 1994 and on or prior to such date.
SECTION 5.14. 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) any Debt
outstanding under the 364-Day Credit Agreement dated as of August
11, 1995 among the Borrower, the Guarantors party thereto, the
banks listed therein and Morgan Guaranty Trust Company of New
York, as agent, as amended from time to time or (z) any Debt of
the Borrower (other than Debt described in clauses (x) or (y))
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.
SECTION 5.15. Investments. Neither the Borrower nor
any Subsidiary will hold, make or acquire any Investment in any
Person other than:
(a) (i) Investments in Person 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 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) and
outstanding at such time does not exceed 20% of Consolidated
Tangible Net Worth.
SECTION 5.16. 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
PAGE <44>
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 5.17. 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
Loan, or any interest, any fees or any other amount payable
hereunder within 3 Domestic 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 10 Domestic Business Days after
notice thereof has
PAGE <45>
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 seeking 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
PAGE <46>
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 remained
undischarged for a period of 30 days during which execution shall
not be 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; 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
PAGE <47>
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 50% 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 50% 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. Each Bank
irrevocably appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under this
Agreement and the Notes as are delegated to the Agent by the
terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.2. Agent and Affiliates. Morgan Guaranty
Trust Company of New York shall have the same rights and powers
under this Agreement as any other Bank and may exercise or
refrain from exercising the same as though it were not the Agent,
and Morgan Guaranty Trust Company of New York and its affiliates
may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or
affiliate of the Borrower as if it were not the Agent.
PAGE <48>
SECTION 7.3. Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default,
except as expressly provided in Article 6.
SECTION 7.4. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 7.5. Liability of Agent. Neither the Agent
nor any of its affiliates nor any of their respective directors,
officers, agents or employees shall be liable for any action
taken or not taken by it in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii)
the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any
other instrument or writing furnished in connection herewith.
The Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission
or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.
SECTION 7.6. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the Agent,
its affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in
connection with this Agreement or any action taken or omitted by
such indemnitees hereunder.
PAGE <49>
SECTION 7.7. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.8. Successor Agent. The Agent may resign at
any time by giving 30 days' notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall
have the right to appoint a successor Agent, with the consent of
the Borrower, which consent shall not be unreasonably withheld.
If no successor Agent shall have been so appointed by the
Required Banks (and so consented to by the Borrower), and shall
have accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be
a commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder as a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.9. Agent's Fee. The Borrower shall pay to
the Agent for its own account fees in the amounts and at the
times previously agreed upon between the Borrower and the Agent.
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 CD Loan or Euro-Dollar Loan:
PAGE <50>
(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 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate or the
London Interbank Offered Rate, as the case may be, as determined
by the Agent will not adequately and fairly reflect the cost to
such Banks of funding their CD Loans or Euro-Dollar 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 CD Loans or Euro-Dollar
Loans, as the case may be, shall be suspended. Unless the
Borrower notifies the Agent prior to 10:30 A.M. on the date of
any Fixed Rate Borrowing 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 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
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 Loans to maturity and
shall so specify in such notice, the Borrower shall immediately
prepay in full the
PAGE <51>
then outstanding principal amount of each such Euro-Dollar Loan,
together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan, the Borrower shall borrow a
Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and such
Bank shall make such a Base Rate 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 (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage
and (ii) with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve
Percentage), special deposit, insurance assessment (excluding,
with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) 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 Fixed Rate Loans, its
Note or its obligation to make Fixed 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 Fixed
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 Note 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
PAGE <52>
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, 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
PAGE <53>
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) 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
PAGE <54>
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 Loans Substituted for Affected
Fixed Rate Loans. If (i) the obligation of any Bank to make
Euro-Dollar 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 CD Loans
PAGE <55>
or Euro-Dollar 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 CD
Loans or Euro-Dollar Loans, as the case may be, shall be made
instead as Base Rate Loans (on which interest and principal shall
be payable contemporaneously with the related Fixed Rate Loans of
the other Banks); and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be
applied to repay its Base Rate Loans instead.
ARTICLE 9.
GUARANTY
SECTION 9.1. The Guaranty. Each Guarantor, as primary
obligor and not merely as surety, hereby unconditionally
guarantees 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 Domestic 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:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other
Guarantor under
PAGE <56>
this Agreement or any Note, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement or any Note;
(iii) 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;
(iv) 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;
(v) 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;
(vi) 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
(vii) 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
PAGE <57>
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.
PAGE <58>
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: in the case of the
Borrower or the Agent, at its address, facsimile number or telex
number set forth on the signature pages hereof, in the case of
any Guarantor, in care of the Borrower, in the case of any Bank,
at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or 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 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. Expenses; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agent, including reasonable fees and disbursements of special
counsel for the Agent, in connection with the preparation and
administration of this Agreement, any waiver or consent hereunder
or any amendment hereof or any Default or alleged Default
hereunder; provided the Borrower shall not be required to pay
fees and
PAGE <59>
disbursements of special counsel to the Agent incurred in
connection with the preparation of this Agreement in excess of
the amount previously agreed upon in writing between the Borrower
and the Agent and (ii) if an Event of Default occurs, all
reasonable out-of-pocket expenses incurred by the Agent and each
Bank, including, with respect to the Agent and each Bank, either
the reasonable fees and disbursements of outside counsel or the
reasonable allocated cost of inside counsel (but not both), but
excluding the reasonable allocated cost of any overhead expenses,
in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Agent 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, 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
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
PAGE <60>
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 . 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 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.
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
PAGE <61>
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 D 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, 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 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, a new Note is 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
PAGE <62>
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
PAGE <63>
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 WAIVES 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.
PAGE <64>
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
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
POLICY MANAGEMENT SYSTEMS CANADA, LTD.
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
CYBERTEK CORPORATION
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
PAGE <65>
POLICY MANAGEMENT SYSTEMS INTERNATIONAL, LTD.
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
PMSI, L.P.
By POLICY MANAGEMENT SYSTEMS CORPORATION;
its General Partner
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
CYBERTEK SOLUTIONS, L.P.
By POLICY MANAGEMENT SYSTEMS CORPORATION;
its General Partner
By /s/ Stephen G. Morrison
Title: Executive Vice President
Secretary and General Counsel
Address: 1 PMS Center
Blythewood, SC 29016
Telex: 803-735-6099
Facsimile: 803-735-4800
PAGE <66>
Commitments:
$17,500,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Eugenia Wilds
Title: Vice President
$16,250,000 FIRST UNION NATIONAL
BANK OF SOUTH CAROLINA
By /s/ Gregory G. Burke
Title: Vice President
$16,250,000 WACHOVIA BANK OF
SOUTH CAROLINA, N.A.
By /s/ Robert W. Derrick
Title: Vice President
$10,000,000 BANK OF AMERICA ILLINOIS
By /s/ Robert A. Kilgannon
Title: Vice President
PAGE <67>
$10,000,000 COMMERZBANK
AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By /s/ H. Yergey
Title: Vice President
By /s/ C. Rost
Title: Vice President
$10,000,000 THE DAI-ICHI KANGYO
BANK LTD., ATLANTA AGENCY
By /s/ Noboru Hasegawa
Title: General Manager
$10,000,000 NBD BANK
By /s/ James D. Heinz
Title: Vice President
$5,000,000 DEUTSCHE BANK AG NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By /s/ Gregory M. Hill
Title: Vice President
By /s/ Ralf Hoffmann
Title: Assistant Vice
President
PAGE <68>
$5,000,000 THE FUJI BANK, LIMITED,
ATLANTA AGENCY
By /s/ Shinichiro Fujimoto
Title: Joint General Manager
Total Commitments
=================
$100,000,000
PAGE <69>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Eugenia Wilds
Title: Vice President
Address: 60 Wall Street
New York, NY
10260
Telex:
Facsimile:
PAGE <69>
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "CD Margin" and "Facility
Fee Rate" means, for any date, the rates set forth below in the row
opposite such term and the Usage on such date and in the column
corresponding to the "Pricing Level" that applies at such date:
Level I
Level II
Level III
CD Margin
Usage < 1/3
Usage >= 1/3
0.525%
0.625%
0.625%
0.725%
0.625%
0.725%
Euro-Dollar
Margin
Usage < 1/3
Usage >= 1/3
0.4%
0.5%
0.5%
0.6%
0.5%
0.6%
Facility Fee
Rate
0.2%
0.25%
0.375%
For purposes of this Schedule, the following terms have
the following meanings:
"Applicable Cash Flow Ratio" means, at any date, the
Cash Flow Ratio as at the last day of the fiscal quarter of the
Borrower most recently ended prior to such date for which the
Borrower has delivered financial statements pursuant to Section
4.4(b), 5.1(a) or 5.1(b), as the case may be; provided that if
the Borrower shall fail to timely deliver the financial
statements required to be delivered by it pursuant to Section
5.1(a) or 5.1(b), as the case may be, the Applicable Cash Flow
Ratio for each date from and including the date on which such
statements are required to be delivered to but excluding the date
on which such statements are delivered shall be deemed to be less
than .30:1.
"Level I Pricing" applies at any date if, at such date,
the Applicable Cash Flow Ratio is equal to or greater than .40:1.
"Level II Pricing" applies at any date if, at such
date, the Applicable Cash Flow Ratio is equal to or greater than
.30:1 but less than .40:1.
"Level III Pricing" applies at any date if, at such
date, the Applicable Cash Flow Ratio is less than .30:1.
"Pricing Level" refers to the determination of which of
Level I, Level II or Level III applies at any date.
"Usage" means at any date a fraction (i) the numerator
of which is the aggregate outstanding principal amount of the
Loans at such date, after giving effect to any borrowing or
PAGE <70>
payment on such date, and (ii) the denominator of which is the
aggregate amount of the Commitments at such date, after giving
effect to any reduction of the Commitments on such date. For
purposes of this Schedule, if for any reason any Loans remain
outstanding after termination of the Commitments, the Usage for
each date on or after the date of such termination shall be
deemed to be greater than 1/3.
The effective date of any increase or decrease in the
Euro-Dollar Margin, the CD Margin or the Facility Fee Rate as a
result of any change in the Applicable Cash Flow Ratio (other
than any such increase pursuant to the proviso in the definition
thereof) 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.
PAGE <71>
EXHIBIT A
NOTE
New York, New York
___________ __, 199_
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 last day of the Interest Period relating to such Loan. 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
Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, New York.
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 Notes referred to in the 3-Year
Credit Agreement dated as of August 11, 1995 among Policy
Management Systems Corporation, the Guarantors party thereto, the
banks listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent (as the same may be amended
from time to time, the "Credit Agreement"). 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.
PAGE <72>
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.
This Note shall be governed by and construed in
accordance with the laws of the State of New York.
POLICY MANAGEMENT SYSTEMS
CORPORATION
By____________________
Name:
Title:
PAGE <73>
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
Amount Type Amount of
of of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
________________________________________________________________
PAGE <74>
EXHIBIT B-1 and B-2
OPINION OF
COUNSEL FOR THE OBLIGORS
________________, 199_
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel
for Policy Management Systems Corporation (the "Borrower")
and certain of its Subsidiaries in connection with the 3-
Year Credit Agreement (the "Credit Agreement") dated as of
August 11, 1995 among the Borrower, the Guarantors party
thereto, the banks listed on the signature pages thereof,
and Morgan Guaranty Trust Company of New York, as Agent.
Terms defined in the Credit Agreement are used herein as
therein defined. This opinion is being rendered to you at
the request of our clients pursuant to Section 3.1(b) of the
Credit Agreement.
We have examined
originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and
have conducted such other investigations of fact and law as
we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the
foregoing, we are of the opinion that:
1. The Borrower is a
corporation duly incorporated, validly existing and in good
standing under the laws 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.
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, 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 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.
3. The Credit Agreement
constitutes a valid and binding agreement of the Borrower
and each Note constitutes a valid and binding obligation of
the Borrower, in each case enforceable in accordance with
its terms except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
PAGE <75>
4. There is no action,
suit or proceeding pending against, or to the best of our
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 reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries, considered
as a whole, or which in any manner draws into question the
validity of the Credit Agreement or the Notes.
5. Each of the
Borrower's corporate Subsidiaries is a corporation validly
existing and in good standing 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.
6. Each Guarantor is a
corporation duly incorporated, validly existing and in good
standing 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
Guarantor of the Credit Agreement is 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. The Credit Agreement constitutes a valid and
binding agreement of each Guarantor, in each case
enforceable in accordance with its terms except as the same
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general
principles of equity.
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,
<COUNSEL FOR THE OBLIGORS>
PAGE <76>
EXHIBIT B-1
August __, 1995
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, NY 10260
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 3-
Year Credit Agreement dated as of August 11, 1995, among the
Borrower, the Guarantors party thereto, the Banks listed on
the signature pages thereof, and Morgan Guaranty Trust
Company of New York, 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
PAGE <77>
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 valid and binding agreement of the
Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in
accordance with its terms.
4. Except with respect to Policy Management Systems Canada,
Ltd. ("PMS Canada") (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 by
each Guarantor which is a limited partnership of the Credit
Agreement 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 Canada (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 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
PAGE <78>
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,
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
__________________________________________
Robert E. Lee Garner
PAGE <79>
EXHIBIT B-2
August __, 1995
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, NY 10260
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 3-Year Credit Agreement
dated as of August 11, 1995, among the Borrower, the
Guarantors party thereto, the Banks listed on the signature
pages thereof, and Morgan Guaranty Trust Company of New
York, 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:
PAGE <80>
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 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 Canada,
Ltd. ("PMS Canada")(for which I express no opinion), each of
the Borrower's 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 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.
PAGE <81>
5. Except with respect to PMS Canada (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,
Stephen G. Morrison
Executive Vice President, Secretary and General Counsel
PAGE <82>
EXHIBIT B-3
August __, 1995
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, NY 10260
Dear Sirs:
We have acted as special counsel for Policy Management
Systems Canada, Ltd., a Canadian corporation (the "Obligor")
in connection with the 3-Year Credit Agreement dated as of
August __, 1995, among Policy Management Systems
Corporation, a South Carolina corporation (the "Borrower"),
the Guarantors party thereto, the Banks listed on the
signature pages thereof, and Morgan Guaranty Trust Company
of New York, 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
PAGE <83>
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 Canada.
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
Canada, 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
PAGE <84>
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,
PAGE <85>
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
________________, 199_
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the 3-Year Credit
Agreement (the "Credit Agreement") dated as of August 11,
1995 among Policy Management Systems Corporation, a South
Carolina corporation (the "Borrower"), the Guarantors party
thereto, the banks listed on the signature pages thereof
(the "Banks"), and Morgan Guaranty Trust Company of New
York, as Agent (the "Agent"), and have acted as special
counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.1(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate
records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.
We have assumed that the execution, delivery and performance
by the Borrower of the Credit Agreement and the Notes are
within the Borrower's corporate powers and have been duly
authorized by all necessary corporate action, and that the
Borrower has duly executed and delivered the Credit
Agreement and the Notes.
Upon the basis of the foregoing, we are of the opinion that
the Credit Agreement constitutes a valid and binding
agreement of the Borrower and each Note constitutes
PAGE <86>
a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms except as the same
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general
principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New
York and the federal laws of the United States of America.
In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction (except
the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or
collect.
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,
PAGE <87>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of
_________, 19__ among <NAME OF ASSIGNOR> (the "Assignor"),
<NAME OF ASSIGNEE> (the "Assignee"), POLICY MANAGEMENT
SYSTEMS CORPORATION (the "Borrower") and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
WHEREAS, this Assignment
and Assumption Agreement (the "Agreement") relates to the 3-
Year Credit Agreement dated as of August 11, 1995 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 Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $__________;
WHEREAS, 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 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
PAGE <88>
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
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. 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. Consent of
the Borrower and the Agent. 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 of
this Agreement by the Borrower and the Agent is evidence of
this consent. Pursuant to Section 10.6(c), the Borrower
agrees to execute and deliver a Note payable to the order of
the Assignee to evidence the assignment and assumption
provided for herein.]
PAGE <89>
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.
<NAME OF ASSIGNOR>
By_________________________
Name:
Title:
<NAME OF ASSIGNEE>
By__________________________
Name:
Title:
PAGE <90>
POLICY MANAGEMENT SYSTEMS CORPORATION
By__________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Name:
Title: